NEW FRONTIERS - SPECIAL FOCUS: Knight Frank
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NEW
FRONTIERS
PROSPECTS FOR REAL ESTATE ALONG
THE BELT AND ROAD INITIATIVE
SPECIAL FOCUS:
Southeast Asia Industrial & Logistics
CONTENTS
NEW FRONTIERS: SUMMARY
FOREWORD
2
3 RANKING THE MARKETS
4
BELT AND ROAD INDEX 2019
INDUSTRIAL OVERVIEW
MARKET UPDATE
5 MAJOR RECENT SOUTHEAST ASIA
BRI DEALS
6
MAP
MAJOR RECENT SOUTHEAST ASIA
BRI DEALS
7
TABLE
BRIGHT INDUSTRIAL OUTLOOK
8
PHILIPPINES
TAPERING SUPPLY TO KEEP
RENTS IN CHECK
THAILAND
9 ON TRACK DESPITE THE DETOUR
10
MALAYSIA
ON THE RISE
11
CAMBODIA
THE BELT AND ROAD INDEX (BARI)
12
METHODOLOGY
NEW FRONTIERS KEY CONTACTS
CONTACTS
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 01
PORT KLANG, MALAYSIA
NEW FRONTIERS: SUMMARY
The Belt and Road Initiative is helping p ote n ti a l , d emog rap h ic ad van - major c oas t al r e g ion s and laying
lift Southeast Asian infrastructure ta g e, i n f ras t r u c t u r e d evelop men t , eit h er rail or exp r e s sway transport
through new ports, railroads and i n s ti tu ti on al ef fe c t iven e s s, mar ket n et wor ks c on n e c t in g the se new
highways. Increased connectivity a c c e s s i bilit y an d r e s ilien c e t o e c on omic h u b s t o t h e c ountr y ’s
through shipping and overland trade n a tu ra l dis as t ers ; f u r t h er d et ails c ap it al. Over t h e p as t five years
routes is likely to provide opportunities on ou r met h od olog y c an b e fou n d s in c e t h e BR I ’s lau n c h , US$59. 25
in the logistics, manufacturing and on p a g e 1 1. b illion in C h in e s e - lin ke d capital
industrial markets. h as b e en inve s t e d across the
Foc u s i n g on t h e Sou t h eas t As ian Sou t h eas t As ian t ransportation ,
Laun ch e d i n 2 0 13, th e B e l t a n d c ou n tr i e s, Sin g ap or e r et ain s it s r eal e s t at e an d log is t ic s se ctors;
Road Ini t i a t i ve ( B RI ) i s Ch i n a’s p l a t- top p os i t ion followe d by M alays ia almos t 3.5 t ime s t h e US$1 7.1 billion
form fo r m u l t i l a t e ra l c oop e ra ti on wh i c h main t ain e d it s t op t en inve s t e d in t h e f ive years prior to
w hi ch w i l l cre a t e new e c on om i c s ta tu s i n 9t h . I mp r ovemen t s wer e BR I .
lin ks an d i m prove i ts b u s i n e s s s e e n wi th Th ailan d an d Ph ilip p in e s
ne tworks a c ro ss t he g l ob e. Of th e wh o m ove d u p f ive an d s ix p lac e s Th e s e in it iat ive s h ave breathe d
six e c ono m i c c o rri do rs th a t we r e to 2 6 th an d 4 4 t h r e s p e c t ively on n ew life in t o t h e in d ustrial and
ide ntifi e d, t hi s re po r t d e l ve s i n to b e tte r i nf ras t r u c t u r e d evelop men t log is t ic s r eal e s t at e se ctors
t he Mar i t i m e S i l k Roa d th a t c on - and i n s t it u t ion al ef fe c t iven e s s ac r os s t h e Sou t h eas t Asian mar-
ne ct Sout he a st Asi a to I n d i a a n d m e tr i c s, w h ile Camb od ia move d ket s by p r ov id in g new either
t he E uro pe M i ddl e Ea s t a n d u p two p lac e s on imp r ove d mar ket s ou r c e s of d eman d or gentrif ying
Afri can re gi o n; a nd g i ve s f u r th e r a c c e s s i bilit y met r ic s. old er s t oc k . Wit h exp e ctations for
insigh ts i nt o how t he B R I h a s i n f l u - mor e in f ras t r u c t u r e inve stments
e nc e d t he i ndu str i a l m a r ke ts A b i g d r i ver b eh in d t h e s u c c e s s of alon g t h e M ar it ime Silk Road, the
across So u t he a st Asia . th e Ma r i time Silk Road is t h e in f ra- ou t look for t h e in d ustrial real
s tr u c tu r e n e e d e d t o “c on n e c t t h e e s t at e s e c t or w it h in t h e Southeast
Th i s e di t i o n i nc l ude s th e u p d a te d d ots” a c r os s a h ig h ly f rag men t e d As ian mar ket s looks promising
Kni gh t F ra nk B e l t a nd Roa d I n d ex a n d r u ral r e g ion . Th is in c lu d e s over t h e n ext t h r e e t o f ive years.
(BARI) whi ch ra nks 6 6 B R I -r e l a te d b u i l d i n g p or t s an d n e g ot iat in g
c ountri e s by t he ir e c on om i c s p e c i a l e c on omic zon e s alon g
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 02
BELT & ROAD INDEX 2019
INDEX COUNTRY RANK 2018 RANK
69.0 SINGAPORE 1 1
58.2 UNITED ARAB EMIRATES 2
57.9 NEW ZEALAND 3
57.3 CHINA 4
56.9 QATAR 5
54.6 ESTONIA 6
54.5 SOUTH KOREA 7
54.2 OMAN 8
54.1 MALAYSIA 9 6
53.3 CZECH REPUBLIC 10
53.2 BAHRAIN 11
52.6 INDIA 12
52.5 VIETNAM 13 11
52.4 ISRAEL 14
51.8 HUNGARY 15
51.8 POLAND 16
51.7 SLOVENIA 17
50.5 BHUTAN 18
50.4 BRUNEI 19
50.4 SLOVAKIA 20
49.9 GEORGIA 21
49.6 MONGOLIA 22
49.5 LITHUANIA 23
49.3 MALDIVES 24
48.7 LATVIA 25
48.3 THAILAND 26 31
48.0 ALBANIA 27
47.7 CROATIA 28
47.7 INDONESIA 29 28
47.6 MONTENEGRO 30
46.8 SAUDI ARABIA 31
46.5 ROMANIA 32
46.4 BULGARIA 33
46.1 LAOS 34 30
45.3 SOUTH AFRICA 35
44.6 CAMBODIA 36 38
44.0 SERBIA 37
43.3 KUWAIT 38
43.1 KAZAKHSTAN 39
43.1 TURKEY 40
43.0 SRI LANKA 41
42.7 ETHIOPIA 42
42.7 JORDAN 43
42.4 PHILIPPINES 44 50
42.0 MYANMAR 45 43
41.2 BANGLADESH 46
40.4 MOLDOVA 47
40.3 ARMENIA 48
39.9 BOSNIA AND HERZEGOVINA 49
39.5 EGYPT 50
39.2 TURKMENISTAN 51
38.5 RUSSIA 52
37.8 KYRGYZSTAN 53
37.6 AZERBAIJAN 54
37.1 LEBANON 55
35.9 PAKISTAN 56
35.7 BELARUS 57
35.6 NEPAL 58
35.5 UKRAINE 59
35.0 UZBEKISTAN 60
34.3 TAJIKISTAN 61
33.7 IRAN 62
30.7 TIMOR-LESTE 63
27.4 YEMEN 64
26.5 IRAQ 65
26.0 AFGHANISTAN 66
0 10 20 30 40 50 60 70 80
SOUTHEAST ASIA
Source: Knight Frank Research
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 03
SOUTHEAST ASIA
INDUSTRIAL & LOGISTICS OVERVIEW
Established in 1967, the Association of Southeast therefore presents an attractive opportunity for the
Asian Nations (ASEAN) is an intergovernmental Southeast Asian countries as both sides share
organisation formed by ten Southeast Asian common goals. Notable examples in recent years
nations to facilitate economic, political and securi- have been the US$2.1 billion highway in Cambodia
ty cooperation among its member states. These that will cut the five-hour travel time between capi-
ten countries have a total population 661 million, tal Phnom Penh and Sihanoukville Port by 50%,
which accounts for 8.6% of the world’s population, and the US$2.7 billion high-speed rail project in
and a total 2017 GDP of US$2.76 trillion or 3.4% of Bangkok that will form part of the rail link between
the world’s GDP. In comparison, the European China’s Kunming and Singapore.
Union with its 513 million population or 6.7% of the
world’s population has a combined 2017 GDP of With all this new infrastructure being built, investor
US$17.3 trillion or 21.4% of the world’s GDP. While interest in the industrial sector has increased in
there are several key differences between these recent years, especially from cross-border inves-
two similar-sized regions, the extensive and tors. Between 2009 and 2015, cross border invest-
efficient transport infrastructure connections in the ments into the Southeast Asian industrial sector hit
European Union stands in stark contrast to South- a high of US$330 million, while the market share of
east Asia, where a lack of infrastructure remains a total industrial investments within the region
major hurdle to economic expansion. capped out at 22%. However, from 2016 onwards
when several large infrastructure agreements were
The authorities within Southeast Asia have recog- signed under the BRI banner, interest from
nised this and have themselves embarked on bold cross-border investors saw a significant increase,
infrastructure plans, for example Thailand’s hitting a peak of US$1.4 billion with a 72% market
Eastern Economic Corridor and Philippines’ share (of total industrial investments) in 2017. In
“Build, build, build” policy. However, many lack the brief, the weight of capital interest has benefitted
necessary fiscal strength given the large upfront the Southeast Asian industrial markets, which we
capital commitments required and the difficulty in detail in this report, by driving rapid development,
attracting private enterprises given the long dated the gentrification of aging stock and rental growth
return prospects. China’s Belt and Road initiative in most markets across the region.
A S I A PAC I F I C SOUTHEAST ASIA INDUSTRIAL
WA R E H O U S E R E N TS CROSS BORDER INVESTMENTS
SINGAPORE
1,600 90%
1,400 80%
TOKYO
70%
1,200
PHILIPPINES
60%
1,000
USD Millions
SHANGHAI 50%
800
40%
THAILAND 600
30%
400
MALAYSIA 20%
200 10%
CAMBODIA*
0 0%
0 50 100 150 200 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
USD psm pa
CROSS - BORDER VOLUME (US$mn) CROSS - BORDER SHARE (%)
Source: Knight Frank Research and Real Capital Analytics
As of Q4 2018
*Factory Land Leases
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 04
MAJOR RECENT SOUTHEAST ASIAN BRI DEALS
LAOS
THAILAND
CAMBODIA PHILIPPINES
TO INDIA,
AFRICA
AND EUROPE
M A L A Y S I A
SINGAPORE
I N D O N E S I A
HIGHWAY
DEEP SEA PORT
HIGH SPEED RAIL
ROAD & TUNNEL PROJECT
LAND RECLAMATION & PORT BUILDING
Source: Knight Frank Research and The American Enterprise Institute
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 05MAJOR RECENT SOUTHEAST ASIAN BRI DEALS
COUNTRY SUB-REGION DATE TYPE HOW MUCH SUMMARY OPPORTUNITY
The railway is expected to spur new
Part of the Kunming- developments including industrial parks and
LAOS VIENTIANE 2016 Sep Railway US$4.15 bn Singapore railway
hotels for increased tourism. Travel time
between kunming and vientiane is cut from 3
days to 3 hours.
First highway in Laos The new expressway will spur new
linking capital Vientiane developments such as industrial parks for
LAOS VIENTIANE 2018 Apr Highway US$1.2 bn
to Boten, bordering Chinese manufacturers looking outside of
China. China.
New four lane highway Part of the government's long-term industrial
linking capital Phnom development plan. Sihanoukville will progress
CAMBODIA PHNOM PENH 2018 Jan Highway US$2.1 bn to be the largest industrial hub in Cambodia;
Penh to Sihanoukville
port town. will bode well for its real estate market.
Railway will cut the current 12-hour car travel
time down to six hours. Increase flow of
PHILIPPINES MANILA 2018 Nov Railway US$270 mn Manila to Bicol shipments from the region which will stimulate
railway industrial real estate, while increased tourism
should benefit the hotel sector.
Boost the attractiveness of Davao as a
New land used for industrial and shipping hub for the Philippines
Land
PHILIPPINES DAVAO 2016 Oct Reclamation US$200 mn new port and real which will attract both domestic and foreign
estate MNCs to setup operations; a boon for the
overall real estate market.
High speed rail to connect to a new interna-
Part of the Kunming- tional airport in the Rayong port region. Expect
THAILAND BANGKOK 2017 Dec High Speed Rail US$2.7 bn industrial and residential real estate sectors to
Singapore railway
benefit.
Undersea tunnel to New mainland link will benefit the real estate
Road And markets in Georgetown and Butterworth
MALAYSIA PENANG 2014 Mar Tunnel US$1.3 bn link Penang Island to
mainland where tunnel entrances are located.
Project
Increased trading activities from the new port
Part of Melaka will stimulate warehousing and logistics
MALAYSIA MELAKA 2016 Oct Deep Sea Port US$1.9 bn
Gateway project. facilities demand.
KUALA Improved economic opportunities to east
LUMPUR TO Part of the East Coast coast states and likely to benefit overall real
MALAYSIA 2016 Nov Railway US$2.1 bn
KELANTAN Rail Link project. estate sector.
Highspeed rail linking Indonesia's two major
cities. Cuts travel time between Jakarta and
Highspeed rail linking Bandung, second largest city, from five hours
JAKARTA US$3.2 bn to forty-five minutes. Main sectors to benefit
INDONESIA 2017 Apr High Speed Rail Indonesia's two major
TO BANDUNG are residential from decentralizing demand
cities.
and hotels from increased tourism - logisitics
markets along the corridor also likely to be
enhanced.
NE W F R O N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 06PHILIPPINES
BRIGHT INDUSTRIAL OUTLO OK
2019 BARI RANK: 44 / 2018 BARI RANK: 50
Since the change of administration in be revised despite the government’s Furthermore, major e-commerce
2016, we have seen a reversal of the plan to liberalise certain portions of players have also started to enter the
previous stance and a pivot towards the economy back in 2017. market as shown by Alibaba’s Lazada
China; paving the way for a slew of setting up its largest Southeast Asia
Chinese-funded infrastructure projects Nonetheless, with the rapid infra- warehouse in Cabuyao in late 2017
and investments into the Philippines. structure push, developers are once and has plans for another five facili-
Coincidentally, this is also in line with again warming up to the industrial ties over the coming three to five
the current administration’s push sector. Initially, developers have been years. Going forward, with the govern-
towards greater infrastructure spending forced outside of Manila due to the ment forecasting the economy to
to boost economic growth. However, scarcity of land and cheaper alterna- expand between 6.5 to 6.9% in 2019
things have been slow to get off the tives. However, due to recent mainly via the strong and consistent
ground with only US$6.7 billion of Belt increased fuel prices, demand for delivery of its infrastructure invest-
and Road Initiative related investments industrial lots and warehouses have ment agenda, the outlook for the
completed since the change in govern- been recently redirected towards industrial sector does look bright and
ment, out of the roughly US$25 to 30 area closer to Manila. This favourable expectations are for 2019 to at least
billion in pledges secured. One key supply dynamic was the driver behind maintain the growth momentum from
reason for this stem from the foreign rental growth for industrial rents last year.
ownership limit rules in the Philippines across most of the country.
on certain key sectors which has yet to
10 YEAR CHINESE INVESTMENTS INTO PHILIPPINES
4,000
3,500
3,000
USD Millions
2,500
2,000
1,500
1,000
500
0
2008 2009 2010 2012 2013 2014 2016 2017 2018
ENERGY REAL ESTATE TRANSPORT OTHERS (E.G. ENTERTAINMENT, TECH, TOURISM, UTILITIES)
Source: The American Enterprise Institute
2018: 152
YOY(%): 21.6% VALENZUELA
QUEZON CITY 2018: 255
YOY(%): -2%
2018: 457
YOY(%): 9.5% MANDALUYONG
2018: 225
PASIG YOY(%): 25%
2018: 589
YOY(%): 1.8% MAKATI
2018: 300
TAGUIG YOY(%): 76.5%
2018: 438
WAREHOUSE RENT YOY(%): 157.6% PARANAQUE
Q4 2018 (PHP/sqm/mo)
LAS PINAS 2018: 157
Source: Knight Frank Research YOY(%): 28.7%
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 07THAILAND
T A P E R I N G S U P P LY T O K E E P R E N T S I N C H E C K
2019 BARI RANK: 26 / 2018 BARI RANK: 31
Unveiled back in 2018, Thailand 4.0 is of higher international freight demand sqm of new space in 2018 and bring-
an ambitious plan by the government and the expansion of U-Tapao airport ing the total market supply to
to revamp the country’s economy via near Thailand’s coast, set to become 5,177,000 sqm, a 6.2% year-on-year
the development of a special the country’s third main international increase. Sector occupancy stood at
economic zone dubbed the Eastern airport and anchor a Special Econom- 83% at the end of 2018, a 1.4% rise
Economic Corridor (EEC) which com- ic Zone. from the year before, driven by stock
prises industrial estates and tourist withdrawals while demand remained
destinations. The EEC and its projects Along with the capital, Chinese com- stable. With occupiers having more
will be integrated with China’s Belt panies have also started taking more supply options last year, rents fell
and Road Initiative through an interest in Thailand. One example is 1.6% year-on-year to Thb151.3
873-kilometer Thai-China high-speed Cainiao, one of China’s leading smart (US$4.75) psm per month. Going
railway that will connect Thailand to logistics network players, who has forward, while the excess supply
Kunming, China via Laos. Currently, committed US$330 million to devel- situation is expected to persist over
the initial 250 kilometers are under op a digital hub within the EEC that it the near term, developers conscious
construction with an estimated cost plans to further optimize the of market conditions will likely adjust
of US$5.6 billion, running between cross-border flow of goods for their supply deliveries. As a result,
Bangkok and Nakhon Ratchasima. Thailand and its neighbors. warehouse rental prices are expected
Separately, other major EEC projects to remain range between Thb150 to
include the US$4.9 billion expansion Developers have been active in the 155 (US$4.71 to 4.86).
of Laem Chabang Port in anticipation warehouse sector, adding 302,000
5,500,000
170
BANGKOK
165 5,000,000
SUVARNABHUMI
- BANGPAKONG 160
Baht per sq.m per month
4,500,000
155
EASTERN
SEABOARD 150 4,000,000
145
PATHUMTHANI 3,500,000
- AYUTTHAYA 140
135 3,000,000
SUPPLY
130
2,500,000
OCCUPIED SPACE 125
120 2,000,000 sqm
Source: Knight Frank Research H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018
H2 2018: 144
YoY(%): -4% PATHUMTHANI
SUPPLY (sqm): 3,628,409 - AYUTTHAYA
VACANCY: 2%
H2 2018: 166 SUVARNABHUMI
YoY(%): -4% - BANGPAKONG
SUPPLY (sqm): 5,004,408 BANGKOK
VACANCY: 0%
H2 2018: 159
YoY(%): -1%
SUPPLY (sqm): 4,825,348
VACANCY: 6%
H2 2018: 150
YoY(%): -2%
SUPPLY (sqm): 4,974,707 EASTERN
VACANCY: 9% SEABOARD
WAREHOUSE RENT
Q4 2018 (THB/sqm/mo)
Source: Knight Frank Research
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 08M A L AY S I A
ON TRACK DESPITE THE DETOUR
2019 BARI RANK: 9 / 2018 BARI RANK: 6
Over the past 10 years, Malaysia has these large foreign direct invest- which would support and spur further
been a major beneficiary of Chinese ments. Nonetheless, this has not shipping and logistics activity at Port
capital with investments totaling deterred Chinese manufacturing FDI Klang, Malaysia’s main port.
US$43.8 billion, the highest amount which rose 410.8% year-on-year to
recorded among its ASEAN peers. A RM15.8 billion in 2018. As these initiatives materialise, the
major driver behind this has been the industrial sector is expected to
relatively open stance the previous Besides just relying on Chinese capi- receive a much-needed boost espe-
government took on China, and one tal to drive growth, the new govern- cially given the ageing stock; redevel-
which is expected to continue under ment has also set in place key initia- opments into sizeable warehouses
the new administration. The Prime tives that will have direct benefits on with higher specifications has been
Minister has emphasized his intention the industrial sector. One major initia- gaining momentum recently as oper-
to develop deeper ties with China, tive is the emphasis on improving the ators seek to get ahead of the curve.
and this was evident when Beijing country’s capabilities in the Halal Current market rents for warehouses
was one of the first overseas coun- industry, a global industry worth within the major industrial zones near
tries visited in an official capacity US$2.1 trillion in 2017, and capitalising Port Klang in Selangor and in Negeri
since returning to power. Further- on Malaysia’s top rated global Islamic Sembilan range from RM0.80 to 2.00
more, while the new government has economic ecosystem spanning (US$0.2 to 0.5) per square foot per
taken precautions by relooking at the finance to manufacturing standards month; while in Johor and Penang
feasibilities of all the MOUs signed and halal certifications. Another major they command monthly rental rates of
under the previous leadership, it initiative announced recently at RM0.80 to RM2.50 (US$0.2 to 0.6)
would not derail but most likely delay Budget 2019 was the plan to set up a per square foot.
the inevitable given the benefits of new Free Trade Area in Pulau Indah
C H I N E S E I N V E S T M E N T S ( A L L S E C TO R S ) PA S T 1 0 Y R S
MALAYSIA
INDONESIA
SINGAPORE
LAOS
VIETNAM
CAMBODIA
PHILIPPINES
THAILAND
MYANMAR
BRUNEI
0 5 10 15 20 25 30 35 40 45 50 US$ BILLIONS
Source: Knight Frank Research and The American Enterprise Institute
JOHOR:
SENAI - KULAI
1.00 – 1.50
SELANGOR:
SHAH ALAM
1.50 – 2.00
SELANGOR:
KLANG
0.80 – 1.20 NEGERI
SEMBILAN
JOHOR:
0.80 – 1.20 PASIR GUDANG
0.80 – 1.20
DETACHED FACTORY RENTS
Q4 2018 (RM/sqft/mo)
Source: Knight Frank Research
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 09CAMBODIA
ON THE RISE
2019 BARI RANK: 36 / 2018 BARI RANK: 38
For many decades, China has devel- in the 5 years post-BRI, an increase Chinese account for circa. 80% of all
oped strong ties with Cambodia, from the 12% share they had prior to companies operating within Sihan-
seeing the emerging nation within the the BRI. oukville’s special economic zones
Indo-China region for its strategic (SEZ) followed by the Americans and
position within South-East Asia. This Recent notable investments include a Europeans at 16%. The improved
was evident in 2018 as Chinese US$2.08 billion highway project by sentiment has positively impacted
entities invested US$3.83 billion into China Communications Construction factory land leases with average long
Cambodian real estate and highway who will build and operate a 190-kilo- term (30 to 50 years) leases rising 3%
projects, one of the highest amounts meter four lane highway connecting YoY to US$32.5 per sq m in 1H 2018.
within Southeast Asia. Phnom Penh to Sihanoukville - home
to Cambodia’s special economic Underpinned by improving infrastruc-
Prior to 2013’s Belt and Road Initiative zones, deep sea port and the coun- ture, the industrial sector for Sihan-
(BRI), investments from China had try’s main gateway for exports and oukville (a proxy for Cambodia’s over-
focused mainly on energy projects imports. all market) is expected to do well over
such as hydroelectric dams across the medium to long term. Further-
the country. However, post-BRI, this The drive to improve infrastructure more, the sector is expected to be
focus has shifted towards transport connecting the capital and economic buoyed by the commencement of oil
infrastructure and real estate hub has made Sihanoukville an extraction in late 2019 which will drive
construction. These two sectors increasingly attractive destination for further demand across the industrial
accounted for a 73% share of all foreign direct investments (FDI) and and manufacturing sectors.
Chinese investments into Cambodia corporate occupiers; c u r r en t ly t h e
4,500 AGRICULTURE 10 YEAR CHINESE INVESTMENTS INTO CAMBODIA
ENERGY
4,000
ENTERTAINMENT
3,500 FINANCE
METALS
3,000 REAL ESTATE
USD Millions
TECHNOLOGY
2,500 TRANSPORT
2,000
1,500
1,000
500
0
2006 2008 2009 2010 2011 2012 2013 2015 2016 2017 2018
Source: Knight Frank Research and The American Enterprise Institute
NEW ROAD
OLD ROAD
30 - 35
LONG TERM (30-50 YEARS)
FACTORY LAND LEASES
1H 2018 (USD/psm)
Source: Knight Frank Research
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 10METHODOLOGY
T H E B E LT A N D R O A D I N D E X ( B A R I )
UNIT WEIGH YEAR SOURCE
ECONOMIC POTENTIAL 25%
GDP PER CAPITA PP US$ 2018 INTERNATIONAL MONETARY FUND
FUTURE GDP GROWTH RATE % AVERAGE 2019-2023 INTERNATIONAL MONETARY FUND
GDP GROWTH RATE % AVERAGE 2014-2018 INTERNATIONAL MONETARY FUND
INSTITUTIONAL EFFECTIVENESS 25%
GOVERNMENT EFFECTIVENESS PERCENTILE RANK (0 - 100) 2017 WORLD BANK
REGULATORY QUALITY PERCENTILE RANK (0 - 100) 2017 WORLD BANK
VOICE AND ACCOUNTABILITY PERCENTILE RANK (0 - 100) 2017 WORLD BANK
POLITICAL STABILITY AND ABSENCE 2017 WORLD BANK
OF VIOLENCE/TERRORISM PERCENTILE RANK (0 - 100)
RULE OF LAW PERCENTILE RANK (0 - 100) 2017 WORLD BANK
CORRUPTION PERCEPTIONS INDEX SCALE (0 - 100) 2018 TRANSPARENCY INTERNATIONAL
DEMOGRAPHIC ADVANTAGE 20%
URBANISATION RATE % 2015-2020 UNITED NATIONS
POPULATION GROWTH % 2015-2020 UNITED NATIONS
DEPENDENCY RATIO RATIO 2015-2020 UNITED NATIONS
INFRASTRUCTURE DEVELOPMENT 15%
QUALITY OF PORT INFRASTRUCTURE SCORING (1-7) 2018 OR LATEST WORLD BANK
LOGISTICS PERFORMANCE INDEX AGGREGATE INDICATORS (1-5) 2018 OR LATEST WORLD BANK
ROAD DENSITY KM OF ROAD PER 100 SQ. KM OF LAND AREA 2018 OR LATEST WORLD BANK
LINER SHIPPING CONNECTIVITY INDEX I INDEX (MAXIMUM VALUE IN 2004=100) 2018 OR LATEST WORLD BANK
INTERNET SUBSCRIPTIONS % OF POPULATION 2018 OR LATEST WORLD BANK
FIXED BROADBAND SUBSCRIPTIONS PER 100 PEOPLE 2018 OR LATEST WORLD BANK
MOBILE CELLULAR SUBSCRIPTIONS PER 100 PEOPLE 2018 OR LATEST WORLD BANK
MARKET ACCESSIBILITY 10%
FOREIGN DIRECT INVESTMENT (% OF GDP) % AVERAGE 2008-2017 WORLD BANK
FOREIGN DIRECT INVESTMENT
INWARD FLOWS AND STOCK US$ AVERAGE 2008-2017 UNITED NATIONS
RESILIENCE TO NATURAL DISASTERS 5%
WORLD RISK INDEX AGGREGATE INDICATORS 2018 UNITED NATIONS
CLIMATE RISK INDEX 2018 AGGREGATE INDICATORS AVERAGE 1998-2018 GERMANWATCH
Th e Kni ght F ra nk B el t a n d Roa d I n d ex (B A R I ) h as b e en d evelop e d u s in g r eliab le an d in t er n at ion ally- re c ognize d
data sourc e s. The i n d ex i s c l a s s i f i e d i n to s i x c at e g or ie s : e c on omic p ot en t ial, d emog rap h ic ad vantage, infra-
structure deve l o pm e n t, i n s ti tu ti on a l e f fe c ti ve n e s s, mar ket ac c e s s ib ilit y an d r e s ilien c e t o n at u ral d is asters. The
value s w i t hi n e a ch c a te g or y h ave b e e n n or m a l i ze d t o en s u r e t h e r e s u lt in g f ig u r e s ar e c omp arab le an d c ontextu-
al i ze d fo r t hi s st u dy. A l l c a te g or i e s a r e a s s i g ne d w it h s p e c if ic weig h t in g s in ac c or d an c e w it h t h eir potential
sign i fi c a nc e t o i nve s tm e n t d e c i s i on s. ‘ Re a l E s t at e Pr os p e c t s’ in eac h mar ket w r it e - u p r efers t o the market
outl ook fo r e a ch re a l e s ta te s e c tor i n th e m e d i u m t er m g iven t h e p r evailin g d eman d /s u p p ly d y n amic s and current
posi tion i n t he pro pe r ty m a r ke t c yc l e.
N E W FRO N TI E RS Special Focus: Southeast Asia Industrial & Logistics PG. 11KEY CONTACTS
ASIA-PACIFIC SOUTHEAST ASIA
Kevin Coppel CAMBODIA
+65 6429 3588 Ross Wheble
kevin.coppel@asia.knightfrank.com +855 23 966 878
ross.wheble@kh.knightfrank.com
RESEARCH
Nicholas Holt INDONESIA
Head of Research Willson Kalip
+86 10 6113 8030 +62 21 570 7170 (100)
nicholas.holt@asia.knightfrank.com willson.kalip@id.knightfrank.com
Justin Eng MALAYSIA
Senior Manager Research Sarkunan Subramaniam
+65 6429 3583 +603 228 99 688
justin.eng@asia.knightfrank.com sarky.s@my.knightfrank.com
CORPORATE SERVICES PHILIPPINES
Tim Armstrong Rick Santos
Head of Occupier Business Development +632 752 2580
+65 6429 3531 rick.santos@santos.knightfrank.ph
tim.armstrong@asia.knightfrank.com
SINGAPORE
Josephine Lee Wendy Tang
Director, Regional Business Development +65 6228 6818
+65 6429 3599 wendy.tang@sg.knightfrank.com
josephine.lee@asia.knightfrank.com
THAILAND
CHINA Phanom Kanjanathiemthao
Alan Liu +66 2 643 8223
+86 21 6032 1700 phanom.kanjanathiemthao@th.knightfrank.com
alan.liu@cn.knightfrank.com
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r e p o r t, no r e s ponsi b i l i t y or l i a b i l i t y wha t so ever c an be ac c e pte d by Knight Frank for any los s or dam age re s ultant fro m
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