SOUTHEAST ASIA OUTLOOK 2025

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

Key Property Data

PIPELINE SUPPLY OVER CURRENT INVENTORY RATIO (%)

RENTS Q4 2024 (SGD PSF PM) 2025 FORECAST

VACANCY Q4 2024 (%) 2025 FORECAST

CURRENT INVENTORY (MILLION SF)

PIPELINE SUPPLY (MILLION SF)

CAPITAL VALUE OUTLOOK 2025

OFFICE (CBD GRADE A) RETAIL (ISLANDWIDE)* PRIME LOGISTICS (ISLANDWIDE) RESIDENTIAL (LUXURY CONDOS)

10.94

4.7

33.2

3.9

12%

29.77

6.2^

68.6^

2.0

3%

1.88

6.3

126.4**

12.7**

10%

5.57***

10.0***

76,923*** units

11,632*** units

15%

Source: Cushman & Wakefield Research * Prime units: Retail units that enjoy strong footfalls with good frontage and accessibility ^ Q4 2024 islandwide retail vacancy and inventory data from Urban Redevelopment Authority (URA)

** Q4 2024 conventional warehouses and prime logistics stock island-wide *** Q4 2024 Data for Private Residential Units in Core Central Region

SINGAPORE MARKET SNAPSHOT

Occupier Market Commentary and Recommendations Office: Tighter supply conditions may be met with steady office demand amidst a backdrop of gradually declining interest rates and steady economic growth. Retail: While the bulk of new retail supply is expected to stem from the suburban market, retailer demand for suburban retail space remains strong with new suburban malls seeing high occupancy rates. Retailers looking for cost effective options can look towards shophouses where rents are lower.

ease as more supply is introduced into the market. This presents a window of opportunity for tenants to negotiate more favourable terms amidst higher supply in the market. Residential: Rents are expected to stabilise and see mild growth in 2025, after a slight decline in 2024. Steady economic growth coupled with a low levels of new completions would be supportive of a return to growth for rents. Tenants can consider taking on longer leases given a limited new supply over the next few years.

Prime Logistics: The above-trend rental growth for prime logistics over the last few years is expected to

Economy Singapore’s economy is poised to see growth at 0%-2% in 2025. Overall economic indicators look resilient, with low unemployment, recovery in tourism, lower inflation and interest rates.

Investment Opportunities And Recommendations Investment sales volumes could sustain in 2025 driven by an increase of institutional grade assets made available for sale as some asset owners continue to seek to deleverage and recycle capital. This has given rise to opportunities especially in the office sector which continues to be weighed down by concerns of hybrid work. Despite low vacancies and rising rents, Singapore offices are seeing a mild re-pricing with two transactions of CBD Grade A developments at lower-than-expected prices. Singapore will face a constrained future supply pipeline across several sectors such as office, retail, hospitality, and private residential due to increased interest rates, higher construction costs, and economic volatility in recent years. Against this backdrop, we anticipate a pick-up in development activities as interest rates come down and economic confidence grows. Investors are increasingly drawn to the living sector, including hotels, co-living and senior living, and are seeking innovative strategies to adapt and repurpose older properties, unlocking their potential in this expanding market. Industrial volumes reached a 5-year high in 2024, with investors favouring new economy assets such as prime logistics and life science assets. This trend is expected to continue given secular trends such as the rise of e-commerce, digital transformation, demands for healthcare amidst an ageing population. Recent Significant Deals

As a small, open economy, Singapore will feel the impact of weaker global trade, but its strong fundamentals position it well to navigate these challenges.

Amidst global geopolitical uncertainty, companies may adopt a wait-and-see approach, delaying key decisions. Singapore’s safe-haven status could attract capital embarking on a flight to safety amidst times of uncertainty.

Key Market Developments KEY INFRASTRUCTURE/ECONOMIC DEVELOPMENTS (EXPECTED COMPLETION) • Tuas Mega Port (Phase 1: 2027, final phase: 2040s) • Terminal 5 Changi Airport (2030)

TYPE

IMPLICATIONS / AREAS TO WATCH • Higher warehouse demand in the west (Tuas, Pioneer, Boon Lay and Jurong East), and east regions of Singapore • Higher demand for properties in residential and industrial areas such as West Coast, Loyang, Defu, Toh Guan, Tengah etc. across the island • Boost demand for decentralised hubs such as Jurong Lake District, Punggol Digital District and Changi region • The SEZ is expected to strengthen both countries’ position to compete for global investments, attracting manufacturers who seek expansion opportunities in the region

• Infrastructure

• Cross Island Line (CRL) (Phase 1: 2030, Phase 2: 2032) • Jurong Region Line (JRL) (3 Phases: 2027 - 2029)

• Infrastructure

PRICE (MIL USD) / US $PSF

PROPERTY NAME BUYER

SELLER

PROPERTY TYPE

NET YIELD (%) DATE

Keppel’s Connectivity Division, Cuscaden Peak Investments Private Limited

Keppel DC Singapore 7 and 8 Concorde Hotel and Shopping Centre

Keppel DC REIT

Industrial

1,030* / 6,848 psf

6.5%

Q4 2024

• Johor - Singapore Special Economic Zone (Ongoing)

• Economic Scheme

Hotel Properties Ltd

Strata owners

Mixed

619 / 1,109^ psf

N.A.

Q4 2024

Singapore Land Group, UOL Grp Ltd, CapitaLand Development

Thomson View Condominium

Strata owners

Residential

612 / 504^ psf

N.A.

Q4 2024

Source: Cushman & Wakefield Research

CapitaLand Integrated Commercial Trust

21 Collyer Quay

Sunrise Capital Management

Office

511 / 2,322 psf

< 3.5%

Q4 2024

ION Orchard (50.0% Stake)

CapitaLand Integrated Commercial Trust

7.1% (Gross yield)

CapitaLand Investment

Retail

1,437 / 4,609 psf

Q3 2024

Portfolio of 7 Properties

Lim Chap Huat, Soilbuild Group, Blackstone

Warburg Pincus, Lendlease

Industrial

1,198 / 266 psf

N.A.

Q3 2024

Source: RCA, Cushman & Wakefield Research * Transaction is to be executed in stages ^ Based on potential GFA, excluding land betterment charge

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