Singapore Most Traded CBD Office Market In Asia Pacific

SINGAPORE – Real Capital Analytics – MSCI’s latest Asia Pacific Capital Trends report showed that Singapore’s property market recorded its strongest start to a year in a decade mainly thanks to foreign investors driving a 21 percent annual growth in the sale of income-earning properties in Q1 2022, reported Mingtiandi on Thursday evening (9 June, SGT).

In fact, transactions involving rent-producing commercial, residential, and industrial buildings in Singapore reached US$2.3 billion during the said period. This enabled the city-state to achieve the highest Q1 tally in a decade, with nearly 50 percent of the acquisition being made by offshore buyers, said the market data provider in its report.

“Singapore has been a magnet for cross-border investors in 2022, with offshore capital responsible for deals across the office, retail and industrial sectors. But it is the office sector where activity has been concentrated the most,” said David Green-Morgan, Real Estate Research Head for Asia Pacific at Real Capital Analytics – MSCI.

“For the first time ever, Singapore was the most traded CBD office market in Asia Pacific in a single quarter, overtaking the likes of Tokyo, Sydney and Seoul.”

Notably, PAG was the top real estate investor in Singapore Q1 2022, after the Hong Kong-based private equity firm purchased Cross Street Exchange from Frasers Logistics & Commercial Trust in January for S$810.8 million. That deal ranked as Asia Pacific’s 5th biggest single asset transaction and the largest commercial deal in the city-state during the first quarter of the year.

Another major commercial property investment in Singapore by an overseas investor was Japan’s Kajima Corp, which acquired an office building at 55 Market Street from AEW for S$286.9 million in February.

For the year ended 31 March 2022, the value of transacted real estate traded in Singapore almost doubled to US$9.9 billion, exceeding the 96 percent jump in Australia, which registered deals totalling US$43.6 billion in the period, while South Korea saw a 33 percent gain to US$41 billion.

Real Capital Analytics – MSCI attributed the city-state’s high investment activity this year to offshore players shifting their focus to offices in Singapore’s central business district (CBD), with buyers from Germany, Japan, Hong Kong, and the United States buying five towers in Q1 2022.

That rising interest in Singapore office properties came as local office landlords enjoyed improved occupancy rates and increasing office rents in core locations here during the period under review.