As former CEO of the Asia-Pacific division of commercial real estate services company, Cushman & Wakefield, for over 5 years, Sanjay Verma has gained first-hand insight into the region’s unique opportunities and challenges. He has observed the market grow and evolve, cultivating valuable learnings along the way. Now, as Advisory Board Member for FlySpaces, he shares his experience and expertise in the field.
“Asia-Pacific, as a region, is one of the fastest growing regions in the world,” Sanjay Verma begins. “Not many regions have a number of countries where the GDP is growing at 5% plus.” He categorizes the various markets such as Japan and Australia, as mature markets that are very regulated, very institutional, fairly-well structured, and information led. On another side of the spectrum are China and India—large emerging markets with booming economies and a tremendous scope for future demand and supply. The up and coming emerging markets, which have just recently appeared on the economic radar, include Indonesia, the Philippines, and Vietnam. Last are the opportunistic markets Cambodia and Mongolia, which Verma believes are the markets of the future. The potential is apparent across all asset classes, from residential and office to retail and industrial.
For the investment capital market, Japan and Australia remain safe bets, where volatility is minimal, while the large emerging markets, China and India, pose moderate to high risk for development. However, it’s the Southeast Asian region (Singapore, Indonesia, the Philippines, Vietnam) that Verma is most excited about. “This is a really dynamic region and has the potential to become as big as China based on opportunity in the future,” he explains.
In the past 10 years, there has been a gradual reversal in the trend of domestic to foreign capital investment. Asian capital has shifted outward to the Western market while more and more foreign capital is chasing after Asia’s diversity and related returns. “The rate in increase of capital moving from East to West has increased tremendously, which makes the whole capital migration a more balanced approach for the whole world.” The job growth in these markets has also affected a boom in office space demand and various construction projects. He goes on to cite the demographic growth potential of Asian countries, 3 of which belong in the Top 4 most populated countries in the world (China, India, Indonesia).
A unique obstacle Sanjay Verma has faced in the newer markets, however, is their lack of transparency. “One has to be willing to invest a lot on information gathering, collation, and ratification. From a real estate standpoint, title risks, execution risks, and government compliance risks are tight.”
Another barrier to entry is the geopolitical strain experienced by Southeast Asian markets. Volatile political contexts are not easy to comprehend from an entry standpoint, while rules and regulations are subject to change through time.
Another challenge is that of talent. “I believe that office marketing is moving from pure real estate to the kind of office configurations that will retain and increase talent productivity. That’s why I think the coworking industry has its own spot.”
This trend has greatly affected conventional office spaces over the years. “7 or 8 years ago, people started talking about how office space has really impacted talent collaboration and productivity. Tenants wanted flexibility in designing their spaces. They wanted spaces that could inculcate innovation and collaboration,” says Verma.
Similarly, Sanjay Verma shifted from his long-standing executive position at Cushman & Wakefield to where he is today. “The idea is to do multiple ventures in as much time as I can devote, and to be part of teams and enterprises trying to create a new story or trying to solve a new problem.”
“I think people living in today’s world are among the luckiest generations because there is just so much happening around the world, with regard to how technology is changing our lives,” he lights up. “I encourage the readers to challenge the conventional and create value out of the innovations that are happening around them.”
We have more inspiring interviews and features in our SpacesAsia magazine.