SOUTHEAST ASIA OUTLOOK 2025

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

BOX ARTICLE: LANDMARK JS-SEZ AGREEMENT

Industries which are labour and land intensive are expected to show interest and would encourage the adoption of the SG+ twinning model. For example, some parts of the value-chain i.e., assembly and testing could move to Johor, with high value manufacturing and global/regional distribution remaining in Singapore. Some industries that have tapped into the SG+ model include general manufacturing, food and agro processing, as well as logistics. Higher adoption of SG+ Twinning Model Property market impact Positive for long term property demand for both Singapore and Malaysia: The zone may draw the supply chains that are shifting elsewhere as a result of US-China trade tensions, leveraging Singapore’s global finance and logistics centre capabilities with Johor’s access to competitive land, labour and energy​. This could drive new property demand in both Malaysia and Singapore. Malaysia’s property sector to get a boost: The SEZ provides a stronger value proposition for companies that are already considering lower cost alternatives. Over time, as industrial demand picks up, this would have positive spill-over effects on other sectors such as retail and residential. Rejuvenation opportunities for Singapore’s industrial market: As some companies relocate part of their value-chain to Johor, they may seek to divest or lease out part of their existing premises. This would give rise to redevelopment or asset enhancement opportunities and potentially spur relocation activities in the market. Singapore will continue to attract high-value manufacturing: Singapore remains a sought-after location for high-value manufacturing that are capital intensive and use highly automated factories, which typically require lesser land and labour. While cost remains a key consideration, some manufacturers prioritise talent availability, global connectivity and the business and research ecosystem in Singapore for their site selection.

3,571 sqkm demarcated

9 flagship zones

20,000 jobs to be created

JS-SEZ At A Glance

S$1.5 billion infrastructure development fund from Malaysia

MALAYSIA

Segamat

Mersing

11 key sectors including manufacturing, logistics, food security, tourism, energy, the digital economy, the green economy, financial services, business services, education, and health 5% special corporate tax rate for up to 15 years for companies investing in qualifying sectors, such as artificial intelligence, quantum computing supply chains, medical devices, aerospace manufacturing and global services hubs Singapore and Malaysia signed an agreement on the Johor-Singapore Special Economic Zone (JS-SEZ) in January 2025. Spanning an area that will include the Iskandar Development Region and Pengerang, the agreement aims to strengthen the value proposition of Johor and Singapore to compete for global investments together by improving cross-border goods connectivity between Singapore and Johor; enabling freer movement of people; and strengthening the business ecosystem within the region.

Johor

Yong Peng

Kluang

Muar

Iskandar Malaysia Region

Batu Pahat

F E

I H

A

B

D

Zone A Johor Bahru Business services, digital economy, health

C

G

SINGAPORE

Examples of Companies Leveraging SG-JB Complementary Strengths

Zone B Iskandar Puteri Manufacturing, business services, digital economy, education, health, tourism

COMPANIES SECTOR

MOVEMENT TO JOHOR

PRESENCE IN SINGAPORE

Zone F Sedenak Manufacturing, business services, digital economy, education, energy, food security, health, logistics, tourism

• Operated manufacturing facilities in Johor, expanding the group’s manufacturing capacity for Internet of Things (IoT) devices and data communication products • Opened its new facility in Johor’s Senai town, its second branch in Malaysia that can run up to four production lines for electronics. • Currently manufactured all its dairy-free cheeses in Malaysia through a partnership with an established Johor manufacturer • Plans to open a food processing facility in Johor Bahru, expected to be operational in mid-2026 • Collaborating with Malaysian state-owned Johor Corporation subsidiary FarmByte to set up one of the largest urban farms in Johor • Scaling down production in Singapore and looking at ramping up production in Malaysia • Eyeing land in Johor to expand operations • Malaysia will become the heart of RMS’ storage capabilities, with buffer and backup stocks housed in Johor

Electronics manufacturing firm Electronics manufacturing firm

Aztech Global

• Singapore remains the company’s headquarter

• Singapore will remain SP Manufacturing’s headquarter, as well as its centre for engineering and development work, and will lead the way for regional offices

SP Manufacturing

Zone C Tanjung Pelepas and Tanjung Bin Manufacturing, energy, logistics Zone D Pasir Gudang Manufacturing, energy,

Zone G Forest City Financial services

Agrocorp International

Agricultural trading firm

• Singapore remains the company's headquarter

Zone H Pengerang Integrated Petroleum Complex (PIPC) Manufacturing, energy, logistics Zone l Desaru Education, food security, health, tourism

• Retain a smaller farm in Singapore which will focus on research and innovation, including studying the best ways to increase crop size.

Agricultural technology firm

Archisen

logistics Zone E Senai-Skudal

• Uses warehouses and third-party storage in Singapore to serve its South-east Asian market • Day-to-day operations will remain in Singapore with vessels continuing to call at local ports

RMS Marine Service

Marine service provider

Manufacturing, digital economy, education, logistics, tourism

Fast-casual bakery and franchise

• Manufacturing facility cum storage area expected to be fully operational in 2025

Paris Baguette

• Maintain retail operations in Singapore

Source: Various media reports

Source: Business Times, Cushman & Wakefield Research

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CUSHMAN & WAKEFIELD