Southeast Asia Outlook 2023

MARKET STATISTICS

OFFICE (CBD GRADE A)

RETAIL (ORCHARD)

LOGISTICS (ISLANDWIDE)

RESIDENTIAL (LUXURY NON-LANDED)

$10.44

$33.76*

$1.63

$5.50

Rents Q4 2022 (SGD psf pm) 2023 Forecast

   

4.5%

9.8%

8.3%

7.9%

Vacancy Q4 2022 2023 Forecast

SINGAPORE MA R K E T S NA P S H OT

   

Current Inventory

31.2 Million SF

7.4 Million SF

122 Million SF

71,681 units

Pipeline Supply (2023-2027)

2.8 Million SF

0.06 Million SF

7.8 Million SF

10,712 units

% of Current Inventory (Pipeline Supply over Current Inventory)

ECONOMY

9.0%

0.8%

6.4%

14.9%

   

Singapore’s open economy will be exposed to the global economic slowdown, and GDP growth is expected to decelerate to 0.5% to 2.5% in 2023. While the manufacturing sector is expected to slow as exports fall due to a weaker external demand and a cooling of the semiconductor boom, this would be mitigated by resilient and recovering growth in service producing industries due to a sustained relocation of businesses towards Singapore, and the reopening of China to bring about positive spillover effects.

Capital Value Outlook

* Prime units: Retail units that enjoy strong footfalls with good frontage and accessibility

RECENT SIGNIFICANT DEALS

INVESTMENT OPPORTUNITIES

PROPERTY NAME

PROPERTY TYPE

PRICE (MIL USD)**

1. INDUSTRIAL: Market demand supply dynamics remain promising with resilient demand and tight market supply as most new warehouse stocks are seeing strong pre-commitments. Aside from logistics, cold chain and life science are niche markets with an imbalance in supply and demand dynamics, with growing demand and limited supply. Sale & leaseback and value add opportunities remain highly sought after. 2. OFFICE: The gap in buyer-seller expectations persists with limited repricing in the market. However, private investors stay active and the strata office market and shophouse markets remain active and are sought after by private wealth and North-Asia Investors. The reopening of China could propel demand further. While overall office demand is expected to slow in 2023, the supply pipeline

remains tight and Grade A office vacancy rates are expected to remain low. Investors looking for better returns can consider taking on vacancy risk and look at value-add or opportunistic strategies. 3. LUXURY HOMES: While private residential prices have soared, luxury home prices have lagged her city-fringe and suburban counterparts. The price gap between luxury vis-a-vis city-fringe and suburban homes have tightened below their 10-year averages. With islandwide home prices at historical highs and still expected to trend higher in 2023, luxury home prices particularly could surprise on the upside.

BUYER

SELLER

YIELD (%)

DATE

Meyer Park Condo

United Venture Development

Collective Sale

Residential

298

-

Q1 2023

Joint Venture between Frasers Centrepoint Trust and Frasers Property

Mercatus Co-operative Limited Mercatus Co-operative Limited

NEX (50% Stake)

Retail

790

4.8%

Q1 2023

Jurong Point & Swing By @ Thomson Plaza

Link REIT

Retail

1,591

4.9%

Q4 2022

Lazada One (50% Stake)

ARA Asset Management

Kenedix

Office

258

N/A

Q4 2022

1 Buroh Lane

Ascendas REIT

PGIM Real Estate

Industrial

146

7%

Q3 2022

Source: RCA, Cushman & Wakefield Research ** Some deals reflect a pro-rated proportion of their latest valuation

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Southeast Asia Outlook 2023: Bouncing Back Stronger | 18