Market Outlook

Southeast Asia (SEA) is expected to be one of the leading sources of growth for the global economy as the United States and Europe tiptoe around a potential recession. Cushman & Wakefield’s latest paper explores how SEA real estate market is positioned to develop given the latest economic and property trends. The report looks at the impact of China’s re-opening and rising interest rates and provide our views on investment opportunities, rents and capital value outlook for major property markets in SEA.

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Despite the rapid change and uncertainty experienced worldwide last year, CBRE retains a relatively positive outlook for the Asia Pacific commercial real estate market in 2023.

From an economic perspective, inflation is expected to ease, and interest rates in the region are set to stabilise in the second half of 2023.

Office demand will be solid, driven by the recovery in mainland China, while retailers will adopt a positive, albeit prudent, approach to expansion.

Logistics demand is forecasted to pull back as e-commerce growth normalises, while hotel performance is expected to surpass pre-pandemic levels.

In the capital markets, investors will stay in wait-and-see mode until there is firm evidence that interest rates have peaked, with purchasing expected to pick up significantly in the second half of the year.

This report was originally published in https://www.cbre.com/insights/books/asia-pacific-real-estate-market-outlook-2023

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Economy

• Significant headwinds lie ahead for Singapore’s small and open economy amid a deterioration in the external economic environment. A silver lining exists however with the reopening of China’s borders and the continued recovery in international travel and tourism. GDP growth is projected to ease to 0.5% – 2.5% in 2023.​

Office

• Prime office rents are expected to continue growing in 2023, albeit at slower rate. The softer market conditions in 2023 could provide a window of opportunity for occupiers to reset and reassess their office requirements. Tenants who are inclined to reduce their office footprint can consider upgrading to smaller but better-quality offices.

Industrial

• With a significant amount of hi-tech supply entering the market in 2023, it will be an opportune time for occupiers to evaluate their space requirements and secure quality and centrally-located space.

• Prime logistics supply for 2023 is still expected to be tight. Logistics occupiers with large space requirements should plan their expansion needs two years in advance or consider build-to-suit solutions.

Retail

• Retail rents in all submarkets will grow further in 2023, particularly in Orchard Road which is likely to benefit from the projected increase in tourist arrivals. Crowds have returned to office areas, which will stimulate leasing demand in CBD retail. Meanwhile, the suburban market will continue to register rental increases amid strong demand.

Residential

• Residential rents have seen a historic run-up since 2021 due to tight supply and robust demand. This unrelenting surge in rents is expected to face resistance in 2023 amid a significant increase in completions. Correspondingly, price growth which was underpinned by strong economic growth and rising rents is set to moderate due to a weaker economic outlook.

Capital Markets

• Despite softening investor sentiments, due to its business-friendly policies and stable political backdrop, Singapore remains a top investment destination in 2023 for investors who are looking to capture the growth potential in Southeast Asia and/or diversify their portfolios.

This report was originally published in https://www.cbre.com.sg/insights/reports/2023-singapore-real-estate-market-outlook

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The 2023 Colliers Global Investor Outlook provides insights from the global survey of our international investor client base, technically analysed by our industry-leading research teams along with views and perspectives from Colliers’ senior experts across markets globally.

Real estate is by no means immune to the volatility impacting capital markets. Yet, it’s also immediately evident that the fundamentals around real estate remain strong. Investors are highly attuned to some advantages that today’s scenario present across asset classes.

As the report highlights, a recalibration is underway in many markets, that we expect to continue well into 2023. Colliers’ consensus is that the global real estate market will start to stabilise by mid-2023 as more certainty emerges around the interest rate outlook. We recommend investors view recent trends not so much as a downturn but as a return to relative rationality.

This report was originally published in https://www.colliers.com/en-sg/research/2023-global-investor-outlook-apac-highlights

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