Aerial view of downtown Singapore. (Photo: Chensiyuan / Wikimedia Commons)
Singapore has retained its position as the world’s most attractive market for infrastructure investment, according to the third edition of the Global Infrastructure Investment Index, published by global design and consultancy firm Arcadis.
The city-state ranked highly across business, risk, infrastructure and financial indicators, and despite a slightly lower score for economic factors, it maintains a strong overall economic environment.
Although most projects here are publicly funded, work is now underway to make infrastructure as an asset class more attractive to private institutional investors, such as through the development of new benchmarking tools.
Currently, Singapore invests around five percent of its GDP in infrastructure (US$20 billion in 2015), and this continues to rise. By 2020, it aims to invest six percent of GDP (US$30 billion).
Several big projects have been planned for healthcare and transport, including the expansion of Changi Airport through the construction of a fifth terminal.
Elsewhere in Asia, Malaysia rose to fifth place in the rankings. Its strong economic performance and continued long-term investment in infrastructure, such as the capital’s metro system, have made the market attractive for investment.
Still, there are several risks of investing there, including its currency depreciation against the dollar and a high-profile corruption scandal that has delayed some projects.
In terms of economic score, China was first among the 41 countries analysed, yet its less attractive business conditions and higher risk environment saw it ranked 17th on the index.
“In the region as a whole, there is clearly a lot of social and public need for new infrastructure. There are a whole host of project ideas and plans out there, but they are not investible or bankable enough, which is the basic problem,” said Graham Kean, Head of Client Development at Arcadis Asia.
“The key to unlocking investments in the region hinges on making the projects bankable, an area which we have been supporting,” he added.
Top 10 countries for infrastructure investment in 2016