The growing call centre/business process outsourcing (BPO) market is having an effect on the whole of the South East Asian market. India is king of the sector, taking the biggest percentage of the offshored jobs. But thePhilippines, South Korea, Malaysia and China are becoming serious contenders.
“India is quite China-phobic because of the offshoring market,” says Michael Thompson, group chief executive officer with Cushman & Wakefield. “But it’s not just China, the whole of South East Asia is a real threat for taking call centre business.”
In turn, China’s growth is benefiting some neighbours. Its economy grew 8.5% last year, the fastest in six years, and it is importing goods from other nations in the region, such as South Korea, at a faster pace. This is having an overall effect on GDP.
Seoul
(South Korea)
Despite historical problems with its neighbour, North Korea, South Korea is doing greatexport businesses with China. Trade to the vast country was increasing by 53% year-on-year by the end of 2003. Overall, exportsincreased by 20% month-on-month.
This year has seen the completion of the 450,000 sq ft Namdaemun Daewoo building in Seoul, and it is letting well. Rents are also increasing, and the South Korean capital has seen its highest rents since the end of 2002. Last year, the office sector finished on a high of KRW456,760 (£217) per m2 pa.
Singapore
Among developments in the city is Alsop & Co’s redevelopment of Clarke Quay in the old area, which continues apace. Stephen Pimbly, partner with Alsop, says the company is adding a nightclub and pontoon to make the area more appealing to residents and office workers.
In the office sector, the 38,090m2 OneMarina Boulevard, and 8,900m2 HB Robinson buildings were completed at the end of 2003, and Marina Boulevard is almost fully let.
Rents in the central business district fell by only 1.4% last year. Further good news is that key financial and banking companies are looking to hire again.
Manila
(Philippines)
The country is increasingly being seen as an alternative for call centres and BPO. US companies, more than UK companies, are taking advantage of the cheaper costs and increasing knowledge of English.
This increased interest is helping the country’s GDP grow. Last year’s GDP growth of 4.5% was only slightly up on 2002’s 4.4%, but it is a signal that the country has overcomepotential political problems. According to Jones Lang LaSalle’s Asia Property Digest, 2004 Q1, the country’s economy is expected to grow by 4.7% this year and 5.8% next year.
Bangkok
(Thailand)
Thai prime minister Thaksin Shinawatra’sattempt to purchase a stake in Liverpool FC has helped to raise the profile of the country.
Additional attention is being passed on to the country’s office market, which started to pick up at the beginning of this year. Lack of supply in the central business district meant take-up dropped, but this in turn has helped push rents up slightly. Capital values increased last year by 7.6% to baht 42,926 per m2 (£60 per sq ft).
Kuala Lumpar (Malaysia)
Kuala Lumpar’s office market is in dire straits.
Malaysia’s capital has one of the highest vacancy rates — at 19.2% — among the major South East Asian countries. Not surprisingly, the city has the lowest rents in the region — $63 per m2 (£3.20 per sq ft) — 10 times less than Tokyo.
No new buildings were completed in Q4 of 2003. But JLL’s Q1 2004 report says the market is starting to pick up. A number of relocation deals at the end of last year helped bring the vacancy rate down slightly.
