Reports indicate that the real estate wellness market has become the fastest-growing. This industry focuses on residential and commercial buildings proactively designed, built, and operated to support the holistic health of their residents.
As the market continues to expand, investors turn to new opportunities presented in Southeast Asian nations, regions that have a high interest in health and growing household buying power.
The Rising Interest in Real Estate Wellness
According to Fortune, real estate wellness has become the fastest-growing market in wellness, a $56 trillion global industry. As part of this trend, developers seek to incorporate health-centric amenities into real estate projects, such as biofiltration systems that improve indoor air quality and outdoor exercise facilities.
The report indicating this market growth comments on how the COVID-19 pandemic may have sparked a global interest in health and wellness design.
“The COVID-19 pandemic has forced us to reckon with how our health is shaped by our built environment, and wellness real estate will continue to be a winner amidst this shift,” said the report authors, Katherine Johnston and Ophelia Yeung.
The authors continue to comment that wellness design has expanded outside of resorts and luxury services, stating, “Across the world, there is rising demand for buildings, homes, and communities that help people to live a healthier lifestyle and protect their health, creating vast potential for the wellness real estate sector.”
Growth in Wellness Fueled by the Pandemic
Since the pandemic, interest in wellness certifications has grown rapidly among developers, as noted in the Global Wellness Institute (GWI) report. Wellness real estate has surged from $225.2 billion in 2019 to $438.2 billion in 2023, demonstrating an 18.1% annual growth rate within that time.
The report additionally forecasts that the wellness real estate market will grow by 15.8% annually from 2023 to 2028. If accurate, this will mean that wellness real estate will approach the trillion-dollar mark by the end of 2028.
The Unique Opportunities in Southeast Asia
Although the GWI report found that the US, the United Kingdom, and China remain the three largest national markets, investor interest in wellness real estate is swiftly rising. According to The Business Times, this region presents unique opportunities for wellness real estate.
Patricia Goh, Chief Executive of Capital Land Investment (CLI) Southeast Asia Investment, stated that “the wellness and healthcare sector in Southeast Asia (is) driven by strong growth fundamentals such as an aging population, rising disposable incomes, and increasing medical tourism.”
CLI launched the CapitaLand Wellness Fund in 2023 to capitalize on this market. This marks the Singapore-based investment company’s first wellness and healthcare-related fund in Southeast Asia.
CLI’s fund focuses on investments across the healthcare, medical, wellness, and preventive care spectrums. In the third quarter of 2024, the fund invested in an orthopedic hospital in Bangkok. According to CLI, this project, which is expected to open in 2027, will aim to meet the “growing demand for musculoskeletal treatments” among Thailand’s increasingly aging population.
A Region With Growing Consumer Power
As reported by The Business Times, forecasts place Southeast Asia’s average gross domestic product growth rate at 4.3 percent from 2024 to 2035. This growth outpaces Asia-Pacific, the US, Europe, and the global rate of 2.5 percent.
Goh stated that, in line with this expected economic expansion, consumer healthcare spending in Southeast Asia is poised to more than double from $92 billion in 2023 to $234 billion by 2035. This reflects a strengthening buying power among households in this region, in tandem with the increased demand for health services.
In addition to investments by CLI, real estate investment entities are continuing to explore development in wellness real estate in countries such as Singapore, Thailand, and Malaysia, each with unique healthcare focuses.
