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Singapore emerged as the top city in Southeast Asia for commercial real estate (CRE) expansions over the next three years, according to the latest study from CBRE.
“Nearly 50 percent of respondents said they expect their CRE portfolio in Southeast Asia to expand in the next three years. Much of this activity will take place in Singapore, which remains the preferred location for high value added jobs and managerial positions serving the wider region,” said the consultancy.
The Philippines is the number one choice for the Business Process Outsourcing (BPO) sector as the market where they are likely to increase their presence. On the other hand, Vietnam is favoured by the manufacturing industry, while Indonesia is for general business expansion.
Meanwhile, CBRE’s first Asia Pacific Occupier Survey revealed that real estate cost is the most important consideration for selecting a commercial space to rent in the region.
“When asked to identify the main factors driving location and building selection decisions, around 70 percent of respondents said real estate costs is the top priority.”
Given this sentiment, multinational tenants in the region are expected to focus more on optimizing their existing space, for example through cost control and efficient talent management, rather than embark on expansions, said Dr Henry Chin, CBRE’s Research Head for Asia Pacific.
Among the initiatives to reduce occupancy costs, improving space efficiency was identified as the most popular with 55 percent of the respondents preferring it. This is followed by lease renegotiation (40 percent) and relocation to less expensive areas (23 percent).
“Many multinationals initially implemented workplace strategy as a means to improve space utilization with the aim of reducing costs,” added Phil Rowland, CBRE Asia Pacific’s CEO for Global Workplace Solutions.
“However, this way of thinking is now changing, as more companies look to strike a balance between reducing costs, improving productivity and enhancing the overall work experience for employees.”
With employee satisfaction as a key criteria for evaluating business performance, workplaces are increasingly offering a wide range of amenities to enhance performance and improve employee retention. These include better accessibility to the workers’ home, provision of facilities and services, plus better indoor environmental quality.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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