Investor interest in wellness real estate is increasing steadily, with South-east Asia presenting significant opportunities within its health and wellness industries, according to a report by CapitaLand Investment (CLI).
The report, titled A Well of Opportunities: Wellness and Healthcare in Southeast Asia, highlights the region’s potential in the wellness and healthcare real estate sector, driven by a global boom in the wellness economy. The report emphasizes that South-east Asia is well-positioned to capitalize on the growing trend of health and wellness as a lifestyle priority, making it a hub for wellness innovation and investment. The region’s wellness and healthcare-related real estate sector is evolving rapidly, especially in markets like Singapore, Malaysia, and Thailand.
The growth of the wellness economy, fueled by increased awareness and demand for health-focused products and services, has created unique opportunities for investors to tap into long-term, sustainable investments. These opportunities are bolstered by favorable economic and demographic factors in the region, including an aging population, rising disposable incomes, and growing medical tourism.
Globally, the wellness economy has seen significant growth since the pandemic, with consumers more focused on health and wellness. The wellness real estate market has also expanded rapidly, growing by 59.9% between 2020 and 2023 and projected to continue rising to US$913 billion by 2028, according to CLI.
Investors are increasingly drawn to real estate that integrates wellness and healthcare, such as apartments, hotels, senior living developments, and medical use facilities. The report notes that the contribution of these assets to total real estate transactions has grown across regions since 2014.
In response to this growing demand, CLI launched the CapitaLand Wellness Fund in 2023, focusing on investments across the healthcare, medical, wellness, and preventive care spectrum. The fund includes a 50% interest in lyf Bugis Singapore, a lodging property with various wellness programs.
South-east Asia, as one of the fastest-growing wellness real estate markets in the Asia-Pacific region, offers substantial untapped potential. Real estate operators are looking to expand through strategic partnerships, infrastructure investments, and mergers and acquisitions to meet the rising demand for wellness and healthcare services.
The region’s wellness boom is driven by factors such as rising affluence, an aging population, and its growing reputation as a medical tourism destination. South-east Asia’s population aged 65 and above is expected to grow by 32.7 million by 2035, leading to increased demand for wellness services, preventive medicine, and senior housing.
Countries like Singapore and Thailand are expected to see the most pronounced demographic shifts, while the region’s economic expansion is predicted to outpace major global economies by 2035. Consumer healthcare spending in South-east Asia is expected to more than double from US$92 billion in 2023 to US$234 billion by 2035.
The report also highlights the role of medical tourism in driving growth in the region’s wellness real estate sector. With its favorable climate, culture, and lower service sector costs, South-east Asia is becoming an attractive destination for international healthcare consumers, seeking services such as health screenings, cosmetic surgery, dental care, and specialized treatments.
Countries in the region have developed specific areas of expertise in the medical field. Thailand is known for cosmetic and reconstructive surgeries, Malaysia for dentistry and fertility treatments, and Singapore for oncology, ophthalmology, and neurology services.
The combination of rising affluence, shifting demographics, and the growing medical tourism industry is expected to continue fueling growth in South-east Asia’s wellness and healthcare real estate sector.
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