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Singapore’s prime office rents are expected to continue growing over the next few years, backed by robust demand for the technology, professional services and financial services sectors.
Property investments in Singapore doubled in the first half of 2019 following a subdued 2018, mainly driven by the office sector which contributed US$$4.6 billion (S$6.3 billion) in investments, reported Singapore Business Review citing JLL.
In comparison, transactions for the office sector in 2018 and 2017 amounted to US$3 billion (S$4.1 billion) and US$4.7 billion (S$ billion) respectively. JLL expects acquisitions in the sector to hit a decade high this year.
“Singapore’s office sector has become a favoured investment destination over the last 12 months, largely supported by the market’s very favourable demand-supply dynamics and a benign interest rate outlook,” said Chris Fossick, head of Southeast Asia at JLL.
“A big draw for investors is also its rising office rents. Singapore’s prime office rents are expected to continue growing over the next few years, backed by robust demand for the technology, professional services and financial services sectors.”
Meanwhile, JLL’s Global Capital Flows report indicated that real estate transactions in Asia Pacific (APAC) rose six percent year-on-year to a record US$86 billion (S$118.8 billion).
The report revealed that APAC was the sole region to register a high percent increase globally. However, the region’s momentum is expected to moderate for the rest of 2019, with investment levels forecasted to reach new highs this year.
“Due to the tightening of yields in core markets across the globe, particularly in Europe and [the] US, investors are made to look beyond their domestic markets in search of higher returns,” said Stuart Crow, CEO of markets APAC at JLL.
“Joint venture and consortium structures continue to increase in popularity for large deals across the region as investors seek to go more direct and see the benefit in partnering with long-term like-minded groups.”
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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