SOUTHEAST ASIA OUTLOOK 2025

Southeast Asia Outlook 2025: Long-Term Growth Prospects Remain Intact

Industrial Stock and Share of Pipeline Supply Across Cities (Q4 2024)

Wellness trends drive hotel interest

Hotel investment sales posted an increase of over 100% yoy in transaction volumes on the back of the continued international travel recovery and stronger demand drivers such as MICE (meetings, incentives, conferences and exhibitions), sports events, and concerts. Overall visitor arrivals are reaching close to pre-pandemic levels. Rising affluence in the region and growing trend toward experiential luxury have supported demand for luxury and up-scale hotels. Additionally, strong growth in demand for affordable wellness

experiences and medical tourism has helped to boost tourist arrivals in popular wellness destinations like Thailand, Bali, and increasingly, Vietnam. SEA countries have stepped up efforts to diversify their tourist source markets, as Chinese demand recovery has lagged, though the pace of recovery differs across markets. Singapore has seen Chinese tourists recover to 87% of pre-pandemic level while for Thailand, the recovery has lagged with tourist arrivals reaching about 60% of pre pandemic levels. India, driven

by its robust economic growth, has emerged as a huge potential market. Countries such as Thailand, Vietnam, Indonesia, and Malaysia are actively courting Indian tourists by exploring visa waivers, streamlining visa processes, and enhancing air connectivity with India. According to a Booking.com and McKinsey report, India is projected to be the fourth-largest global travel spender by 2030, driven by its young population with the median age of 27.6, significantly younger than that of most major economies.

10% 15% 20% 25% 30% 35%

100 120 140 160

0 20 40 60 80

0% 5%

% of pipeline Supply

Industrial Stock (million sf)

Singapore

Greater Jakarta (Warehouse / Logistics)

(Warehouse)

Islandwide (Prime Logistics)

Philippines –

Logistics)

Vietnam Northern Key Economic Region (Logistics)

Vietnam Southern Key Economic Region (Logistics)

Thailand (Warehouse /

Stock (Mil Sq Ft)

Planned/ Under Construction (Mil Sq Ft)

Percentage of Pipeline Supply

Source: Cushman & Wakefield Research

Visitor Arrivals Breakdown by Countries (2019 vs Estimated 2024)

Investors go shopping The retail sector has started to come on to the radar of institutional investors, especially in Singapore, amidst better-than-expected operating performance despite the overhang of e-commerce. The majority of retail spending is still done within physical stores, highlighting the importance of well-designed and convenient retail malls. Prime retail rents have continued to rise across most major markets, supported by resilient domestic consumption, tourism recovery and stabilising e-commerce adoption. The highest-value transaction in this segment during 2024 by absolute price was the sale of a 50% stake in ION Orchard mall in Singapore at an agreed property value of US$1.4 billion (50% basis) to CapitaLand Integrated Commercial Trust. Another key transaction was KLCCP Stapled Group’s acquisition of the remaining 40% equity interest in Suria KLCC Sdn Bhd (Suria KLCC), which owns and manages Suria KLCC Mall in Malaysia, for US$477 million.

45

100%

90%

40

80%

35

70%

30

60%

25

50%

20

SEA’s Main Streets’ Retail Landscape (2024)

40%

Millions

RENT (USD/ SQFT/YEAR)

RENT (USD/ SQFT/MONTH)

15

COUNTRY

CITY

LOCATION

YOY (LCY)

30%

Singapore

Singapore

Orchard Road

$468

$39.0

2%

10

20%

Vietnam

Ho Chi Minh City

Dong Khoi

$368

$30.7

-6%

Vietnam

Hanoi

Trang Tien

$312

$26.0

0%

5

10%

Malaysia

Kuala Lumpur

Suria KLCC

$277

$23.1

6%

Central Retail District (CRD)

Thailand

Bangkok

$126

$10.5

1%

0%

0

Thailand Malaysia Singapore Vietnam Indonesia Philippines

Indonesia

Jakarta

Prime

$93

$7.8

7%

2019 Estimated 2024 Percentage of Pre-pandemic Levels

Philippines

Manila

Prime Metro

$51

$4.3

3%

Source: ASEAN Stats, Country Tourism Website, Cushman & Wakefield Research 1 Estimated for 2024 using annualization

Source: Cushman & Wakefield Research

14

15

CUSHMAN & WAKEFIELD