Forbes cites figures that show that growth of the middle classes between 2010 and 2030 will be static in Europe at around 680m, will fall in North America to 322m from 342m, but in Asia will explode to a massive 3.2bn over the same 20-year period, from around 562m in 2010. "A young, urban, middle class in developing Asia will become the dominant source of investment opportunity and capital," he writes. "The real estate industry has already woken up to the fact that this new middle class will want to spend in shops, buy houses, use banks and other service providers, who operate from offices driving the demand from occupiers for buildings. They will also want to invest and provide for their old age, creating a demand for investment products, new distribution channels, new sales and marketing needs. The broader life insurance and pensions industry will change dramatically over the next decade. The real estate industry needs to adapt too to match the changing business model of those who provide for old age."

 

Forbes says a predominantly defined-contribution approach to pension insurance around the world on this basis will create significant challenges for real estate. "Many of the big international insurers are looking at how to better tap into these emerging pools of capital, and this should provide opportunities for real estate investment managers," he says. Increasing liberalisation of regulations coupled with harmonisation should increase opportunities. Chinese insurance companies are one example. Until recently, they were not able to invest in real estate as an asset class but will soon be permitted to do so both domestically and internationally. The first instance may be the widely-expected acquisition of the Lloyd’s insurance building in London by Chinese life insurance company Ping An, "the first evidence of what are likely to be many overseas forays by Chinese insurers."