According to a study released on Thursday by real estate consultancy Colliers, property investment sales in Singapore are projected to return to pre-Covid-19 peaks over the next three quarters of the year as consumer sentiments strengthen amid economic growth and stability (April 15).
The first quarter of this year saw a 25.8% growth in real estate investment revenue, bringing the total to $3.8 billion, up 47.9% year over year. Mergers and government land purchases are not included in this calculation.
The commercial and industrial property divisions led the way, with large transactions including the selling of a half-stake in OUE Bayfront for $634 million, the sale of YewTee Point for $220 million, and Boustead Projects’ $469 million infusion of 14 assets into the newly formed Boustead Industrial Fund. More industrial and commercial property set to launch in the pipeline such as Polaris at Woodlands.
Colliers predicts higher revenues this year, thanks to “Singapore’s safe-haven status, pro-business climate, and economic development,” according to the firm.
Tricia Song, Colliers’ head of analysis, observed that the government’s loosening of regulations to enable 75 percent 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 expansion in the first quarter of this year, owing to improvements in the manufacturing sector, which reversed three quarters of contraction.
According to the Ministry of Trade and Industry’s advance estimates issued on Wednesday, it’s a 180-degree turn from the previous quarter’s 2.4 percent contraction.
The extension from January to March stunned observers, who had 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 rose in commercial property sales, outside real estate investment trust mergers.
In the first quarter of this year, the division produced $1.1 billion in revenue, up 377 percent quarter over quarter and 43.8 percent year over year.
Meanwhile, industrial expenditure revenues increased by 141% to $1 billion in the first quarter of this year.
Colliers predicts positive long-term growth in this sector as investors follow high specs and data centers, rather than warehouses, to capitalize on the e-commerce and technology developments, according to Colliers.
The residential sector saw increased activity as well, with continuing high sales of good-class bungalows and a record-breaking purchasing by foreigners.
Residential investment revenue increased to $1.6 billion in the first quarter of this year, excluding government land sales. This reflects a quarter-on-quarter increase of 12.9% and a year-on-year increase of 154%.