Commercial Property Investments Nearly Tripled In Singapore
SINGAPORE – Real Capital Analytics’ (RCA) Asia Pacific Capital Trends report showed that the total property investments in the city-state almost tripled year-on-year to US$9 billion in 2021, bringing activity back to pre-COVID average, reported The Business Times on Thursday morning (17 March, SGT).
The market rebound in Singapore’s commercial property market is attributed to offshore capital, which invested in office assets compared to the rest of the Asia Pacific (APAC) region.
In fact, the sale of the One George Street office building to JPMorgan Global Alternatives and Nuveen Real Estate during the last quarter of 2021 marked the first billion-dollar sale since the beginning of the pandemic, while German investor AM alpha signed an office transaction in Singapore’s Central Business District (CBD) for nearly S$269.7 million.
Singapore continues to be the leading target for the largest investors in the world. Foreign capital made up more than 50 percent of the volume last year, with over S$5 billion spent – the second highest on record just behind the peak in 2019.
Investors from the city-state also spent a record amount outside Singapore in 2021. The group invested nearly US$16 billion on assets in the rest of Asia Pacific, making them the top source of cross-border capital ahead of US companies.
Meanwhile, data from RCA revealed that commercial property investment in the region exceeded the US$200 billion mark for the first time in 2021. Investment volume rose by around 20 percent on an annual basis, and the recovery was broad-based across all major real estate categories and most major markets.
Overall, the purchase of income-producing real estate hit US$205.4 billion last year – 22 percent greater than 2020’s figure and 23 percent higher than the 5-year average before the virus outbreak.
RCA’s Head of real estate research for Asia Benjamin Chow said that nearly all key markets and property sectors have rebounded to or above their historical levels, which indicates that investors are looking forward to the region’s longer-term growth prospects.
“The dominant narrative for Asia Pacific was no longer about the strong rebound from 2020, but a resumption of its pre-COVID growth trajectory.”
Furthermore, the office, retail and hospitality sectors are gaining ground in the region despite sector-specific issues that arose from the virus outbreak. In particular, offices remained the dominant property category that changed hands last year, with price held up despite fears over occupancy in certain markets.
