Southeast Asia Outlook 2024

Southeast Asia Outlook 2024: Opportunity Beckons

CUSHMAN & WAKEFIELD

MARKET STATISTICS

OFFICE (CBD GRADE A)

RETAIL (ISLANDWIDE)

PRIME LOGISTICS (ISLANDWIDE)

RESIDENTIAL (LUXURY CONDOS)

Rents Q4 2023 (SGD psf pm) 2024 Forecast

10.75

28.99*

1.81

5.68

X X X

X

6.5% ^

0.5%

X 9.8%***

X 3.7%

Vacancy Q4 2023 2024 Forecast

X

X

X

Current Inventory (million sf)

31.9

67.6^

125.0**

74,379 units

Pipeline Supply (million sf)

4.7

1.8

9.7

12,520 units

SINGAPORE MARKET SNAPSHOT

Pipeline supply over Current Inventory Ratio

15%

3%

7.8%

16.8%

X X

Capital Value Outlook

X

X

X

X

Source: Cushman & Wakefield Research

ECONOMY

* Prime units: Retail units that enjoy strong footfalls with good frontage and accessibility ^ Q4 2023 Islandwide retail vacancy and inventory data from Urban Redevelopment Authority (URA)

• Singapore’s economic growth is set to improve to 3.0% in 2024, higher than 1.1% growth in 2023, albeit growth would be tempered by a still-high interest rates environment and global economic uncertainties. • Economic growth would be underpinned by a recovering manufacturing sector as external demand recovers and resilient demand for services given Singapore’s status as a regional business hub and tourism recovery. • Overall property demand should improve, albeit cautiously and higher supply in some markets such as the residential and office market would crimp rental prospects.

** Reflects conventional warehouses and prime logistics stock islandwide ***Vacancy Rate of Private Residential Units in Core Central Region

RECENT SIGNIFICANT DEALS

PROPERTY NAME

PROPERTY TYPE

Price (mil USD) / US $PSF

NET YIELD (%)

BUYER

SELLER

DATE

CAPITAL MARKETS ANALYSIS

402 / 1,437 psf

Shenton House

Shenton 101

Strata Owners

Office

-

Q4 2023

1. OFFICE: While rents remain on an uptrend and occupancy is high, deals remain challenging to transact due to negative cash on cash returns which is likely to persist. 2. RETAIL: There is emerging interest for value-add retail opportunities as tier one malls have performed strongly as consumers seek experiential retail. 3. PRIME LOGISTICS: Very tight vacancy

rates and a surge in rents in recent years have driven investor interest. Volumes remain held back by low industrial tenure in Singapore. 4. RESIDENTIAL : Recent cooling measures have dented demand for luxury condos as foreign demand pulls back. However, there could be long term capital gains as the price gap between suburban and luxury condos has been shrinking in recent years.

VisionCrest Commercial

LaSalle, Metro Holdings, TE Capital Partners

348 / 2,341 psf

Union Investment

Office

2.6%

Q4 2023

Apricot Capital, Lian Beng Group

Wilkie Edge

Keppel Capital

Office & Retail

261 / 1,684 psf

3.0%

Q4 2023

Frasers Centrepoint Trust

Changi City Point

Zhao Family

Retail

247 / 1,187 psf

4.3%

Q3 2023

Source: RCA, Cushman & Wakefield Research

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