Singapore property investment to increase 20% in 2021

27 Jan 2021

The positive forecast for 2021 comes on the back of the strong rebound registered in Q4 2020, where property investment sales trebled quarter-on-quarter and doubled year-on-year to $14.4 billion.

Singapore property investment sales trebled quarter-on-quarter and doubled year-on-year to $14.4 billion in the fourth quarter of 2020, mainly on REIT merger, revealed a Colliers International report.

“2020 is the year of two-halves as we see investment sales at $18.6 billion in the second half, making up three-quarters of the full year of $24.7 billion, signalling strong momentum going into 2021,” said Jerome Wright, Senior Director of Capital Markets at Colliers International.

With the strong rebound registered in Q4 2020, Colliers Research expects volumes for 2021 to recover to pre-pandemic levels, buoyed by Singapore’s pro-business environment, economic growth and status as a safe haven.

Property investment sales is forecasted to grow 20% to $29.7 billion in 2021.

Recommended article: REITs vs Property: Which is a better investment?

In Q4 2020, residential investment sales soared 92.6% quarter-on-quarter and 94.2% year-on-year to $1.97 billion, mainly on the revival of public and private land sales, including two en bloc sales.

Residential investment volume, however, fell 23.6% to $5.25 billion in 2020 as there were fewer public land sales awarded and luxury homes sold due to delays caused by the COVID-19 pandemic.

The report revealed that 38 Good Class Bungalow (GCB) sites worth $1.01 billion were transacted in 2020, down from 2019’s 34 GCB sites worth $1.05 billion.

“With strong developer sales and a depleting pipeline, we expect private land sales via en bloc and collective sales to recover in 2021,” said Steven Tan, Senior Director of Investment Services at Colliers International.

Suggested read: Property Investment in Singapore: How to Get Started, Calculate Rental Yield and More

Commercial investment sales surged 228% quarter-on-quarter and 509% to $8.69 billion in Q4 2020, mainly due to CapitaLand Mall Trust acquiring the six offices and two mixed-use developments of CapitaLand Commercial Trust for $10.8 billion in a merger of equals.

Keppel Bay Tower was also acquired by Keppel REIT for $657 million.

Industrial investment sales, on the other hand, fell 9.3% quarter-on-quarter and 82.1% to $405 million in Q4 2020.

The two major business park transactions during the quarter was the $176 million sale of Sandcrawler business park and the $118 million sale of former Big Box retail-warehouse, which is set to be redeveloped into a business park.

“We see positive long-term growth as investors seek warehouses, data centres and hi-specs space to leverage growing e-commerce and technology trends,” said Tan.

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