Indonesia’s increased piousness has led to a demand for the services of Islamic or Sharia banks: growth is at 40% a year.
In the report*, called Emerging Trends in Real Estate Asia Pacific 2013, Singapore fell to third place in the rankings, losing the top place it held for the last two years to Jakarta. “The main issue in Singapore is a glut of new supply that’s arrived just as financial sector firms have been shedding headcount,” said Mr Colin Galloway, ULI’s Research Consultant and the author of the report.
Jakarta is seen by the 400-over industry experts surveyed for the report as the best bet, especially in the retail and office segments. Its jump to the top from its previous mid-table position has been driven by strong investor interest tied to the country’s economic growth. “It’s really boom times in Indonesia now,” said one of the surveyed developers. “The demographics look good, it’s a country as big as America in terms of headcount and corruption seems to have been at least partly reined in.”
Singapore may face further competition in attracting real estate investment as it may lose out to countries offering better yields across the region, such as emerging and frontier markets like Cambodia and Myanmar, the report said.
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*According to a report co-published by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI).