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Singapore’s commercial properties are expected to remain highly attractive to developers and investors on the back of the continuous growth in office rent, revealed a Colliers International report.
The city-state’s increasing visitor numbers and tight supply situation are also raising revenue forecasts within the hotel sector.
“In Singapore, the hospitality sector continued to grow in Q1 2019 driven by keen interest from investors and developers who shifted focus to non-residential sectors,” said Tang Wei Leng, managing director of Colliers International, Singapore.
“The commercial sector also enjoyed some deals after months of negotiations and due diligence thanks to a recovery in the office rental market and limited short-term supply opportunity.”
Among the notable deals in the commercial sector include the acquisition by a joint venture between Chelsfield and ARA Asset Management of the office building Manulife Centre for $555.5 million.
The Pasir Ris Central white site was also awarded to a tie-up between Allgreen Properties and Kerry Properties for around $700 million, while a hotel site at Club Street was awarded to Midtown Development (part of Worldwide Hotels Group that includes Hotel 81) for $562.2 million.
The Club Street site was the first hotel site to be made available via the confirmed list of the Government Land Sales Programme since 2008.
Looking ahead, Colliers expects the keen interest in commercial properties to continue among developers and investors in the second quarter, driven by the city-state’s status as a global business hub and the steady office rental growth.
“We also expect the hotel sector to be attractive to investors and developers, with Singapore hotels’ RevPAR expected to grow at about 3.5 percent year-on-year in 2019 as tourism arrivals reach record highs amid tightening hotel supply.”
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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