Savills Research & Consultancy aims to offer objective advice to clients in order to help them make well-informed real estate related decisions and realise pre-defined goals.
The office leasing demand profile in Hong Kong has been changing quite rapidly in recent years. Although Hong Kong is regarded as an international finance centre which houses various financial institutions, multinational investment banks such as Societe Generale, Credit Suisse, Morgan Stanley and Deutsche Bank, have all recently reduced their office requirements in prime office buildings since 2009, after aggressive expansion in 2008.
Many academic commentaries compare and contrast Singapore and Hong Kong. From topics as diverse as labour productivity and social mobility to the quality of life for an expatriate, these two economies have been like magnets, drawing contributions from different analytical sources. Of course, this is wholly understandable: both are Asian, coastal cities with high population densities. However, there are subtle and overt differences between Singapore and Hong Kong. For example, Hong Kong has a currency peg to the US Dollar whilst Singapore maintains a strong currency to ward off imported inflation. Also, the GDP per capita of Singapore is about 42%, higher than that of Hong Kong.
According to the Ministry of Land, Infrastructure and Transport, 2,223 logistics facilities were registered as at May 2015. The Seoul, Incheon and Gyeonggido areas accounted for 43% of these, of which 899 were dry warehouses and 45 were cold warehouses.
Since the launch of Abenomics, Japan’s real estate industry has experienced a recovery, due to the policy support the Abe administration has given the industry. One of the notable influences is the change in residential land prices, particulary in Tokyo. Whilst the national average for residential land prices is still in negative territory, the average residential land prices for Tokyo’s 23 Wards rose both in 2014 and 2015. In particular, the five central Wards showed strong improvements in land value.
Transaction volumes for real estate in Japan have increased substantially compared to the market nadir in 2012. Recent figures by Real Capital Analytics (RCA) suggest that approximately JPY2.7 trillion worth of properties were transacted from reported deals in Japan during 1H/2015. Approximately 80% of the total transactions were concentrated in Tokyo, while transactions in other regions also rose as investors sought higher yields. Over the past few years, Japan’s transaction volumes in the second quarter have tended to be lower than in the first. The uncertainty of the global economy, however, geopolitics and the scarcity of opportunities in the current market significantly pulled the Q2/2015 figure down to JPY695 billion, the lowest level since late 2012.
In line with recently observed trends, the total number of inbound travellers to Taiwan climbed to 9.91 million in 2014, representing a 23.6% increase year-on-year (YoY), the second highest increase since 2008. Tourists from Asian countries accounted for 90%, with mainland China representing 40%, followed by Japan (16%), and Hong Kong and Macau (14%). Since mainland Chinese tourists have been allowed to apply for travel visas, the proportion of inbound travellers accounted for by mainland Chinese has grown from 29% to 40% in three years and now plays an important role in Taiwan’s tourism market.
Malaysia retail sales growth has been revised for the fourth time by the Malaysia Retailers Association, lowered from an initial anticipated growth rate of 5% to 3.1% for 2015. 1H/2015 saw a major decline in sales, experienced by even the best malls. The Malaysia Consumer Sentiment Index has reached a low point, similar to the level recorded during the Global Financial Crisis (2008). Market expectations for Q4/2015 are for an improvement if sentiment picks up.
Tourism and the manufacturing are the two core support sectors of Penang’s economy. Since UNESCO gave World Heritage Site status to George Town (the capital city of Penang) in July 2008, tourism has grown at a remarkable rate. This is evidenced by the arrivals statistics registered at Penang International Airport, which have grown at a compounded annual growth rate (CAGR) of 10%, since 2009, against 4.0%, prior to the award. Penang International Airport is the second most visited airport in Malaysia by the international sector in 2014, having welcomed 1.28 million international passengers.
Since the inception of Iskandar Malaysia in 2006, total cumulative investment has reached RM172.51 billion with a realization of 50% as at June 2015. The economy is domestically driven, with a fair contribution from Foreign Investments (39%). The services & utilities sector contributed the most to total investments, which includes logistics, healthcare, tourism, education, the creative industry, finance, retail and industrial properties, emerging technologies and utilities. This is followed by the manufacturing sector and residential properties. Major catalyst projects which have been completed in recent years include Educity, Pinewood Iskandar Malaysia Studio, Johor Premium Outlet (the first in the region), and Legoland Malaysia (the first in Asia), to name of a few. The increasing tide of investment is expected to boost the property market by creating more job opportunities, generating higher incomes, and promoting population diversity.
In Q2/2015, villas, townhouses and land plots performed well, with demand increasing for affordably priced small and medium-size properties. In this report we take a closer look at Ho Chi Minh City, the largest city in Vietnam.