Mega office deals helped drive international investment in local properties to their highest level since 3 years ago.
About $8. 85 billion dollars from international has been driven into Singapore property at this point this year — the best end result since the $15. 27 billion dollars outlay in 2007, ahead of the global financial crisis strike.
The influx of foreign money is due partially to the viewpoint of Singapore as a more secure investment vacation spot in a universe roiled simply by uncertainties.
It can be due to global market unpredictability as a result of Brexit and the gas and oil sector. International investors look at Singapore being a defensive perform where purchase is fairly secured due to the power of the Singdollar.
The data, which in turn records purchase deals more than $10 mil in worth, shows international expenditure for $8. eighty-five billion, accounting for forty one. 7 % of total property spending so far this season. That was up simply by 62 % from international investment product sales of about $5. 46 billion dollars last year.
It had been also substantially higher than the other investment amount of $4. 67 billion in 2014.
Any office sector came the most curiosity – 76. 5 per cent or about $6. 77 billion from the foreign capital spent so far in 2016.
Over the next three, four years, there is very little new office space being completed. The more forward-looking investors are looking at that period of little supply, which will then result in rental growth.
Investors typically look towards 2020, when the market is projected to pick up.
A huge chunk of foreign investment went into the Asia Square Tower One deal in June, when the Qatar Investment Authority stumped up nearly $3. 4 billion intended for the trophy asset in Marina Bay.
Malaysian developer IOI Properties Group’s unit, Wealthy Link, smashed public land sales tender records with its $2. 57 billion bid last month for a white site in Central Boulevard, also in Marina Bay.
Foreign investors have also been active in the residential sector, notably Chinese developer Qingjian Realty’s $638 million purchase of Shunfu Ville via a collective sale in May. It also won the soft for a mixed development site in Bukit Batok West for $301 million in the same month.
Those deals led to Qatar, Malaysia and China being the top three sources of foreign investment in real estate here so far this year.
Slower economic growth and efforts to cool the property market have weighed on the real estate sector in recent years.
During this period, other major markets across Asia have experienced a strong market upturn, making Singapore an increasingly attractive investment proposition on a relative basis.
Foreign investment volume in 2017 could keep pace with this year’s activity, but the recent run-up in long-term interest rates will see investors cautiously pricing opportunities.
The market next year could get a boost from Jurong Point mall which is on the market, and Asia Square Tower Two – for which its owner BlackRock is said to be sussing out interest from potential buyers.