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Singapore real estate jumps from near bottom to third place

Friday, January 12, 2018

As per this year's Emerging Trends in Real Estate Asia Pacific 2018 report, a real estate forecast published by the Urban Land Institute (ULI) and PwC, Singapore property has gone from near the bottom to a whopping third place in investment prospects within the Asia-Pacific region.

This comes on the back of a revival in investor sentiment towards the republic in 2017.It appears to have found a bottom in both its office and residential sectors.

The report stated that after two years of declining rents caused by a slack economy and an excessive supply, investors presently believe that Singapore's commercial and residential markets are near its bottom.

It also stated that office rents in Singapore have firmed probably much before than expected, while completion of the region's biggest office deal in September 2017 has now stimulated the local market and set a floor for valuations. It has resulted into the occurrence of several core office transactions this year, with foreign funds buying actively.

The September office deal mainly refers to CapitaLand Commercial Trust's S$2.09 billion acquisition of Asia Square Tower 2 from Black Rock Asia Property Fund III LP.

It added that with increasing transactions and a slight uptick in pricing for the first time in four years, the residential sector is also showing bright signs of recovery. Sales of developer sites have risen amid tightening supply as developers seek to replenish the land banks. There are high chances that the rebound shall be sustainable, thanks to the several years of pent-up consumer demand. The Chinese developers have also been active in buying land, pushing up land auction prices for residential sites, mainly through 2017.

The report displays an outlook on Asia-Pacific real estate investment and development trends, and is based on the opinions of more than 600 real estate professionals including investors, developers, property company representatives, lenders, brokers and consultants.

Singapore: The Business Times

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