Sustainable real estate asset investments to grow in South-east Asia

THERE is an expected rise in sustainable multi-family real estate asset investment in markets such as Thailand and South-east Asia, said property player Asia Capital Real Estate (Acre), as it taps green financing to support this emerging segment.

It comes as UOB Thailand on Monday said it has provided Acre with a 675 million baht (S$28.8 million) green loan to develop Homa Phuket Town, an environmentally-friendly and affordable residential rental apartment complex in Phuket.

In the next five years, Acre aims to invest more than US$250 million to develop six Homa projects across Thailand, in partnership with Noon Capital, a Thai multi-family housing property developer, said the press release from UOB. They also plan to introduce the brand to other markets across the Asia-Pacific region.

Blake Olafson, the founder and managing director of Acre and Homa, said that sustainable multi-family real estate asset investment is a new concept that Acre is introducing to the Thai market. 

"Globally, multi-family real estate has proven to be extremely resilient and has demonstrated its ability to generate stable performance amid the Covid economic slowdown when compared with other asset classes such as office or retail spaces," he said.

"Investors continue to demand a focus both on programmatic capital deployment and the benefits that sustainability brings in the form of increased long-term returns on investment while reducing the impact on the environment."

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Founded in 2011, Acre is a real estate private equity firm managing capital for institutional and family office investors through a series of private equity and debt funds. Its website said it has an asset under management exceeding US$1.8 billion, with offices in Singapore, Atlanta, and New York. 

The loan was approved under the UOB Real Estate Sustainable Finance Framework, which is dedicated to supporting sustainability-related projects in Asia's real estate sector.

The financing framework sets out the eligibility criteria, sustainability metrics and performance targets, which the bank will monitor under the framework, for companies to meet.

Homa Phuket Town is a 505-unit rental housing development designed to meet the green building standards of Excellence in Design for Greater Efficiencies (Edge Advanced) established by the International Finance Corporation.

With solar panels, LED lighting and other energy-efficient appliances, the development aims to achieve more than a 40 per cent reduction in energy and water consumption compared to conventional buildings, and help reduce around 325 tonnes carbon dioxide-equivalent in greenhouse gas emissions per year.

The project will be the first residential rental property in Thailand to obtain a Leadership in Energy and Environmental Design (LEED) certification upon completion in October this year, the press release said.