Boston, MA -- (SBWire) -- 06/19/2013 --The Singapore real estate report examines the commercial office, retail, industrial and construction segments in the context of a volatile macroeconomic landscape that is underscoring the increasingly cautious sentiment in Singapore's historically stable commercial real estate market.
With a focus on the commercial side of the real estate market, the report covers the city-state's rental market performance in terms of rates and yields, and examines how best to maximise returns in the commercial real estate market while minimising investment risk and exploring the impact of the government-led cooling on a market particularly susceptible to global dynamics. The key potential growth areas - driven by increasing activity on the part of international investors - and the potential of the domestic market are also explored, with corporate growth strategies looking to geographical diversification for expansionary opportunities.
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While reports of a decrease in market volume and activity characterised the news flow of 2012, the underlying attractiveness of the real estate market persists, with sound fundamentals and investor demand anchoring performance. Our recently collected data covering full-year 2012 did not reveal any unpredictable, tangible effects of increasing market pessimism. Nevertheless, further cooling measures are likely to compress the market over 2013.
Key Points
- Singapore's construction sector saw a successful pick-up in activity in 2012, but we doubt this momentum will continue into 2013 due to the lack of trade activity in Singapore (a major driver of non-residential construction), the latest round of government measures to curbing speculation in the buildings market, and lower fixed investment by the government. This outlook is reflected in our forecasts - real growth for Singapore's construction sector is expected to reach 5.1% in 2013, lower than the 8.7% estimated in 2012. That said there are still significant growth opportunities in the construction sector in 2013, particularly in the infrastructure and residential sectors.
- Singapore has enacted a harsh set of real estate cooling measures to date, in an effort to keep a lid on skyrocketing property prices. While the measures are likely to result in considerably lower property transaction volumes over the coming months, we do not believe that a substantial sell-off is nigh. Instead, the real trigger for a correction in the market is more likely to be the eventual normalisation of interest rates, which will stretch the affordability of mortgage payments and negate rental profits. However, we believe that the city's property market boasts strong underlying fundamentals which will continue to support price appreciation over the long term.
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"Singapore Real Estate Report Q2 2013" Published
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