​​​​​​​Property investment market activity to remain muted for the rest of 2023

Knight Frank expects total investment sales for 2023  to reach around $18b-$20b.

Despite an uptick in total investment sales in 3Q23, property experts believe the capital markets space will see muted activity for the rest of the year.

“Given the tentative pace of investment activity and prevailing challenges in the Singapore property market, a continued slowdown will likely feature in the remainder of 2023,” Knight Frank said.

According to Knight Frank, Singapore’s property investment market will be “characterised by investors on the search for assets being primarily focused on adding value to the properties to achieve higher returns.”

“This is to justify the higher borrowing costs involved with the acquisition of the property,” Knight Frank added.

In the months ahead, Knight Frank believes the industrial sector will remain the hunting ground for core acquisitions, but “other investors currently in the process of discovery are increasingly observed to be prepared to move up the risk curve for commercial properties to obtain higher returns, and this can include taking the enhancement and redevelopment route.”

Knight Frank expects total investment sales for 2023 to reach around $18b-$20b, lower than the previous projection of $20b-$22b.

Q3 performance

Singapore’s total transacted value rose for the first time in 3Q23 after five consecutive quarters of decrease since 1Q22.

In 3Q23, Singapore recorded a total transacted value of S$6.9b, an increase of 74.8% QoQ and 19.4% YoY. 

Knight Frank, however, underscored that more than 60% of the transacted value comprised Government Land Sale (GLS) sites that were awarded, amounting to almost $4.1b.