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1、STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC1Opportunities AcrossAsia PacificSTRENGTHTHROUGH DIVERSIFICATION2STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC3TABLE OF CONTENTSEXECUTIVE SUMMARY01DRIVERS OF CHANGE IN ASIA PACIFIC03INTRODUCTION02CHALLENGES IN EXP
2、ANDING ACROSS ASIA PACIFIC04SECTORAL TRANSFORMATION05MARKET FOCUS06STRATEGY07401STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC5EXECUTIVE SUMMARY01016STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC7 Intra-APAC trade has increased 5-fold in USD dollar values sinc
3、e 2000,further growth is expected which will force supply chains to become more regionally focussed.As mainland China continues to move up the value chain,new manufacturing and logistics hubs are emerging,especially across South East Asia and India creating opportunities across the region.Although l
4、abour pools are deep compared to Europe and US,talent is heavily concentrated within the region.At the same time,there is great variability in skill levels,meaning investment in capability and capacity building.Port throughput capacity also needs to be expanded across much of the region.India and So
5、uth East Asian markets,cumulatively account for 19%of throughput of the worlds top 50 ports,while China accounts for 45%.Sectoral trends are also driving the need to redesign supply chains to incorporate greater flexibility,automation and resilience while also reducing input costs and accommodating
6、greater sustainability initiatives.Occupiers of logistics and industrial space can capitalise on these opportunities by expanding into new markets and/or expanding existing facilities to meet the forecast growth in demand.However,they would be well advised to undertake rigorous supply chain mapping
7、and location analysis to help ensure the optimum design of their manufacturing and distribution strategy.For investors and developers,opportunities will flow from leveraging existing relationships with tenants to aid their expansion through providing bespoke solutions.In turn,this will provide oppor
8、tunities to deploy capital and expand portfolio sizes.8INTRODUCTION02STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC9INTRODUCTION020210INTRODUCTIONNotwithstanding these near-term fluctuations,the underlying driver for the sector in Asia Pacific is one of growth and expansion.This
9、is being fuelled by several sources which is driving transformative change across the region and is creating a range of opportunities for occupiers,developers and investors alike.However,at the same time there are challenges that need to be overcome for the sector to reach its full potential in the
10、region.Like other commercial real estate sectors,the industrial sector globally has been buffeted by a variety of headwinds and tailwinds over the past few years.STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC1112DRIVERS OF CHANGE IN ASIA PACIFIC03STRENGTH THROUGH DIVERSIFICATION:
11、OPPORTUNITIES ACROSS ASIA PACIFIC130303DRIVERS OF CHANGE IN ASIA PACIFIC14DRIVERS OF CHANGE IN ASIA PACIFICGROWTH OF ASIA PACIFICThe Asia Pacific region has established itself as“the factory of the world”,with a significant role being played by mainland China which accounts for almost 15%of global e
12、xports1,has trade links with over 200 markets globally2 and is the top trade partner to more than 120 of them3.However,trade routes within the region will become more important.Europe and North America have long been the largest trading partners with AsiaPacific,respectively accounting for 16%and 15
13、%of exports by value in 20224.However,while the dollar value has increased,theproportionate share of exports hasdecreased from 19%and 23%respectivelyin 2002.Both Europe and North Americado and will remain significant partners,but their dominance is lessening.This isexpected to continue into the futu
14、re asconsumption growth in these regions lag faster developing markets and the prevalence of near-shoring is gathering pace.In contrast,intra-regional trade across Asia Pacifics top 13 economies has increasedfrom USD820bn in 2000 to over USD4.4tnin 2022 a five-fold increase(Figure 1)with intra-regio
15、nal trade accounting forapproximately half of total export trade for these markets.Beyond this,modest increases in trade are occurring with the Middle East and Africa.STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC15FIGURE 1:INTRA-REGIONAL EXPORTS WITH ASIA PACIFIC*,USDBN 1980-202
16、2However,it is the underlying strength of the region itself that will be most influential into thefuture.The regional economy is forecast to increase by over USD10tn in real terms through tothe end of the decade,accounting for half of global growth5.Alongside this,Asia Pacific will have the largest
17、growing regional population and dominate the middle class,accounting for 89%of total global growth through to 20306.In short,the region will increasingly look toservice itself and supply chains will need to be redesigned to capitalise on the opportunity.2 Truman Du(2023).Visualizing All of Chinas Tr
18、ade Partners.Visual Capitalist3 Ambassador Mark A.Green(2023,January 17).China Is the Top Trading Partner to More Than 120 Countries.Wilson Center4 International Trade Centre5 Moodys analytics,September baseline forecast 6 Brookings InstituteSource:International Monetary Fund*Top 13 markets16DRIVERS
19、 OF CHANGE IN ASIA PACIFICAs the region continues to develop and mature,the manufacturing sector hasresponded.Mainland China has made rapid advances in its manufacturing sector,in part spurred by technological development and automation but also supported by increasing labour costs,which on average
20、have risen 10%per annum over the past decade(Figure 2).These factors,together with government policy such as“Made in China 2025”and a greater focus on sustainability,have driven a marked shift to higher order goods production and the development of a“modern industrial system”.For example,mainland Ch
21、ina has taken a leading positionin the production of electric vehicle batteries,photo-voltaics and quantum sensors.FIGURE 2:MONTHLY MANUFACTURING WORKER COMPENSATION(USD)Source:Moodys Analytics,National Statistics AgenciesDIVERSIFICATION OF MANUFACTURINGIN ASIA PACIFIC16DRIVERS OF CHANGE IN ASIA PAC
22、IFICSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC17This progression in mainland China is providingopportunities across the region,much of which first emerged in the mid-2000s and wasdirected initially towards South East Asia and now also to India.This originally was driven by co
23、st pressures,with these markets offering the combination of comparatively less expensive labour and real estate costs;factors that are especially important for lower-order goodsproduction,where cost pressures are a much more significant input variable.In USD terms,industrial rents in Greater Hanoi a
24、re 40%cheaper than Tier 1 cities in mainland China,while markets in India are over 50%cheaper.These gains extend to Tier 2 cities in mainland China,though with a reduced margin nearer 5%for Hanoi and 25%to 40%for Indian cities.The impacts of this transformation are nowbecoming clearer,with China exp
25、ected to soonaccount for less than 50%of low-cost imports to the U.S.in 2023 for the first time in a decade7.Vietnam has been a key beneficiary,which has doubled export volumes to the U.S.over the past five years and tripled them over the past decade,though India and Malaysia have also grown export
26、share.STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC177 Kearney18DRIVERS OF CHANGE IN ASIA PACIFICManufacturing sector growth in these markets has not just been due to the lower cost base.The need for diversification in supply chains,not least due to COVID-related bottlenecks,as
27、well as supportive government policy have also contributed.In India,the Modi governments“Make in India,Make for the World”,is a FIGURE 3:MIX OF MANUFACTURED GOODS IMPORTED IN THE US FROM ASIAN LOW-COST COUNTRIESSource:Moodys Analytics,National Statistics Agenciesmajor policy drive to grow manufactur
28、ings share of GDP through reducing reliance on imports but also driving export growth.Increasing industry specialisation has also played a contributing role.Together,these factors suggest there are multiple options for developing new hubs across the region.STRENGTH THROUGH DIVERSIFICATION:OPPORTUNIT
29、IES ACROSS ASIA PACIFIC19Footwear,apparel and retailTech manufacturingIndustrialElectronics and automotivePetroleum and pharmaceuticalsVIETNAMMALAYSIAINDONESIATHAILANDINDIA20DRIVERS OF CHANGE IN ASIA PACIFICSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC21It is acknowledged that t
30、his productivity gap is notspecific to Asia Pacific,but it does highlight wherecompaniesseeking to expand in the region shoulddirect at least some of their attention.Inevitably,supportive government policy is often seenas a solution but there are a number of options available to private enterprises.
31、In the first instance,this includes investing in capability building to improve capacity,quality,and lead times.In addition,greater focus onanalytics should be made to identify where the greatestadvancements can be made to maximise return on investment.Developments are likely to be multi-speedbetwee
32、n markets and companies,which should be considered by corporates looking to both enter orexpand in the region.The Asia Pacific region has strong growth fundamentals,but aproductivity gap between the region and both Europe and the U.S.remains.Although a broad statement,according to the World Bank,lab
33、our productivity in emerging markets/developing economies is just under 20%that of advanced economies.CLOSING THE PRODUCTIVITY GAP22CHALLENGES IN EXPANDING ACROSS ASIA PACIFIC04STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC230404CHALLENGES IN EXPANDING ACROSS ASIA PACIFIC24CHALLE
34、NGES IN EXPANDING ACROSS ASIA PACIFICAs producer of almost 15%of the world exports,it is unsurprising to note that mainland China has a significantly sized workforce dedicated to the industrial sector.In simple numerical terms,53%of Asia Pacifics total warehouse employment,some 163 million employees
35、 are located in mainland China.The drop-off afterwards is stark with India accounting for 20%(60 million)and Indonesia 8%(25 million).Despite strong growth rates across much of South East Asia and India,of up to 4%per annum through to the end of the decade,the situation is forecast to remain little
36、changed(Figure 4).While there are many drivers that are positively impacting the logistics and industrial sector in Asia Pacific,several key challenges need to be overcome.Some of these derive from inherent inertia in the system,while others will require significant investment.LABOUR SUPPLYSTRENGTH
37、THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC25There are also other nuances at play,beyond just depth of the labour pool which include varying talent skill levels.While this is considerably harder to measure,it stands to reason that mainland Chinas longstanding experience and strength ac
38、ross manufacturing and logistics sectors will be hard to replicate overnight.Of course,this also highlights the need to drive productivity gains,as highlighted above,and rapidly invest in both capability building and automation.FIGURE 4:PERSONS EMPLOYED IN WAREHOUSING BY MARKET(MILLIONS)Source:Moody
39、s Analytics26CHALLENGES IN EXPANDING ACROSS ASIA PACIFICAt the headline level,Asia Pacific against for approximately 65%of the worlds container port volumes.Against this backdrop,Asia Pacific isunsurprisingly well-represented amongst the worlds busiest ports,accounting for 30 of the top 50 locations
40、.However,at a more granular level,it is evident that port throughput capacity is heavily concentrated in Greater China ports which occupy four of the top 5 positions and 7 of the top 10 positions.Singapore is the only other city to make the top 5,while Busan and Los Angeles make the top 10(Figure 5)
41、.The issue becomes more stark when levels of TEU(twenty-equivalent unit)throughput are examined.Limiting the analysis to the top 50 ports,Greater China accounts for 45%of throughput at 247 million TEUS.India and South East Asian markets,including Singapore,cumulatively account for 19%of throughput,e
42、quivalent to 106 million TEUs.The key takeaway here is that significant port capacity will need to be created across these markets if they are to accommodate future growth.PORT CAPACITYIn a similar vein to labour supply,port capacity also needs to be considered in any wider expansion of logistics an
43、d industrial across the region.STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC27STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC2728CHALLENGES IN EXPANDING ACROSS ASIA PACIFICFIGURE 5:GLOBAL PORT CAPACITY RANKING AND TEU THROUGHPUT,202228CHALLENGES IN EXPANDING A
44、CROSS ASIA PACIFICSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC29STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC292022 rankPortTEU(millions)1Shanghai47.282Singapore37.293Ningbo-Zhoushan33.364Shenzhen30.045Qingdao25.666Guangzhou(Nansha)24.67Busan22.088Tianjin21
45、.0310Hong Kong16.6914Port Klang13.2215Xiamen12.4216Tanjung Pelepas10.5118Kaohsiung9.4919Laem Chabang8.7421Suzhou8.1123Guangxi Beibu Gulf7.0224Ho Chi Minh City7.425Colombo6.8626Mundra6.527Tanjung Priok(Jakarta)6.428Jawaharlal Nehru Port Trust5.9530Rizhao5.831Lianyungang5.5732Haiphong6.0533Manila5.473
46、6Yingkou539Tokyo4.9345Dalian4.4646Cai Mep5.0147Tanjung Perak4.07Source:World Shipping Council 30Supply chains have a design life,normally of at least 5 years but usually of around 10 years and so require ongoing assessment and updating.However,enacting a complete redesign,or even an update,should no
47、t be undertaken lightly as 80%of supply chains costs are locked in at the design phase.This is why it is imperative that making the right decisions about the design and operation of future supply chains networks needs to involve rigorous data analytics,use of advance planning processes,algorithms an
48、d tools and access to latest market conditions.Beyond this,further factors for consideration include:Service lead times can vary greatly by sector and by different supply chain design types.Agile supply chains allow for quick response,while lean supply chains offerpredictability at low cost.It is im
49、portant to analyse and understanding customer buying behaviour,not just now but into the future and how this impacts competitive environments.Labour availability,cost and productivity varies considerably across sectors and geographies.Corporates need to consider labour availability against the key s
50、kills required.While the ongoing shift to automation,particularly robotic solutions,can significantly reduce blue collar labour it simultaneously creates demand for skilled technicians and engineers to ensure efficiency gains and continuity.Such labour which is not always readily available in every
51、market.Proximity to suppliers is a fundamental consideration inachieving manufacturing continuity and not exceeding target input costs.Transforming supply chains and moving away from established supplier ecosystems carries risk that can sometimes outweigh benefits which should be rigorously analysed
52、 and tested in the design phase.SUPPLY CHAIN REDESIGNExploring Opportunities for your Assets?Contact our Logistics Experts NowSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC31STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC3132CHALLENGES IN EXPANDING ACROSS ASIA
53、PACIFICEfficiency and reliability of shipping both domestically and cross-border are paramount to supply chains.The maturity and effectiveness of logistics providers can impact overall supply chain performance for both service and costs.As highlighted above,congestion at ports is a key factor in det
54、ermining continuity in supply of raw materials and movement of finished goods.Carbon reduction measures should be built into supply chain design at all stages given the long-term nature of the decisions being made.Doing so will help ensure companies are in a position to meet future sustainability ta
55、rgets demanded by consumers,investors and internal stakeholders.Tax and Duties vary greatly across markets and can effect the total cost of supply significantly.Minimising taxes and duties can often result in complex entity structures,product and transaction flows that may impact on supply chain eff
56、iciency and lead times.Companies need to ensure that the total cost of supply consider all factors.Exploring Opportunities for your Assets?Contact our Logistics Experts Now32STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC33Source:Moodys AnalyticsTHE EXPORTERS TRINITYSTRENGTH THROU
57、GH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC3334SECTORAL TRANSFORMATION05SECTORAL TRANSFORMATIONSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC350505SECTORAL TRANSFORMATION36SECTORAL TRANSFORMATIONAPPAREL36SECTORAL TRANSFORMATIONSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITI
58、ES ACROSS ASIA PACIFIC37ELECTRONICSFOOD&BEVERAGESTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC3738MARKET FOCUS06STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC390606MARKET FOCUS40MARKET FOCUSEvolutionary changes are underway as not only the manufacturing sector
59、 becomes more sophisticated,but also as mainland China pivots to reduce dependency on exports and strengthens domestic consumption.First introduced in 2020,the dual circulation economy now places emphasis on domestic economy-led growth and self-sufficiency based on mainland Chinas domestic market of
60、 1.4 billion people,which include over 400 million middle-income consumers.The growth of domestic consumption has especially been seen in mainland Chinas third-and fourth-tier cities,especially through the rapid adoption of e-commerce,which has created significant demand for increased logistics capa
61、city.Furthermore,as the population continue to prioritise more efficient medicine delivery and fresh and safe food continues to increase,so demand for these items will continue to grow.For example,fresh MAINLAND CHINAMainland China has long established itself as the worlds largest source of exports,
62、and with that has access to significant labour,transport and throughput capacity.40MARKET FOCUSSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC41food e-commerce sales in China in 2022 recorded a 20.3%annual growth rate,which will only result in extra demand for additional cold stor
63、age logistics capacity.Given the changing dynamics within the global manufacturing sector,mainland Chinas manufacturing corporates will need to continue to innovate and upgrade in order to remain competitive.By promoting an innovation-development strategy,Chinas manufacturing corporates will then be
64、 in a position to further develop their talent,strengthen their scientific and technological research and ultimately produce and sellquality cutting-edge products.This is already yielding significant success,with China leading in 37 out of 44 key technologies8.Currently,across many industries in mai
65、nland China,there is evidence of cutting-edge products being produced in the country.One example of this can be found in mainland Chinas automotive sector,with the rapid growth of electric vehicle(EV)technology.As early as the 2000s,new energy vehicle advancement in the county was first looked into.
66、In the 2010s,related R&D and EV adoption policies were enacted.Along with this development,mainland Chinas automotive manufacturing sector has been able to make inroads into more progressive and cleaner technologies and today,mainland China has now become the worlds largest exporter of new EVs,surpa
67、ssing Japan,the U.S.,and Europe.STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC418 Australian Strategic Policy Institute42MARKET FOCUSFirstly,its huge consumer base some 473million people is second only to mainland China,which creates demand for product.Combining this demand with
68、the availability of a large and relatively inexpensive labour pool not only with domestic policy to supports domestic production has seen significant growth in the sector.The governments Production Linked Incentive(PLI)scheme,which was introduced in 2020 to boost manufacturing and reduce imports,has
69、 now been expanded to cover 14 sectors.While this has come at an expected cost of USD24bn,it is forecast to generate a minimum of USD500bn in production value by 2026.While these factors have helped drive the domestic market,they also provide a strong foundation to build Indias export capabilities.T
70、he Indian Government has also lent a hand here through numerous trade agreements.In aggregate,India shares preferential market access and economic cooperation through INDIAIn recent years,India has experiencedsignificant expansion within its industrialsector,driven on several fronts.42MARKET FOCUSST
71、RENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC43STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC43trade agreements with over 50 countries,many of which were finalised over the past three years and is engaged in a further 16 Free Trade Agreements.Notwithstanding th
72、is strong base,India is currently lacking in high quality transport infrastructure.This is most readily seen in the high cost of logistics,which sits at 12-13%of GDP compared to the global average ofnearer 8%,though again there is policy9 in place to affect reduce these costs.Moreover,greater capaci
73、ty needs to be built to accommodate a larger volume of throughput.While land has been appropriately zoned for industrial purposes,regional development agencies have been slow to release this land.Furthermore,there are also compliance issues with it taking almost double the length of time to obtain t
74、he required export clearances compared to similar markets within the region.Having established itself as a core destination for business outsourcing and global capability centres,India is now firmlyturning its attention to growth in theindustrial sector and playing a major role in regional and globa
75、l supply chains.As incentives continue to flow into the sector,this has prompted a raft of activity with industrial land prices rising substantially across core and peripheral locations.Given the underlying growth trajectory further land-pricing increases and therefore rental growth,are practically
76、assured.9 PM Gati Shakti 44MARKET FOCUSMuch of this growth has come as US-and European-based corporations continue to expand and diversify their operations within the region,though Chinese manufacturers also continue to expand their presence.The northern region of Vietnam,such as Hai Phong and Hanoi
77、,has attracted strong investment from Chinese and Korean manufacturers given its close proximity as well as its strong geographical connectivity regionally andglobally.However,investment to date,at the corporate level,is more incremental rather than wholesale transformation.Change in this way allows
78、 for continuity of operations at existing sites as well as more moderate capital expenditure requirements.SOUTHEAST ASIAThe ASEAN bloc is fast establishing itself as major growth focus within the Asia Pacific,attracting healthy levels of foreign direct investment which are expected to reach at recor
79、d peak in 2022 of USD223bn.STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC45STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC45In summary,Southeast Asia is gaining export global market share,albeit at a gradual and steady pace.Nonetheless,first-mover advantages ar
80、e still available,and the region will continue to benefit from several catalysts such as increasing consumption growth due to favourable demographics,higher regional trade due to regional economic growth as well as trade agreements such as the Regional Comprehensive Economic Partnership,which would
81、cut tariffs on most goods traded between member countries.46MARKET FOCUSis increasing capability in semi-conductor and electronic manufacturing due to strong intellectual property legislation and high-quality talent pool.Under the 12th Malaysia Plan,the government has identified the electronics sect
82、or as one of the high impact sectors for the economy and is looking into infrastructure and policy reforms.States across Malaysia specialises in different sectors from FMCG to semiconductors.MALAYSIASTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC47a key beneficiary of China+manufa
83、cturing strategies due to close geographical proximity and wider regional/global connectivity.Aside from its strategic location,Vietnam remains cost-effective with significantly lower labour costs compared to China.Further benefits comes from a balanced mix of high value manufacturing such as electr
84、onics and low value manufacturing such as garments,footwear and food.High-value manufacturing is expected to grow,with the government intent on increasing manufacturings share of the economy from 25%to 30%by 2030 by attracting more high-value manufacturinginvestment.Vietnam has the room to accommoda
85、te such growth with a strong concentration of electronics production in northern Vietnam(Hanoi,Haiphong),while the southern Vietnam(Ho Chi Minh City,Binh Duong,Dong Nai)has a mix of food,consumer goods and electronics manufacturing.VIETNAMSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PA
86、CIFIC4748MARKET FOCUStraditionally has been a key destination for business process outsourcing(BPO),but is also establishing itself as a key manufacturing hub through the development of special industrial zones focussing on food(vegetable oils).From this base,the Philippines is also targeting higher
87、 order goods including electronics.However,further development of transport infrastructure is required for the market to advance more rapidly.PHILIPPINESSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC49STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC49The governm
88、ent is pursuing Industry 4.0 opportunities with the launch of Making Indonesia 4.0 program,which provides a roadmap to develop food and beverage,automotive,electronics,chemicals and textiles industries.Beyond this,rapid growth in electric vehicle(VC)supply chains has been founded upon deep nickel re
89、serves estimated to be 22%of the global total.Further benefits are derived from the availability of low-cost labour with locations,such as Java,providing options for the textile industry.Additional manufacturing hubs with accessible land and seaports are located in West Java,Central Java,East Java,B
90、anten and Batam and provide alternative location options.INDONESIA50MARKET FOCUShas established itself as a major exporter of electronics(14%of exports)and vehicles(13%of exports),though also retainsstrength in food production.The Eastern Economic Corridor(Chachoengsao,Chonburi and Rayong provinces)
91、is the manufacturing hub for advanced manufacturing and services.THAILANDSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC51STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC51is the leading destination for FDI in SEA.It has long been viewed as the key,stable regiona
92、l business hub and a critical global supply chain node particularly.This is especially the case for high-value manufacturing projects,which require intensive capital expenditure and a deep local talent pool.Singapore continues to target growth,aiming to expand its manufacturing sector by 50%by 2030.
93、Despite its small geographic size,Singapore is significant actor on the global semiconductor stage,accounting for about 11%of the global semiconductor market and is the manufacturer of approximately 20%of global semiconductor equipment.SINGAPORE5207STRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACRO
94、SS ASIA PACIFIC530707STRATEGIES54STRATEGIES Opportunities to establish new facilities may lead occupiers into new geographies carefully understanding the benefits and challenges of these locations will be crucial to integrating these new facilities and operations into supply chains.Locational analys
95、is,supply chain mapping and scenario planning will help to inform occupiers how and where to best deploy their resources.We are increasingly seeing occupiers explore Digital Twins of their supply chains to virtually walk through these changes before implementation.Nearshoring could also mean expansi
96、on of existing facilities:this will require careful programming not only to plan,manage and deliver but also to ensure expansion does not interrupt the smooth operation of existing production lines.There could also be opportunities for improvement to existing assets,either through refurbishment or r
97、edevelopment but also the retrofitting of sustainable energy generation technologies,such as PV panels or air source heat pumps.FOR OCCUPIERSExploring Opportunities for your Assets?Contact our Logistics Experts NowSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC55 Businesses nearsh
98、oring plans could create opportunities to partner with investment capital:investors remain keen to explore investment into industrial and logistics property assets,particularly where occupier commitment is secure and where return profiles are attractive.New developments with strong commitments by es
99、tablished businesses could prove attractive to some investors,particularly in core countries in Western,Southern&Northern Europe where risk appetite is low and also in new geographies,which may represent higher returns for investors with higher risk appetites.There are also growing opportunities to
100、structure leases to include elements of operational capital investment,such as in logistics and manufacturing automation systems and technologies,within rental agreements.Capital contributions by landlords that can be rentalised over the term of a lease could prove attractive to occupiers given the
101、typically longer period of write-down than within standard depreciation periods should the occupier have to capitalise the investment themselves.56STRATEGIES Developers may have opportunities to leverage relationships with existing customers to explore collaborating on the delivery of new facilities
102、.Having established,well-functioning relationships with occupiers could make the learning journey of locating,transacting and delivering new facilities easier for both parties when working together from a position of trust and understanding.Developers also have the opportunity to deliver for occupie
103、rs the standard or specification of building that they are accustomed to receiving from development partners in established geographies.Knowing what they are going to get in terms of building design and quality could help to remove some of the risk of the unknown for occupiers considering new market
104、s for nearshoring.FOR DEVELOPERSExploring Opportunities for your Assets?Contact our Logistics Experts NowSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC57 Developers could look to secure land positions in key geographies,especially those where there is little international develop
105、er presence currently,in order to leverage opportunities to deliver new spaces for nearshored facilities.vestors with higher risk appetites.Developers could also look to explore relationships with local developers and contractors to ensure on-the ground capabilities in new geographies.This kind of c
106、ollaboration could also bring larger developers experience and understanding of expected building standards for occupiers to new geographies which could be transformational for the real estate environment in these countries.58STRATEGIES In the past,there has been some investor perception of risk rel
107、ating to manufacturing assets,usually related to the perception of bespokeness of buildings and the lack of flexibility for alternative users.However,given the evolving nature of manufacturing particularly in high tech and green technologies there is great potential for investors to secure new oppor
108、tunities to deploy capital in a part of the industrial asset class which has typically traded at a discount to logistics and light multi-let industrial assets.Investors have the opportunity to secure long-term income,particularly for newly-built assets where tenants are committing to significant inv
109、estment in automation and digitalisation technologies over a long period of time.Landlords have opportunities to leverage relationships with existing tenants to explore how they may work together to secure new facilities in new geographies or expand existing operations.This could be through forward
110、funding of developments or extensions to existing facilities with potential upside on lease regears and capital valuations.Investors could benefit from higher returns(albeit with possible higher risk profiles)by funding developments or acquiring assets in new and emerging locations,especially where
111、markets have attracted little real estate investment in the past.FOR INVESTORS/LANDLORDSExploring Opportunities for your Assets?Contact our Logistics Experts NowSTRENGTH THROUGH DIVERSIFICATION:OPPORTUNITIES ACROSS ASIA PACIFIC59 Some countries present foreign currency exchange risk also but where c
112、ompanies are seeking to establish complementary facilities in nearer-to-home locations,there could be the possibility of contracting leases on rents denominated in alternative currencies or pegging to non domestic inflationary metrics(for example,in EUR or USD rather than the domestic currency of th
113、e country).This is also an opportunity to consider the risks to existing assets,whether through the potential change in business circumstance for the incumbent tenant(such as,as an OEM supplier to a primary car manufacturer,will their products remain needed as the industry moves towards EVs and away
114、 from internal combustion engine vehicles?)or through the future appropriateness of the real estate asset(will older buildings remain operationally appropriate if a tenant implements greater levels of automation?)This could help to identify opportunities to either divest of these types of assets or
115、start devising strategies for asset management of these buildings to remain relevant to occupiers,particularly where there are opportunities to upgrade the sustainability credentials of the buildings.FIGURE 5:MANUFACTURING AND LOGISTICS PRIME YIELDS60Cushman&Wakefield(NYSE:CWK)is a leading global co
116、mmercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries.In 2022,the firm reported revenue of$10.1 billion across its core services of property,facilities and project management,leasing,capital markets,and
117、valuation and other services.It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity,Equity and Inclusion(DEI),Environmental,Social and Governance(ESG)and more.For additional information,visit .ABOUT CUSHMAN&WAKEFIELDDENNIS YEOHead of Inves
118、tor Services,Logistics&Industrial,Asia PTIM FOSTERHead of Supply Chain&Logistics Advisory,Asia PacificTim.FJAYNA POHSenior Manager,Business Development Services,Asia PBUSINESS CONTACTSDR.DOMINIC BROWNHead of International ResearchRegion DSHAUN BRODIEHead of Research,Greater CWONG XIAN YANGHead of Research,Singapore&SEAXianyang.WSUVISHESH VALSANHead of Research,India Suvishesh.VRESEARCH CONTACTSExploring Opportunities for your Assets?Contact our Logistics Experts Now