Knight Frank, the independent global property consultancy, today launches its inaugural New Frontiers: The 2018 Report 《新兴领域》, aimed at helping investors understand potential opportunities that China’s Belt and Road Initiative (BRI) could generate beyond its borders.

The report’s Belt and Road Index assesses 67 countries considered core to China’s initiative. The index is classified into six categories: economic potential, demographic advantage, infrastructure development, institutional effectiveness, market accessibility and resilience to natural disasters. Values for these six categories have been normalised from the various data sources and are assigned specific weightage that commensurate with their perceived importance to investment decisions.

Highlights of Belt and Road Index:

• Singapore, Qatar and United Arab Emirates top the Index.
• Southeast Asian countries rank favourably, especially Malaysia (ranked 6th) and Vietnam (ranked 19th). Apart from Singapore, many Southeast Asian countries are confronted with major infrastructure financing deficits. Chinese companies are well-placed to plug those gaps.
• Middle Eastern countries diverge in their BARI rankings, reflecting the potential and challenges that co-exist in the region. While Qatar, UAE, Bahrain, Oman and Saudi Arabia are in the top half, Iraq and Yemen sit in the bottom half.

Notably, Malaysia (US$2.37 bn) is one of the top recipients of Chinese outbound real estate investment into Belt and Road countries, totalling US$10.2 billion over the last four years, alongside Singapore (US$3.87 bn) and South Korea (US$2.74 bn). Slightly over half of this total amount (US$5.2 bn) was spent on purchasing development sites, while another third (US$3.1 bn) was spent on office building.

Nicholas Holt, Head of Research, Knight Frank Asia Pacific, says, “The Belt and Road Initiative is a long-term strategy that will play out over decades, not simply years. Therefore, it will take patient capital that is prepared to look at new frontier markets with greater levels of country risk and at greenfield projects that have a long-term time horizon. For many, this transition away from pure-play, low-risk investment, requires detailed market knowledge and advice in terms of deal sourcing, evaluation, execution and asset management.”

Kevin Coppel, Regional Head, Knight Frank Asia Pacific, says, “The Belt and Road Initiative is one of the clearest manifestations of China’s vision and influence. The infrastructure and investment underpinning the BRI will streamline trade flows and lift economic activity in much of Asia, the Middle East, and North and Eastern Africa. While the vision will bring huge opportunities for investors and developers, the BRI will also change the face of corporate China, which will have an enormous influence in the 21st century as Chinese brands become household names around the world.”

For more information on the findings or to discuss potential opportunities that China’s Belt and Road Initiative (BRI) could generate beyond its borders, phone or email Nicholas Holt, Asia-Pacific Head of Research Knight Frank via the contact details below. 

Click here to download the Knight Frank New Frontiers: The 2018 Report

Sources: Knight Frank Malaysia

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