Singapore

Singapore's real estate industry can use the current policy adjustment period to rethink its business model and explore how to better integrate urban development and sustainability in its project development.

    Singapore’s bulk real estate transaction volume fell 5.1% year-on-year last year, with a transaction volume of S$38 billion (approximately 190 billion yuan), mainly due to the impact of the government’s property cooling measures launched in July 2018, which resulted in a sharp drop in private housing transaction volume in the fourth quarter . Real estate analysts predict that the value of major real estate transactions this year will increase slightly by 0.7%, reaching approximately S$38.3 billion. In response to the performance of the real estate industry, Singapore’s Finance Minister Wang Ruijie said that in 2019, Singapore’s real estate industry needs to change its mindset and take a long-term view to seize opportunities to achieve development.

Last year's block transaction value fell

    The latest data released by Colliers International, a commercial real estate services company headquartered in Washington, USA, shows that the volume of major real estate transactions in Singapore in the fourth quarter of last year fell by 47% year-on-year to S$6.7 billion, mainly due to the decline in private housing investment and government land sales. cut back.

    In the fourth quarter of last year, Singapore’s private housing transaction volume was only S$1.1 billion, a sharp drop of 86% year-on-year. Thanks to the active transactions in the first half of last year, the annual private home transaction volume still hit a new high of S$22.1 billion.

    Song Mingwei, head of research at Colliers International in Singapore, said that with the introduction of the government's cooling measures, investors and developers are expected to remain cautious in the short term, and the private home transaction market will continue to be sluggish in the first half of this year. If the response of new private housing projects is good, the market purchase aspirations may pick up in the second half of the year, but it is expected that the private housing transaction volume for the whole year will still fall.

    Last year, the value of commercial real estate transactions, including office buildings and retail spaces, rose 8.6% from the previous quarter to S$2.3 billion in the fourth quarter, mainly boosted by a number of large transactions. Statistics show that the annual commercial real estate transaction volume reached S$6.2 billion, a drop of 47% from 2017. This is because there were several large-scale transactions such as government lots in 2017 that resulted in a relatively large base.

Industrial real estate growth has become a bright spot

    Wright, Director of Capital Markets and Investment Services, Colliers International, predicts that leasing demand from the fields of finance, technology and flexible office will drive the growth of the commercial real estate market. In addition, the tight supply of new office buildings in the next three to five years, coupled with the continued increase in office rents, will help commercial real estate attract more investors.

    Statistics show that the transaction volume of industrial real estate rose by 5.8% to S$4.4 billion last year, a record high since 2011. This was mainly because in the fourth quarter of last year, Yishang Hongmu Trust acquired the assets of Yida Industrial Real Estate Investment Trust, which led to a 229% year-on-year increase in industrial real estate transactions in the quarter. At the same time, CapitaLand Group announced in January this year that it will acquire Xingqiao Tengfei for S$11 billion, demonstrating its confidence in the industrial real estate sector. Colliers International predicts that as the local industrial market bottoms out and rebounds, the transaction volume of industrial real estate this year is expected to increase by nearly 90%, becoming the largest increase in all types of real estate.

    In addition, although shophouses that integrate residential, commercial and hotel elements do not account for a large proportion of the overall transaction volume, they have continued to grow in the past four years, reaching a record high of S$1.2 billion last year. It is expected that the shophouse market will remain stable in the next three years. Due to the low price of such real estate units, it is more likely to attract the interest of small investors.

Must seize Asia’s growth opportunities

    In response to the downturn in the real estate industry in 2018, some people in the industry suggested that the government should review the real estate cooling policy. In this regard, Wang Ruijie said when attending the event a few days ago that the economies of countries and regions around the world are closely related to each other, and fluctuations in various markets may cause huge impacts. The world economic development in 2019 will face many uncertain factors. As a highly export-oriented economy, Singapore's economy is greatly affected by changes in the external economic environment. Therefore, the development of the real estate industry must be considered from a long-term perspective, to avoid being severely affected by the external market, and to overcome the challenges, we must seize the growth opportunities in Asia.

    Wang Ruijie said that Singapore's long-term planning capabilities are critical to future development. Singapore will further explore R&D work in various aspects such as urban development and sustainability. The real estate industry can use the current policy adjustment period to rethink its business model and explore how to better integrate urban development and sustainability in its project development. Fused together.