Singapore Property Market to return to Pre-Covid Level

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Singapore Property Market to return to Pre-Covid Level

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According to a study released on Thursday by real estate consultancy Colliers, property investment sales in Singapore are forecast to return to pre-Covid-19 peaks over the next three quarters as market confidence improves amid economic growth and stability.

In the first quarter of this year, real estate investment revenues increased by 25.8% to $3.8 billion, representing a 47.9% growth year over year. Mergers and government property purchases are not included in the calculation.

The commercial and industrial property divisions led the way, with large transactions including the $634 million acquisition of a half-stake in OUE Bayfront, the $220 million sale of YewTee Point, and Boustead Projects' $469 million infusion of 14 assets into the newly formed Boustead Industrial Fund.

Colliers forecasts higher revenue this year, citing "Singapore's safe haven status, pro-business climate, and economic development" as reasons.

Tricia Song, Colliers' head of analysis, observed that the government's relaxation of policies to enable up to 75% of workers to return to work at any given period could boost mobility and economic activity.

This follows the Singapore economy's unexpected 0.2 percent rise in the first quarter of this year, driven by improvements in the manufacturing sector and reversing three quarters of contraction.

According to the Ministry of Trade and Industry's advance estimates published on Wednesday, it's a 180-degree change from the 2.4 percent contraction posted the previous quarter.

The extension from January to March shocked economists, who predicted a 0.5 percent year-over-year contraction in a Bloomberg survey.

Colliers noted that competition in Grade A office buildings and suburban shopping centers increased in commercial property transactions, outside real estate investment trust mergers.

In the first quarter of this year, the division produced $1.1 billion in revenue, up 377 percent from the previous quarter and 43.8 percent from the previous year.

In the first quarter of this year, manufacturing investment revenues increased by 141% to $1 billion.

Colliers predicts positive long-term growth in this sector as investors follow high specs and data centers, rather than warehouses, to take advantage of the e-commerce and technology developments, according to Colliers.

The residential sector saw an increase in operation as well, with continuing high sales of good-class bungalows and a record-breaking purchasing by foreigners.

The first quarter of this year saw a $1.6 billion increase in residential investment revenue, excluding government land sales. This reflects a quarterly increase of 12.9% and a year-over-year increase of 154 percent.

The recent high-profile selling of all 20 completed units in the freehold premium condominium Eden in Draycott Park to the Tsai family of Taiwan has raised international investor confidence.

It was the third-largest sale in the first year, behind only the OUE Bayfront and Boustead offers.

"Foreign investors' trust in Singapore's real estate sector is quite high, the transaction... is a fantastic testimonial," said Mr Steven Tan, senior director of investment services at Colliers International, in reference to the sale.
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