Economic rebound to lift most property sectors

February 1, 2021

Residential, office and industrial sectors are expected to see the biggest economic rebound by end 2021. 

An economic rebound in 2021 is expected to lift most of Singapore’s property sectors to some extent, particularly the residential, office and industrial sectors.

The residential property sector, for instance, is expected to post a recovery in private land sales via en bloc and collective sales this year.

“With strong developer sales and limited land sales in 2020, unsold private residential inventory has come off to 27,000 units, close to the 24,000 units, a trigger point for the collective sale back in 2017-2018,” said Colliers International.

It noted that developers’ hunger for land was evident in the 15 bids received at the last residential tender site, making it the highest number of bids received since 2017.

Recommended article: Need to Move In Urgently? Condos that will TOP in 2021

Office rents are forecasted to expand by 5.5% towards end-2021 as vacancy shrinks to 5% from the 5.2% registered as of December 2020.

Demand for office space will continue to be led by the technology and the overall business recovery.

Colliers also expect the number of investors taking advantage of the incentives provided by URA to rejuvenate the CBD to increase.

“With occupiers needing more flexibility in the pace, space and place of work and placing more importance on sustainability, we see scope for older and less efficient CBD stock to be redeveloped into mixed-use and greener buildings,” it said.

Over at the industrial property market, logistics rents are forecasted to climb by 1.3% in 2021.

This comes as demand for logistics warehouses and data centres have increased following accelerated e-commerce and cloud computing last year.

The hotel sector, on the other hand, is expected to register its first signs of recovery by the fourth quarter of 2021.

Suggested read: Should You Invest In Commercial Or Industrial Property To “Escape” ABSD?

Visitor arrivals and revenue per available room (RevPAR) are forecasted to recover to 55% and 72% of pre-COVID-19 levels, respectively, by Q4 2021.

With travel restrictions remaining in place for most part of 2021, Colliers expects pent-up demand for hotels to drive a V-shaped recovery by 2023.

“Planned new attractions and infrastructure projects scheduled between 2021 and 2030, and the relatively tight supply pipeline underpin the sector’s long-run fundamentals,” it added.

The retail property sector emerged as the second-worst performer in 2020, with rents in the Central Region dropping 14.7% as lockdowns and safe distancing measures affecting retailer sales.

While foot traffic and tenant sales have recovered to 60% to 97% of pre-COVID levels by end-2020, Colliers predict “an uneven recovery among trades, landlords to rejig tenant mix, and thus rents to remain flat with vacancy rates rising marginally to 8.9%”.

Finally, investment sales is forecasted to increase to $29.7 million in 2021, led by the commercial sector, on a favourable interest rate outlook, healthy fundamentals as well as Singapore’s status as a key gateway city.

Looking for a property in Singapore? Visit PropertyGuru’s Listings, Project Reviews and Guides.

POST COMMENT

You may also like these articles

Singapore property investment to increase 20% in 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.Sing

Continue ReadingJanuary 27, 2021

More buyers willing to pay extra cash for HDB resale flats

One of the factors causing the higher demand and premium prices of resale HDB flats include buyers' desire for a larger living space following the experience during the circuit breaker. Property age

Continue ReadingJanuary 29, 2021

Landed homes market to see increased activity this year

Knight Frank noted that 253 landed homes were transacted in the second half of 2020, up from the 108 units shifted in 1H 2020 and the 126 units sold in 2H 2019.With demand for landed homes remaining h

Continue ReadingJanuary 29, 2021