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November 13, 2013

The Association of Southeast Asian Nations 1 (ASEAN) is a political union of 10 member states. The rapid growth in these economies and expanding consumer markets will see larger volumes of goods being transported around the region, producing a growing requirement for supply chain solutions and associated real estate. This report examines the rapidly changing patterns in Southeast Asia and will help real estate players to understand the growing prominence of these important markets and the investment opportunities they offer.

Asia’s population currently stands at over 4 billion, with 618 million people in Southeast Asia alone. The expanding labour force and a rapidly increasing middle class means we continue to see rapid economic growth in Asia, with GDP growth forecast at 5% per annum over the next decade. Economies within Asia such as China, India and the ASEAN community will be the economies driving future global growth and are expected to see higher than average growth on a globally comparative basis.

Focused investment in infrastructure is opening up new markets and presenting many opportunities for investors. Likewise legislation is becoming easier to navigate and increasing confidence in local markets is resulting in even greater inflows of foreign investment.

Changes are having a positive effect on trade volumes in Southeast Asia, and are presenting a wealth of opportunities for the rapidly expanding logistics sector and associated real estate. The demand for logistics facilities is growing and the industrial sector continues to see large changes, while this presents challenges there are significant opportunities for early market entrants.

Foreign investors are targeting Southeast Asia as a prominent growth region due to stable economic conditions, a strong demographic profile and rising regional trade volumes in the face of slow global demand, leading to increased confidence in the region and strong investment activity. As the region becomes more affluent and the economies continue to mature and modernise there will be an increasing need for
modern supply chain solutions.

The logistics and distribution sector is being further boosted by proactive infrastructure investment which will modernise the transport network in the following decade. Investment in infrastructure has been extensive over recent years and this is expected to accelerate looking forward.

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