RI among Asia-Pacific's top expansion destinations

The Jakarta Post, Jakarta | Thu, 06/26/2008 10:39 AM

Indonesia remains attractive to expansion-minded multi-national firms despite global fallout from the U.S.' sub-prime crisis, a survey reveals.

According to a report by global real estate management firm Jones Lang LaSalle, of 15 nations surveyed in the Asia-Pacific region, Indonesia ranks sixth in a list of top destinations for business expansions -- ahead of Malaysia, Australia, Cambodia, Japan, Korea, Thailand and Hong Kong.

China topped the list, followed by India, Vietnam, the Philippines and Singapore.

Eighty-three percent of the multi-nationals said they would increase or maintain their current growth rates in the region, while 28 percent accelerated the growth of their operations in the region in this year's second quarter, the report shows. 

The survey company's CEO for regional business lines and corporate solutions John Forrest said emerging markets in Asia were the world's bright spots for growth at the moment. 

Asian countries were less affected by the sub-prime turmoil, with the property sector remaining bright, he said. 

"We're still seeing strong demand for space. However, an uncertain economic environment is forcing corporations to find smarter ways to manage their growth," Forrest said. 

Demands for commercial office spaces in Jakarta's commercial business district continued to grow, with the occupancy rate in the first quarter of this year rising 24 percent, the report shows. 

The growth was due mostly to tenant expansions, the company said. 

New office buildings in Sudirman and Kuningan in South Jakarta accounted for the bulk of leasing activity, mainly involving banking, oil-and-gas and services companies. 

Jones Lang LaSalle surveyed 30 senior corporate real-estate executives from leading multi-nationals in Asia-Pacific in the second quarter of this year. 

The survey covered three sectors -- financial services, technology and consumer goods. 

Among the three, the financial services sector was predicted to be the most aggressive this year based on data showing that 44 percent of the companies added growth plans in the first quarter of this year, and 33 percent predicted higher growth by the end of this year. 

The consumer goods sector, on the other hand, showed mixed responses, with one third of the companies saying they would expand their growth plans, another third saying they would downsize their businesses and the rest expecting to maintain their current expansion rates. 

Companies in this sector will likely look to initiate operations in the region to take advantage of promising new markets or shift current operations within it to search for lower-cost destinations. (dia)