Singapore reopening to stimulate real estate investment

Property investment activity is expected to pick up further this year as Singapore re-opens and the economy gets back on its feet.

Singapore remains an appealing destination in the Asia-Pacific for investors given its safe haven status and pro-business environment. While interest rates are heading north as central banks seek to subdue inflation, industry players are of the view that the office sector will shine as the growth in rents could outstrip higher funding costs. Moreover, the latest cooling measures - which were introduced to rein in the exuberance in the residential market – could push some investor demand into the commercial sector, which is exempted from Additional Buyer's Stamp Duty (ABSD).

The republic is seeing demand for office space from the likes of technology and asset management firms as it positions itself as a hub for innovation, technology, finance and sustainability. At the same time, office supply growth is tight in the CBD, due to a lack of state tenders, while existing stock is being removed from the market as building owners choose to redevelop older assets.

Some of the significant deals in Q1 2022 included Lendlease Global Commercial Reit's acquisition of the remaining 68.2% stake in Jem for some S$1.41 billion (S$2,329 psf). Other notable deals included the purchase of Grade A-office building 79 Robinson Road by CapitaLand Integrated Commercial Trust (CICT) and CapitaLand Open End Real Estate Fund for S$1.26 billion (S$2,423 psf), and Tanglin Shopping Centre, which was sold to the Tanoto family for S$868 million ($2,769 psf/plot ratio).