Regions of Opportunities
South East Asia
With a regional population of around 650 million and an economy that is the fifth largest globally, Southeast Asia’s consumer base is one that cannot be ignored. Over the coming years, as its young population, with a median age of 29 years, matures and forms part of its expanding middle class, its consumer patterns and expectations are projected to mirror that of developed markets. This expanding class of consumers will demand a wide selection of goods online and efficient delivery and return options. This in turn will have profound implications on the industrial real estate sector via greater demand for warehouses.
However, for the industrial sector in these regions to proliferate, there must be a minimum standard of existing infrastructure to underpin its growth. But this is where things start to diverge given the uneven levels of investments into infrastructure, by both public and private entities, within these markets over the past two decades. Furthermore, while there have been programs such as China’s Belt and Road initiative which has done its part in levelling the playing field, a disparity remains, and these have had downstream implications for attracting foreign logistics players.