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Demand for office space in the Southeast Asian region is expected to grow at 6 percent per annum until 2020, according to the latest report from JLL entitled “The Fourth Industrial Revolution: The Impact on Real Estate in Southeast Asia.”
This projection is attributed to the region’s forecasted annual economic growth of 5 percent over the next four years and the rise of the bourgeois, as Asia is expected to be home for 66 percent of the global middle-class.
Another factor is that more jobs are likely to be outsourced to Southeast Asian countries, like Manila and Kuala Lumpur. In fact, both are key cities to watch out for as demand for office space there are anticipated to rise significantly over the next five years, said JLL’s national director for Analysis & Research, Capital Markets, Regina Lim.
In Metro Manila, the demand for office space has been exceptionally strong due to the rapid expansion of the Business Processes Outsourcing (BPO) industry. Demand for office space there increased by 12 percent per annum since 2010 surpassing the country’s annual GDP growth of 5 percent
While office supply in the Philippine capital is high in 2015 to 2017, demand has grown in tandem, with occupancy remaining above 90 percent and rents rising moderately.
Over at Kuala Lumpur, demand for office space is anticipated to be robust, growing at 6 percent per annum from 2016 to 2020, Lim noted.
“While demand from oil and gas companies could weaken, we think financial services, technology and business services are likely to pick up the slack. We see large-scale developments going on in both KL’s CBD and decentralised areas,” she added.
Upcoming massive developments in Malaysia’s capital include the country’s tallest tower, KL 118 (Warisan Merdeka), which has a gross development value of RM6 billion. Also on the horizon are SP Setia’s RM7 billion KL Eco City and MRCB’s RM15 billion PJ Sentral.
Image: Metro Manila skyline.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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