As per the recent reports from Singapore commercial real estate market, the country is experiencing the best ever returns from recent quarter sales. Just within the previous three months, the deal volume increased by 74% while touching the maximum value of $7.72 billion. This is a great record for the single quarter when institutional investors made a grand entry into the market.
MSCU stated that the previous drop was caused by the sharp decay in individual property trades that turned out to be somewhere around the US $33.1 billion. Whereas the average for the year 2021 was reported to be the US $40 billion per quarter. They also revealed that Singapore turned out to be a star during second-quarter sales in the Asia Pacific region. The majority of sales happened in apartments, hotels, industrial, retail, office, and senior housing properties. The Singapore property demands were very high where Central Business District offices attracted the majority of investments; however, hotels and shopping centers performed really well.
The maximum transaction volume in Singapore increased up to the US $7.8 billion during the first half of the year 2022, it was 53% higher than the previous year. MSCI also noted that global investors are the main driving factors behind the stellar growth of Singapore commercial estate. Offices were observed to be the most concerning property types among all the sales that happened for above $3600 psf. A few other key properties included cross street exchange, Tanglin shopping center, twenty Anson, and Westgate tower.
Head of Asia real assets at MSCI research wing, Mr, Benjamin Chow, recently stated that Singapore’s commercial real estate market went down during the previous two downturns; however, 2022 proved to be very lucky for this investment sector so far.
Although the broader slowdown in the region presented a downfall in various smaller deals; the market was dominated by institutions in Singapore with macroeconomic headwinds. As per the MSCI report, the global investors in Singapore increased this year with AEW, KKR Real Estate, and Bright Ruby being the most relevant names among cross-border buyers. Moreover, the outbound investment in Singapore fell within the previous six months after huge gains in the year 2021.
If all deals that happened in Singapore during the previous quarter are kept in the pipeline, Singaporean investors are going to sit on the top and they are now proven to be the most powerful source of capital in the area.
Traditional real estate companies and GIC are responsible for the majority of deals that happened this year. Singapore’s real estate market had great improvement even after price correction in the equity market. Other than this, the financial and economic concerns along with extended lockdowns caused by Covid-19 hampered the real estate market by a considerable level. One of the biggest activity contractions occurred in the Chinese market, mainly in Hong Kong and Mainlands.
The office prices were in a state of recovery during the previous year and they are now rising fast while offering greater returns to the Singaporean economy.
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