JLL also conducted a research on the impact of the Fourth Industrial Revolution on real estate in Southeast Asia in 2016 (SEA). Following are the main changes and trends of real estate in SEA in the next 5 to 10 years.
Transportation: Smart traffic management, car sharing, autonomous driving and mass transit
Due to the lack of investments in mass rail transit and caps on car ownership, traffic congestion in most cities is absolutely serious in SEA. Online services like Grab, Uber and Waze (transportation network and services) have deepened their penetration and allowed the use of mobile phone data to leapfrog state efforts in traffic management. The ongoing construction of mass rapid transit projects in Singapore, Kuala Lumpur, Bangkok, Manila and Jakarta will increase rail length by 50% by 2020 and promote the use of public transport. Commercial properties at the intersections of these new rail lines are also expected to outperform.
Work: people work differently and the impact on office space
Flexible working, outsourcing and co-working spaces will accelerate in the next 5 years and further enhance office demand in emerging markets. Co-working and serviced office spaces currently account for 1-5% of total office stock in developed cities, but this proportion could grow to 20-30% by 2030.
After the global financial crisis, while global office demand growth has slowed, SEA has withstood the trend, with demand growing 20% faster. Therefore, office demand in SEA may grow at 6% till 2020 due to economic growth, the increase of the middle class, as well as further acceleration of outsourcing from developed markets.
Entertainment: people shop differently and the impact on retail space
Globally, the popularity of the smartphone has changed the way we shop. In SEA, 50-90% of consumers outside of the most developed cities have used mobile phones to shop online regardless of low urbanization and internet line connections.
The demand for new stores for regional malls is expected to grow as incomes rise, especially as customers tend to show more priority for cash payments and customer pick up instead of home delivery.
Live: Sharing our homes and the impact on residence
In SEA, home-sharing platforms in Singapore, Bangkok and Kuala Lumpur currently approximate 2% of occupied room nights and have potential to grow to 5% by 2020. As forecasted, residential land prices in central locations could rise if regulations are easing to allow short term stays in residential sites within these locations.