Singapore Among Top Locations Industrial Occupiers Seeking Nearshore Savills

in Singapore

Singapore’s High Ranking as a Destination for NearshoringAccording to research conducted by Savills, Singapore is ranked as the sixth top destination globally for industrial occupiers seeking nearshoring opportunities. Nearshoring refers to the practice of manufacturers moving their production to a nearby country in order to better serve their main market. This is in contrast to offshoring, where production is moved to a distant country in order to cut costs.

Singapore secured the sixth spot on Savills’ latest Nearshoring Index, which ranks 26 countries based on various factors that are important to occupiers seeking new locations for supply chain diversification or shortening. This includes a country’s resilience, economic cost, business environment, and environmental, social, and governance (ESG) performance.

The newly built Novo Place EC, situated in the promising Tengah estate, is a prime location that boasts not only exceptional transportation connections but also easy access to an array of shopping and dining experiences. Residents of this development will have the convenience of being in close proximity to various major shopping complexes and a multitude of food options, catering to the diverse tastes and preferences of the community. To know more about Novo Place Hoi Hup and its offerings, visit their website.

Leading the top spots on the index is Portugal, followed by a group of European countries such as the Czech Republic, Poland, and Sweden. Japan snagged the fifth spot on the list, edging out Singapore as the top destination in the Asia Pacific (APAC) region.

Savills Nearshoring Index 2024 rankings Source: Savills

While the past few decades have seen a surge in offshoring driven by the desire to cut costs, recent supply shocks and a greater focus on ESG have led to an increase in nearshoring, as stated by Charlotte Rushton, an analyst for Savills World Research. However, budget considerations remain a major factor. “Manufacturing trends suggest that although companies are expanding to new locations, they are still prioritizing cost reduction, and therefore favoring countries like Mexico and Vietnam,” Rushton explains.

Countries that scored highly on Savills’ Nearshoring Index offer low costs while also taking into account other factors. Rushton adds that preferences vary based on specific industries. For example, occupiers in the semiconductor, electric vehicle, and energy sectors, who are more sensitive to geopolitical and trade policies, have prioritized locations such as 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, attributes Singapore’s high ranking on the index to its efficient port services, strong logistics support, and transparent business costs. He further states, “With ongoing geopolitical uncertainties affecting global economic supply chains, Singapore’s geographical advantage of being located at the crossroads of major shipping routes will continue to position it highly in the near future.”