In 2015, the Singapore office market will continue to attract investors, including institutional players, opportunistic private-equity investors, high-net worth individuals and family offices. There will be an undersupply of new office space in 2015 that will support healthy occupancy rates as well as rising rents and prices.
The residential sector in Singapore will be an interesting sector to watch in 2015. Transaction volume has been declining and prices have been softening at the same time. But wealthy individual buyers and investors as well as family offices will be keeping an eye out for good-value opportunities, especially in the luxury segment. With asking prices expected to become more realistic in 2015, narrowing the gap between buyers and sellers, residential volume (especially in the luxury segment) could improve. There could be slightly more momentum in the year ahead compared to what has certainly been a lackluster 2014.
It is expected that the capital market in Singapore will see an increased volume of transactions in 2015, when compared with 2014. We should see some interesting development sites coming on the market from both the private sector and the government. Private-equity groups based in north Asia, including mainland China, as well as institutional investors from Europe will account for the bulk of prospective buyers in 2015, while Asian high net worth individuals and family offices will also be sniffing around. It is likely that there will be more foreign investors on Singapore’s shores next year. These investors, regardless of buyer profile, continue to believe in the strength and resilience of Singapore’s economic fundamentals and stability. The Lion City’s evolution into a wealth hub for the region also encourages longer-term investment and attracts inbound capital from Asia and beyond.
At the same time, Singaporean institutions and investors will continue to cast their net wide in overseas markets, looking for diversification. Singaporean institutions rank among the top foreign investors in Australia, mainland China and the United Kingdom, and will likely continue to put money to work in these markets.