As Singapore continues to invest in infrastructure, i.e. new mrt lines, new town centres etc. one thing is certain, the population will continue to grow. When we look at the density in Hong Kong, Singapore still has quite some way to go. With population, inflation is a certainty, so we need to invest to make sure our money doesn’t depreciate over time. So what are the investments that are driven by population growth?
1. Healthcare Services / Healthcare REITs
While healthcare services do not trade at a cheap valuation, they will be a primary beneficiary not just from population growth as it is a necessity. The ageing population also requires more healthcare services than a young population. Healthcare REITs can also be a major beneficiary as they own the hospitals which are rented out to healthcare providers.
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Some examples are Raffles Medical/Parkway REIT
2. Consumer Goods
With population growth, consumption of consumer goods will definitely increase. The general public has also gotten used to the fact consumer goods will increase in price over time due to inflation.
Some examples are F&N/QAF
3. Consumer Retail
Like consumer goods, consumer retail especially supermarkets and hypermarkets are the key places for consumers to buy their daily necessities.
Some examples are Dairy Farm/Sheng Siong
As population grows, there will be more and more people carrying mobile phones and using internet services. There are only 2 companies which can provide bundled services of mobile, internet, Pay TV etc.
Some examples are Singtel/Starhub
5. Retail REITs
Retail sector is most driven by population as compared to office and industrial space. In particular, suburban malls are very defensive as they provide daily necessities for the people living in the area. As population density increases, the malls will get more foot traffic, therefore leading to higher rentals as well.
Some examples are CapitaMall Trust / Fraser Centerpoint Trust
About the Author
Calvin Yeo is the Managing Director of Doctor Wealth Pte Ltd (www.drwealth.com), which is an online financial planning platform. He is also a Chartered Financial Analyst (CFA) as well as Certified Financial Planner (CFP).
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