A stable political situation, secure business environment and strong growth potential have allowed Singapore to retain its crown as the most attractive market for infrastructure investors, according to Arcadis.
The consultancy's latest bi-annual Global Infrastructure Investment Index report, which ranks the top 41 markets for infrastructure projects, features Singapore in pole position for the third time in a row.
The country ranked consistently high across business, risk, infrastructure quality and financial indicators. Despite a slightly lower score for economic factors, it continued to benefit from a strong overall economic environment, Arcadis said.
The report pointed out that while most projects in Singapore have traditionally been publicly funded, the country is seeking to boost involvement from private institutional investors.
“Work is underway in the city-state to improve understanding of infrastructure as an asset class to make it more attractive to investors, part of which includes the development of new benchmarking tools,” Arcadis said.
It noted that Singapore offered a solid deal flow in the healthcare and transport sectors, with projects such as the expansion of Changi Airport through the construction of a fifth terminal.
Currently, Singapore invests around 5 percent of its GDP on infrastructure, equivalent to $20 billion in 2015. By 2020, it aims to invest 6 percent of GDP, which would allow it to disburse $30 billion a year.
Another noteworthy country in Asia is Malaysia, which rose in the ranking to the fifth place globally and the second place within the Asia Pacific region. The report highlighted that strong economic performance and continued long-term focus in infrastructure have made the market attractive for investment.
In the short term, however, Arcadis noted that risks including currency depreciation and a high-profile corruption scandal had delayed some projects.
“In the region as a whole, there is clearly a lot of social and public need for new infrastructure,” said Graham Kean, head of client development at Arcadis Asia. “There are a whole host of project ideas and plans, but they are not investible or bankable enough, which is the basic problem.”
“We have already seen Asia-based investors taking positions globally as infrastructure becomes an increasingly popular asset class for private sector investors, particularly in times of increased risk and uncertainty,” he added.
On the list of the top ten most attractive countries for long-term infrastructure investment are also Qatar, the UAE, Canada, Norway, Sweden, the USA, the UK and Netherlands.