Yahoo Finance 
Singapore slips in ranks of real estate investment favourites
Core assets such as office spaces in Singapore’s CBD are favoured by investors and institutions, but yields and returns have declined on the back of a weaker macroeconomic outlook.
Singapore fell 10 places for city investment prospects, dropping to 21 from its 11th spot a year ago, a report authored by the Urban Land Institute (ULI) and Price Waterhouse Coopers (PWC), revealed. As recently as 2012, Singapore had topped the ranks of real estate investment favourites.
“Singapore’s low ranking in this year’s report has been attributed to various factors including overcapacity in office space, falling retail sales and a residential market correction” said Dr Seek Ngee Huat, Chairman of ULI Asia Pacific and Chairman, Global Logistic Properties.
Amidst a market slowed by cooling measures and a weaker economic outlook, the Urban Redevelopment Authority’s (URA) price index for Singapore’s private residential market slid 1.5 percent to 137.9 in in the third quarter of this year, its 12th consecutive quarter of decline. Meanwhile, retail sales fell 1.9 percent year-on-year (YOY) in September over 2015’s numbers.
“However, the report findings indicate that investors still believe in the long term fundamentals of Singapore and are on the look out for investment opportunities,” Dr Seek continued.
“Focusing on the positive, we could be close to the bottom of the cycle and we are seeing opportunities to invest. I hope, given the uncertainties in local and global economy, there will be an increase in transactions across asset classes over the next twelve months,” said Yeo Chee Keong, Real Estate and Hospitality leader for PwC Singapore.
While a weaker core market in Singapore has made assets in the city state more attractive, the report suggests that prices have yet to fall enough to attract serious buyers. However, Chinese investors are rumoured to be looking in Singapore, and may be early buyers as they are relatively less price sensitive.
Topping the list of investment prospects this year are Bangalore, Mumbai, Manila, Ho Chi Minh City and Shenzhen. The rise of these cities in emerging markets is part of a trend where investors, both institutional and private, are finding it hard to source for core, high value assets, even as yields and returns continue to decline.
The report Emerging Trends in in Real Estate Asia Pacific 2017 is authored annually by ULI and PwC, and solicits the opinions of 604 real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.
This article was written by Chang Hui Chew.
