Both multinational corporations and Asia Pacific-based companies are looking to expand further in the Asia Pacific region over the next 3 years, according to the result of the CBRE Asia Pacific Occupier Survey 2017. However, Thailand won’t likely see much of this expansion activity as companies look to expand to places that can either handle outsourcing or have more promising economic outlooks.
Nearly 50 per cent of multinational companies that participated in the survey are looking to increase their employee numbers in Asia Pacific. This new headcount growth is expected to continue with organic business growth showing international companies that Asia Pacific’s long-term growth potential is strong despite a cloudy global economic outlook.
Where this expansion will take place is expected to vary across different markets. Multinational companies are most eager to expand in emerging markets with China and India drawing the most interest. Among Southeast Asian countries, Indonesia is the most popular with the Philippines also seen as a market worth considering. Businesses are also considering expansion in Thailand and Malaysia but they are not the focal point of multinational corporations looking to increase operations in the region at the moment.
There is also a desire from multinational companies to consolidate in places such as Hong Kong, South Korea and Taiwan. This will have less of an impact on Hong Kong which is being heavily targeted by Chinese businesses who are leasing or buying Grade A buildings there at an extraordinary rate. Overall, the strategy of most international businesses is to capture the growth potential of emerging markets while streamlining operations in mature markets in a bid to stabilise costs.
A majority of Asia Pacific-based companies will also strongly consider expansion with Indian businesses expected to be the most aggressive in the next three years. This is due to the country’s buoyant economy, continued progress in making regulatory reforms, and a booming outsourcing sector, notes the report.
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