INVESTMENT
Performance
- Investment sales reached S$6.3 billion in 2Q 2024, spurred by government land transactions and a few successful collective sales. Amid ongoing uncertainties, developers remain cautious but retain strong interest in prime locations.
Outlook
- Investment sales are expected to moderate as developers navigate these challenges. While the introduction of the Long Stay Serviced Apartment (SA II) and the substantial land supply anticipated in the latter half of 2024 may spur interest, the overall investment sentiment will likely remain cautious. The pace of investment growth may be tempered, with developers expecting to focus on projects with clear viability and reduced risks.
OFFICE
Performance
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Singapore’s office market in 1H 2024 saw stable rental rates despite a 1.0% dip in occupancy rates to 94.8%. This was on the back of new CBD supply arising from the partial completion of IOI Central Boulevard Towers.
Outlook
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Islandwide occupancy rates are expected to be under pressure in 2024 with three major office projects targeted for completion in 2H 2024. Grade A rental rates in the CBD are anticipated to remain stable for the remainder of 2024.
INDUSTRIAL
Performance
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Singapore’s industrial market witnessed positive performance in 1H 2024 as manufacturing expanded, while overall industrial occupancy rose to 89.0%. Divergence in rental performances widened between centrally located and suburban business parks.
Outlook
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The electronics manufacturing sector’s positive trend is expected to continue into 2H 2024, driven by support for AI advancements in the semiconductor segment. Multiuser factories and warehouse/logistics sectors are likely to benefit from the sustained growth in manufacturing sector, thus supporting rental rates in these segments. Conversely, rental rates for business parks and hitech industrial spaces may face pressure due to high vacancies with limited qualifying occupiers for these segments.
RETAIL
Performance
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In 2Q 2024, prime first-storey rental rates along Orchard/Scotts Road increased by 0.4%, reaching S$41.00 per sq ft. This rise in rental rates was driven by gradual rebound in tourism, with increasing visitor arrivals and tourism receipts. The limited supply of prime retail spaces is expected to spur strong interest and continued rental growth. Rental rates in Fringe/Suburban Areas remained stable at S$34.00 per sq ft, while Other City Areas held steady at S$19.35 per sq ft.
Outlook
- Given the expected growth in visitor arrivals and a limited supply pipeline of retail projects in the near term, rents and occupancy rates are expected to remain robust throughout 2024.
RESIDENTIAL
Performance
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Residential property prices saw moderate growth of 2.3% in 1H 2024. A ripple effect in the CCR and RCR drove growth in property prices. Rental rates faced pressure with the expected new supply and the shift in focus towards serviced apartments.
Outlook
- For 2H 2024, residential prices are anticipated to increase moderately. As the market adjusts and establishes new price levels, price growths are expected to stabilize following the recent upward shift caused by the ripple effect. Rents are expected to continue being under pressure, given around 7,000 units due for completion in 2H 2024 and 2025. The increasing interest in serviced apartments may add further pressure onto rents in the market.
Click for the full 2Q 2024 DIGEST
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For further information, please contact:
Seah Li Ching (Ms)
Corporate Communications
DID: +65 6393 2369
Email: liching.seah@etcsea.com