Singapore property investment drops 30% to USD3.7b in Q3

The total investment year-to-date is now at USD16.7b.

Singapore property investment’s strong momentum of the first two quarters of 2022 slowed in Q3 according to Colliers, as market players adjusted to headwinds such as higher inflation, increased borrowing costs and greater macroeconomic uncertainty.

Colliers’ preliminary investment data show that investment volume for Q3 totaled SGD5.33 billion (USD3.72 billion), a 30% QoQ decline as momentum slowed. 

Here’s more from Colliers:

This brings the year-to-date total for 2022 to SGD23.93 billion (USD16.7 billion), 85% of the SGD28.31 billion (USD19.75 billion) recorded in all of 2021. 

Investment was driven by a mix of residential public land sales, as well as private office and industrial deals. 

Forecast 

The next few months will likely be a period of price discovery and repricing as buyer and seller expectations widen, and market players reassess their portfolios amid greater uncertainty. They may also need to brace themselves for additional headwinds from higher operating costs and rising interest rates. 

Against this backdrop, the search for high-quality and inflation-proof assets will intensify; meanwhile, investors will have to accept lower returns as borrowing costs climb higher. Nevertheless, the current environment favours well-capitalised investors, especially those who need minimal leverage. 

Expert view 

We advise fully funded investors to seize this opportune period to negotiate pricing as institutional investors take to the sidelines. Once this current period of rising inflation, higher interest rates and market uncertainties tapers off, institutional investors will look to Singapore for interesting opportunities, especially in the commercial, office and logistics segments. 

We envisage there will be more joint ventures and platform investments leveraging third-party expertise as investors seek to de-risk.