Asia’s share of global revenues at non-Asian firms in the global real
estate sector is expected to increase from 21.1 percent in 2013 to 33.3
percent in 2018, according to the Asia Business Outlook Survey 2014 (ABOS) from The Economist Corporate Network.
“Our
survey shows that non-Asian companies in every sector have high
expectations for the Asia Pacific region, but the most bullish sector of
all is property and construction,” said Justin Wood, Director,
Southeast Asia, at The Economist Corporate Network.
But,
added Wood: “Even with the expected increase in Asia’s contribution,
real estate revenues coming from the region will still lag behind Asia’s
share of the global economy. In 2013, Asia Pacific made up 31 percent
of global GDP, and we expect that share to rise to 35.5 percent by
2018.”
Another interesting finding in the survey is the growing role of real estate strategy in managing human capital.
Companies
from all sectors say they are investing in workplaces as part of their
efforts to improve employee attraction and retention.
“Because of
Asia’s high growth rates, the demand for qualified labour often exceeds
the supply, leading to high rates of staff turnover. But companies are
now thinking about real estate strategy as an important part of
attracting and retaining staff,” said Wood.
The survey, which
polled 334 companies from a wide range of sectors, revealed that 37.8
percent of companies have already upgraded their workplaces as part of
their human capital strategy, and that a further 26.8 percent plan to do
so in the coming year.
Just as important, the survey shows that
companies are harnessing real estate strategy as a way to improve worker
productivity. Many companies in the region are seeing their wage bill
rise more quickly than the productivity of workers, so putting margins
under pressure. But upgrading workplaces can help alleviate such issues
by creating work environments that encourage greater collaboration,
creativity, and idea generation, making workers more productive.
“Real
estate has often been seen merely as a cost that needs to be managed,
but our survey suggests that companies may be taking a more strategic
approach to the role that property and workspaces can play in driving
growth,” added Wood.
Other highlights from ABOS 2014 included;
executives at global multinational companies say that Asia Pacific is
delivering better profit margins than the global average at their
companies; China remains the top investment destination, but Indonesia
has overtaken India in second place; and executives feel the investment
climate is improving across Asia, except for India, Australia and
Thailand.
To access the report visit: http://ecn.st/ABOS2014
Andrew Batt, International Group Editor of PropertyGuru Group,
wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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