Singapore s Commercial Property Sector Still Subdued from Coronavirus Mid-Summer

CENTRAL DISTRICT, Hong Kong - Aug. 10, 2020 - PRLog -- Singapore's Investment Sales

With investors adopting a wait-and-see stance, compounded with no significant land tender under the Government Land Sales (GLS) program, Q2 2020 saw investment sales plummeting 53.5 percent quarter-on-quarter (q-o-q) to S$1.9bn, down from nearly S$4.0bn in Q1. However, a spark of optimism remained in the office sector, which saw S$1.3bn changing hands, up 68.9 percent from the previous quarter.

The sale of 30 and 50 per cent stakes of TripleOne Somerset and AXA Tower, respectively accounting for S$155.1m and S$840m, will lead to Shun Tak Holdings, a Hong Kong-Macau based company, holding 100 per cent stake of the former building, while China-based Alibaba Group will own 50 per cent stake of AXA Tower. In another commercial transaction, Olayan Capital, a Saudi Arabian-based fund, acquired the retail podium and three office floors at 30 Raffles Place for S$315m.

Edmund Tie's executive director of investment advisory, Ms. Swee Shou Fern said, "These substantial foreign investments indicate sustained investor confidence in Singapore's economy and real estate to weather shocks and eventually rebound."

The Office Market

A combination of factors – including economic contraction and telecommuting – have exerted downward pressure on occupancy rates and rents in the office sector. Based on Edmund Tie Research estimates, occupancy rates of office developments island wide contracted by 0.8 percentage points q-o-q to 92.8 percent in Q2, while rental rates across all locations slipped between 0.4 per cent to 2.0 per cent, with the Shenton Way/Robinson Road/Tanjong Pagar subzone bearing the brunt of the rental contraction.

Despite the soft market and prevailing sentiment of caution, there were still several companies that moved into new premises. Over the quarter, Envysion Wealth Management, a multi-family wealth management firm, and MCTC, an international maritime catering management and training business, opened new offices here.

Industrial and Retail Markets

Both the industrial and retail sectors were among those hardest hit by the pandemic. The implementation of the Circuit Breaker from 7 April to 1 June earlier this year, together with the disruption of global production and supply chains worsened an already weak industrial market.

On the other hand, temporary closures earlier in the year and sales volume impeded by social distancing requirements, combined with plummeting visitor arrivals and residents spending more time at home, have presented an unprecedented challenge for retailers.


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Housing Market Group
Hongkong
Phone: +852 5993 6777
Website: https://housingmarketgroup.com