Singapore a real estate investment bright spot
The Emerging Trends in Real Estate Asia Pacific 2020 report also underscored that “sentiment for Singaporean assets has rebounded”.
With global allocations to Asian properties increasing over the past few years, Singapore emerged as a real estate investment bright spot, according to Colliers International.
“Real estate opportunities in Singapore will likely be front-and-centre of investment strategies in the coming year,” said Colliers.
It noted that PWC and the Urban Land Institute has even stated in a recent report that Singapore offers the best real estate prospects within the Asia Pacific region.
The Emerging Trends in Real Estate Asia Pacific 2020 report also underscored that “sentiment for Singaporean assets has rebounded”. It noted that the office sector’s oversupply has been absorbed, and “with vacancies at an all-time low and limited supply in the pipeline, confidence in medium-term prospects has returned”.
In fact, real estate transactions in Singapore surged 53.7% in Q3 2019 – both from the previous quarter and the corresponding period a year ago – to $11.2 billion.
“Amid unprecedented levels of uncertainty in the global environment, Singapore remains firmly on investors’ radar owing to its growth potential, stable government, and pro-business policies. Therefore, we expect Singapore real estate – particularly commercial and hospitality assets – to continue to attract interest,” said Tricia Song, Colliers International’s head of research for Singapore.
In particular, Colliers expects assets within Raffles Place to be highly sought after by investors.
This comes as the area offers many attractive attributes – which include city centre location, rich history and excellent connectivity.
The healthy demand for and limited supply of office space have also kept rents within the area firm. Based on Colliers Research data, (Grade A) rents in Raffles Place/New Downtown area climbed 7.9% year-on-year to $10.41 per sq ft per month in Q3 2019.
But while development sites in Raffles Place are rare and assets are tightly held, the ongoing en bloc sale of The Arcade presents investors with a unique investment opportunity, said Tang Wei Leng, managing director of Colliers International.
“This site can potentially be redeveloped into a new high-rise tower with a business hotel, office space, and retail shops, injecting more buzz to Raffles Place,” she said.
Source: CommercialGuru, 8 Jan 2020