property investment

Singapore Leads APAC Cities For Property Investment Prospects In 2021

SINGAPORE – The city-state was ranked number one for both property development and property investment prospects in the latest edition of the survey entitled Emerging Trends in Real Estate Asia Pacific 2021.

For property development outlook, Sydney is 2nd place followed by Tokyo. For real estate investment prospects, Tokyo is number 2, then 3rd is Sydney, according to the survey, which was jointly conducted by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI).

“In terms of its size, liquidity, and economic maturity, Singapore does not fit easily alongside Tokyo, Sydney, or Melbourne, which are generally regarded as the more established Asia Pacific gateways. But despite weakening rents and a full pipeline of supply for the next two years, Singapore offers qualities the others do not,” they said.

First, the city-state has fostered a reputation for neutrality, making it the “Switzerland of Asia”, said an interviewee. This has made it a haven amidst an increasingly hostile global environment, luring a steady stream of investors and corporate occupiers, like Chinese tech giants – Alibaba, Tencent, and ByteDance.

“These companies may choose to list in Hong Kong but operate from offices in Southeast Asia, where they expect a majority of their new users to be located,” remarked an interviewee.

While Singapore was also named as the number 1 city in Asia Pacific that will most likely see rental growth next year, an institutional fund manager based in the city-state shared that “people are talking about 10 to 20 percent rental drops”. Still, property valuations have not come down as there’s too much holding power.

But forced sales could happen soon, especially in China, India and Australia, PwC and ULI forecasted in the recently published report.

The research also suggests that office properties in the region would fare better than those in the West amidst the COVID-19 pandemic.

“The balance of opinion among interviewees across the Asia Pacific was that although employees will work from home moreso than in the past (perhaps one day per week), it is unlikely to become a trend to the same extent as is expected in Western markets. Downtown offices will survive, therefore, although workplace layouts and facilities may change significantly.”

Furthermore, the survey pointed out that Grade A offices in Singapore are attractive as their valuations are about 30 percent lower than in Hong Kong, which may be avoided by multinational financial services and asset management companies due to the latter’s prevailing uncertainties.
The study interviewed 134 persons and surveyed 391 individuals. Specifically, the research reflects the views of experts comprising property owners or developers, real estate service firms, fund/investment managers, institutional equity investors, bank lenders, and other entities.

The respondents come from different parts of the world – Australia, mainland China, India, Japan, the Philippines, Singapore, Hong Kong, South Korea, Germany, Indonesia, Mali, Malaysia, Taiwan, Thailand, Vietnam, UAE, the UK, and the United States.

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