Real estate opportunities in Southeast Asia

Real estate opportunities in Southeast AsiaUncovering hidden potential in a turbulent worldJanuary 2012

6

ForewordFor the longest time, any serious real estate investor in Asia would start by investing in Japan due to its long established liquidity and market depth for foreign investors to transact. China and India slowly became the new darlings in Asia and cannot be ignored, not only because of their size and rapidly emerging potential, but also their very young population, urbanization trend, increasing affluence and consumption power. Although there are various risks in executing deals in these countries, there is a growing appetite to invest in all sectors of real estate in both China and India.

Heavy interest in Japan, China and India inevitably took away much of the attention from Southeast Asia (SEA). Many would say SEA is fragmented, as it consists of many countries with different legal systems, histories, cultures, languages, business environments, and political systems, and hence, it has numerous policies affecting the stability and outlook of the business and investment environment. Doing business in SEA requires more than just market knowledge in these countries but also a deep appreciation of the culture, language, business practice and way of life. Transacting in SEA can be challenging. While the barriers to entry are high, the growth and return potential can be equally significant.

In this inaugural issue of Ernst & Young’s Transaction Real Estate newsletter – ‘Real estate opportunities in Southeast Asia’, we will explore five key SEA countries and their respective real estate markets. We reviewed recent news and industry research reports, and gathered insights from our SEA colleagues, and consolidated these observations to share with you in this newsletter, which we hope give you a concise overview of these markets. If you have any questions or require further information, please contact any of the members of the Ernst & Young real estate team listed at the back.

1

Cont

ents

Outlining the Influence Zones 02

Singapore: consistent and stable 04

Malaysia: growing beyond KL 07

Vietnam: comes under stress 10

Thailand: resilient, emerging stronger 13

Indonesia: firmly in the limelight 16

2 Real estate opportunities in Southeast Asia

Countries in Southeast Asia are represented in the Association of Southeast Asian Nations (ASEAN), which is in fact a geo-political and economic organization of 10 countries located in Southeast Asia, comprising Singapore, Malaysia, Indonesia, Thailand, Philippines, Brunei, Myanmar, Cambodia, Laos and Vietnam. Collectively, it covers a land area of 4.46 million sqkm, approximately 3% of the total land area of Earth, with a population of approximately 600 million people (Source – ASEAN Statistics Leaflet Selected Key Indicators 2011). In 2010, its combined nominal GDP had grown to US$1.8 trillion, which would rank as the 9th largest economy in the world (Source – World Bank).

Southeast Asia is strategically situated at the crossroads of China and India, which are the two largest markets in Asia (excluding Japan), have 1 billion-plus populations and are seen as key drivers of future world economic growth. Within Southeast Asia, this report will look at five key markets namely Singapore, Malaysia, Vietnam, Thailand and Indonesia and highlight their real estate potential and opportunities.

The real estate markets in Singapore, Malaysia, Vietnam, Thailand and Indonesia have a few things in common, which are critical success factors and growth drivers for them.

PopulationThe abundance of a young labor and talent pool is a magnet for foreign direct investment. Malaysia, Vietnam, Thailand and Indonesia have a young working population and enjoy the advantage of having a large portion of their population at their prime and most productive

Outlining the Influence Zones

working ages (between 15 and 59). Even in a country like Singapore where the birth rate has slowed, the Singapore Government has successfully attracted a large foreign talent pool to the base local population. Such a talent pool and working population will ensure that these countries continue to attract foreign companies to set up their operations and/or headquarters in this part of the world. The side effect of this is increased local and foreign demand for real estate across all sectors.

UrbanizationOther than Singapore, the rest of the countries will continue to enjoy the urbanization trend as the population grows and migrates from rural towns to urban cities. An increase in urbanization should lead to more demand for all types of real estate.

Increasing affluence and consumption powerASEAN countries have enjoyed rapid economic growth for many years. This has resulted in increased affluence and wealth, especially among the middle class. According to the Asian Development Bank, the estimated middle class in developing Asia, which includes Malaysia, Indonesia, Thailand and Vietnam, had risen from 21% of their total population in 1980 to 56% in 2008. Besides the growing middle class, the number of high net worth individuals (HNWIs) in Asia is also growing. These HNWIs are especially interested to invest part of their wealth in the residential market, and increasingly so in smaller commercial and hospitality projects and/or properties.

SEA/ASEAN

Real estate opportunities in Southeast Asia 3Real estate opportunities in Southeast Asia

Influence zone outlook

China

Southeast Asia

India

Japan

Malaysia• Islamic financing hub

of Asia• New government is

pro-business• Various economic

initiatives introduced

Thailand• Resilient economy• Political outlook

has improved• Recent floods leading to

infrastructure concerns

Vietnam• Attracts significant FDI • Young, hardworking

population• Improving public

infrastructure

Indonesia• Well balanced economy • Solid economic growth

in last 5 years• Master plan 2011-2025

will spur growth

Singapore• Efficient, stable and

transparent • Open economy• Consistent pro-business

and pro-investment policies

Source: EY research

Thailand

MyanmarLaos

Vietnam

Cambodia

Malaysia

Singapore

Philippines

Indonesia


After a strong showing in 2010, growth in 2011 has started to moderate from this high base. For 2011, according to Ministry of Trade and Industry (MTI), GDP growth was 4.8%, slightly below the previous estimate of 5%, and for 2012, MTI projects GDP growth rate to be in the region of 1% to 3%.

Singapore GDP growth

Source: World Bank

The real estate marketSingapore’s real estate market has witnessed robust growth, driven by the economic recovery. Residential prices remained largely unchanged in light of the Global Financial Crisis and economic slowdown although sales volumes have come down. The growth in this sector was so strong that the Government had to intervene through the introduction of many rounds of anti-speculative measures. While commercial office space witnessed a turnaround in leasing sentiment, the retail sector has been very resilient.

SingaporeConsistent and stable

Surface area 710 sqkm

GDP (2010) US$222.7b

Population (2010) 5.1m

GDP per capita US$43,867

FDI (2010) US$18.8b

Income classification High income

Unemployment 5.9%Source: World Bank

Recent economic performanceThe city state of Singapore is an important business hub for Southeast Asia and one of the most open and competitive markets in the world. Singapore is ranked as the best country to do business in the 2011 World Bank Ease of Doing Business Index and ranked second in the World Economic Forum’s Global Competitiveness Report. Singapore’s success can be attributed to its open economy, relatively corruption-free and transparent business environment and low tax rates. Exports, particularly in electronics and chemicals, and services provide the main source of revenue for the economy.

Singapore experienced good growth in the years 2004 to 2007, with GDP growing at a CAGR of 8.5% (refer graph below). Due to the Global Financial Crisis (GFC), GDP growth slowed to 1.5% in 2008 and in 2009, the economy contracted by 0.8%. In 2010, GDP growth rebounded significantly to 14.5%, helped by growth in both the manufacturing and services sector (due to opening of the 2 Integrated Resorts).

Country and economic overview

4.2% 4.6%

9.2%

7.4%8.7% 8.8%

1.5%

-0.8%

14.5%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2002 2003 2004 2005 2006 2007 2008 2009 2010


Real Estate market snapshotResidential sector: New supply to fulfill pent-up demand

• The Government has taken a multi-pronged approach to moderate the rapidly rising residential prices by building more, selling more land (so that the private sector can build more) and introducing policies to curb speculation.

• According to Credit Suisse research, the Government is building 25,000 public housing units per year in 2011 and 2012, and can build a further 16,000 units per year until 2015 to address pent-up demand.

►• As a result of the Government’s various measures, sales have slowed down considerably. This is evident in the thinning crowd of residential sales launched. However, average residential prices have not changed significantly. In the high end/luxury segment, home prices only suffered a slight decline, while in the mid tier segment, home prices also dipped marginally. Mass market prices remain high.

►• On 7 December 2011, the Government in its latest set of cooling measures introduced an Additional Buyer’s Stamp Duty (ABSD) with an objective to moderate investment demand, especially in the current low interest rate environment. The ABSD affects foreigners the most, with a 10% additional stamp duty for any purchase of residential property by individual foreigners. For Singapore Permanent Residents, the ABSD is 3% for the 2nd and subsequent purchase; while for Singapore citizens, the ABSD is 3% for the 3rd and subsequent purchase. Thus, while residential sales volumes and prices are expected to drop, especially for foreigners and speculators, first time local / genuine buyers would not be affected. After the introduction of ABSD, developers were seen to be offering incentives / rebates to absorb the additional duty and push sales at launched projects.

►• Bids for land sales have also turned cautious. While choice sites at good locations continue to be well received, bid pricing has been more reasonable indicating developers’ stance in view of ample supply from the Government Land Sales program and the recent introduction of ABSD. In private land sales, sellers’ price expectations have also decreased, as is evident by the withdrawal of several collective sales due to lack of interest.

►• Though residential prices are expected to decline in 2012, since speculative demand has been eliminated substantially through the cooling measures, the decline is not expected to be as much as what was experienced post GFC.

Office sector: Showing signs of slowdown

• Occupiers’ initial exuberance in early 2011 in response to the economic turnaround from the GFC quickly subsided as the European debt woes worsened leading to a potential sovereign crisis.

►• Office leasing is now showing signs of slowdown with increased vacancy rates and hiring freezes / job cuts by banks and financial institutions. Overall sentiment is turning pessimistic with the protracted financial crisis in US and Europe.

►• Despite the slowing office market, recent office transactions see capital values climbing albeit at a slower pace.

►• Government released new land for fear of another office shortage similar to the one experienced in 2007-2008. Marina Bay white site was released as part of the Government Land Sales program. This site has a potential GFA of over 1m sqf. One of the local developers also made known its proposed development of a 33-storey office building with an estimated NLA of 300,000 sqf at Robinson Road/Cecil Street.

Retail sector: Growing tourism industry drives retail

• The global slowdown has not dampened the Singapore retail sector. Singapore’s rising population and tourist arrivals contributed significantly to strong retail sales.

• Large-format retail stores are increasingly dominating the local retail scene. The opening of flagship stores by international retailers such as H&M, Louis Vuitton and Abercrombie & Fitch provided the support for continuing retail rental growth. More international labels are attracted to Singapore due to its positioning not only as a business and financial hub, but also a centre of attraction through its integrated resorts and staging of mega events such as F1 Grand Prix and world famous Broadway performances.

• Rental growth remains in positive territory. According to DTZ research, prime first storey rents in Orchard Road increased 0.5% quarter over quarter to S$40.2 psf per month in Q3 2011.

Hospitality sector: New “Singapore” repositioning attracts record business travelers and tourists

• Upscale and luxury hotel segment experienced a supply surge in 2010, injecting approximately 11,000 rooms into the market. Contrary to an earlier concern of oversupply and pressure on ADR, these fears quickly evaporated with the surge in tourist arrivals as a result of the re-positioning of Singapore as a centre of attraction.

►• Hence, despite the large increase in supply, industry ADRs increased significantly from a low of S$180 in 2009 to S$255 in Q3 2011 (Source – DBS research).


Industrial sector: Cautious outlook due to rising costs

• Rentals for industrial space in Singapore are currently past the pre-crisis peak and pace of rental growth has been slowing down. According to DTZ research, industrial rents across different market segments remained stagnant on a quarter over quarter basis during Q3 2011 as economic growth slowed.

►• Though the overall supply pipeline of industrial space looks manageable, over-supply concerns exist for the business parks segment. According to Credit Suisse research, the expected increase in business parks supply pipeline is 29% over the next 4 years, which when taken together with the high vacancy of 20% plus could present some problems.

►• Outlook for industrial space has turned cautious due to concerns over a global economic slowdown and the rising cost of industrial operations in Singapore which is reflected in recent land bids.

Key trends• Overall residential volume is expected to come down. Prices

are also expected to decline, especially in the high-end and luxury segment.

• The cautious land bids for the Government Land Sales Program and withdrawals of several private land sales as a result of developers’ cautious stance in view of uncertain outlook and ample land supply provides a good window for attractive land purchase.

• Office rental growth may move into negative territory after an impressive start in 2011. Leasing activity is expected to slow down further given the economic slowdown in the Western world and protracted financial/sovereign crisis.

• Rents on Orchard Road are expected to hold firm with retail sales continuing an upward trajectory.

• 2011 was an exceptional year for tourism in Singapore, translating into an upward trend in hotel performance as compared to the previous years.

• Moving forward, Singapore Tourism Board is developing a new road map known as Tourism Compass 2020.

Key transactions1

• An offshore fund acquired 50% of Finexis Building, an office building in Singapore CBD at S$2,043 (US$1,628) psf.

• A local REIT acquired 87.5% interest in an office building in Singapore CBD for S$2.0b (US$1.56b) i.e., S$2,260 (US$1,800) psf.

• Two office buildings, One and Three Philip Street in Singapore CBD were sold for S$283m (US$221m) i.e., S$2,350 (US$1,836) psf.

• 50% of Royal Brothers Building, an office building in Singapore CBD sold at S$3,050 (US$2,383) psf.

• A local corporate acquired Park Regis Hotel in the Boat Quay area for S$270m (US$211m), approximately S$0.94m (US$0.73m) per key and S$1,900 (US$1,484) psf for office.

• Midlink Plaza, a retail and office building located close to Singapore CBD was sold for S$126.8m (US$99m) to a buyer who is reportedly keen to redevelop this site into a hotel (price worked out to be just under S$1,000 / US$781 psf ppr).

• A local REIT acquired a business park in International Business Park for a consideration of S$121.55m (US$99.6m) i.e., S$512(US$420) psf.

• A local REIT acquired 2 business parks in Biopolis for a consideration of S$125.6m (US$ 98.9m) i.e., S$412 (US$324) psf.

• A fund entered into an agreement with a local firm to invest US$200m in a 1.3m sqf retail warehouse development project in Jurong.

1 Public information from company announcements and press reports

OutlookDue to the open nature of the Singapore economy which is highly dependent on trading, banking and financial services activities, it is highly susceptible to the global economic climate and debt problems in Europe and the US. Threats to financial stability have actually grown in H2 2011 and there is concern that this may last longer. For 2012, the Government has lowered its growth forecast to 1% – 3%.

In the real estate market, the Government remains very concerned with the high residential prices, that it would take all necessary measures to curb speculative elements. On the commercial front, the Government’s continued emphasis on competitiveness could result in a twin blow for the office sector due to slowing growth and lower hiring; and at the same time, Government may introduce new supply to avoid a run in office rent similar to what was experienced in 2007-2008.


Surface area 330,800 sqkm

GDP (2010) US$237.8b



FDI (2010) US$9.1b

Income classification Upper middle income


Recent economic performanceMalaysia is the third largest economy in Southeast Asia after Indonesia and Thailand. Since the 1950s, Malaysia has transformed itself from a low cost supplier of commodities to one of the world’s largest producers of electronic and electrical products, which make up a vast majority of its exports. Malaysia is also one of the world’s leading exporters of palm oil and one of the region’s major oil and gas exporters. Malaysia is now an upper middle income, export-oriented economy, with a vision of becoming a developed economy by 2020.

The Malaysian economy grew at a healthy pace during 2002 to 2007, with GDP growing at a CAGR of 5.9% (refer graph below). Due to the Global Financial Crisis, GDP growth slowed to 4.7% in 2008 and in 2009, the economy contracted by 1.7%. In 2010, GDP growth rebounded significantly to 7.2%, driven by a strong comeback in

Country and economic overview domestic demand as well as export demand backed by increased private investment.

Growth in 2011 has started to moderate, with Q2 2011 growth at 4%, year over year, down from 4.9% in Q1 2011, (Source - Bank Negara Malaysia) as a result of the earthquake in Japan and weak export markets. During H2 2011, growth is expected to be better due to resilient domestic demand and high commodity prices. According to Moody’s Analytics, Malaysia’s economy grew 5.8% year over year as of Q3 2011, faster than the previous quarter. For 2011 as a whole, as per The Malaysian Institute for Economic Research (MIER), growth is expected to be 4.9%, higher than previous estimate of 4.6%. But for 2012, MIER has revised downwards the GDP growth estimate from 5% to 3.7% based on deteriorating global conditions.

Malaysia GDP growth

Source: World Bank

5.4% 5.8%

6.8%

5.3% 5.8%

6.5%

4.7%

- 1.7%

7.2%

- 3%

- 2%

- 1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

2002 2003 2004 2005 2006 2007 2008 2009 2010

MalaysiaGrowing beyond KL


The real estate marketMalaysia’s real estate market is expected to stay stable due to many factors supporting demand despite concerns of a price bubble and the slowing global economy. This is due to a young population base, healthy employment situation, urbanization trends as well as a pro-business government with many pro-growth policies and fiscal stimulus. Residential sales targeted at local purchasers continue to sell very well despite a slowdown in condominium transaction

Real Estate market snapshotResidential sector: Strong demand in mass market, but high end fading out

• No new high-end condominiums were launched in Q3 2011, though there are some developers who are testing the market with higher prices through pre-registration as an indication of interest. Condominiums in KLCC are facing some pressure due to the immense supply there and slow take-up as a result of the uncertain global economic outlook. Outside KLCC, demand remains strong for condominiums and landed housing, especially if they are targeted at locals.

• Malaysia’s Economic Transformation Plan (ETP) for the Greater Kuala Lumpur area targets to increase its population from the current 6.4m to 10m in 2020, which should result in strong residential demand.

Office sector: Demand remains strong, upcoming supply to keep rents in check

• ►According to Colliers research, office vacancy declined from 13.6% in Q1 2011 to 12.3% in Q2 2011. Going forward, the recent completions of new office buildings are expected to add pressure to the supply of overall stock. However, the effect is not expected to be severe as the key projects under the ETP and the Malaysian Government’s ‘Invest KL’ program aimed at attracting top MNCs to the capital will provide additional demand sources. Under the ETP, the drive to boost the oil, gas and energy sector will also generate more office demand from occupiers in this industry.

• Overall rents are expected to be in check as, with the new supply, landlords of old and/or poorly occupied buildings would reduce their asking rents or offer various incentives to retain tenants.

Retail sector: Rents and capital values to increase due to strong fundamentals

• ►Despite an increase in supply of approx. 1.5m sqf in both 2010 and 2011 (Source – Jones Lang LaSalle research), there is no oversupply expected, as the retail sector in Malaysia caters to specific cities and target segments and is still undersupplied as compared to markets like Singapore.

• According to Jones Lang LaSalle research, KLCC vacancy was 11.6% as of Q3 2011 and this is expected to decline in future due to a limited supply pipeline. In both the city centre and the suburbs, rental values will stay stable and capital values will see moderate increase due to lack of competition, narrowing yield expectations and outlook improvement.

Hospitality sector: Tourism industry to drive demand for hotel rooms

• ►Between 2004 and 2010, international tourist arrivals grew from approximately 15.7m in 2004 to 24.6m in 2010 (CAGR of 7.8%) (Source – Tourism Malaysia). The influx of tourists into Malaysia, coupled with the Malaysian Government’s promotion efforts is fuelling growth in this sector.

• This is evident in the moderate increase in ADR from RM331 (US$103) in Q3 2010 to RM340 (US$106) in Q3 2011 in the upscale segment with occupancies remaining fairly constant at approx. 70% (Source – CBRE research).

• While the global economic slowdown that started in late 2008 has impeded the progress of upcoming developments and cancelled or delayed new construction, there is still considerable supply expected to come on-stream in the short to medium term.

• Within the serviced apartment segment, demand was slightly affected as this is highly correlated to the expatriate and corporate budget, which came under pressure in the light of the global economic condition.

• Across the country, there are multiple initiatives to promote the other states/cities such as eco-tourism efforts at Kota Kinabalu, Sabah; beach resort destinations in Trengganu, hospitality and medical tourism in Johor, Malacca and Penang.

prices and volumes in Kuala Lumpur City Centre (KLCC). Office leasing and capital values remain strong notwithstanding several new completions in 2011. Retail remains a very much sought after asset class, and foreign investors are getting comfortable acquiring retail assets beyond Greater Kuala Lumpur to places like Penang, Malacca and Kuantan. This bodes well for Malaysia as the other cities offer an alternative investment destination besides Kuala Lumpur.


Industrial sector: Healthy prospects because of newer growth areas

• ►►Malaysia is a preferred location for high technology, knowledge-based and capital intensive industries resulting in strong demand for factories.

• As of end 2010, there was a total stock of approx. 60,582 industrial units in the 3 main industrial areas of Klang Valley, Johor and Penang, and future supply was manageable at 8,241 units or 13.6% of stock. (Source – CBRE research). Rents remained relatively stable throughout 2010.

• Going forward, prospects for industrial real estate are positive with the progressive development of the Iskandar area and the thrust given to key industries under the Economic Transformation Plan.

Key trends• Demand for residential is expected to grow more gradually in

view of the global situation and the efforts by the Government to cool speculation.

• Landed housing that caters to local demand continues to see genuine interest as opposed to condominiums in city centers.

• Iskandar continues to attract domestic and foreign interest, with the most recent being an investment commitment by a Chinese investor in a mixed development of residential and commercial.

• In the office segment, there will be some pressure from new supply and flight to quality but this is not expected to derail the office market. Government initiatives to promote Kuala Lumpur as a commercial hub and the ETP will inject new demand.

• Investor appetite for retail assets in Kuala Lumpur and other state capitals (e.g., Penang, Ipoh, Kuantan, and Malacca) is expected to remain robust.

• Foreign investors are getting comfortable with the Tier 2 cities in Malaysia i.e., other state capitals, as evident in the recent transactions.

• Outlook of Malaysian tourism industry is likely to remain strong and is expected to display consistent growth given the relatively secure and stable political situation.

• Both the hotel and serviced apartment sector is expected to benefit from the pro-business government policies and in the medium-to-long term, the hospitality prospects remains promising.

Key transactions2

• A local shopping mall trust is seeking to raise RM700m (US$222m) in an upcoming IPO in Malaysia.

• 6 new hotel developments planned in Penang with a GDV of RM860m (approximately US$275m).

• A Chinese investor signed an agreement to invest up to US$558m in 2 mixed residential and commercial developments in Iskandar, Johor.

• Local property developer taking a 80% stake in joint venture development of high-rise mid to premium condominium in Medini Iskandar, Johor, with a GDV of RM600m (US$190m).

• Local developer acquired via a joint venture 276 ha of land in Medini Iskandar, Johor for a lease consideration of RM745m (US$234m) i.e., RM25 (US$7.8) psf. An integrated residential and commercial development with a GDV of RM12b (US$3.77b) is planned at the site.

• A local REIT acquired East Coast Mall in Kuantan (NLA 441,342 sqf) for a consideration of RM330m (US$105m) i.e., RM748 psf (US$237 psf).

• Menara Multi Purpose Property, a 43-storey office building with a NLA of 541,400 sqf in Kuala Lumpur was sold for a consideration of RM375m (US$119m) i.e., RM693 psf (US$220 psf).

• A local REIT entered into an agreement to acquire an office and warehouse building in Penang for a consideration of RM48.5m (US$15.4m) i.e. RM209 psf (US$67 psf) at a gross yield of 9.4%.


OutlookThe Malaysian Institute of Economic Research has revised downward the country’s GDP growth forecast for 2012 from 5% to 3.7%, owing to slowing exports and weaker domestic demand stemming from a volatile global outlook. While the growth numbers have been revised downwards, the transformation programs introduced by the Government are expected to keep the momentum going.



GDP (2010) US$103.6b

Population (2010) 87m


FDI (2010) US$8b

Income classification Lower middle income


Recent economic performanceVietnam’s recent economic growth has been remarkable. From 2002 to 2007 Vietnam’s GDP grew at a CAGR of 7.9% (refer graph below), the highest among the Southeast Asian economies. After slower growth in 2008 and 2009 of 6.3% and 5.3% respectively due to the Global Financial Crisis, growth in 2010 bounced back to 6.8%.

Vietnam’s growth has been characterized by growth in industry and services sector, growing exports and an increasing role of foreign capital. FDI inflows into Vietnam were US$8b in 2010, compared to just US$2b in 2005.

In 2010, Vietnam experienced significant economic instability with high inflation and currency fluctuation. Between November 2009 and February 2011, the State Bank of Vietnam (SBV) had to devalue the currency by 20%. In February 2011, the SBV implemented

Country and economic overview Resolution 11, a series of measures to restore macroeconomic stability. The most important were the credit tightening measures - banks to reduce credit growth to less than 20% (from an original target of 23%) and to limit credit outstanding to ‘unproductive’ sectors such as real estate.

The policy tightening measures have started yielding results. GDP growth for 2011 slowed to 5.89% (Source – General Statistics Office of Vietnam) and for 2012, the Government targets a growth of 6% while continuing to keep inflation and macro-economic stability as key priorities.

Vietnam GDP growth

Source: World Bank

7.1% 7.3%7.8%

8.4% 8.2% 8.5%

6.3%

5.3%

6.8%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2002 2003 2004 2005 2006 2007 2008 2009 2010

VietnamComes under stress


The real estate marketAfter a mini real estate boom in almost all sectors from 2007, the real estate market in Vietnam has slowed down since early 2011 in the residential sector mainly due to the monetary tightening measures of the SBV. Office sector absorption has been growing in line with the

Real Estate market snapshotResidential sector: Pronounced slowdown due to monetary tightening

• Vietnam’s increasing urbanization and rise in income levels is driving demand for new homes in its growing cities. According to Mekong Securities research, the total residential floor space in Vietnam is expected to double to 2b sqm by 2020 indicating significant growth potential.

• In recent times however, there has been a pronounced slowdown in the condominium market mainly due to the high interest rates and over-supply conditions.

• According to Jones Lang LaSalle research, absorption rate in Ho Chi Minh city (HCMC) for Q2 2011 was very low at 7%, and prices were down by 10% since mid 2010. To push sales, developers have been seen to be cutting prices or offering various promotions. The volume of units launched reduced significantly in Q3 2011 as developers adopt a wait and watch policy. Prices in HCMC are expected to correct even further.

Office sector: Demand revival across key markets

• ►Demand from the financial sector, telecoms and information technology sectors and continued FDI inflows are resulting in demand for quality office space in HCMC and Hanoi.

• After the Global Financial Crisis, office demand rebounded in 2010. According to CBRE research, 2010 absorption in HCMC was 2.4m sqf, an increase of 50% compared to the previous 3 years and absorption in Hanoi was at an all time high of 0.75m sqf. In 2011, office demand is expected to revert to pre-crisis levels.

• For the first time in nearly 18 months, Grade A office rents increased in Q2 2011, to US$40 psm per month. In HCMC, rental rates eased as competition for tenants remain fierce due to the new office completions – Kumho Asiana and Bitexco Financial Tower.

• In 2012 and 2013, there is expected to be a significant supply pipeline which is expected to keep office rentals in check.

Retail sector: Growing market, but concerns over future supply

• ►Vietnam has been consistently rated among the top emerging markets for organized retail, and there is immense potential in the major cities. • HCMC has a GDP per capita comparable to Jakarta and Manila but lags well behind in retail space per capita. Due to a hardworking and

young population, there is a pent-up consumption potential to be tapped.• Overall, demand for space from international retailers is still growing and HCMC retail occupancy as of Q3 2011 was healthy at over

90% (Source – DTZ research). Going forward, 1.5m sqf of new supply will come on-stream between Q4 2011 and 2013 (Source – DTZ research). This is 43% of existing stock which could put pressure on rentals.

• On the consumption front, there has been a moderation in retail sales growth as a result of the slowdown in GDP growth.

Hospitality sector: Strong pick up post Global Financial Crisis helped by growing tourism industry

• Though a young market, the hotel sector in Vietnam has been expanding at a healthy pace. According to the Vietnam Tourism authority, between 2003 and 2010, international tourist arrivals doubled from 2.4m to 5m (at a CAGR of 11%). However, the greatest growth opportunity appears to be in the domestic tourists segment which is expected to number approximately 28m in 2011 (Source – CBRE Hotels research).

• The hotel sector has bounced back strongly helped by a revival in business travel and a boom in domestic tourism. For example, in the luxury hotel segment in HCMC, occupancies were nearly 70% as of Q3 2011, a sharp increase from a low of 40% at the end of 2008 (Source – CBRE Hotels research).

• Apart from the traditional markets of HCMC and Hanoi, the resort markets of Da Nang and Nha Trang in central Vietnam have also gained in importance and there are a number of international resorts planned to tap the growing market there.

economic recovery after the Global Financial Crisis. The hospitality sector has also staged a strong comeback post the crisis. On the industrial front, Vietnam, with its low cost of operations and ports has finally emerged on the global manufacturing scene.


Industrial sector: Emerging as a viable alternative to China

• With the emergence of Vietnam as a manufacturing base, the industrial real estate market has also grown significantly. Currently, there are more than 250 industrial parks in Vietnam’s 3 main economic regions – Northern, Southern and Central.

• According to CBRE research, FDI into industrial parks increased 15% year over year in H1 2011, with several new commitments from large multinationals, in spite of a general slowdown in FDI into Vietnam. What is more encouraging is that apart from the traditional manufacturing sectors, high tech manufacturing is also becoming more and more significant with some landmark investment commitments from global majors such as Nokia (largest plant in Southeast Asia) and Samsung (largest outside Korea). Consequently, industrial land rentals in Vietnam have more than doubled between 2008 and 2010 (Source - CBRE research).

• With one of the lowest cost bases in the ASEAN region, Vietnam is expected to be a significant hub for manufacturers looking for an alternative to rising costs in China and the political instability in Thailand.

Key trends• Tightening liquidity and financing is giving developers stress,

leading many to consider disposing of some assets to meet immediate cash flow needs.

• Slowing demand across all sectors in the market. Office leasing activity has slowed. Flight to quality among tenants from older buildings to the newly completed ones.

• New construction activity has also slowed down due to tight financing and uncertain demand outlook.

• REIT legal framework is being contemplated for the Vietnam market.

• Most of the residential developments in the past were targeted at the high-end/luxury segment but this is also the segment that is most heavily impacted by the downturn and the tightening liquidity.

• Going forward, the mid-market/affordable home developments are expected to perform better. This is the segment where the buyers are genuinely in need of a home. Majority of demand comes from young couples working in the capital who are currently letting.

• Foreign interest is also spreading beyond HCMC and Hanoi, as evidenced in transactions in places like Hai Phong and Danang.

Key transactions3

• A local developer sold a piece of land in Thao Dien, District 2 (land area 7,435 sqm, meant for a 2-tower residential development of 197 units) for US$11m (based on land area, this translates to US$1,480 psm; and US$925 psm based on estimated GFA).

• A Vietnam focused real estate fund sold a piece of land in District 9 (land area 31,000 sqm) for US$10.9m. (based on land area, this translates to US$352 psm).

• A Taiwanese investor bought an 80% interest in KDC Tan Tao A project in Binh Tan District (land area 21,993 sqm) in Ho Chi Minh City from a local developer for US$14.4m (US$655 psm land area).

• A Singapore based developer entered into a joint venture with a local developer and acquired a 70% interest for US$49m. The project has a land area of 2.9 ha and is located in District 2 Ho Chi Minh City, with an expected 974 units upon completion. Total investment capital is US$70m.

• A Singapore based developer entered into a joint venture with a local developer and acquired a 65% interest for US$5.8m. The project has a land area of 0.9 ha and is located in Binh Chanh District, with an estimated 800 units upon completion.

• A Singapore based developer acquired a 90% interest in a serviced apartment in Hai Phong (132 keys) for US$9.45m.

• An overseas developer recently renewed its investment commitment to build a landmark US$930m, mixed use office project in HCMC.

• A Malaysian developer entered into a 70:30 joint venture with a Vietnamese government agency to develop a US$230m residential and commercial project in HCMC.


OutlookThe combination of the Government’s anti-inflationary measures and the global economic uncertainty are expected to result in a moderation of growth prospects for Vietnam in the short term. Though the long term outlook for the real estate sector in Vietnam is positive due to its strong demographics and stable government, the revival of the residential sector depends critically on when the Government decides to relax policy. The industrial real estate sector is expected to draw more investor interest as Vietnam emerges on the global manufacturing map. The presence of a growing middle class bodes well for the retail and hospitality sectors in Vietnam.



GDP (2010) US$318.8b



FDI (2010) US$6.3b

Income classification Upper middle Income


Recent economic performanceThailand is a free enterprise economy with a well-developed infrastructure and pro-investment policies. It is known for its openness to foreign investment, achieving a World Bank ranking of 16 from 181 countries for ease of doing business in 2011. Exports are the main driver of the Thai economy forming about 70% of GDP.

Thailand experienced good growth in the years 2002 to 2004, with GDP growing at a CAGR of 6.3% (refer graph below). But due to its political problems, investor confidence was damaged and during 2005 to 2007, GDP growth fell to a CAGR of 4.9%. Subsequently, due to the Global Financial Crisis and further political uncertainty, GDP growth slowed to 2.5% in 2008 and in 2009, the economy contracted by 2.3%. In 2010, GDP growth rebounded significantly to 7.8% enabled by an accommodative monetary policy and the recovery in the global economy.

Country and economic overview In 2011, growth in H1 2011 has been 2.8%. However, since July 2011, Thailand was hit by heavy monsoon rains resulting in the worst ever floods in its history. Seven key industrial estates in Bangkok have been affected, causing disruption in the global supply chain of automobiles and electronics, and disrupting household consumption. CIMB research estimates the cost of the catastrophic floods at 2% of GDP resulting in growth estimates for 2011 being reduced to 1% to 1.5%. According to Moody’s Analytics, real GDP is expected to grow 4.4% in 2012 helped by the boost from flood reconstruction measures.

Thailand GDP growth

Source: World Bank

5.3%

7.1%6.3%

4.6%5.1% 5.0%

2.5%

-2.3%

7.8%

-4%

-2%

0%

2%

4%

6%

8%

10%

2002 2003 2004 2005 2006 2007 2008 2009 2010

ThailandResilient, emerging stronger


The real estate marketThailand is the second largest economy within Southeast Asia and with its large domestic market, it’s one of the most important real estate markets within Southeast Asia. After the Global Financial Crisis, the real estate sector was seen to be reviving in 2010 with residential sales at a high and healthy absorption of office space. Retail sector

Real Estate market snapshotResidential sector: Slowing absorption and rising supply could put pressure on prices

• Apart from favorable demographics such as increasing urbanization and growth in affluent population in Bangkok, the continuous expansion of transport infrastructure (BTS sky train, MRT and the Outer Ring Roads) has provided additional stimulus for residential demand with newer demand areas being created.

• After reaching an all time high in 2010 due to the pent up demand post the Global Financial Crisis, residential absorption has slowed down. Greater Bangkok’s absorption for 2011 is expected to be 77%, down from 82% in 2010 and 103% in 2009 (Source - Macquaire research). Though the expected supply in 2012 is significant, developers were seen to be adjusting launches to balance the demand-supply equation.

• The recent floods in Bangkok have been negative for the single detached houses and townhouses segment with many houses in suburban Bangkok being affected. In the long term, construction costs for this segment should increase, as developers look to make adjustments to product specifications. In the near term, condominium developers will benefit as these have been largely unaffected by the flooding.

Office sector: Healthy occupancies and limited supply pipeline point to healthy prospects

• Bangkok office market showed improvement signs in light of the stabilizing political situation, though business confidence is marred by the recent floods. In addition, outlook remains uncertain due to the ongoing global uncertainties.

• Office demand has generally rebounded since the beginning of the Global Financial Crisis. According to Jones Lang LaSalle research, as compared to negative net absorption in 2009, absorption increased to 1.25m sqf in 2010 and 1.02m sqf in H1 2011, and overall occupancies were at approximately 85%.

• Further, very limited office supply is expected in 2012 and 2013 which point to good rental growth prospects.

Retail sector: Strong fundamentals and growing interest from foreign retailers

• The Bangkok retail market is concentrated in suburban Bangkok in proximity to residential areas. The retail sector has been performing well with the retail sales index at its highest level since the last five years due to improving political stability.

• Overall retail occupancy in Bangkok is quite healthy at around 95% and rents have shown an improving trend since Q1 2010 (Source – Colliers research). Going forward, with availability of land in central Bangkok expected to be scarce, a majority of the upcoming supply will be concentrated in the outer city and suburban markets.

Hospitality sector: Significant over supply risks in 2012 – 14

• After the political situation stabilized post the national elections, international tourist arrivals to Bangkok came back strongly in H1 2011.

• According to CBRE research, occupancy for upscale hotels improved to 60% in H1 2011, from approx. 50% in 2009 and 2010. However, ADRs continued to be under pressure at THB 5,488 (US$180), a year over year decrease of 4%. Going forward, the greatest risk to the hotel sector in Bangkok is the upcoming supply. Approx. 6,000 rooms are expected to be added in the luxury and upper scale segment in the next 2 years (Source - Colliers research), representing an increase of 40% from current levels. Coupled with the expected increase in serviced apartment supply and the global economic uncertainty, occupancies and rates could come under renewed pressure.

was also doing well helped by an improvement in consumer confidence post the elections. However, the largest ever floods in Thai history in H2 2011 has depressed business sentiment and residential and industrial real estate markets have been adversely affected.


Industrial sector: Strong fundamentals, but brief hiccup due to largest ever floods

• Thailand is a well established regional manufacturing base with a large domestic market. Thailand is the largest manufacturer of automobiles in ASEAN and is one of the world’s largest production bases for hard disk drives.

• After the Global Financial Crisis in 2009, the industrial real estate sector bounced back in 2010 and 2011. According to Macquarie research, land sales bounced back from 901 rais (144 ha) in 2009 to 3,622 rais (580 ha) in 2010, and foreign investment applications for H1 2011 were up 34% year over year.

• However, the floods since July 2011 have hit the sector hard with 7 major industrial estates in the central provinces of Ayutthaya and Pathumthani heavily affected resulting in loss of production and supply chain disruptions. Subsequently, many of the affected estates have resumed operations in Q4 2011 and the remaining are expected to do so in Q1 2012. As a result of the floods, manufacturers have been evaluating locations based on the flood safeguard measures and locations such as the Eastern seaboard which were not affected have increased in preference.

Key trends• Expansion of modern retail formats will continue to drive

absorption. TCC Land’s Asiatique mall with a NLA of 30,000 sqm is expected to be ready in early 2012.

• Recent floods affecting some of the suburban malls will further spur retail developers to rejuvenate their portfolio and build/relocate some of their assets.

• Office market to perform well given limited supply additions and improved political situation. In the long term, Bangkok has potential to become a sub-regional financial hub within SEA, given its close proximity to the Indo China region.

Key transactions4

• A Hong Kong based investor acquired the 469-key 5-star Sofitel Silom Hotel from a global fund for THB2b (US$66.7m) (US$.14m per key).

• 49.5% interest in the 469 room Pullman Pattaya Aisawan Resort was sold to a Hong Kong based investor for THB2.01b (US$65.7m) i.e., THB 4.3m (US$ 0.14m) per key.

• A local corporate purchased a 9rai former Japanese embassy site on New Phetchaburi Road for THB2b (US$65.7m), which it intends for mixed-use development.

• A local developer bought a building that was part of The Ambassador Hotel located between Sukhumvit Soi 13 and 15 for an undisclosed sum. The plan is to redevelop this into a 25-story condominium project to be known as 15 Sukhumvit Residences.

• Other land purchasers include: A local developer purchased a 3 rai site on Sathorn Road from the French Government; Other local developers have also been purchasing land for residential developments.

• A Thailand focused industrial property fund acquired 3 warehouses for THB 943.5m (US$31.45m) i.e., (US$51 psf) in Bangna and Laemchabang.


OutlookSince manufacturing and exports are key components of Thailand’s economy, the current global economic uncertainty could have significant implications. The recent floods have been a temporary setback to the industrial sector. However, the long term potential is still intact since Thailand’s importance in the supply chain in Asia and unique competitive advantages make it very difficult to relocate out. On the macro-economic front, the flood reconstruction efforts are expected to provide a boost to the Thai economy in 2012. Office sector is expected to remain strong as the limited supply pipeline is expected to result in rent increases in 2012 and 2013. In the retail sector, interest among foreign retailers remains strong and that would translate into increased demand for mall space. In the Hotel industry, the significant upcoming supply could trigger a price war from 2013.


Surface area 1,904,570 sqkm

GDP (2010) US$706.6b



FDI (2010) US$13.3b

Income classification Lower middle Income

Unemployment 7.9% Source: World Bank

Recent economic performanceIndonesia is the largest economy within Southeast Asia and is a member of the G 20 group of countries. Domestic demand and external demand from the rest of growing Asia for its commodities are the two main drivers of the Indonesian economy. The middle class in Indonesia is growing fast, and in coming years, could emerge as the largest middle class after China and India. Indonesia is rich in natural resources and is the largest exporter of thermal coal in the world. In the WEF’s 2010-2011 Global Competitiveness Index rankings, Indonesia climbed 10 spots to 44th place. According to an AT Kearney survey in 2010, Indonesia ranks among the top 20 investment destinations in the world.

Strong growth and significant reforms have resulted in Indonesia’s debt-to-GDP ratio declining steadily in recent years and strengthening external liquidity. As a result, Indonesia’s investment ratings have consistently improved. In April 2011, Standard & Poor’s raised Indonesia’s credit rating to BB+, just below investment grade.

Country and economic overview This was followed by rival agencies Fitch and Moody’s upgrading Indonesia to investment grade in December 2011 and January 2012 respectively. This marks Indonesia’s return to investment grade status after the Asian financial crisis when the ratings were downgraded to junk status. Indonesia’s rising popularity among foreign investors is reinforced by the fact that in 2011, Indonesia attracted record-high FDI of approx. US$20b (Source – Indonesia Investment Coordinating Board).

Indonesia has been experiencing consistent GDP growth during the 2002 to 2010 period growing at a CAGR of 5.4% (refer graph below). In 2009, when many other Southeast Asian economies contracted, Indonesia’s economy expanded by 4.6%. In 2010, growth increased to 6.1%. According to Moody’s Analytics, Q3 GDP in 2011 grew 6.5% year over year, driven partly by strong growth in manufacturing and services sectors, along with robust private consumption and investment spending. For 2012, the central bank in Indonesia forecasts GDP growth at 6.3%, down from its earlier estimate of 6.5% due to concerns over a potential global economic slowdown.

Indonesia GDP growth

Source: World Bank

4.5%4.8%

5.0%

5.7% 5.5%

6.3%6.0%

4.6%

6.1%

0%

1%

2%

3%

4%

5%

6%

7%

2002 2003 2004 2005 2006 2007 2008 2009 2010

IndonesiaFirmly in the limelight


The real estate marketIndonesia did not benefit from the Asian real estate boom in 2006 to 2008. Now, the real estate market in Indonesia appears to be immune from all the global economic woes and concerns. Investors are flocking to this country, with portfolio capital as well as FDI rising rapidly, driven by promise of local consumption, urbanization and young population. Indonesia is the world’s 4th most populous country.

Real Estate market snapshotResidential sector: Fast growing market driven by an expanding middle class

• Residential demand continues to stay strong, absorbing any new supply introduced by the newly built apartments. Condominium sales in Jakarta have been steadily increasing from around 500 units per quarter to 2,000 units in Q2 2011 (Source – Jones Lang LaSalle Pro Con research). Further, take up rates remained healthy. Take up rates in Jakarta were about 75% during Q3 2011 with projects in CBD recording almost 100% absorption rates (Source – Colliers research). South and West Jakarta have been witnessing increasing apartment supply owing to both the better infrastructure in these areas and presence of other facilities such as shopping and schools.

• Expatriate housing market will see rental increase as a result of new demand from anticipated new hires from MNCs especially from consumer goods companies.

Office sector: Buoyant prospects for capital value appreciation

• Strong demand for office space in Jakarta continues to fuel rapid rental growth. According to Colliers research, office rents grew 9.5% year over year in Q3 2011 (with rentals of some prime CBD buildings approaching US$40 psm per month); and CBD occupancies were at an all time high of 92.9%.

• With limited new supply expected in 2012-2013, the expected supply in 2012 has seen healthy pre-commitments. With the expected completion from World Trade Center Phase II, this may provide some temporary relief.

• With the high occupancies, healthy take-up and significant rental growth, capital values are expected to rise significantly.

Retail sector: On the upswing due to strong consumer spending and interest from foreign retailers

• Indonesia’s economic growth has resulted in a sizeable and growing high spending middle class population which is driving demand for retail malls. Indonesia’s retail sales are expected to grow from IDR1.24trillion (US$119.4b) in 2010 to IDR2.07trillion (US$200.16b) by 2014 at a CAGR of 13.5% (Source - Lippo Mapletree Indonesia Retail Trust Annual Report 2010).

• Demand for retail malls remains healthy on the back of growing consumption and lifestyle. Of the total 2012 supply, a significant portion has been committed and beyond 2012, there is very limited supply (Source – DTZ research). There is growing interest among leading retailers to expand their presence in Jakarta and surrounding cities.

Hospitality sector: Playing catch up with the rest of Southeast Asia

• The hospitality sector in Jakarta has shown a consistent upward trend in line with Indonesia’s economic growth. ADRs in Jakarta which has traditionally been among the least expensive hotel markets in Southeast Asia have been growing consistently, and occupancies have rebounded strongly after the GFC. According to CBRE Hotels research, between July 2010 and June 2011, Jakarta’s REVPAR increased by nearly 20% to IDR551,100 (US$65), even ahead of Singapore’s REVPAR increase.

• Apart from the Golf Pondok Indah Tower 3 serviced apartment, there was virtually no new supply in the hospitality sector in Jakarta for the last 2 years. With the expansion of MNCs operating in Indonesia and improving business environment, there has been an influx of foreign workers and expatriates. As a result, demand for serviced apartments should increase.

As a result, demand and healthy leasing activity can be seen across all sectors in the real estate market. Due to the earlier pessimism in this country, there were little developments then and hence supply today is limited. The combination of these factors is fuelling the real estate market in the short to medium-term.


Industrial sector: Record levels of absorption and rental growth

• Sales of industrial land in 2011 reached an all time high. According to Colliers research, total land sales up to Q3 2011, were 896 ha, 65% higher than full year 2010 due to robust demand from automotives and consumer goods companies, and absorption levels in Q3 2011 increased to about 85%, up from about 75% in 2010. This resulted in shortages of quality industrial land at many prominent industrial estates and healthy price increases. In Karawang, the largest industrial estate, prices increased from US$40 psm in early 2009 to about US$90 psm in Q3 2011 (Source – Colliers research).

• Going forward, prospects for industrial real estate are expected to be strong with the continued strong growth of the Indonesian economy and increasing investment interest from Japanese, Korean and Indian manufacturers.

Key trends• Residential sales will continue to grow given the trend towards

condominium living and increased affluence among the working population.

• Jakarta office market is expected to continue enjoying robust demand due to the strong economy and business environment.

• Retail rental growth is expected to continue over the short to medium-term. Hypermarkets, department stores, entertainment outlets and fashion stores will continue to dominate the retail scene.

• Hotel and serviced apartment development is bound to grow and many international operators are intending to increase their footprint in Indonesia.

Key transactions5

• Several large retailers have taken up large retail spaces in Kota Kasablanca. 100% of Ciputra World Jakarta Mall (NLA 65,000 sqm) taken up by a leading Korean retailer which plans to occupy most of the space and sublet the remainder to other retailers.

• An overseas REIT acquired Pluit Village, a 929,000 sqf mall in North Jakarta for 1.6 trillion IDR (US$196 psf), and Plaza Medan, a 603,000 sqf mall in North Jakarta for 1.05 trillion IDR (US$198 psf).

• A local developer acquired a 75-hectare land parcel in Bintan islands, near Tanjunguban port for development of industrial estate.

• ►A leading local developer announced plans to expand its hotel portfolio by developing budget hotels in Jakarta and Bandung.


OutlookWith the hosting of World Economic Forum on East Asia 2011 held in Indonesia, the country will come under the spotlight for investment opportunities. The government recently released its Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development 2011-2025 and aims to move Indonesia into one of the largest global economies by 2025. The first pillar of the plan is the development of six regional economic corridors through investments in sectors with high growth prospects and in regions with comparative advantages. This requires improving connectivity and strengthening human resources and science and technology. The Master Plan targets investments of US$488b over 2011-2025 of which 45% are in infrastructure. About half of the total investment will come from the private sector.

Growth is expected in all real estate sectors.


ContactsErnst & Young ASEAN Transaction Real Estate

ASEAN and Singapore

Teh Seng LeongPartner and Co-Leader Real Estate DealsErnst & Young Solutions LLP [email protected] +65 6309 8393

ASEAN and Singapore

Ram SoundararajanAssociate Director, Real Estate DealsErnst & Young Corporate Finance Pte Ltd [email protected]+65 6309 8555

Malaysia

Stephen DuarPartner Ernst & [email protected] +60 3 7495 7878

Thailand

Vorapoj AmnauypanitPartnerErnst & Young Corporate Services [email protected]+66 2 264 0777

ASEAN and Singapore

Mak Hoe KitExecutive Director and Co-LeaderReal Estate DealsErnst & Young Corporate Finance Pte Ltd [email protected]+65 6309 6832

Singapore

Aaron LohPartner Ernst & Young Solutions LLP [email protected]+65 6309 6105

Indonesia

Sahala SitumorangPartner PT Ernst & Young Indonesia [email protected]+62 21 52895188

ContactsErnst & Young Global Transaction Real Estate

Howard RothGlobal Real Estate Industry LeaderNew [email protected] +1 212 773 4910

Chris LawtonAsia Pacific Real Estate [email protected]+61 292 48 5165

Rick SinkulerGlobal Real Estate Markets [email protected]+1 312 879 6516

ADB Asian Development Bank

ADR Average daily rate

b Billion

CAGR Compounded annual growth rate

CBD Central business district

FDI Foreign direct investment

GDP Gross domestic product

GDV Gross development value

GFA Gross floor area

Ha Hectare

IDR Indonesian Rupiah

IMF International Monetary Fund

m Million

NLA Net leasable area

Ppr Per plot ratio

Psf Per square feet

Psm Per square meter

REIT Real estate investment trust

REVPAR Revenue per available room

RM Malaysian Ringgit

S$ Singapore Dollar

Sqf Square feet

Sqkm Square kilometer

sqm Square meter

THB Thai Baht

US$ United States Dollar

WEF World Economic ForumList

of a

bbre

viat

ions

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Real estate opportunities in Southeast Asia

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