DTZ Property Times Singapore Q3 2011

DTZ offers a rich source of research on real estate markets in many countries around the world. Their team of almost 100 analysts and researchers cover trends and data in real estate markets to provide insights into real estate decision-making. This report seeks to keep readers updated on the commercial and residential sectors in Singapore.

Caution sets in

Slower economic growth in Singapore, against a backdrop of global uncertainties and volatility in the stock markets, led to more cautious sentiment in the real estate market, particularly for commercial real estate. Property investment transactions fell significantly by about 55% to $4.0bn in Q3 2011.

Office & Industrial rents stay flat in Q3

Office rents in the CBD and average rental values for private industrial space were largely unchanged in Q3 2011 as leasing demand slowed down. Office and industrial rents are expected to stay flat in the near term but the possibility of a fall in rents is now higher as the probability of a financial contagion from the eurozone debt crisis has increased.

Cautious optimism in retail sector

Retail rents in Orchard Road increased 0.5% quarter-on-quarter (QOQ) in Q3 2011, due to the limited potential supply. While international retailers are still looking to move away from their home base to expand operations in Asia, the deteriorating economic outlook has led to some retailers becoming more hesitant in taking up new space. Retail rents are expected to move along sideways, barring a drastic turn in the economic situation.

Private property prices moderate

The pace of increase in resale prices of private homes has moderated across all segments in Q3 2011. The price increase for landed homes continued to outpace non-landed homes. Purchases of private homes continue to be supported by low interest rates and upgrader demand, with the bulk of purchases in the suburban area. However, if the global outlook worsens significantly, this will eventually affect buying sentiment and lead to less exuberant purchase activity.

To download the full report, please click here.