​Real Estate Investment: Is Singapore losing its shine?

Singapore is less likely to be on the radar of institutional real estate investors this year compared with other developed regional cities, especially those in Australia and Japan, said a UBS report.
 
It cited the oversupply in the office and logistics sectors here amid weak consumer sentiment and a housing market dealing with cooling measures.
 
The Monetary Authority of Singapore noted last November that property transactions, prices and mortgages could have been higher by as much as a third had these measures not been implemented.
 
Mr Graham Mackie, managing director and head of global real estate for Asia Pacific at UBS Asset Management, said yesterday that there is certainly no rush to exit Singapore and some global investors still perceive the country as a relatively safe market.
 
Real Capital Analytics data noted that while capital of about US$28.7 billion (S$39 billion) from Singapore was invested in overseas real estate last year, up 49 per cent from 2014, total inbound capital rose 157 per cent to US$3.4 billion.
 
Globally, investors are increasing their exposure to real estate, Mr Mackie noted. Property traditionally formed about 5 per cent of investors' portfolios but this seems to be going up to 10 to 15 per cent.
 
The report said there appears to be greater capital value in Australia and Japan now, relative to Singapore, Hong Kong and China.
 
Property yields in Australia are significantly higher than risk-free rates in the market.


Posted on 05 Apr 2016

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