More Real Estate investment is expected for the Philippines and its Southeast Asian neighbors as its growth numbers continue to increase.
Based on JLL’s research, the country’s premier property advisor economies in SEA have started to recover from the slow-down of 4.5% in 2016 as it bounced back by 4.8% in the first quarter of 2017.
Right now, the Philippines, along with Indonesia and Vietnam take up 60% of the economy and all three are expected to have 6% growth per annum between 2016 and 2020. According to JLL, Indonesia will be the fourth largest economy in the world. With the Philippines at the 19th spot and Vietnam the 20th.
One major factor behind the growth SEA’s property market is the relocation of factories to more affordable countries. Salary also plays a big role since wages in Vietnam and Indonesia continue to hover between USD1.0/hour to USD1.35/hour which is low compared to China.
Development of infrastructure is also increasing in Southeast Asia. Urbanization will drive land prices up. Since 2010, industrial land prices in Manila, Kuala Lumpur and Bangkok have appreciated by 60-80% (USD). Despite depreciating in their currencies. Urbanization will also drive industrial land prices up because as cities develop land becomes scarcer which will cause prices to appreciate, according to JLL.
The Philippines, Vietnam, and Indonesia will still expect an increase in shopping malls despite the rise in access to mobile shopping. Market research shows that online retailers will soon expand to physical stores. Another factor is the rise in urban population in Southeast Asia.
A demand for office space is also seen to expand in Southeast Asia which will also cause rents to increase. Outsourcing is the fuel behind the increase in demand. Meanwhile, the co-working space is also growing in the Philippines with freelancing. JLL predicts that demand for office space will increase due to an increase in freelancers in the Philippines. Majority of online jobs taken by Filipinos are in administrative support, sales and marketing, and customer service. According to JLL’s Country Head Christophe Vicic, prospects for more real estate opportunity looks brighter for the rest of the SEA nations. Moreover, JLL is the best equipped Real Estate firm complete with tools for investors to study their options and make sound decisions based on their researches.