Diverse outlooks for Singapore's commercial sectors
Singapore's retail sector remained vibrant with new store and mall openings in the last quarter of 2013 on the back of the healthy influx of tourists, a Colliers International report revealed.
Based on the Singapore Tourism Board's latest figures, around 12.9 million tourists visited Singapore from January to October 2013, an 8.4 percent hike over the same period in 2012.
However, investor demand for shop and F&B spaces in the strata-titled retail space market, including those mixed-use projects, will likely remain soft due to the total debt servicing ratio (TDSR) framework. In fact, both micro-segments are expected to remain flat for 2014.
On the other hand, the outlook the office property market appears brighter due to bullish economic sentiments in Asia and renewed confidence in Singapore as a regional and international hub.
"Confident in Asia's growth prospects and Singapore's position as a Global-Asia hub, a growing number of firms are expanding their operations in Singapore and relocating their top decision-makers to the island," noted Colliers.
"Notwithstanding the downside risks, the office property market in Singapore is expected to grow from strength-to-strength in 2014," the report added.
Meanwhile, the industrial property sector ended 2013 on a tepid note, with market sentiment and activity in Q4 2013 impacted by the recent government measures, and by industrialists' continued cost-conscious stance.
Specifically, the total number of caveats lodged for strata-titled industrial properties fell from 733 and 647 in Q2 and Q3 2013, to 392 in Q4 2013 respectively.
Looking ahead, rents of high-specs and prime conventional industrial properties could likely dip by up to three to five percent respectively in 2014, while that of business parks are expected to remain stable.
Nikki De Guzman, Junior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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