Industrial estates: front, forward and centre - Maybank Kim Eng
Watch for incoming high tide of foreign investment Strong interest expressed by major companies in the electric vehicle and logistics & warehouse sectors will bring multi-years of industrial land demand, we believe. Plus, the incentive for Indonesia to invite FDI from new sectors into the country is higher than ever before to help sustain economic growth. Significant improvement has been made to improve Indonesia’s competitiveness and we expect many more reforms during President Joko Widodo’s second term. With positive presales growth outlook, we expect the industrial-estates sector to rerate from its depressed valuations since its downturn in 2015-2018 with DMAS and BEST to benefit the most from this trend.
At the frontline to benefit from FDI In order to move away from the country’s high dependency on commodities, the government has made significant efforts to promote industrialisation. There are plans to make Indonesia an export base for many sectors, such as auto, FMCG and textiles. Before other parts of the economy feel the positive impact of strong FDI inflow, the industrial estate sector will be the primary beneficiary as the government requires all industrial facilities to be located in an industrial estate.
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