The Emerging Powerhouse of South East Asia: What Does It Mean for Real Estate Investors?

Office – Manila: Offshoring and Outsourcing destination

Manila, attracts the young literate English speaking adult population that has supported the continual growth of the O&O industry. Followingthe AFC in 1997, global companies started to “outsource” business processes thatcould be done outside the company with more efficiency and at less cost. Major property developers are taking advantage of the demand for a large volume of office space from theO&O sector. From 1.1 million sqm in 2005, Grade A office stock in Makati CBD andBonifacio Global City (BGC) more than doubled to 2.4 million sqm by end-2014.

Logistics – Jakarta: Urbanisation drives demand

The demand for consumer goods is rising rapidly in Indonesia in tandem with solideconomic growth, rising urbanisation and increasing wealth levels. Currently justover half of Indonesia’s population of 250 million live in cities, and this is set torise to 57% by 2020. Compellingly, the middle class is projected to almost doublebetween now and 2020, to 80 million people.

Retail – Bangkok: Consumer confidence lifts

A more stable political environment in Thailand, following the military coup in May 2014, has given landlords and occupiers greater motivation to renew their contracts as consumer confidence has also recovered. Beyond the large supply completions in the next two years, the continual urbanisation, growth in tourist arrivals, and strong domestic buying power will support the retail market. While the limited retail assets available for sale makes direct investment challenging, investors have participated in the growth of the retail market through joint ventures with local partners or direct participation in the equity market.

Residential – Jakarta: Housing demand on the rise

A large population base, coupled with stable economic growth over the past fewyears, has supported the housing market, especially in Jakarta. Indonesia, witha population of over 250 million today, is expected to add 3 million more peopleper year from 2015 to 2020. Supported by sustained economic growth, the middleincome population has grown to 45 million in 2015, and is expected to swell byanother 7 million a year, reaching 80 million by 2020.

Hospitality – Myanmar: Opportunities abound

Myanmar is one of the last frontier markets in SEA, with immense potential given the government commitment to political and economic reforms in recent years. With almost 2,000 km of coastline and an immense collection of archaeological sites, the tourism opportunity ahead is strong. According to statistics released by the Myanmar Ministry of Hotels and Tourism, visitor arrivals grew by 50% from 2 million in 2013 to 3 million in 2014, the bulk of which were from Thailand, China and Japan.

Singapore: Gateway to ASEAN

Singapore’s business friendly environment, political and financial stability, and its reliable and clean legal structure, have earned the government the top grade (AAA) rating by the major credit rating agencies. As a global financial hub, Singapore is a natural commercial gateway to ASEAN. Occupier demand has been driven by a broad spectrum of occupiers, ranging fromregional financial and wealth management firms to IT. Social media companies and other modern services firms have been expanding or establishing their SEA headquarters in Singapore since 2009.

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