What's Happening?
Singapore is at the forefront of a logistics boom in the Asia Pacific (APAC) region, as demand for logistics services is expected to recover gradually in 2025. According to the Vistra Fund Solutions Friction Index 2025, Singapore has seen the highest regional activity, leading in inquiries and site visits. This recovery is driven by increased requirements from manufacturers and e-commerce firms. The report highlights Singapore's attraction of private capital in the real estate sector, particularly in industrial and hotel properties. Domestic capital continues to dominate most markets, while offshore investments are set to increase due to improving investor confidence and attractive valuations.
Why It's Important?
The logistics boom in Singapore signifies a positive economic outlook for the APAC region, with potential benefits for various sectors. The recovery in logistics services is crucial for manufacturers and e-commerce firms, which rely on efficient supply chains. Singapore's leadership in this boom could enhance its position as a key logistics hub, attracting more investments and boosting its economy. The increase in offshore investments reflects growing confidence in the region's economic stability, which could lead to further growth in commercial real estate and other sectors.
What's Next?
Singapore is expected to continue leading the growth of commercial real estate in the APAC region throughout 2025. Real asset investment volumes are projected to remain progressive, supported by easing inflation, healthy economic growth prospects, and a potential decline in borrowing costs. The commercial real estate transaction volume in the region is anticipated to rise between 5% to 10% year-on-year, driven by growth in Singapore, Korea, Australia, and Hong Kong. Continued investor interest in Japan and India will also support this expansion.
