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JLL eyes more residential business in region
[SINGAPORE] Global property consulting firm JLL, which is traditionally strong in office leasing and investment sales, is not letting up on its efforts to grow its residential services in South-east Asia, where it just opened a new office in Malaysia through an acquisition - the firm now wants to expand the pool of buyers in this region and bring in more products for these investors to capitalise on rising Asian affluence and investment appetite for real estate.
"At the moment, Asian investors in the global residential market are concentrated in Singapore, Kuala Lumpur, Hong Kong, Taiwan, China, Beijing and Shanghai. Our goal is to expand the base of buyers into cities like Jakarta and Bangkok," JLL managing director for Singapore and South-east Asia, Christopher Fossick, said in an exclusive interview.
"We would also like to expand into some Indian cities and Chinese cities."
According to Mr Fossick, investors prefer proximity and familiarity when choosing where to put their money, which is why many have invested in more transparent and mature markets such as London.
"In 2013, we started selling Tokyo properties. I think 2014 onwards, we will see more products from America, from New York and San Francisco, and more properties from Australia - Sydney and Melbourne in particular," he said.
JLL's capacity to serve its clients in the region was boosted when it opened a new office in Malaysia following a 49 per cent stake acquisition in YY Property Solutions Sdn Bhd this month. The Kuala Lumpur-based transaction and advisory firm has since been rebranded as JLL Malaysia.
Mr Fossick explained that the acquisition was "opportunistic" in nature to capitalise on the relaxation by Malaysian government on the cap for foreign equity in real estate.
"This is not due to a change in market outlook or opportunities in Malaysia," he said. "We are not taking short-term views. We think that Malaysia is a country that will continue to grow and provide opportunities."
JLL is hoping to double the team there from the current staff strength of 40 over the next two years. The team will focus on office leasing in Kuala Lumpur and investment sales. It will also look at providing residential sales services in the capital city.
Elsewhere in the region, Jakarta and Manila are the other hot spots, Mr Fossick said. Manila is growing as a business process outsourcing (BPO) centre and there is demand for residential upgrading. The demand for mid-priced affordable apartments in Jakarta from Indonesians is also picking up.
As for Singapore, which remains JLL's largest South-east Asian market, the residential market is becoming more challenging. But leasing demand for office space in both centralised and decentralised locations is supported by steady corporate growth and a balanced supply, Mr Fossick said.
There will be limited new office supply in the central business district until 2016 onwards when Marina One, the mixed-development in Marina South, Guoco Tower in Tanjong Pagar and mixed-use Project Jewel in Changi will come onstream.
Mr Fossick has been working in Asia for 25 years since he joined CBRE's Singapore and Asia office leasing teams and later became president and CEO of CBRE Japan, before joining JLL in Singapore in 2006 in his current role.
JLL has made a string of acquisitions here in the past few years. In 2011, it acquired DST International Property Services, which markets projects in Asia-Pacific, the US and the UK and in 2012, bought Credo Real Estate, which specialises in collective sales. Last year, JLL acquired boutique firm Halcyon Real Estate to beef up its strength in project residential leasing.
The success of these acquisitions came in the form of a 50 per cent jump in profits in Singapore. Strong market performances in Jakarta and Manila also aided a 33 per cent profit growth in South-east Asia.
"2013 had an exceptional growth that is hard to repeat," Mr Fossick said.