Quick stats: Why SEA will be a leading source of growth in 2023

Southeast Asia is expected to be one of the leading sources of growth for the global economy, with an average growth of 4.7% in 2023, close to pre-pandemic average growth rates of about 5% annually, according to global real estate services firm Cushman and Wakefield’s Southeast Asia Outlook 2023 report.

Key drivers for this rebound include China’s reopening following the pandemic, which is a boost to Asia Pacific with SEA being a major beneficiary and stronger trade growth across the SEA economies.  

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“While the pace of economic growth differs across the markets, the SEA economy is huge and has the third largest population after China and India. Benefitting from current global trade trends and geopolitical environment, SEA offers a wide spectrum of investment opportunities as a fast-growing region, said Anshul Jain, Cushman and Wakefield’s head of Asia Pacific tenant representation and managing director, India and SEA.

Jain shared that there is a positive impact of the reopening of China on SEA. China’s reopening is a catalyst for the SEA economies given that China is a key export destination.

Against this backdrop, the property markets in the SEA region are poised to rebound in 2023 and perform strongly in the decade ahead. Higher consumption demand out of China bodes well for commercial, industrial and residential investments in the region, explained Jain. Hotel and retail assets could also see the strongest uplift in the near term due to a strong tourism boost, he said.

In Singapore, its open economy will be exposed to the global economic slowdown, and GDP growth is expected to decelerate to 0.5% to 2.5% in 2023.

According to the report, there are also other positive drivers that will contribute to the growth of the SEA markets in the decade ahead:

• Increasing urbanisation fuelled by digital transformation, which would create a huge market opportunity that would drive property demand in SEA.
• Increase in trade regionalisation and diversification of supply chains into SEA, which will drive investments, particularly in the logistics and industrial space.
• The potential acceleration of institutionalisation of real estate in emerging SEA markets as development policies, ease of doing business and government effectiveness improve, especially in Indonesia and Vietnam.
• Sustainability is seen as a rising opportunity in SEA as the major SEA economies set “green building” targets. The green building market could be worth US$20 to US$25 billion by 2030, according to the Southeast Asia’s Green Economy 2022 Report.

Aside from SEA's growth, small business owners in Singapore are feeling good about the future and the health of their businesses despite concerns over inflation and the broader economic environment.

As many as 59% of business owners are optimistic for the future, with 63% expecting revenues to rise. 

In addition to business owners' optimism, more than half of all businesses are comfortable with the health of their business, reporting positive cash flow (58%). These numbers are found by “second annual Sleek Small Business Index” report by Sleek, the solution for entrepreneurs that want to register new businesses.

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