Asian investors redefine diversification with portfolio-level thinking

Sophisticated investors across Asia are rethinking what diversification means. Instead of spreading capital across disconnected exposures, they are demanding portfolios that behave as cohesive systems—where real assets, credit, and alternatives interact strategically alongside traditional investments. The result is a shift away from siloed bets and towards integrated, agile strategies.‍

“Investors want real-world guidance, not layered process,” said Jagjit Singh Matharu, Managing Director for Key Clients and Institutions at Lighthouse Canton. Clients increasingly expect bilateral engagement, where advice and execution are delivered directly and swiftly. “They value decisions that are counselled and executed with discretion, clarity and precision,” Matharu said speaking to LC IDEAs: Views & Insights, adding that much of the industry has become too process-heavy to meet those expectations.‍

The shift also reflects frustration with old advisory models that focused narrowly on sourcing deals. Investors, particularly family offices, now want more.

‍“Our work spans markets and asset classes, from structured debt in Europe to private equity hospitality deals in ASEAN,” said Amrit Singh, Board Member and Global Head of Key Clients and Institutions at Lighthouse Canton. “What defines our approach is not just access, but alignment.”‍

Singh described this as a “portfolio-level mindset that blends institutional discipline with entrepreneurial agility,” noting that Lighthouse Canton’s own role as a proprietary investor shapes how it advises clients.‍

Trends shaping allocations‍

That generational change is reinforcing broader industry shifts.

According to CBRE, Asia Pacific institutional investors increased their allocations to real assets in 2024 even as global transaction volumes fell 20%. The region remained more resilient than North America and Europe, with logistics and hotels together accounting for over one-third of total activity.

Source: CBRE Investment Report 2025‍

Matharu said much of the new activity is being driven by private wealth and family offices, which are increasingly comfortable making direct cross-border investments. “We are seeing a growing trend of bilateral transactions where clients prefer discretion and efficiency over long auction processes,” he noted.‍

Singapore’s status as a jurisdiction also supports this appeal. ‍

“Singapore is widely regarded as a transparent and secure jurisdiction to acquire property due to streamlined processes and robust legal protections for both local and foreign buyers,” said Lee Chau Hwei, partner at international law firm Withers. He pointed to statutes such as the Land Titles Act and Residential Property Act, noting that Singapore’s land registration system is based on the Torrens system which provides a central register of land titles so that once a person is registered as proprietor of land, their title is considered indefeasible – meaning ownership is guaranteed and cannot be challenged except in limited circumstances. The foregoing, combined with efficient digital conveyancing systems for property transactions, reinforces investor confidence.‍

This dovetails with a sharper focus on sectors where allocations can be scaled over time rather than made as one-off bets. Real estate, in its many forms, has become one of the testing grounds for this approach. Within real estate, investors are casting a wider net too with hospitality, logistics and life sciences emerging as the most active segments, each offering a distinct mix of income stability, scalability and thematic growth.

‍HOSPITALITY AND THE PRIVATE CAPITAL ALLOCATION‍

Singapore's hospitality sector is benefitting from robust tourism recovery. According to the Singapore Tourism Board, tourist arrivals rose 2.4% year-on-year to 10 million in the first seven months of 2025. This figure is expected to grow to 18.5 million visitors by the end of the year—97% of pre-pandemic levels, generating SGD30.5 billion in receipts. This demand has supported operating metrics, with average daily rates maintaining in excess of 2019 figures and occupancy rate holding steady at above 75%‍

Source: JLL‍

“Hospitality has become such an attractive hedge against inflation,” said Ling Wei Tan, Senior Vice President at JLL Hotels & Hospitality Group. “Owners can adjust average daily rates in real time, unlike offices locked into leases, which gives hotels resilience in volatile cost environments.”‍

Generational wealth transfer is also shaping investments in this sector. Tan shared, “Historically, these hotels were tightly held by generational owners. But in the last few years, we are seeing the second and third generation coming in with a different mindset. They want to recycle capital, and are more open to letting go of legacy assets.” ‍

This move to diversify portfolios is reflected in the demand for boutique hotels, with some such as Duxton Reserve and 21 Carpenter in Singapore trading under SGD 100 million, becoming attractive entry points for family offices and first-time buyers. Earlier this year, Lighthouse Canton was portfolio advisor to Lotus One Investment on its SGD80 million acquisition of Duxton Reserve, a 49-key heritage property in Tanjong Pagar. The deal, averaging SGD1.63 million per room, underscored both the premium private investors are willing to pay for culturally significant assets and the growing role of family offices in Singapore’s hotel market.

Matharu said the attraction is not only financial. “For many investors, hospitality is as much about lifestyle and prestige as yield,” he observed. “That combination makes it a unique addition to diversified portfolios.”‍

COMMERCIAL REAL ESTATE ADAPTS TO STRUCTURAL SHIFTS‍

Outside hospitality, commercial and industrial real estate are re-emerging as important allocations as interest rates ease. Savills noted that with borrowing costs in Singapore now falling close to or even below net yields for the first time since 2022, the door has opened again for institutional investors. Three-month SORA stood at 1.5% in early September, translating into all-in funding costs of 2.5% to 3%—leaving positive spreads across asset classes. Net property yields currently average about 3% for hotels, 3.75% for offices, 4.5% for retail and more than 6% for industrial.‍

Strata office space continues to attract high-net-worth individuals and family offices, who are less sensitive to rental yields and view Singapore as a safe-haven market, shared Savills.‍

Industrial demand has also proven to be resilient. Ambient and cold-storage logistics remain in high demand from food manufacturers, wholesalers, distributors and central kitchens serving dense urban populations. ‍

Matharu said the appeal lies in the durability of these assets as investment options. “These are not speculative assets,” he explained. “They are backed by structural consumption trends that are not going away.”‍

Savills’ Jeremy Lake, Managing Director of Investment Sales & Capital Markets, described Singapore as “Asia’s Switzerland and a safe harbour for UHNW investors in the region.” He added that the sharp fall in interest rates in 2025 was “a very pleasant surprise,” reinforcing the city’s draw as a capital destination.‍

LIFE SCIENCES REMAINS A FOCUS

Life sciences real estate is quickly maturing into a mainstream allocation for Asian investors, thanks to its stable income and defensive profile. The sector offers attractive yields with long-term leases that typically include escalation clauses, low vacancy risks due to high tenant stickiness, and predictable cash flows that are relatively insulated from economic cycles.‍

Data from National Council of Real Estate Investment Fiduciaries (NCREIF) reveals life sciences assets have earned higher total returns than most property types across various time periods, especially against offices.‍

The Neovantage Innovation Parks platform in Hyderabad’s Genome Valley illustrates the trend. Lighthouse Canton acquired the assets in 2016 from Alexandria Real Estate, initially floating the venture with private capital. In a milestone transaction in 2021, Canada’s La Caisse bought the portfolio alongside Lighthouse Canton, marking the first time a global pension fund invested into life sciences R&D real estate in India.

Today, Neovantage, a clear leader in the life sciences real estate segment, counts some of the top global and domestic pharmaceutical companies as its clients, and secured HSBC’s first-ever green loan in India’s life sciences real estate sector in 2024. The combination of sustainability credentials and tenant resilience has made it a model for how global capital can access the sector.

“Our build out of Neovantage platform is a clear example of how we approach real assets with long-term alignment, institutional discipline and thematic conviction,” said Sanket Sinha, MD & CEO, Global Asset Management for Lighthouse Canton. “We are not just aggregating investments. We are building platforms. Across alternative assets, we seek to create scalable, high-quality exposure that global investors can underwrite with confidence.”‍

The platform exemplifies how diversification is moving beyond traditional property types to capture high-growth themes such as health innovation. For investors, Sinha said, it represents an allocation that is both defensive and forward-looking.‍

DIVERSIFICATION AS ORCHESTRATION‍

Ultimately, real estate is only one part of the story. Investors are combining allocations to hospitality, logistics, and life sciences with exposure to private credit, alternatives, and public markets, all viewed through a portfolio-level lens.‍

Matharu said this orchestration is what defines the new phase of diversification. “Sophisticated investors are less interested in trophy assets or rigid structures,” he noted. “They want portfolios that can adapt across cycles, integrate exposures, and respond quickly to shifting conditions.”‍

For Singh, that requires moving beyond access. Alignment, he argued, is the true differentiator: constructing portfolios that serve long-term objectives while retaining agility to capture opportunities. In that sense, diversification is no longer just about adding new assets—it is about engineering how the pieces fit together.