The Indonesia property market is Asia’s most transparent and efficient according to Cushman and Wakefield’s Emerging and Frontier Markets Report.

The study focused on office and retail property in 42 emerging nations, excluding Brazil, Russia, China and India.

Demand for commercial property in Indonesia has been strong. This was even during the country’s general elections when multinational firms had a “wait and see” approach. However, a large office supply could weaken growth in Jakarta’s central business district.

Indonesia ranked 5th in the world and was the only place in Asia which made the top ten.

The nation scored well in several categories, including the amount of bureaucracy and ease of leasing real estate. Both of these categories improved along with the rapidly developing Indonesian economy.

 

Neighbors Catching Up to Indonesia Property Market

Real Estate Markets

Botswana topped the world’s list because of its improving economy and large amount of office supply.

Other Southeast Asian real estate markets included in the study were Thailand, Philippines, Vietnam, and Myanmar. They were ranked 11th, 14th, 25th and 40th place respectively.

Ranking second in Asia, Thailand’s rental yields continue to increase because of a limited supply of prime real estate in Bangkok that has access to the MRT and BTS transit lines. Many property owners and have begun refurbishing malls and offices to prepare for the upcoming ASEAN Economic Community.

Offices in the Philippines remain one of the world’s least expensive to lease. According to the report, improvements in infrastructure and public transportation should spur development beyond the Metro Manila area.

Analysts are wary of emerging markets, where risk is generally higher than in developed markets. Corruption, political instability, and crime are some of the primary concerns.

“Existing political systems in many countries are under pressure and states with poor governance and cultural tensions are susceptible to terrorism and other crimes such as kidnapping,” stated the report.

While countries with high a geopolitical risk have fallen out of favor, the report also noted that there are significant growth opportunities across many emerging and frontier markets.

Property investors see strong population growth, an increasingly educated and affluent labor force, and more transparent governments as key factors for expansion.

 

 

About Chandra Alatas

Chandra is the assistant manager of a large portfolio of residential and commercial real estate with holdings in Singapore and Jakarta, Indonesia. He is a specialist in property and REITs in Southeast Asia and the Middle East.

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