As markets reel under the pressure of unpredictable U.S. trade policies and rising geopolitical risks, volatility has become a defining feature of the current investment environment.

In such a landscape, thoughtful asset allocation becomes a cornerstone strategy—not just for mitigating risk, but for achieving a durable balance between protection and growth. Among the diverse range of options available, real assets stand out as a key building block of resilient portfolios.

Andy Yin, Managing Director of Olive Private Equity, frames this opportunity with clarity: "In the context of escalating global trade friction and accelerating economic fragmentation, asset allocation strategies must prioritize both geographic and currency diversification. These two dimensions are central to managing systemic risk in a multipolar world."

Conventional portfolios concentrated in a single currency—particularly the U.S. dollar—or a single economy are increasingly vulnerable to geopolitical shocks and currency volatility. In contrast, diversifying into high-quality real assets in mature Asia-Pacific markets, such as Japan and Singapore, offers investors a form of structural resilience.

"Allocating to assets denominated in yen or Singapore dollars introduces valuable currency hedging benefits," Andy explains. "The Japanese yen offers low correlation and defensive characteristics during risk-off periods. Singapore, on the other hand, provides a stable legal environment and exceptional asset liquidity, underpinned by its role as a regional financial hub."

Ultimately, he notes, the objective is to construct a portfolio that combines geographic reach and monetary diversification—a strategy designed to serve as a long-term safety cushion amid macroeconomic uncertainty.

In a recent online discussion titled "Asia-Pacific Safe Havens: Opportunities in Serviced Residences," Andy Yin joined John Zheng, Head of Private Capital Markets at CapitaLand Investment, to examine how defensive real assets can help investors manage risk and sustain returns through volatile cycles.

The conversation explored the evolving landscape of real estate, the characteristics of commercial property as an asset class, and CapitaLand's investment experience across Asia. Key investor questions were addressed, including:

What long- and short-term trends should investors be watching?

Which asset classes are truly equipped to weather multiple cycles?

Where does the real estate market currently stand in terms of valuation?

"Security" and "Trend Alignment": The Next Frontiers in Asset Allocation

Andy observed that the world is undergoing a deep structural shift. The age of globalization is gradually drawing to a close. The collaborative, growth-oriented global framework that defined the past 80 years is giving way to a more confrontational and fragmented environment. The progression we witnessed over the last century, from minor trade disagreements to economic confrontation, and ultimately to full-scale military conflicts, represents a historical pattern that none of us have personally experienced in our lifetimes.

He emphasized the importance of adjusting expectations, the cooperative, win-win global landscape that investors once took for granted may not return within our lifetime.

Given this new reality, Andy advises clients to be clear-eyed about risk, and to adapt their portfolios accordingly. Two guiding principles emerge:

Firstly, Security: Diversification should not only span asset classes, but also industries and geographies.

Secondly, positioning with emerging trends: Andy identified six key macro themes driving future investment opportunities. For the long term, he highlighted the acceleration of artificial intelligence, growing instability in global monetary systems, and continued deglobalization. In the nearer term, he pointed to attractive valuations in select credit markets, persistent underinvestment in energy infrastructure, and regional economies poised to benefit from shifting China-U.S. trade patterns.

Andy noted that capital, trade, and supply chains are flowing out of China into neighboring economies. High-end manufacturing is migrating back to Japan and South Korea; mid- to low-end production is moving to Southeast Asia. Trade is increasingly ASEAN-centric, while capital flows are concentrating in Singapore.

In a high-volatility environment where both equity and bond markets are prone to disruption, real assets—with their physical, enduring value—are uniquely positioned to provide long-term cycle resilience. Two categories, deserve attention: essential infrastructure assets and premium commercial real estate in key urban centers. These physical investments provide natural protection against market turbulence while offering the potential for stable returns across economic cycles.

Three Pillars Supporting Real Estate Opportunities

There are three structural reasons why the current environment favors selective investment in the Asia-Pacific property market:

1. An attractive entry point

After the pandemic and a period of sharp interest rate hikes, real estate valuations in many regions now offer a compelling margin of safety.

2. Potential for re-rating

As central banks pivot toward monetary easing, the potential for valuation recovery is growing, especially in advanced Asian markets such as Singapore, Japan, and Australia. These gateway cities are benefiting from the return of manufacturing, healthy economic growth, and inflows of both immigration and tourism, all of which support rental demand.

3. A resilient sub-sector: serviced residences

Within the real estate world, serviced apartments and rental housing have demonstrated resilience.
Markets like Tokyo and Singapore are characterized by limited new supply and increasing demand. As CPI continues to rise, rental income in this segment is likely to experience sustained upward momentum.

What is Serviced Residences?

John explained the unique position of serviced apartments, which bridge the gap between traditional hotels and residential leasing.

Serviced residences offer better cost efficiency than hotels and stronger hygiene and safety standards than conventional housing. More importantly, they combine short-term and long-term lease models to provide income stability and operational flexibility.

Unlike hotels, which rely almost entirely on short-term stays and are highly exposed to business cycles, serviced residences generate more predictable income, especially from corporate tenants.

They also operate more efficiently, with lower staffing needs and fewer high-touch services.

"During the worst of the COVID-19 pandemic in 2020, CapitaLand's global serviced apartment portfolio still achieved an average 38% occupancy rate. Post-reopening, that figure swiftly rebounded to 90%," said John. "That resilience is why we continue to invest in the space."

CapitaLand's Approach: Value Creation Through Asset Repositioning

John explained that CapitaLand, backed by Temasek and listed in Singapore, manages over USD 100 billion in assets globally, with more than 90% of that footprint in Asia. Its two most critical markets: Singapore and China.

CapitaLand's serviced residence brand, The Ascott Limited, manages nearly 1,000 properties worldwide. Many of its owners are longstanding institutional partners, offering exclusive off-market opportunities when they look to exit.

"We don't just acquire stable assets and collect rent. Our model is to acquire underperforming properties, deploy capital strategically, and reposition them based on local demand dynamics."

These transformations draw on deep market knowledge. For example, older business hotels in younger, trend-conscious districts may be converted into co-living spaces tailored for modern travelers or digital professionals.

CapitaLand leverages Ascott's direct sales platform to improve occupancy, raise rental rates, and ultimately drive income and valuation growth.

As geopolitical tensions reshape the global investment landscape, more capital is turning toward Asia, not just for returns, but for reliability.

For years, global portfolios have leaned heavily on Europe and the U.S. But as those regions face growing instability, investors are increasingly seeing Asia as the next cycle's core beneficiary. We believe this trend will persist over the next three to five years.