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INFLUENCING FACTORS AFFECTING REAL ASSETS INVESTMENT
Real assets investment has delivered consistent returns with low risk, even during economic downturns. However, global warming and its impacts of climate change and changes of the way we live and work have resulted in dynamic structural shifts that affect the investments of various real asset classes. As real assets investor, we carefully consider the impacts of these structural shifts to adjust risk management and timely capture new investment opportunities arising from economic and social transformation as a result of such structural shifts.
Three Major Dynamic Shifts Influencing the Investments of Real Asset Classes
The global transition from fossil fuel to renewable energy to combat climate change and reduce global warming effects
The change in mobility to work remotely using communication networks, as remote working has become more acceptable after COVID-19
The deployment of advanced technologies in digital transformation, artificial intelligence, renewable energy generation and storage, and electric machinery
1. Effects of the Global Energy Transition on Real Assets Investment
The world is shifting from fossil fuel to renewable energy to reduce global warming effects and combat climate change. This trend affects our investment in infrastructure, energy, agriculture, and how we treat our environment in project development.
In line with the global energy transition, we invest in wind, solar, biomass, hydropower, and biofuels instead of oil and gas in the energy sector to generate clean energy for infrastructure, real estate, and natural resources development. We use electric or solar operated machinery and vehicles where possible in our projects, tapping into abundant source of solar energy to save cost and protect the environment.
Additionally, we take great care and consideration of all influential issues affecting our environment and communities in planning, design, development, and operational activities of our projects to reduce greenhouse gas, mitigate the impacts of climate change, and effectively manage natural resources to ensure investment’s sustainability.
These influential issues include but are not limited to climate change, renewable energy generation and usage, water usage and conservation, deforestation, biodiversity, carbon emissions, air and water pollution, and plastic and waste management.
2. Effects of the Current Mobility Trends on Investment of Real Assets
2.1 Effects of Remote Working on Telecommunication Industry
As the global trend of remote working has gained acceptance and continued to rise to 27% by September 2022 (US Bureau of Labour Statistics), the demand for telecommunications infrastructure, including high-speed internet connections, virtual private networks, VoIP technology, cloud computing, and cyber security, has significantly increased to enable seamless communication, data transfer, and collaboration over long distances.
This global trend, together with maturing technologies and networks at lower costs and risks, have opened up new investment opportunities globally in the ICT (Information and Communication Technology) sector. Maylan continues to monitor and adjust the market demand and risks for ICT infrastructure investment accordingly to reflect the dynamic changes of the ICT asset class and capture new investment opportunities.
2.2. Effects of Remote Working on the Real Estate Industry
The rise of remote working has had a significant impact on the real estate industry, creating both challenges and opportunities for investors in the real estate business. Demand for office space in large urban cities has continued to fall globally since the COVID-19 Pandemic, while demand for new homes in the suburban areas outside the cities has continued to rise. This global trend is happenning because more people switch to work from home and move away from the large and crowded cities to more affordable and spacious homes in the suburban areas. For examples, from mid-2020 to mid-2022, New York City lost 5% of its urban core population, and San Francisco lost 6%.
At Maylan, we continue monitoring the impacts of remote working in the real estate industry to finetune our investment portfolios in this sector accordingly, optimizing risk management and capturing new investment opportunities.
3. Effects of Technology Trends on Investments of Real Assets
The current technology trends in digital transformation, artificial intelligence, renewable energy generation and storage, electric machinery and vehicles transformation and deployment in a wide range of industries to achieve automation, better efficiency, and lower operational costs affect the investments of real assets. As technologies in these areas evolve, their applications in industrial processes and end products in infrastructure, mining, agriculture, and real estate development, including building construction heating and cooling systems, electric cars and transport vehicles, hybrid agriculture and mining machinery, will continue to improve and change.
As investor and developer in these industries, we strive to stay abreast of technology advances and deployments in our project development and operational processes to maintain a competitive edge and best profitability.
