ASEAN AND THE REAL ESTATE PRACTITIONERSBy: Augusto B. Agosto, REA, REB

President, PAREB-Cebu South Real Estate Board

Key Pointers in ASEAN

1. ASEAN countries—Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Such a development easily creates a vast economic market composed of 600 million people, which accounts for at least 8 percent of the global population, spread across 4.6 million sq m of prime real estate.

More liberalized trading will be a direct result of the removal of both tariff and non-tariff barriers on both goods and services among the member-nations, and is expected to facilitate the creation of deeper, better economic relationships with our partners in the region.

2. local developers will also get a more favorable access to a bigger resource—the regional workforce—that is eyed to play a significant role in fueling a stronger exchange of best industry practices and ideas among the AEC participants.

3. AEC will result in stronger capital inflow and investments, particularly here in the Philippines, which has gained attention from the international business community due to the series of investment-grade ratings that we have received from different crediting firms this year. This now puts the Philippines at a very strategic position, showing a renewed capability to lure investors and sustain good business returns for foreign businesses wishing to make it big in the region.

4. More industry players also mean increased rate of construction activities where we will be seeing mixed-use residential districts, retail, commercial and office hubs, and key infrastructures—airports, sea ports and many others more—racing to dot the skyline all at the same time. There will be a greater demand for skilled laborers to help the local property sector sustain the increased level of property development.

5. There will be a significantly higher rate of consumer spending given the huge inflow of goods and services. This will then drive the development of more lifestyle-centric developments, such as malls, retail complexes and properties anchored on tourism, across the archipelago.

6. Such an event only serves to hasten modernization, increase urban development standards, and drive unprecedented regional growth in Southeast Asia—factors that encourage and sustain direct investments in the region.

7. We will also see more emerging economic hotspots in various parts of the country, particularly in Mindanao—a region deemed as the Philippines’s gateway to the rest of

Southeast Asia—as more and more businesses try to get their name out and capitalize on their newfound economic opportunities.

10 Things Real Estate Service Practitioners Should Know About ASEAN Economic Integration

1. AEC will result in stronger capital inflow and investments. The Philippines has gained attention from the international business community due to the series of investment-grade ratings upgrade that the country has received from different credit rating firms in the past several years.

2. AEC will result in a significantly higher rate of consumer spending given the huge inflow of goods and services. This will drive the development of more lifestyle-centric developments, such as malls, retail complexes and properties anchored on tourism, across the archipelago.

3. An increase in foreign direct investments (FDI) in the manufacturing sector would bring a substantial increase in demand for commercial and industrial development. This will lead to accelerate modernization, increase urban development standards, and drive unprecedented regional growth in Southeast Asia – factors that sustain direct investments in the region.

4. The real estate sector of the Philippines is expected to grow with the dawn of the AEC in 2015. The Business Process Outsourcing (BPO) industry will continue its robust growth as the country is still a preferred location by reason of its skilled pool of human resources.

5. Tourism developments would receive major infusion of capital due to the increase access of people to and from each member-state. Expect the improvement of airports and seaports in major urban and regional centers throughout the archipelago. Furthermore, expect the increase in the construction of infrastructures related to and in support of the hospitality industry.

6. Increased rate of construction activities where we will be seeing mixed-used residential districts, retail, commercial and office hubs and key infrastructures racing to be built.

7. Increase in employment opportunities due to the greater demand for skilled laborers to help the local property sector sustain the increased level of property development.

8. Increase in demand for Real Estate Practitioners. The immediate impact of the economic integration of ASEAN will be the increase in demand for both commercial and industrial space in various economic hotspots all over the region.

9. Higher standards of property management will be applied. The same can be said here in the Philippines. The increase in real estate projects and its eventual completions will engender the adoption of higher standards of property management in all these various development and projects.

10. Residential, commercial and retail developers, which will be exposed to international market will expand their operations and acquire properties inside and outside the country. Foreign

investors and corporate executives with local operations in the country will look for residential spaces for a place to stay.

References:

1. The impact of the 2015 Asean integration to PHL real estate, Amor Maclang December 2013

2. ASEAN Economic Blueprint, Asean Secretariat, 20083. ASEAN Integration: Its Effect on Philippine Real Estate, Nov.2014