WORLDVIEW : Singapore
Cap Rates in 1Q2022
�ffi�e 3.1-4 %
Shopping Center 4.5-5.25 %
Industrial 5.25-6.75 %
Hotel 3.5-4.5 %
1Q2022 Rental Rates ($/ sf )
�ffi�e $ 10.01 Industrial
$ 6.04 ( city fringe )
$ 3.52 ( outlying areas )
Retail $ 27.47
Inventory in 1Q2022
�ffi�e 31.1million sf Industrial
30 million sf ( estimated ) Retail
66.7 million sf
Major Economic Indicators ( in 4Q2021 )
GDP 6.1 % growth
Unemployment 2.4 %
Annual Inflation Rate
3.7 %
Vacancy Rates in Singapore in 1Q2022
�ffi�e 4.6 %
Industrial 4.9 %
Retail 8.1 %
Data provided by Cushman & Wakefield and CBRE .
As expected , Singapore bounced back in a major way in 2021 , with the economy expanding by 7.6 percent year over year , outpacing initial projections of 7.2 percent . Retail sales surged by 10.8 percent year over year in 2021 , though they remained 5.1 percent short of pre-COVID-19 levels . Manufacturing expanded by 13.2 percent , while the office sector slowly began its recovery with vacancy rates beginning to drop , while rents grew by 1.1 percent in downtown areas and 0.7 percent in suburban locations .
“ Investment sales momentum is expected to stay robust this year amid stable economic growth and the gradual resumption of various economic activities . Investment sales volumes could surge in the upcoming quarter as various mega deals are expected to be completed by then ,” writes Xian Yang Wong , head of research in Singapore for Cushman & Wakefield .
Looking forward to the rest of 2022 and 2023 , Wong outlines an improving situation across the primary CRE markets :
• Stable economic growth could boost investors ’ confidence in acquiring quality commercial assets despite risks like rising interest rates and inflation .
• Private residential investment sales will continue to increase .
• Hospitality deals could tick upward as tourism recovers as border restrictions are relaxed .
• The investment sale market may grow in 2022 amid the completion of large commercial deals .
While many in the CRE markets look at the future with cautious optimism , reasons for concern are visible . The ongoing geopolitical crisis related to the Russian invasion of Ukraine could threaten global supply chains and food production . Inflation , tied directly to increasing energy prices and otherwise , represents another challenge that could darken Singapore ’ s economic outlook . Also , COVID-19 still threatens to disrupt the regional and global economy as surges in cases may result in lockdowns across the globe .
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COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE SUMMER 2022