Singapore property investment market to return to pre-Covid-19 levels in quarters ahead: Colliers

Residential investment sales, excluding government land sales, grew to $1.6 billion in the first quarter of 2021.
Residential investment sales, excluding government land sales, grew to $1.6 billion in the first quarter of 2021.ST PHOTO: GIN TAY

SINGAPORE - Property investment sales in Singapore are expected to return to pre-Covid-19 levels over the next three quarters of the year as investor sentiments continue to improve amid economic growth and stability, said real estate consultancy Colliers in a report on Thursday (April 15).

Real estate investment sales rose 25.8 per cent in the first quarter of this year, posting a year-on-year increase of 47.9 per cent to $3.8 billion. The figure excludes mergers and government land sales.

This was mainly led by the commercial and industrial property segments, including a number of major deals such as the half-stake in OUE Bayfront sold for $634 million, the sale of YewTee Point for $220 million and Boustead Projects' injection of 14 properties into the newly established Boustead Industrial Fund at $469 million.

Colliers said it expects stronger sales this year, supported by "Singapore's safe haven status, pro-business environment and economic growth".

Colliers head of research Tricia Song noted that the Government's easing of measures to allow 75 per cent of employees to return to the workplace at any one time should further increase the mobility and economic activities.

This comes on the back of the Singapore economy's unexpected growth of 0.2 per cent in the first quarter of this year, led by gains in the manufacturing sector and reversing three quarters of contraction.

It is an about-turn from the 2.4 per cent contraction recorded in the previous quarter, according to the Ministry of Trade and Industry's advance estimates released on Wednesday.

The January to March expansion surprised analysts, who had tipped the economy to shrink 0.5 per cent year on year in a Bloomberg poll.

Colliers noted that commercial property deals, excluding real estate investment trusts mergers, grew on continued interest in Grade A office buildings and suburban retail malls.

The segment recorded $1.1 billion in sales in the first quarter of this year, posting an increase of 377 per cent quarter on quarter and 43.8 per cent year on year.

Meanwhile, industrial investment sales jumped 141 per cent in the first quarter of this year to $1 billion.

Colliers said it expects positive long-term growth in this segment as investors seek out high specifications and data centres, beyond warehouses, to leverage the growing e-commerce and technology trends.

The residential sector also recorded more activity, with continued strong sales on good class bungalows and a purchase by foreigners that hit record amounts.

Residential investment sales, excluding government land sales, grew to $1.6 billion in the first quarter of this year. This represents a growth of 12.9 per cent quarter on quarter and 154 per cent year on year.

The recent high-profile sale of all 20 completed units in freehold luxury condominium Eden in Draycott Park to the Tsai family in Taiwan has also boosted foreign investors' confidence.

It was the third-largest transaction in the first quarter of this year, just behind the OUE Bayfront and Boustead deals.

Referring to the sale, Mr Steven Tan, senior director of investment services at Colliers International, said: "Foreign investors' confidence in Singapore's real estate market is very strong, the sale... is a great testimonial."