SG real estate market attracts $26.2b investment sales in 2021

The amount clocked a 10.4% YoY increase.

Cushman & Wakefield, its latest Investment Market Beat research report, revealed that the Singapore real estate market has attracted almost $26.2b of investment sales, clocking in a 10.4% year-on-year (YoY) increase as economic recovery boosted investors' confidence in the market.

Total investment volume in the fourth quarter (Q4) of 2021 moderated to around $7.4b due to the lack of government land sale (GLS) sites sold during the quarter compared to the third quarter (Q3).

The private residential market continues to be the main driver of investment sales, taking up 38% of investment sales. Total residential investment volume declined to $2.8b compared to $3.8b registered in the preceding quarter. The decrease was mainly driven by the lack of public residential deals as there was no residential GLS tender closing during the quarter, whilst four residential GLS sites were sold in Q3 for around $1.7b.

The government announced another round of cooling measures, which took effect on 16 December 2021 to prevent the market from overheating. Following the new measures, the residential collective sale market is expected to cool as developers become more cautious and selective in their land acquisition activities. Nonetheless, the residential collective sale market could still pick up, albeit at a much slower pace, as unsold inventory remains low and developers are still looking to replenish their landbanks.

Cushman & Wakefield Research expects a 'sanguine' outlook for the residential collective sale markets despite the latest round of cooling measures as developers are expected to continue replenishing their landbanks amid fast-depleting unsold stock. Continued economic growth, as well as relatively a low-interest-rate environment, would further support investors' confidence in deploying capital for quality assets. Shophouses, office, and industrial properties to stay high on the radar for investors and investment sales activities to remain robust in 2022.