We have seen record breaking deals in commercial real estate take the Singapore property market to its highest range since 2007. There has been nearly $9 billion foreign investment into Singapore property from investors overseas.
Back in 2007 the figure was around $15 billion and while todays figures have some way to go it is none the less a positive sign of investor sentiments towards buying property in Singapore.
With a strong economy, it is expected that 2017 will be another bumper year for the property market, since investors view Singapore as a safe and secure investment destination, especially with so much uncertainty in other mature markets.
While the oil and gas sector is uncertain, investors are weary of the fallout from Brexit along with many other uncertainties, and Singapore therefore stands to gain.
The world-famous property consultancy firm CBRE have shown that deals over the $10 million value mark are attributed to 41% of total property spending throughout 2016. That figure was up 62% on the previous year. $6.7 billion of the foreign investment was in the office sector which was 76% of the total investment amount.
It is expected that over the five years we are going to see very little new office space added to the market, thus investors are forward planning against the supply increasing vs higher interest in rental occupancy.
Investors are buying now with the view to profiting from demand issues in 2020, which is when the market is projected to pick up.
It must be mentioned that a significant portion of foreign investment went into the Asia Square Tower One deal in June 2016 – this one deal attracted $3.4 billion from the Qatar Investment Authority.
FJP Investment have said “A new record land tender of $2.5 billion was made for the new white site in Central Boulevard / Marina Bay. These numbers are mind boggling and further demonstrate the resilience of the Singapore property market.”
Investors from overseas have also been active in the residential market. A good example is the notable purchase of 2016 by Chinese real estate developer Qingjian Realty with their $638 million purchase of Shunfu Ville which was made up of a collective sale in May.
The top three countries were Qatar, Malaysia and China for the most investment in the Singapore real estate market.
The office sector shows strong potential for 2017 according to Renwick Haddow, business development consultant at Bar Works. “The coworking trend is gaining rapid traction in Singapore, this is an area of particular interest for Bar Works in 2017”.
Coworking in Singapore has been attracting freelancers, entrepreneurs to its spaces for quite some time. The space doubles as office and social space and members are seeing huge benefits from the opportunities to network.
This particular concept is not unique to Singapore, we are seeing the same thing happening all over the world. Coworkers love to socialize as this is a fundamental component in getting business done.
It is true that with efforts to slow the property market in recent years and less than average economic numbers being posted, the sector has cooled somewhat.
With oher major markets throughout Asia already posting very strong numbers, the Singapore alternative is an attractive proposition on a relative basis.
With long term interest rates being increased, it is likely that investors will be cautiously pricing opportunities. None the less, it is expected that interest will continue to increase throughout 2017.