Strength Through Diversification: Opportunities across Asia Pacific

FOR INVESTORS/LANDLORDS

• In the past, there has been some investor perception of risk relating to manufacturing assets, usually related to the perception of ‘bespokeness’ of buildings and the lack of flexibility for alternative users. However, given the evolving nature of manufacturing – particularly in high tech and green technologies – there is great potential for investors to secure new opportunities to deploy capital in a part of the industrial asset class which has typically traded at a discount to logistics and light multi-let industrial assets. Investors have the opportunity to secure long-term income, particularly for newly-built assets where tenants are committing to significant investment in automation and digitalisation technologies over a long period of time.

• Landlords have opportunities to leverage relationships with existing tenants to explore how they may work together to secure new facilities in new geographies or expand existing operations. This could be through forward funding of developments or extensions to existing facilities with potential upside on lease regears and capital valuations.

• Investors could benefit from higher returns (albeit with possible higher risk profiles) by funding developments or acquiring assets in new and emerging locations, especially where markets have attracted little real estate investment in the past.

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