Real estate market to see more investment activity as price gap narrows: Colliers
The Singapore real estate capital market is poised for more activity, according to an October research study report by Colliers. “As we get around the tail end of 2024, the outer environment shows signs of positive outlook with rising prices declining and interest rate cuts, together with a pick-up in business force,” sees John Bin, Colliers’ director of capital markets and financial investment companies for Singapore.
The bolder expectation will provide investors with the clarity and incentive to pursue interesting deals in the market, Bin adds. While the influence of the price cut is not assumed to translate into an instant surge in action, he expects the cost expectation space in between customers and sellers will gradually narrow in the coming months.
Institutional clients and REITs are anticipated to proceed steering investment event, pushed by more clarity on risk and gains including their general confidence in the continued market value of prime Singaporean property. For the entire of 2024, Colliers is predicting investment revenues to total in between $22 billion and $24 billion, representing a 5% to 15% progress compared to in 2023.
The investment quantity was reinforced by several substantial Government Land Sale (GLS) tenders that totaled up to $3.01 billion, or 34% of overall investments. Investment quantities omitting the GLS offers also charted strong development, climbing up 77% q-o-q and 107% y-o-y.
Colliers’ cheerful overview complies with a bounce back in financial investment volumes last quarter. Singapore property financial investment deals appeared at $8.94 billion in 3Q2024, according to data compiled by the consultancy. This embodies a 37.5% growth q-o-q and a 27.5% surge y-o-y.
This, in turn, is assumed to foster an uptick in transaction amounts as the market gets used to the brand-new economic environment. Colliers is predicting transaction quantities are going to increase in late 2024 and early 2025, as financiers’ risk appetite rises with the expectation of additional rate cuts.
The progress was supported by notable private commercial and industrial arrangements, including the purchase of a 50% interest in Ion Orchard by CapitaLand Integrated Commercial Trust from its sponsor for $1.85 billion and the sale of a $1.6 billion profile of industrial investments to Warburg Pincus and Lendlease.
Colliers’ report emphasize that numerous financial investment arrangements in 3Q2024 were generated by institutional investors and REITs proactively going after high-grade assets. “These deals indicate an expanding preference for financial investment in stabilised, high-performing resources instead of seeking value-add chances,” the write up puts in.
