The Makati business district in the Philippines. Malls, luxury residences and hotels in the country are said to be gaining momentum. (Photo: Shutterstock)
Supply-chain diversification and digital infrastructure buildout are redirecting capital flows in real estate markets across Southeast Asia.
Investors are gravitating towards high-growth sectors such as logistics, industrial assets, housing and hospitality, with Vietnam, Malaysia, Indonesia and the Philippines emerging as beneficiaries of manufacturing expansion, tourism recovery and digital infrastructure investment.
That is according to a May 25 trend report by the Asia Pacific Real Assets Association (Aprea), citing industry participants including consultants and developers.
Read also: Tishman Speyer secures US$300 mil from APG and Bouwinvest for Korean rental housing fund
Logistics, data centres, and affordable mid-market urban residential are the most resilient opportunities across the region over the next three to five years, says Chris Marriott, CEO of property consultancy Savills for Southeast Asia.
This is unfolding against the backdrop of geopolitical uncertainty, elevated borrowing costs and heightened concerns over energy prices, inflation and investor sentiment.
The “increasingly multipolar and fragmented” global environment is driving long-term structural shifts within the Southeast Asian region, Marriott highlights.
In turn, these changes are reinforcing investor preference for real assets supported by domestic growth and regional trade.
Vietnam, in particular, remains “one of the most compelling growth stories in Asia” with resilient economic fundamentals, says Michael Piro, co-CEO of real estate developer and capital markets advisory firm Indochina Capital.
Industrial and logistics assets remain his highest-conviction theme, driven by Vietnam’s position as a major beneficiary of the China-plus-one strategy and rising foreign investment.
Read also: Industrial building with cold rooms at Pandan Loop for sale at $45 mil
Global investors have taken significant positions in ready-built factories and warehouses in the country, particularly in northern Vietnam, where improving infrastructure and proximity to China are boosting occupancy and rental growth, Piro notes.
Hospitality is also a bright spot in Vietnam amid its booming tourism sector and the ability of hotels to adjust room rates quickly in a higher-interest-rate environment.
He sees a “barbell strategy” emerging — industrial for structural growth and durability, coupled with hospitality for pricing power and cyclical upside.
Over in the Philippines, malls, logistics, data centres, offices and hotels are expected to remain among the most resilient property plays.
Sectors that offer recurring income, long-term visibility and protection against volatility are the most attractive in today’s macro environment, reckons Jericho P Go, president and CEO of Philippines-listed RL Commercial Reit, which focuses on office properties and malls.
“Long-term contracts and predictable cash flows are what make them attractive in uncertain markets,” he adds.
For example, mall assets stand out for their guaranteed lease structures that combine minimum base rents with percentage-of-sales upside. Logistics facilities are likewise compelling, benefitting from long-term leases with built-in rental escalations, Go shares.
The luxury residential market in the Philippines is also outperforming, with Manila ranking third in Knight Frank’s Prime International Residential Index.
The country’s hospitality sector is regaining momentum as international operators expand and global brands re-enter key destinations, according to the Aprea report.
In both the Philippines and Thailand, Marriott of Savills has observed more resilience in urban residential and selective tourism-linked assets, supported by domestic and regional demand.
Data centres are gaining ground in the Philippines, too. This comes as hyperscalers increasingly partner with local developers to set up facilities, says Rick Santos, chairman and CEO of Santos Knight Frank, a real estate agency and consultancy based in the Metro Manila region’s Makati financial hub.
Santos describes the current macro environment as “effectively acting as a filter”, separating sectors with structural demand from those still dependent on cyclical recovery.
In Malaysia, industrial and logistics assets appear to be emerging as standout performers.
Structural shifts in digitalisation, e-commerce, AI and global supply chains are benefitting assets including data centres and modern warehouses in the country, according to Selangor-based industrial and logistics developer AREA Management’s executive chairman, Stewart Labrooy.
Malaysia’s proximity to Singapore, access to international subsea cables and established infrastructure are cementing its position as a regional digital hub, the report notes.
Savills’ Marriott sees Malaysia and Indonesia emerging as the region’s next data centre hubs as hyperscalers exhaust available land and power capacity in Singapore.
Beyond industrial assets, investors are also targeting sectors that can offer stable, defensive income streams in Malaysia.
These include purpose-built student accommodation, healthcare facilities, international schools, and selected retail and office properties tied to tourism and demand trends driven by environmental, social and governance (ESG) priorities, says JLL’s head of research and consultancy for Malaysia, Yulia Nikulicheva.
She points out that prime ESG-compliant office buildings are outperforming the broader market, while Grade B offices continue to face structural pressure from hybrid work and secondary retail remains under strain.
Despite elevated office vacancy rates of 25%–30% in the Greater Kuala Lumpur area, green-certified buildings with large floor plates and efficient layouts are maintaining occupancy rates of about 87%. That creates a landlord’s market in a narrow but high-quality sub-segment, Nikulicheva adds.
For more news and analysis, read our weekly e-paper. Prefer a print copy? Get it delivered to your home every Monday.