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Property transaction volume in Asia is expected to surge next year due to an increase in both supply and demand, according to Collier International’s latest report.
“There is pent-up underlying demand from both occupiers and investors, primarily due to the lack of stock, and that will gradually be satisfied by what we anticipate as a growing volume of new supply in 2015,” said the consultancy’s Interim CEO for Asia, Dennis Yeo.
According to Colliers, one of the drivers behind this trend is that more real estate funds are set to expire next year leading to an increase in the number of willing sellers with institutional-grade property. Additionally, more investments are expected to pour into Asia, while more new stocks are expected to be released into the market.
In particular, Singapore’s office market will continue to attract investors, such as institutional players, family offices, high-net-worth individuals (HNWIs) and opportunistic private-equity investors due to the scarce supply of office buildings, the consultancy said.
“The expected under-supply of new office space in 2015 will encourage a gradual rebound in occupancy until at least early 2016. These supporting factors will ensure that rents and prices for office space continue to improve,” said Chia Siew Chuin, Colliers International’s Director of Research & Advisory.
Similarly, Singapore’s retail property scene will continue to lure new players, while moneyed international brands that have already set-up shop in the republic could expand further, she noted.
“The industrial sector, however, is expected to slow down in 2015, as new government measures and policies continue to filter through the market,” added Chia.
“Specifically, JTC’s revised sub-letting policy and other earlier policy changes are expected to slow down en bloc sale transactions of properties built on JTC land, as well as increase the difficulty in executing Sale & Leaseback transactions, which in turn, could hurt the rents and yields achievable by third-party facility providers in the medium term.”
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
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