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by Cheryl Tay
The
recent introduction of market cooling measures is unlikely to have much
impact on commercial and overseas real estate investor sentiment,
according to some analysts.
Last week’s launch of Alexandra Central (pictured)
next to Ikea saw nearly all of its strata retail units snapped up in a
single day, giving weight to predictions that many industrial property
investors will shift their focus to retail and office units.
Toby
Dodd, Country Manager (Singapore) at Cushman & Wakefield (C&W),
believes that “strong investment demand is likely to remain, given the
sound economy, ample liquidity, low interest rates and a lack of
alternative investments. Investors’ risk appetite will likely continue
under these fundamentals”.
At the same time, office, retail and
overseas properties which are not affected by the measures are expected
to garner more attention.
According to Dodd, “overseas buyers
had already started to look away from Singapore after its previous round
of cooling measures and we have seen a recent increase in overseas
sales to Asians, especially in Malaysia, Australia and the UK. A
knock-on effect of these measures could see a decrease in appetite from
developers and thus a cooling of Government Land Sales (GLS)”.
Meanwhile,
smaller office and retail units offering lower entry levels, stronger
tenant demand and rental growth are likely to continue attracting
investors shying away from the residential and industrial markets.
Commenting
on prices, Dodd said: “We do forecast an increase in both retail and
office pricing but nothing similar to that seen in the industrial market
over recent years. There will be a clear first mover advantage as
investor focus switches sectors.”
But he noted that the
government will closely monitor the market over the next few quarters
and respond with more curbs “if pricing and volumes follow unhealthy
trends. For investors, the message is to purchase prudently and ensure
acquisitions are not reliant on short-term exits and financing”.
Cheryl Tay, Editor of CommericalGuru, wrote this story. To contact her about this or other stories, email cheryltay@propertyguru.com.sg
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