Bridging the infrastructure gap in APAC

Infrastructure is a cornerstone of economic and social progress. While parts of the Asia Pacific (APAC) region boast advanced infrastructure, continued development in areas such as renewable energy, transportation and digital transformation is essential to meet the growing demands of expanding economies, evolving demographics and ongoing technological advancements.

According to the Global Infrastructure Hub, APAC faces a potential investment gap of USD 3.3 trillion by 2040. This is the difference between current spending trends and what’s needed to match performing regions ^[1].

India and emerging Southeast Asia (SEA) could face the largest investment gap, potentially up to 0.6 percentage point of annual GDP. Factoring in the extra investment needed to meet the United Nation’s the Sustainable Development Goals (SDGs) could push those gaps over one percentage point of annual GDP. Even China and mature regional economies like Australia face significant shortfalls.

Figure 1: Potential investment gaps in infrastructure by country

Source: estimates of infrastructure investment from The Global Infrastructure Hub, 2024; GDP estimates from Oxford Economics, 1Q25; calculation by JLL
Notes: 1) Investment gap refers to the difference between current investment trends and investment that would occur if countries were to match the performance of their best performing peers.
2) Include the additional investment needed for countries to meet SDGs by the UN.

Meeting APAC’s infrastructure demands requires a blend of public and private funding. While public funding comes from government budgets, private funding can take many forms including investment loans or Public-Private Partnerships (PPPs). The region’s unlisted infrastructure investment market, with USD99.0 billion in assets under management (AUM) in 2024, is far less than North America’s USD 511.0 billion and Europe’s USD 479.0 billion^[2]. Increased allocations from both private capital as well as public pension and sovereign wealth funds into unlisted infrastructure are expected, mirroring trends in other regions.

Figure 2: Unlisted infrastructure investment (AUM) by region focus

Source: Global Infrastructure Report, Preqin, 2024

In 2024, APAC-focused unlisted infrastructure deal value totalled USD 60.0 billion. Over the past five years, renewable and conventional energy have dominated deal volume (nearly 60%) and accounted for around 30% of deal value, reflecting the region’s commitment to clean energy. Significant investment in renewable facilities will be critical to achieving energy transition. For instance, India may need to add at least 50.0 GW of renewable energy capacity annually for the next six years compared to the 18.5 GW installed in 2023-24.

Digital transition is another key priority, driven by the rise of digital products and services. The proliferation of artificial intelligence (AI), cloud computing and internet of things (IoT) is boosting the importance and value of data centers. Consequently, both mature and emerging APAC countries are investing heavily in digital infrastructure.

Transportation infrastructure projects are also noteworthy. Economic growth and shifts in global supply chains are driving demand to upgrade transportation networks. For example, China plans to extend its high-speed rail network to 50,000 km by 2025, and 200,000 km by 2035. Furthermore, the country is exploring opportunities in intelligent transportation networks and autonomous vehicle technologies^[3]. Across the region major investments are also being made in modern airports, expressways, and urban transit systems to improve connectivity and mobility. In Singapore, the upcoming Tuas Port is set to become the largest fully automated container terminal by 2040, solidifying the city state’s position as a leading transshipment and logistics hub.

Investing in infrastructure, seen as one of the lower-risk asset classes, is attractive to investors because it offers access to steady and reliable cash flows. The revenues generated are often guaranteed by long-term contracts with creditworthy government organization, and there are opportunities in both developed and developing economies.

Even though macroeconomic and geopolitical factors may cause short-term fluctuations in deal activity and fundraising, the longer-term prospects remain positive. An increasing number of investors are likely to consider infrastructure investments as a means of portfolio diversification, which, in turn, should help meet critical infrastructure funding needs and yield substantial long-term benefits for the region.

Figure 3: Unlisted infrastructure investment by sector, aggregate deal value (US$ billion)

Source: Global Infrastructure Report, Preqin, 2024

_{[1] Estimates of infrastructure investment from The Global Infrastructure Hub, 2024
[2] AUMs and deal value from Global Infrastructure Report, 2024 and APAC Q1 2025:Preqin Quarterly Update.
[3] Source: various news sources.}