In the first half of 2021, investment activity in real estate Singapore market almost quadrupled to US$4.7 billion (S$6.4 billion), up 97% from the previous year.
According to Real Capital Analytics’ (RCA) latest second-quarter Asia-Pacific Capital Trends report, published on Wednesday (Aug 11), the number is the third-highest for Singapore, while being “still some way from 2019’s exceptionally high record.”
Cross-border investors accounted for more than half of overall capital inflows.
According to RCA, the number has vaulted Singapore to the top of the list of foreign investment locations for the first time.
While the majority of the capital went to the commercial and industrial sectors, RCA highlighted Swire Properties’ recent sale of Eden, a freehold residential complex, for US$220.2 million as a “unique apartment transaction” that contributed to the first-half inflow.
Singapore’s excellent first-half real estate investment market performance is consistent with the Asia-Pacific region’s ongoing recovery, which saw sustained sales growth in nearly all major markets in the second quarter.
Investment activity in the area increased to US$77.6 billion in the first half of 2021, up 8% from the same time the previous year, after reaching US$40.3 billion in the second quarter.
RCA observed a growing disparity between top- and bottom-quartile in the Central Business District (CBD) office prices in the area over the first half-year period, which it attributed to a divergence in investor preferences.
According to the data source, this trend was seen in the region’s gateway cities such as Seoul, Sydney, and Tokyo, where top-quartile price levels significantly exceeded bottom-quartile pricing levels by the middle of this year.
Singapore was the lone exception, with top-quartile office price, the typical proxy for changes in Grade A office pricing, increasing by 3% in the second quarter from end-2019. Bottom-quartile pricing, which RCA considers to be a “closer indication of the strength of the wider office market,” rose by 9% during the quarter to a record high.
This follows the establishment of new office price records in Singapore this year, which includes a floor at Samsung Hub that exceeded the $4,000 per square foot (psf) level, breaking the previous record established prior to the Covid-19 epidemic.
According to RCA managing director for Asia-Pacific David Green-Morgan, the sale of Grade B office building Robinson Point for $3,800 psf established a new record for an entire office block.
He cited Singapore’s office sector market as one of the most unpredictable in the region, noting that office volumes in the city-state had increased this year, despite price hikes across the board.
“However, Singapore’s office pricing rise stands out from the rest of the region for another reason: this boom is benefitting more than simply premium offices. Strong cross-border demand has also spilled over into the secondary office market, with record levels set in the second quarter “Mr. Green-Morgan added