Singapore's real estate investment market is No 2 in Asia-Pac: report

Singapore

SINGAPORE'S real estate investment market has been ranked second in the Asia Pacific region in a real estate forecast jointly published by the Urban Land Institute (ULI) and PricewaterhouseCoopers (PwC).

This is due to a large number of major office deals in the last 12 months, with domestic investors being the biggest buyers, ULI and PwC said in a joint statement on Wednesday.

The forecast report titled "Emerging Trends in Real Estate Asia Pacific 2019" listed the top five Asia Pacific markets for investment and development in 2019 as Melbourne, Singapore, Sydney, Tokyo and Osaka.

It also indicated that Singapore continues to rebound from cyclical lows of a couple of years ago, as it climbed to second place from third last year. Office rents have risen strongly due to a lack of supply and revived tenant demand, while coworking and other flexible office space operators are now among the biggest lessors of office space.

"The improvement in Singapore's office market has seen the city-state comprehensively rerated by respondents, after falling to 21st place in our 2017 report," said Pauline Oh, executive director at ULI Singapore.

Yeow Chee Keong, real estate and hospitality leader at PwC Singapore, added: "(Singapore's) pro-business environment and the growth in crowd data has also placed the Republic as one of the more attractive markets for data centres, an alternative asset class with higher yields."

Singapore's residential market remains resilient despite the cooling measures that have been in place for several years, while solid economic growth and high visitor numbers have supported rents and yields for prime retail space. The logistics market continues to grapple with suppressed rents caused by oversupply, although there are signs that excess space is now being taken up and rents are predicted to improve slightly next year.

The report identifies trends including investors' interest in value-add plays, or assets upgraded with more flexibility, better user experience and design and technology improvements. Logistics facilities continue to be a go-to investment, and more developers are using co-living to pack more people into smaller areas. Capital flows remain strong and robust outflows are expected to continue, with new reserves from Japan likely to enter the mix in 2019.

The Emerging Trends report is based on the opinions of 350 real estate professionals including investors, developers, property company representatives, lenders, brokers and consultants. It provides an outlook on Asia Pacific real estate investment and development trends, real estate finance and capital markets, and trends by property sector and metropolitan area; and is being released at a series of events across Asia over the next several weeks.