Savills cuts 2023 property investment sales value forecast to $19b-$21b

This is on the back of the geopolitical situation globally.

Savills revised its projected total investment sales value for 2023 to reach $19b to $21b from the previous forecast range of $24b to $25b on the back of the current global political environment.

In a report, Savills said its projection is due to the potential eruption of new conflicts, the rewiring of supply chains, political purges and the contagion effect of the conflict in Israel.

Large ticket items may still be transacted for the rest of the year or up to the first half of 2024 but its likelihood is lower than the pre-pandemic period, with institutional investors seeing retrenchment in deals.

“While the global real estate industry may suffer from a host of problems, Singapore has that unique selling point that being a safe haven, there will still be a base level of transactions coming from those, especially the ultra-high net worth families, seeking to diversify from riskier assets and countries,” Alan Cheong, Managing Director, Investment Sales & Capital Markets.

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Jeremy Lake, Managing Director, Investment Sales & Capital Markets, said the low point in 2023 may contribute to a strong rebound in 2024 if there are no unforeseen events.

He noted that interest rates will probably start declining next year and the global economy will grow, making investors “conclude that the bottle is half full rather than half empty.”  

“A lot of investors have large war chests to deploy and are itching to resume buying and Singapore will continue to be a favoured market for private and institutional investors from the region and beyond. In addition, there will be sellers and thus the environment will be conducive to deal making,” Lake added.