CapitaLand Investment has released a new research report titled “APAC Flexible Living: Achieving Scalable Growth From Structural Demand,” which underscores the resilience and strategic importance of the living sector in the Asia-Pacific (APAC) region. The report highlights that whilst structural demand remains strong, the key differentiator for growth is now execution, focusing on entry strategy, asset management, and operational capabilities.
The living sector has emerged as APAC’s most resilient real estate category, recording investment volume growth of 51% during the COVID-19 pandemic and 18% during the global rate-hiking cycle. This growth is attributed to rental increases that have consistently outpaced inflation and interest rates, making it a compelling choice for income-oriented investors.
Demographic shifts, such as shrinking household sizes and increased urbanisation, are driving demand for rental housing across APAC. Government policies supporting immigration and labour mobility further bolster this demand, creating a favourable environment for institutional rental housing. However, the report stresses that excess returns will increasingly depend on how investors enter, operate, and scale their assets.
The report also notes the diversity within the APAC living sector, with each market offering unique risk-return profiles and entry strategies. For instance, Japan’s multifamily market relies on direct acquisition, whilst Australia’s purpose-built student accommodation (PBSA) and coliving sectors offer development and conversion opportunities. In Singapore, the coliving sector focuses on adaptive reuse, and Hong Kong’s PBSA is driven by policy reforms.
CapitaLand’s research emphasises that operational capability and scale are becoming core sources of alpha, with regional platforms enhancing sourcing, standardising design, and optimising operations. As the sector continues to mature, these factors will be crucial in delivering sustainable growth and long-term income resilience.
