Which real estate sectors will see continued growth in 2022?

Growth in two sectors will moderate this year.

The real estate market will continue to see recovery in 2022, but several sectors will see their growth moderate this year, CBRE said.

In a report, the office market will be among the sectors which will see continued expansion in 2022, with rents expected to grow further in the mid-term.

CBRE said the growth will be supported “by the rapid expansion in demand from the technology sector and limited new supply.”

The total new supply is estimated at 3.76 million square feet (sq ft) over the next three years (2022 – 2024), equivalent to an annual average supply of 1.25 million sq ft.

The office sector will be led by Grade A market in the CORE CBD, where rents are expected to grow 6.9% to $11.55 per sq ft per month by the end-2022, CBRE added.

For the retail sector, CBRE said it expects a 1.4% broad-based growth in islandwide prime floor rents in the second half of 2022.

“Prime locations will remain keenly sought after, as retailers take advantage of the tenant-favoured market to secure lower rents and better locations,” the analyst said.

Growth of the investment sector, meanwhile, will be underpinned by “the liquidity-flushed global capital market and Singapore’s recovering economy,” according to CBRE.

CBRE expects a 10% growth in investment volumes in 2022.

Unlike other sectors, the residential sector's upward momentum will be tapered in 2022, mainly due to the latest round of cooling measures which is making buyers “re-evaluate their potential buying decisions.”

Whilst remaining on an upward cycle in 2022, the pace of rental growth in the logistics sector is also expected to moderate to 5% in 2022, from the previous 6.5% YoY in 2021.