Singapore property investment to recover to pre-Covid levels in coming quarters: Colliers

SINGAPORE property sales are expected to grow in the coming quarters, recovering to pre-Covid-19 levels, said Colliers. The company reported improving investor sentiment following the reopening of Singapore's economy.

In a report on Thursday, Colliers noted that total property investment volume reached S$3.8 billion in Q1 2021. This is 73.8 per cent lower from Q4 2020. However, excluding mergers and government land sales (GLS), the number grew 25.8 per cent quarter on quarter (qoq) from Q4 2020 and 47.9 per cent year on year (yoy) from Q1 2020, led by the commercial and industrial segments.

Commercial volumes fell 87.4 per cent qoq to S$1.1 billion. Excluding the merger of CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT) last year, the sector jumped 337 per cent qoq and 43.8 per cent yoy. Its highlights for the quarter include the S$634 million half-stake in OUE Bayfront and the S$220 million divestment of YewTee Point.

"Commercial assets, especially Grade A office buildings, remain attractive as more tech giants set up bases in Singapore, and potentially leveraging on the URA Incentive Scheme," said Jerome Wright, senior director of capital markets at Colliers.

Industrial sales gained 140.6 per cent qoq but fell 12.2 per cent yoy. With S$976 million in sales, the sector was boosted by the S$469 million launch of the Boustead Industrial Fund and the S$142 million sale of Admirax, a high-specification light industrial building.

"We see positive long-term growth in this sector as investors seek warehouses, data centres and hi-specs space to leverage growing e-commerce and technology trends," said Pearl Lok, associate director of investment services at Colliers.

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The company also noted that the absence of GLS during the quarter resulted in lower residential investment sales, which fell 22 per cent qoq. Excluding GLS, the market grew 12.9 per cent qoq and 154 per cent yoy to S$1.6 billion. Over half of this came from good class bungalows.

The residential sector's major transaction includes the sale of a freehold luxe condominium, Eden, for S$293 million. Bought by Taiwan's Tsai family, Colliers believes the transaction reflects the return of foreign investors' confidence in Singapore's real estate market.

In the residential space, the real estate company expects private land sales via en bloc and collective sales to recover in 2021.

Colliers added that shophouses have always been sought after for their flexible property usage, stable rental income, and capital appreciation potential. The market saw a 53.6 per cent decline qoq and 93 per cent rise yoy to S$134 million.

"We recommend assets with long-term growth drivers, such as CBD offices with redevelopment potential, high-specs space, logistics assets and shophouses," said Colliers.