Property investment sales volumes could remain stable

Commercial sector remains the most attractive for investors.

Singapore remains a top property investment destination as sales volumes grow at an average of 5% per annum (pa) over 2019-2024, according to Colliers Research. This is despite the 24% forecasted drop YoY in 2020 as Singapore’s strong policy response reinforces its safe haven status.

The report stated that commercial real estate activities in 2020 are to match 2019’s levels, mainly on the REITs’ merger and acquisitions (M&A) activities, even as commercial investment sales crashed 46.9% QoQ and 35.4% to $758m YoY.

“The commercial sector remains the most attractive for investors [as] short-term disruption could offer long-term opportunities,” said Jerome Wright, senior director of capital markets at Colliers International.

Colliers also anticipates the residential market sentiment to recover in the longer run, underpinning a growth of 12% per annum on average over 2019-2024. Residential transactions improved by 113% in QoQ and surged by 68.5% QoQ to $2.0b in Q1 on strong public land sales, the report stated.

Meanwhile, industrial investment sales saw a 50.8% drop QoQ in Q4 2019, thanks to MCT’s acquisition of MBC II. M&A deals in the industrial property sector are expected to pick up in H2 2020 as industrial assets’s high yields continue to attract investors.
 

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