Southeast Asia Outlook 2025: Long-Term Growth Prospects Remain Intact

Note: At the time of writing, global policy uncertainty - particularly due to recent U.S. tariff measures- remains high. As the situation continues to evolve, the long-term impacts are unclear, and the findings in this report may be subject to change.

Now in its third edition, our latest Southeast Asia (SEA) Outlook highlights the region’s economic prospects in 2025. The report also offers occupiers and investors insights into key SEA markets, including Singapore, Malaysia, Indonesia, Thailand, Vietnam, and the Philippines.

While the risk of a global economic slowdown may temper SEA’s short-term growth, the region’s demonstrated resilience and strong long-term fundamentals will continue to position it among the world’s fastest-growing economies. SEA remains one of the fastest-growing regions globally, with gross domestic product (GDP) poised to rise by 4.8% year-over-year (YOY) in 2024, outpacing the 3.9% growth recorded in 2023.

Indonesia's Economic Overview

Indonesia's economy is projected to achieve healthy GDP growth in 2025, supported by its robust domestic consumption and export expansion. Macroeconomic stability is key to Indonesia's economic growth, with inflation contained at approximately 3% and fiscal deficits lowered to 2.7% of GDP.

Key Takeaways for Occupiers in Indonesia

• Office Sector: On the back of relatively limited new office supply, vacancy rates are expected to improve while rentals are projected to increase in 2025, supported by strong office demand and a positive economic outlook.
• Retail Sector: Although overall occupancy rates could decline marginally amid rising supply, rents are projected to remain stable. 
• Warehouse/Logistics Sector: In 2025, the warehouse vacancy rate is anticipated to stay largely stable despite high new supply level.
• Residential Sector: The supply of landed housing in 2025 is expected to remain stable. Developers mainly focus on middle and lower-middle market segment supported by first-home demand and various housing programs.