The real estate industry will have a key role to play in the ongoing development of the Association of Southeast Asian Nations group of countries, according to real estate consultants Jones Lang LaSalle.
Discussions at the recent World Economic Forum on East Asia 2012 in Bangkok revealed that the real estate industry will need to play a vital role in the growth and development of the ASEAN nations.
‘This is a great opportunity and responsibility for all those involved in the industry, be they advisors, investors, developers or occupiers,’ said Chris Fossik, managing director of Jones Lang LaSalle South East Asia.
It focused on key areas where connectivity needs to be addressed in order to secure the future economic, political and social success of the ASEAN countries. Jones Lang LaSalle highlighted the ten key areas where smart real estate planning and creation will impact on the success of the ASEAN group.
The firm believes that increasing urbanisation will continue, particularly in the less developed ASEAN nations, resulting in demand for housing, offices, retail space and hotels and improvements in infrastructure means increased connectivity between ASEAN countries and cities will lead to more real estate development.
The company also pointed out that the growing affluence of populations will lead to increased demand for housing and increased tourism, both from within and outside of the region, is expected to keep booming in coming years, which will create a significant requirement for more hotels and resorts, particularly in developing countries such as Myanmar and Laos.
On the commercial front a focus on improving health and the increased spending on healthcare will create a demand for more hospitals and clinics and developing industry and trade will lead to increased demand for manufacturing and logistics facilities.
There will also be a requirement for more schools and colleges and investment will be needed for the funding of real estate and infrastructure projects which will present the opportunity to invest in markets with healthy returns in comparison to other global markets. Jones Lang LaSalle believes this will also lead to the development of established real estate capital markets.
Changes will be needed included a liberalisation of land ownership laws to encourage investment in order to fund developments across all sectors. There will also need to be transparency and increased professionalism as the demand for personnel in the real estate sector increases.
‘Major differences between ASEAN markets such as foreign property ownership, alien business laws and tax system need to be fine tuned. Once these areas are managed efficiently, the gap in competitiveness among the real estate markets in ASEAN should become narrower, and every market will then be able to capture most, if not all, of the opportunities that will follow the connectivity and collaboration within the sub region,’ said Suphin Mechuchep, managing director of Jones Lang LaSalle Thailand.
‘For example, investors from more developed economies in ASEAN should be more confident to expand to property markets in newly opened economies like Myanmar, Laos and Cambodia where new business opportunities are abundant. At the same time, the less matured real estate markets in these countries will benefit from a better inflow of capitals as well as the transfer of tested business process, expertise, know how and technology,’ he explained.
‘All these are among the key factors that will allow for the faster development of the real estate industry in these less developed economies. While this cooperation will help boost intra regional investment opportunities, the stronger real estate markets in the sub region should become more attractive to investors from EMEA and the Americas,’ he added.