SINGAPORE (EDGEPROP) - The Southeast Asian (SEA) economy is expected to grow by 4.7% in 2023, close to pre-pandemic average growth rates of about 5% annually, said Cushman & Wakefield in its Southeast Asia Outlook 2023 report. This is expected to positively affect the region's property markets, which Cushman & Wakefield says are “poised to rebound” in 2023.

Key drivers for the rebound include China’s reopening following the pandemic as well as stronger trade growth across the Southeast Asian economies.“China’s reopening is a catalyst for Southeast Asian economies, given that China is a key export destination. Higher consumption demand out of China bodes well for regional commercial, industrial, and residential investments. Hotel and retail assets could also see the strongest uplift in the near term due to a strong tourism boost.” says Anshul Jain, Cushman & Wakefield’s head of Asia Pacific tenant representation and managing director, India and Southeast Asia.

The consultancy also has an optimistic outlook for the longer term, predicting that Southeast Asian property markets will see strong growth in the decade ahead. Positive drivers expected to contribute to the growth include increasing urbanisation fuelled by digital transformation,  which will drive property demand in Southeast Asia. An increase in trade regionalisation will also drive regional investments, particularly in the logistics and industrial spaces.

Other positive drivers include the faster institutionalisation of emerging Southeast Asian real estate markets, as development policies, ease of doing business and government effectiveness improve, especially in Vietnam and Indonesia.

Meanwhile, sustainability is a rising opportunity as major Southeast Asian economies set green building targets. Cushman & Wakefield highlight that the green building market could be worth US$20 billion ($26.53 billion) to US$25 billion by 2030.

“While the pace of economic growth differs across the markets, the Southeast Asian economy is huge and has the third largest population after China and India. Benefitting from current global trade trends and geopolitical environment, Southeast Asia offers a wide spectrum of investment opportunities as a fast-growing region,” says Jain.