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Singapore is expected to become the second top property investment location in Asia Pacific by 2019, based on a survey by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC).
According to their Emerging Trends in Real Estate Asia Pacific 2019 report, office rents in the city-state have been increasing solidly thanks to limited inventory and a resurgence in tenant demand.
Operators of co-working spaces have also become among the largest office tenants in Singapore, while leasing demand from tech companies remains healthy.
In addition, the city-state’s retail space market was buoyed by strong economic growth and high visitor arrivals in 2018, after years of lacklustre performance as retail space owners and tenants struggle to boost sales in the era of e-commerce.
On the other hand, Singapore’s industrial property market is facing a supply glut. Although this situation has dragged down rents, rental rates are expected to recover next year as there are signs that surplus space is now being absorbed by the market.
“Singapore has climbed from third to second place in this year’s rankings (in terms of property investment potential),” said Pauline Oh, Singapore executive director at ULI. By real estate development prospects, the city-state was ranked eighth.
“The improvement in Singapore’s office market has seen the city-state comprehensively rerated by respondents, after falling to 21st place in our 2017 report. This can be demonstrated by a number of major office deals that have been sealed in the past 12 months, with domestic investors the biggest buyers.”
The Emerging Trends survey is derived from the opinions of 350 property professionals, such as investors, developers, property firm representatives, lenders, brokers and consultants.
“Singapore’s stronger performance this year is reflective of the rebound we are seeing over cyclical lows over the past number of years. Its pro-business environment and the growth in crowd data also has placed the republic as one of the more attractive markets for data centres; an alternative asset class with higher yields,” noted Yeow Chee Keong, real estate and hospitality leader at PwC Singapore.
Meanwhile, Melbourne leads the pack for both investment and development prospects, whereas Sydney came in third for each category.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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