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Total investment volume for 2022 reached S$29.1 billion, a 2.8% increase over 2021

The investment market is likely to shift into a price discovery mode for the first half of 2023


Singapore, January 18, 2023 – Leading diversified professional services and investment management firm Colliers (NASDAQ and TSX: CIGI) today releases its Q4 2022 Investment Market Report. Key highlights include:  

  • Close to S$5 billion of investment sales were recorded in Q4 2022, a 10.8% decline QoQ and 37.1% decline YoY.
  • Total investment volume for FY2022 was S$29.1 billion, a 2.8% increase over 2021 due to an active market in the first half of 2022. 
  • The year also saw a significant inflow of foreign capital, including some new entrants, a testament to Singapore’s attractiveness as a global investment destination. 
  • Investment sales is expected to decline by around 15% YoY to S$25 billion in 2023.
     

In Q4 2022, investment sales declined by 10.8% QoQ due to higher borrowing costs and macroeconomic uncertainties. Investment activity is expected to slow down until the trajectory of interest rates becomes clearer. The market performance was boosted by a couple of large transactions – the divestment of Jurong Point and Swing By @ Thomson Plaza by Mercatus Co-operative Limited for S$2.161 billion and the sale of 50% stake in Lazada One by ARA Asset Management for S$361.49 million as well as some public residential land sales. 

2023 01 18 Investment Market Q4 2022_total investment sales

                                                                     2023 01 18 Investment Market Q4 2022_investment sales by sector

                                                                         Source: Colliers, URA, RCA

The investment market is likely to remain in a price discovery mode in the first half of 2023, as investors adjust to the new normal of higher interest rates and slower growth. Consequently, investment sales is expected to decline by around 15% YoY to S$25 billion in 2023.

Deals are likely to be more bite-sized as larger acquisitions would generally involve an extended time frame and higher leverage, which are unfavorable in the current environment of higher uncertainty and volatility. Nonetheless, investments could pick up in the second half of 2023 as the course of inflation and interest rates becomes more certain.

Ms Tang Wei Leng, Managing Director and Head of Capital Markets & Investment Services, Singapore at Colliers says, "Despite yield spreads narrowing, for those looking to invest in quality core assets, Singapore properties still offer long term capital appreciation potential for decent total returns.”

“There will still be attractive assets coming onto the market. It will only be a matter of time before asset owners have to make the choice between higher operating and refinancing costs or lowering their price expectations. Hence, buyers could position themselves for opportunistic buys or move up the risk curve to look at core plus or value-add assets. 

“With institutional investors taking a back seat, private wealth will become increasingly more prominent. Such capital, typically with less stringent underwriting hurdles, is expected to focus on the luxury residential market, strata-titled commercial space and shophouses,” adds Ms Tang. 
 

Ms Catherine He, Director and Head of Research, Singapore at Colliers says, “On the investment front, prime logistics and prime office capital values will continue to be supported by positive rental growth and ample liquidity, while prime retail capital values are expected to recover over the next few quarters. As such, net yields are likely to remain relatively stable until transactions pick up in the second half of 2023.”

View our Q4 2022 Investment Market Report here.


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WeiLeng Tang

Managing Director | Head of Capital Markets Singapore

Capital Markets & Investment Services

Singapore

WeiLeng is the Managing Director | Head of Capital Markets in Singapore and is responsible for the growth of Colliers' Capital Markets & Investment Services team. An exceptional leader of great entrepreneurial spirit, WeiLeng possesses strong capital markets expertise and proven track records. She is adept in advisory and brokerage, as well as principal real estate. With more than 25 years of experience in the real estate industry, she excels in building deep client relationships and extensive industry network. ‚Äč

WeiLeng has a strong collaborative culture and regional outlook, which enables her to fully connect Colliers Singapore to our other businesses within Asia Pacific and across the global platform. It creates added value for clients who now demand highly effective solutions spanning from country to country.

Capital Markets is her expertise. Her first foray into real estate began nearly three decades ago when she was headhunted by government service. She has since accumulated a wealth of experience in selling buildings, hotels and development land. She sold her first office building at 20 Malacca Street at Raffles Place – just barely one year into her new role. That same relentlessness saw her through many more deals, some bigger, others smaller. Over the years, she has developed an excellent network and invested in strong relationships.

She often gets the question, "What drives you?", which she usually answers, "the inexplicable joy I see on my clients' face when I close a deal!" By building trusted relationships, she has successfully entered into joint ventures with both CapitaLand and City Developments Limited (CDL), during her stint on the buy-side with Wells Fargo (then Wachovia Real Estate).

Having three daughters of her own that are coming of age, she understands her people's aspirations and recognises the acceleration of success of her people as one of her key focuses, where she mentors and nurtures them in becoming the next generation of leaders.

Colliers has given her tremendous space to accelerate her success, and she would like to accelerate yours too. Connect with her today!

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Catherine He

Head of Research

Research

Singapore

Catherine started her career as an Investment Analyst at IFC, the investment arm of the World Bank group, where she participated in the screening, due diligence, financial modelling, and execution of debt and equity investments. She also managed a portfolio of investments through financial analysis and the preparation of quarterly and annual reports. After completing her MBA at INSEAD, she joined Standard Chartered Bank as a Management Associate before starting her own company in Real Estate valuation and forecasting using Machine Learning. Catherine then joined Colliers from CBRE Research. 

Catherine brings to Colliers more than 15 years of experience, primarily in real estate and investments. She has worked with market data and brokers to develop consolidated views of the real estate markets in Asia Pacific, with a focus on Singapore. She was responsible for producing key market and economic updates, forecasts, and thought-leadership papers,  contributing to business development initiatives, investment advisory proposals and client presentations.

In addition, she has drafted feasibility studies and investment recommendations for top clients which include major developers, REITs, financial institutions, family offices, and funds, as well as presented research findings in client meetings and events. As a real estate research specialist with extensive experience, she looks forward to maximising the potential of property through data driven insights. 

 

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