The report titled “Singapore Real Estate Market Outlook to 2023 – By Residential Market (New Sales, Re-Sales and Sub-Sales), By Retail Market (Private and Public Retail Space), By Office Market (Private and Public Office Space) and By Hotel Market (Gazetted and Non-Gazetted Hotels)” provides a comprehensive analysis of the real estate space within Singapore. The report covers various aspects including introduction, business models, supply and demand for residential, retail, office and hotel market. The report provides Singapore residential real estate market segmentation by new sales, sub-sales and re-sales, office segmentation by public and private office space, retail market by public and private retail space and hotels by gazette and non-gazetted hotels; comparative landscape, growth drivers, trends and developments, issues and challenges, snapshot on co-working spaces and malls, property buying process and the regulatory framework of the industry. The report concludes with future projections for all the segments and analyst recommendations highlighting the major opportunities and cautions.
Singapore real estate industry was observed to attain maturity majorly because the country serves as a global business hub, tourism center and effective residential housing demand in the country. The country started with selling land parcels for commercial development and itself became the largest housing developer. Lack of space and high demand has allowed Singapore to evolve into a modern real estate infrastructure pioneer with mixed developments, environment friendly constructions and architectural marvels at the core of real estate. Being a global business hub, Singapore’s commercial real estate space sees major foreign investments and gain significant revenues from the presence of international players in the market. Increasing tourism allows revenue surge for retail as well as hotel real estate. Growing population and tourist influx into the country has allowed Singapore to become one of the most expensive real estate markets in the world with majority of population living in Government’s HDB properties.
Singapore Residential Real Estate Market
After three years of continuous decline in the prices during 2014-2017, the residential real estate market gained some growth momentum in 2018 with residential property price index rising during 2017-2018. The market noticed strong recovery till first half of 2018 but cooling measures such as curb on foreign ownership and revised guidelines on ABSD and LTV have led to dampened demand in the second half of 2018. One of the main drivers of residential demand is the growing population with majority of the Singaporean population living in HDB flats and condominiums. Landed properties and other planned sales by the Singapore government and the developments submitted for approval were collectively witnessed to capture the remaining market.
Despite the cooling measures and uncertain external environment, prices for private residential properties continued to increase during 2018. Buyers’ sentiments were more subdued as they adopted a “wait and see” approach after the policy changes and given external environment. On the other hand, higher availability of cheaper resale apartment / flats as well as condos in Singapore has been driving the resale market. Resale flats are cheaper as individual owners may not be able to hold on to an investment property if they face a fund crunch or not able to afford the EMIs. The residential real estate market is expected to grow at a positive CAGR over the forecast period 2019-2023. The residential segment will continue to see moderate increase in prices as the sector faces continuous low demand side pressure. Prime properties at preferred locations are still expected to be the hotspot locations with high asking price. A greater migration to the central Singapore, growing population and swelling middle class are creating additional demand for urban real estate including residential housing.
Singapore Retail Real Estate Market
The retail estate market within Singapore was observed to take a fall during the review period 2013-2018. Occupancy of retail space in fringe area registered highest decline majorly due to the completion of new retail space such as Macpherson Mall and Raffles Holland V in the region. Retail real estate in Singapore is evolving with customer engagement and is further moving towards an activity based approach to tackle offline market space. The market has been witnessing technology integration in existing and upcoming projects.
Private retail space within Singapore real estate market was observed to dominate in terms of available area in the year 2018. The private retail space includes limited large scale players capturing majority of the market. Some of the leading real estate players include operating within the country’s retail space including Capitaland, City Development, Frasers Property Ltd., UIC, UOL and United Engineers. All the major malls and retail outlets in Singapore are owned by Private retail players. This includes the retail space in the famous Orchard area of Singapore which is a retail hub and completely owned by private players. Whereas on the other hand, HDB and Government Occupancy make up the public retail real estate space which captured limited share and mostly consists of retail outlets within the HDB projects.
Singapore Office Real Estate Market
Singapore office real estate market in terms of rental revenue was witnessed to increase during the review period 2013-2018. The net absorption rate of Grade A offices within Singapore office space was good during 2013-2014 majorly in the CBD (central business district) area. Leasing demand further continued to rise from a wide range of industries coupled with the rising trend of co-working operators which has significantly contributed towards market revenue. Major deals in the CBD included the sale of 55 Market Street and the office component of OUE Downtown.
Private office space within Singapore real estate market was observed to clearly establish itself as market leader in terms of available area during the year 2018. Tech and Co-working firms continue to drive majority of the private office space supply. Singapore office real estate market is further projected to grow during the forecast period 2019-2023. Rents are projected to maintain an upward trajectory as supply pipeline dries up. Solid pre-commitments for new development are a healthy sign of vacancy going down in the upcoming years. Co-working spaces and large technology firms are further expected to drive the office space demand and the Singapore government’s decentralization strategy will take off some pressure from CBD area.
Singapore Hotel Real Estate Market
The hotel space within Singapore real estate industry was witnessed to grow during the review period 2013-2018 driven by tourism arrivals. The country’s hotel real estate industry contains a combination of gazetted and non-gazetted hotels. Hotels in Singapore are further categorized into Luxury, Upscale, Mid-tier and Economy. Singapore has 9 major hotel areas with CBD and Orchard road carrying major 5-star hotels, Sentosa Island and River District carry 4-star and 5-star hotels , Heritage District mostly carries 3-star hotels with a few 5-star hotels, Little India, Chinatown, North Downtown and Airport area emphasis more on budget, 2-star and 3-star hotels.
In terms of total room revenue, hotel space within Singapore real estate industry is further expected to grow during the forecast period 2019-2023. The market revenues are further anticipated to increase on account of increasing demand and supply of rooms. Gazetted hotels are expected to lead the supply of rooms as non-gazetted hotels show signs of stagnancy.
Comparative Landscape in Singapore Real Estate Market
The real estate industry within Singapore is further characterized by high levels of competition, an increasing demand for newer properties and commercial activities along with rising population in the country. Competition stage within the country’s real estate space was observed to be moderately concentrated along with the presence of major players such as CapitaLand, Frasers Property Ltd, UOL Group, City Developments, APAC Realty, Chip Eng Seng and Roxy-Pacific Holdings and other small players.