The demand for Asian infrastructure is increasing as these countries grow and investment in the asset class is key to capturing this growth, according to Vijay Pattabhiraman of JP Morgan.
Pattabhiraman, chief investment officer for Asian infrastructure in the global real assets group of JP Morgan Asset Management, said: “Asian infrastructure is becoming increasingly attractive as a proxy for capturing the longer-term growth outlook of the various Asian economies in light of inflation and rate rises.”
He said demand of all types of infrastructure has heightened as a result of urbanisation, the expansion of a wealthier middle class and increasing domestic consumption which have been the key drivers of Asia’s strong growth trends.
“The increased demand for infrastructure, which follows years of underinvestment has created a situation where supply is unable to keep pace with demand.
"Emerging Asia’s large economies, such as China and India, are significantly behind their more developed peers in the west, which we view as a tremendous opportunity in the upcoming years,” said Pattabhiraman.
He cited India's low electricity supply and growing demand for coal from Indonesia as examples of investment opportunities.
Pattabhiraman said: “With India building power stations, Indonesia selling the required coal and China importing everything in between, it is clearly evident Asia is booming and private investment, as well as government spending, is funding this much needed spend on infrastructure.
“It is evident Asia is growing and infrastructure is central to its development. While, immediate impacts such as rates rises and inflation are increasingly a concern for some investors we believe infrastructure investing is capturing the long-term growth outlook.”
©2011 funds europe