Real estate market to see more investment activity as price gap narrows: Colliers

Institutional investors and REITs are expected to continue pushing financial investment activity, pushed by more precision on risk and gains and also their overall assurance in the long-term value of prime Singaporean real estate. For the entire of 2024, Colliers is estimating investment revenues to total in between $22 billion and $24 billion, representing a 5% to 15% development compared to in 2023.

The Singapore property capital industry is stood for more activity, according to an October research study review by Colliers. “As we get around the tail end of 2024, the external atmosphere shows indicators of optimism with the cost of living declining and interest rate cuts, together with a pick-up in economical propulsion,” sees John Bin, Colliers’ supervisor of capital markets and financial investment companies for Singapore.

Colliers’ information feature that several investment transactions in 3Q2024 were driven by institutional investors and REITs proactively seeking premium investments. “These deals indicate a growing preference for investment in stabilised, high-performing resources rather than seeking value-add opportunities,” the write up puts in.

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The investment quantity was strengthened by several significant Government Land Sale (GLS) tenders that amounted to $3.01 billion, or 34% of complete financial investments. Investment quantities omitting the GLS offers also charted robust development, climbing up 77% q-o-q and 107% y-o-y.

This, consequently, is expected to cultivate an uptick in deal quantities as the market gets used to the new economic setting. Colliers is forecasting transaction quantities will increase in late 2024 and early 2025, as investors’ risk appetite rises with the assumption of additional price cuts.

Colliers’ sanguine overview adheres to a rebound in financial investment volumes last quarter. Singapore real estate investment deals appeared at $8.94 billion in 3Q2024, according to data collected by the consultancy. This represents a 37.5% growth q-o-q and a 27.5% surge y-o-y.

The progress was supported by well known private commercial and industrial arrangements, including the purchase of a 50% involvement in Ion Orchard by CapitaLand Integrated Commercial Trust from its sponsor for $1.85 billion and the sale of a $1.6 billion account of industrial assets to Warburg Pincus and Lendlease.

The brighter overview will offer capitalists with the clearness and incentive to seek engaging deals in the industry, Bin adds. While the effect of the rate cut is not assumed to convert into an immediate growth in activity, he expects the cost presumption space between purchasers and vendors will gradually over time narrow in the coming months.


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