However, this year’s performance is still “respectable”, according to CBRE.
Given the slower en bloc sales market, Singapore saw total real estate investment volume drop 31.8% to $22.83 billion as at 13 December, which is the lowest since 2016, reported The Business Times citing CBRE.
Despite the decline, CBRE still considered this year’s performance as “respectable” due to the sizeable transactions posted, such as Mapletree Business City II, Duo and 30 Raffles Place (previously known as Chevron House).
The residential sector drove this year’s investment volume, accounting for 32.1%. This was mainly due to public sales of nine Government Land Sales (GLS) sites.
CBRE, however, does not expect the trend to continue considering the build-up of unsold housing stock. The government has also reduced the supply of land for residential development under the first half of 2020’s GLS programme.
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The office sector accounted for 31.1% of this year’s investment volume, while the hospitality sector saw transaction volumes quadruple to $2.15 billion in 2019 from $544.7 million in 2018. The hike was mainly driven by growing tourist arrivals from new attractions as well as major events, exhibitions and conferences held within the city-state.
Looking ahead, CBRE Senior Executive Director of Capital Markets Michael Tay expects investment volume for 2020 to remain resilient due to anecdotal evidence of investors exhibiting interest in Singapore assets, which could boost foreign capital inflows.
The city-state registered a higher proportion of foreign capital in 2019 at 31.1%, versus 2018’s 24.3%.
Tay expects lower interest rates to support strong capital flows into real estate, with active fundraising and cheap debt in the capital markets.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
