Singapore Among Top Locations Industrial Occupiers Seeking Nearshore Savills
in Singapore.
Savills, a leading global real estate services provider, has recently conducted research that has revealed Singapore’s position as the sixth top destination for industrial occupiers seeking to nearshore their production. Nearshoring refers to the relocation of manufacturing activities to a nearby country in order to better serve their primary market, as opposed to offshoring, which involves moving production to a distant country in order to reduce costs.
As part of Savills’ Nearshoring Index, which ranks 26 countries based on various factors that are important to occupiers looking for new locations to shorten or diversify their supply chains, Singapore has been placed in the sixth position. The factors considered in the index include a country’s resilience, economic costs, business environment, and environmental, social, and governance (ESG) performance.
At the top of the index is Portugal, followed by a group of European countries such as the Czech Republic, Poland, and Sweden. Japan ranks fifth overall, surpassing Singapore as the top destination in the Asia Pacific (APAC) region.
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According to Charlotte Rushton, an analyst for Savills World Research, the trend in recent decades has been towards offshoring as companies sought to reduce costs, but current supply shocks and increased focus on ESG have led to the emergence of nearshoring. However, budget remains a key consideration, with companies still prioritizing cost reduction when selecting new locations. This has led to the popularity of countries like Mexico and Vietnam.
The countries that scored well on Savills’ Nearshoring Index were those that offered low costs while also balancing other factors. Rushton notes that preferences may differ according to specific industries, with occupiers in industries such as semiconductors, electric vehicles, and energy, which are more sensitive to geopolitics and trade policies, favoring countries like Sweden, the UK, and the US, which offer higher-skilled and higher-value production.
Alan Cheong, executive director for research and consultancy at Savills Singapore, adds that Singapore’s high ranking in the index is supported by its efficient port services, logistics support, and transparent business costs. He also notes that with the current uncertainties in global trade, Singapore’s geographical location at the intersection of major shipping routes will continue to play a significant role in maintaining its high ranking in the future. If you are interested in industrial real estate properties in Singapore, check out the latest listings.
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