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Singapore real estate jumps from near bottom to third place in investment prospects: ULI, PwC survey

SINGAPORE property has gone from near the bottom in investment prospects within the Asia-Pacific region to third place, according to this year's Emerging Trends in Real Estate Asia Pacific 2018 report, a real estate forecast published by the Urban Land Institute (ULI) and PwC.

This comes on the back of a resurgence in investor sentiment towards the republic in 2017, which appears to have found a bottom in both its office and residential sectors.

The report noted that after two years of declining rents caused by a sluggish economy and a glut of supply, investors now believe that Singapore's commercial and residential markets are near its bottom.

"Office rents in Singapore have firmed probably earlier than expected, while completion of the region's biggest office deal in September 2017 has now galvanised the local market and set a floor for valuations. Several core office transactions have taken place this year, with foreign funds buying actively."

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The September office deal refers to CapitaLand Commercial Trust's S$2.09 billion acquisition of Asia Square Tower 2 from BlackRock Asia Property Fund III LP.

It added: "The residential sector is also showing signs of recovery, with rising transactions and a slight uptick in pricing for the first time in four years. Sales of developer sites have surged amid tightening supply as developers seek to replenish the land banks. The rebound seems likely to be sustainable, given several years of pent-up consumer demand. The Chinese developers have also been active in buying land, pushing up land auction prices for residential sites significantly through 2017."

The report provides an outlook on Asia-Pacific real estate investment and development trends, and is based on the opinions of more than 600 real estate professionals including investors, developers, property company representatives, lenders, brokers and consultants.