Singapore’s commercial real estate market rebounds

After a sluggish start to the year, a mega-deal has helped Singapore’s commercial real estate market bounce back, with transaction volumes at US$4.3 billion (S$5.86 billion) in Q3 2017 – its second-best quarterly showing on record, according to a JLL report.

In fact, CapitaLand Commercial Trust’s US$1.54 billion (S$2 billion) acquisition of Asia Square Tower 2 emerged as the biggest office transaction in Asia Pacific during the first nine months of the year.

“Singapore’s property market has largely turned the corner, underpinned by a brightening economic outlook,” said Tay Huey Ying, Head of Research & Consultancy at JLL Singapore. “Residential and prime CBD Grade A office assets are poised to remain as investor favourites for the rest of 2017 and 2018.”

For the third quarter of 2017, global transaction volumes held flat at US$166 billion, while Asia Pacific transaction volumes rose six percent to US$35 billion. This takes year-to-date volumes for Asia Pacific to US$95.8 billion, up 11 percent over the same period last year.

“Commercial real estate transactions in Asia Pacific held up remarkably well into the third quarter of 2017,” noted Stuart Crow, Head of Asia Pacific Capital Markets at JLL.

“India is the standout in Asia Pacific, and the top picks for investors include Mumbai, NCR and Bangalore, with more than two-thirds of total investments flowing into these cities,” revealed Ashutosh Limaye, Head of Research at JLL India.

Real estate transaction volumes in India reached US$2 billion in Q3 2017, with the US$1.4 billion joint venture of Singapore’s GIC with DLF Cyber City Developers forming one of the biggest cross-border purchases within the region during the period.

“The joint venture involved a portfolio of office and retail assets across India in August,” said JLL.