Property market liquidity dipped 5% in Q2

It was attributed to the Lion City’s souring office and retail rents.

Real estate investment volumes in Singapore remained muted for Q2 as its market liquidity fell 5% QoQ, according to RCA Capital Liquidity Scores.

This figure may have been driven by falling office and retail rents, whilst the Lion City’s trade-reliant economy appeared fragile amidst the ongoing tensions between the US and China. An assortment of property assets have already been placed on the market in Q3, but it may be too late as investors have started looking elsewhere, RCA noted.

“Singapore’s office and retail real estate cycles had peaked even before the onset of the pandemic at the end of last year. With a recovery not in sights until next year, we will probably have to wait for an extended period before investment sentiment returns,” said RCA’s managing director for Asia Pacific.

In the Asia-Pacific region, property investment deal volume was under $38.2b (US$28b) in Q2, down 37% QoQ and on par with Q1. Sales of individual properties continued to weaken, falling to a 10-year low, as hopes of a V-shaped recovery across Asia Pacific proved short-lived.

Cross-border investment in the region grew 11% to $18.01b (US$13.2b) in Q2 QoQ. Almost half the capital deployed in the region originated from a global or intra-regional player, standing in stark contrast to a collapse in domestic investment activity.

The study stated that the numbers slightly overstate the strength of capital inflows, as volumes were boosted by a few billion-dollar deals which were agreed on before the pandemic rattled global markets in late March. Almost half the capital from outside Asia Pacific has gone to Japan this year, with multifamily assets the most popular sector.