Thoughts

3 min read

Singapore – The gateway to Sustainable Real Estate Investment in Asia

Thoughts

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    EVORA

In the week before last, I was in the iconic European city of Amsterdam. Cobbled streets of merchants’ homes and old warehouses built around the old port and canals. A place where you can’t walk along the street on your mobile phone or risk getting run down by a bicycle or two. In October, apples were in season for the famous appeltaart, delicious with whipped cream.

What a contrast to the next week – in Singapore for the Fintech Festival. A city of extraordinary architecture with many ships anchored offshore from this modern port. Much of my week was spent in taxis and in lifts in Singapore, rather than on foot or on a bike in the Netherlands. 

This is a symbolic Asian city where many people walk around with hooked-over heads lit up by the glow of their phones. At our hotel, the majority of guests live-streamed the breakfast buffet; talking to their phones rather than their friends around the table. 

Citrus fruits were in season in the hot humidity of this gateway city. The very affordable and UNESCO protected hawker food markets were buzzing with delicious, freshly cooked fish and veg. Both cities share a love of deep-fried snacks and both have a warm, respectful openness. 

Our business there was with the many global investment managers and local REITs which use Singapore as a gateway for investments in the rest of Asia. With the city’s close relations with other major financial centres, like London and Tokyo, it is an obvious choice.

The city is home to sustainable real estate leaders, like CapitaLand. With iconic assets, including CapitaSpring and the Jewel, the company has become a touchstone for other real estate companies. Backed by a Sovereign Wealth Fund they are encouraged to support, and lead, the government’s drive towards sustainability and the management of climate risk.

We were part of a Great Britain trade mission, warmly hosted by the British High Commissioner, Kara Owen, and her team. The Singapore Fintech Festival provided us with a focus on “green” fintech as the city looks to establish itself as a centre of green finance.

Having spoken with our partners, MSCI and Paia, and many clients, including another global leader Hines, it was clear that the sustainability and climate agenda has moved on significantly over the last year. Looking to challenge Europe’s leadership and arguably more advanced than the USA. We were in listening mode last week and it was an inspiring community to visit.

Real estate investment in Singapore and the nearby major Asian markets of India, Japan, HK and Korea are on the front line of climate change. Whilst also grappling with air pollution, the destruction of natural biodiversity and a range of social and governance issues. Against this background, you could expect that these markets could lead the way with new innovations in the near future. That could be why new green products, including credit, is on the rise.

European LPs, including the Dutch pension funds, are one driver of this market, alongside new Government rules on disclosure. We’ll be watching how the Asian LPs pick up this agenda, particularly the Japanese pension funds and Australian Supers.

Like every other market, ESG data quality is a problem. The Government’s Project Greenpoint is attempting to solve this problem and backing an ESG data utility. Smart thinking to ensure that both risks and opportunities can be made transparent.

What an exciting market to explore as EVORA thinks about how and where we grow following our recent investment round. Thank you Singapore for being such a great host.