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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