Singapore commercial property attracts foreign investors
Singapore’s commercial real estate is becoming increasingly attractive to major foreign investors. US-based Warburg Pincus and Australia’s Lendlease have acquired S$1.6 billion (US$1.2 billion) worth of assets in the country.
The companies said the acquisition was due to Singapore’s high potential for commercial property. The portfolio of new assets includes business parks and purpose-built space, the latter of which has tenants in the biotechnology sector. The deal was one of the largest in the country’s commercial property market.
The assets were sold by the companies that make up Blackstone and Soilbuild’s structure. As for the buyer, Warburg Pincus and Lendlease joined forces in the third quarter and formed a joint venture focused on industrial properties in the APAC region.
Analysis of the Singapore residential property market
According to Mordor Intelligence, the Singapore property market is worth US$46.58 billion in 2024. Analysts forecast that it will reach US$64.04 billion by 2029. Key market drivers include:
– remote working trends;
– affordable housing schemes;
– demand for logistics and industrial space.
It is worth noting that the commercial property segment is showing activity. This can be a sign of recovery after the slowdown. As for the residential sector, analysts note insignificant growth here. Demand is still weak due to the measures taken to stimulate the economy. At the beginning of 2024, the picture for the housing market was as follows:
– the private residential property index rose by 4.9% in the first quarter;
– for 2023 as a whole, the index rose by 11.4%;
– this result indicates a slowdown in the segment, the strongest since the end of 2020;
– property values rose by 1.9% in inflation-adjusted terms in the first quarter.
This suggests subdued sentiment among buyers. House prices remain high, while wage growth has slowed. In addition, the crisis has shaken Singapore’s economy, and inflationary pressures have been felt.
Analysts have noted an increase in the prices of flats and houses in the second half of 2024. At the same time, demand remains at a basic level, which points to healthy property liquidity.
JLL analysts expect prices to continue rising but at a moderate pace. In general, the increase in value in 2024 will be between 3-5%. In 2023, the figure was 6.8%. The volume of sales of houses and apartments in the current period remains lower than in the previous period. One reason cited by experts is the modest growth of the local economy.
Singapore’s property market is generally stable. Experts note that the commercial segment is developing faster than the residential segment.