Australia is seeing some of its biggest deals driven by Asian investment, especially in sectors like digital infrastructure and energy. At the same time, Singapore is cementing its place as the region's financial hub, playing a key role in the flow of global and intra-Asia investment.
In the latest episode of KWM's View from Asia, Nicola Yeomans connects from Singapore with Will Heath in Melbourne. They share fresh insights from the AFR Asia Summit, explore what's driving Asian investors and take a close look at the sectors and regulations shaping the region's future.
Five things to know about Asia's investment scene
1. Digital infrastructure is leading the way.Digital infrastructure, especially data centres, is attracting huge interest across Asia Pacific. Big-ticket data centre deals show Asia's commitment to supporting the region's tech backbone—and Australia is a key destination.
'Digital infrastructure and data centres are continuing to be a sector of focus. We actually think we'll see some Australian investment into Asian data centres in the year or so to come.' – Nicola Yeomans
2. Regulation is the deciding factor. Investors are watching Australia's regulatory settings closely. Improvements are being made, but concerns about deal timing and coordination between the Foreign Investment Review Board (FIRB) and the competition regulator, the ACCC, remain.
'No investor likes time killing deals. That's something that we're still seeing, that needs to be ironed out.' – Will Heath
3. Intra-Asia investment and cooperation are growing. Across the region, capital is flowing not just into Australia, but between Asian markets. Japan and Korea are working more closely together. Singapore is cementing its role as the region's investment hub.
'That's certainly a theme we're seeing—Asia markets, Asia regulators, working together to look at how they manage the response to US policy.' – Nicola Yeomans
4. Japanese investors are stepping up. Japanese capital is moving into new areas. Insurance and pension funds are now looking beyond traditional assets, considering direct investments and co-investments in sectors like real estate and digital infrastructure.
'The trends are looking strong for Japanese investors. There's a view in Japan that if the policy settings stay right, that money will come down to Australia.' – Will Heath
5. Japan's regulatory reforms drive more assertive deals. Japan is seeing more assertive M&A activity, thanks to better governance and increased transparency for listed companies. This is leading to more competition for control and a higher level of inbound and cross-border deals.
'There's a growing assertiveness for acquisitions inbound into Japan and competition for control. That's a new theme that has come as a result of the better governance and better disclosure.' – Nicola Yeomans
What's next?
Expect more capital to move across Asian borders, stronger government focus on cross-border investment and regulation to play a bigger role. Investors and businesses need to stay agile and keep an eye on policy settings.
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