|(a) The Asia economic crisis and its impact on development;|
|(b) The demographics of the region;|
|(c) "Bread and Butter" tall buildings; and|
|(d) The "darker side of construction".|
The Asian Region streaches from India and Pakistan in the East, to Korea and Japan in the West. China is in the North and the Philippines and Indonesia flank the Southern boundary. China and India alone account for over 2 billion of the world's population.
In mid to late 1997, the Asian economic crisis evolved. The effects are still with us. It moved like a falling pack of cards through Korea, Japan, Indonesia, Malaysia, Singapore and Hong Kong. China and India were not really affected.
Looking at the Asia from a property market perspective, the region can be divided north and south. The south is stagnant, many construction sites are vacant and negative equity is widespread. In Indonesia, Philippines, Malaysia, Vietnam, Burma, Laos and Combodia, development is stationary or sluggish. There is little investment and a large number of projects have come to a stop. Some countries have papered over the economic cracks, but investors fear the cracks may return. While Singapore has been impacted by the events in Indonesia and Malaysia, there is some movement in the office and residential markets.
By contrast, North Asia is on the move. Korea is doing quite well. The property market was never oversupplied, and there is a shortage of offices. While the economy of Japan has not recovered, there is both demand and investment in the office and residential sectors, although this is not really translating into new build. Turning to China, there has been an upsurge in office demand in Beijing, and rents have increased by some 30% in the past year on the back of W.T.O. However, there is oversupply and many projects are mothballed.