Singapore's Commercial Property Market

Singapore’s Commercial Property Market Benefitted From The Pandemic

SINGAPORE – The city-state has shown exceptional resilience against the COVID-19 pandemic and certain sectors of its real estate market have emerged stronger from the health crisis, according to a commentary published on the South China Morning Post (SCMP) on Monday afternoon (12 October, SGT).

“In Asia, Singapore has performed significantly better than its peers, coming out of the crisis even stronger in certain areas of the property industry,” wrote Nicholas Spiro, a partner at Lauressa Advisory.

He also cited Knight Frank Singapore’s Global Head Of Capital Markets, Neil Brookes, who said the pandemic has accentuated the advantages of the city-state’s real estate market as well as the vulnerabilities of the property sector of its neighbours in Asia.

In the commercial real estate segment, Spiro highlighted that Singapore is ticking the right boxes.

“While renewed virus-related curbs have dampened office leasing volumes, net take-up is expected to remain firmly in positive territory for the year as a whole, while rents for grade A offices in the central business district are forecast to continue to rise, in contrast to many other markets in the region, notably Hong Kong,” he noted.

Spiro also underscored that the global health crisis has helped cement Singapore’s role as a leading tech hub in the region that acts as a springboard for Chinese tech companies looking to expand in offshore markets.

Consequently, the strong demand for office space from tech firms and the tight supply of quality workspace in Singapore’s central business district bode well for rental growth in the coming years. In fact, JLL foresees that office rents here would grow by 25 to 30 percent in the next 5 years, representing the highest forecasted growth in the region.

Another positive factor driving Singapore’s outperformance in its commercial property market is the city-state’s most mature REIT regimes, which provide a large and liquid domestic institutional investor base. This not only facilitates the recycling and deployment of capital, but also provides a platform for expansion in overseas markets.

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