Low Property Investment Sales

Property investment is dragged down by the lack of big-ticket investment deals. From $32.2b in 2018, retail investment sales slipped by 6.2% YoY as sales in retail, office, and industrial sectors declined.

While developers are reassessing their development pipeline, the economic uncertainties are expected to continue to affect the sector’s sales, which moderated due to the cooling measures that were introduced. The sector’s sales moderated during the second half of 2018.

Moreover, residential sales fell by 10.6 per YoY to 21,657 units in 2018. With investment sales at 51.9% ($15.7b), residential investment still accounts for most overall real estate investment sales, marking an increase of 8.9% YoY, according to a report from Edmund Tie & Company.

According to the report’s authors, the industrial performance was somewhat mixed and varied based on the factory type and location. The total investments sales of 11.3% are occupied by Industrial investments sales, which fell to 16.9% YoY.

“From Q4 2018 to 2022, an estimated 22.2 million sqft of private industrial development space is expected to come online. However, approximately 68% of this new supply is owner-occupied i.e. comprising single user industrial developments; and extensions, additions, and alterations to industrial properties,” said Ong Choon Fah, CEO of Edmund Tie & Company.

From 6.8%. office rentals in the central business district (CBD) went up to $9.50 pft per month. This is due to the demand from technology, FinTech firms, and growing market share of co-working space.

 

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