Robust Demand and Major Deals Signal Resurgence in Real Estate Sales
Singapore’s real estate sector is poised to approach pre-Covid annual investment sales levels, potentially nearing the S$31 billion average seen between 2010 and 2019. As of August 23, 2021, the market had already attracted S$17.4 billion in investments, just shy of 2020’s total of S$17.6 billion.
The residential sector has been the driving force, contributing S$10.8 billion to year-to-date (YTD) sales—surpassing the full-year figure of S$8.7 billion in 2020. A significant portion of this came from landed property deals, including S$1.9 billion in Good Class Bungalows (GCBs), the highest since 2010.
Institutional Investments in Office and Industrial Assets
Institutional investors have channelled S$3.4 billion into Singapore’s property market, making up 20% of the total investment volume. The industrial sector led with S$1.4 billion in deals, followed by office assets at S$1.3 billion.
Key transactions included Allianz Real Estate’s S$634 million acquisition of OUE Bayfront and related assets, Ascendas Reit’s S$540 million purchase of Galaxis, and Lendlease Global Commercial Reit’s S$353 million stake in Jem.
Noteworthy Residential and Commercial Deals
In the residential segment, developers acquired 18 land parcels worth S$2.7 billion YTD. Among these was the S$784 million Lentor Central site, a government land sale acquired by GuocoLand.
Upcoming opportunities include the Marina View white site, valued at a minimum of S$1.51 billion, and the Jalan Tembusu and Lentor Hills Road plots set for tender this month.
Outlook and Challenges
Despite strong demand, the market faces uncertainties, including pandemic-related labour shortages and rising construction costs. Developers are likely to prioritise government land sales and smaller private plots to mitigate risks.
With significant deals in the pipeline, including the potential S$2.7 billion en-bloc sale of International Plaza, Singapore’s property investment market is set to solidify its recovery, reaffirming its reputation as a stable and attractive destination for global investors.
