Global trade war may spur prime property deals

It presents an opportunity to get these assets at a discount.

Real estate activity in Singapore is expected to pick up in the lead-up to and after the end of the 90-day US tariff freeze, with local buyers likely to snap up prime assets whose prices have been dropping amidst a trade war and slowing global economy.

“Opportunistic investors and private wealth are likely to remain active with a longer-term view,” Catherine He, head of research at Colliers Singapore, told Singapore Business Review. “Slower economic growth and reduced foreign investments might put a downward pressure on property prices, which in turn could lead to more attractive valuations.”

“While some investors may become more conservative and adopt a wait-and-see mode, others potentially will try and take advantage of the window of opportunity to secure assets at more attractive valuations,” she said in an emailed reply to questions.

US President Donald Trump last month announced sweeping reciprocal tariffs as part of his “America First” trade policy, leading to a global trade war that puts economic growth, jobs and wages at risk. The US has since delayed the tariffs pending negotiations.

He said some prime assets in Singapore’s Central Business District have recently been sold at reduced prices, presenting some opportunities for core and value-add strategies.

Alan Cheong, executive director of research and consultancy at Savills Singapore, said Singapore’s industrial sector would continue to thrive, anchored by long leases, even as manufacturers keep near-term expansion plans in “sleep mode” during the 90-day freeze.

Seven property deals involving institutional investors in Singapore’s industrial sector hit $211.2m in the first quarter, according to Savills.

“The impact on upcoming factory and logistics space demand is unlikely to be affected by the tariffs because end-users have signed up long leases for the completing properties,” Cheong told Singapore Business Review in an email.

“Over time, there is a likelihood that the tariffs will either be removed in part or reduced. These long lease terms pave over this period of uncertainty,” he added.

Colliers’ He said the tariffs could still affect demand for industrial assets and office leasing since trade tensions tend to affect export-oriented sectors such as manufacturing, wholesale trade, transport, and finance.

Within the office sector, Cheong said segments that would likely be affected are nongraded or Grade B and C office buildings or older, or less premium office spaces.

Cheong remains confident about the residential sector, noting that the more uncertain things become in Singapore, the more locals gravitate toward buying private homes.

“This could be due to their perception that bricks and mortars are more secure than cash and equities,” he said. “The liquidity fuelling this is from the baby boomers and early Gen Xs who have amassed a largesse of savings after having benefited from the double-digit economic growth in the earlier post-independent decades.”

Cheong said the property market could weather economic and political storms, adding that developers and buyers should carry on with their business.

He also noted that Singapore’s real estate supply is managed by the authorities, allowing developers to stay active in landbanking as long as policies remain in place.

Still, he said property developers should be conservative when bidding for land and setting prices for new product launches.

Bastiaan van Beijsterveldt, managing director at Colliers Singapore, said property companies should diversify geographically, focus on keeping tenants, and target core or income-yielding assets that are typically more resilient during economic crises.