Why did real estate investment momentum slow down in Q3

Investment volume declined 30% QoQ to $5.33b.

The strong real estate investment momentum in the first two quarters of the year slowed down in Q3 as market players adjusted to different economic headwinds, Colliers reported.

Colliers said higher inflation, increased borrowing costs, and greater macroeconomic uncertainty have restrained market activity in Singapore.

In Q3, investment volume declined 30% QoQ to $5.33b (US$3.72b). Year-to-date, however, volume reached $23.93m (US$16.7b) or 85% of the total figure for 2021.

Looking ahead, Colliers said markets players will reassess their portfolios amidst greater uncertainty.

“Additionally, the search for high-quality and inflation-proof assets will intensify as the market braces for additional challenges, such as higher operating costs stemming from rising interest rates,” Colliers added.

Once inflation and interest rates taper off, Colliers said institutional investors will look again to Singapore for opportunities, especially in the commercial, office and logistics segments. 

“We also envisage more joint ventures and platform investments leveraging third-party expertise as investors seek to de-risk,” the expert added.