Singapore to recover to pre-pandemic level in Q4 2021: report

APAC real estate investment volumes to hit US$165b in 2021.

The Singapore economy is expected to recover to pre-pandemic levels by Q4 2021 on the back of 4.5% growth and will be one of the key markets leading growth in Asia Pacific, according to Cushman & Wakefield's report.

According to The Signal Report: Investor’s Quarterly Guide to 2021, Singapore’s logistics market is buoyed by accelerated e-commerce growth and shifting consumer preferences. The report also noted the demand for other industrial real estate, which is boosted on the production side by manufacturers seeking to build safety stock. The demand is supported in the long term by producers seeking to shorten supply chains as evidenced by the broad increase in rents of local industrial properties in Q4 2020.

Meanwhile, logistics cap rates have tightened and investment demand will continue to pour into this sector given the favourable tailwinds.

“With ample dry powder in the region, flows into real estate are expected to resume as confidence in the broader recovery strengthens globally. Liquidity is expected to accelerate towards the end of the year as the office sector bottoms out, joining already strong conditions for logistics and residential assets,” said Shaun Poh, executive director of capital markets at Cushman & Wakefield. 

Meanwhile, total real estate investment volume in Asia Pacific is also expected to bounce back, with investment volumes expected to reach $221.3b (US$165b) in 202, 90% of the 2019 level.

“This rebound in investment activity in the region is supported by greater investor confidence as Asia Pacific leads the economic recovery across the world. The region is also riding on the positive momentum off the back of a surge in investments in the last quarter of 2020,” the property firm said.