Sustained growth in real estate going into 2022
  • Press Release
  • 13 October 2021

Sustained growth in real estate going into 2022

SINGAPORE, 13 October 2021Singapore’s economy grew by 14.7% yoy in 2Q 2021, a substantial increase from the 1.5% yoy in 1Q 2021. While some uncertainties remain, strengthening global demand and the government’s commitment to Singapore’s reopening plans will drive the nation’s economic recovery path.


Total investment sales for 3Q 2021 rose significantly by 23% to $7.2bn, as compared to $5.9bn in 2Q 2021, signalling continued investor confidence. Investment sales in the quarter were led by the residential sector which contributed $6bn (85%), followed by office which contributed $0.5bn (8%). $3.7bn of residential transactions were sites from the Government Land Sales (GLS) programme. The quarter also saw $521mn of Good Class Bungalow (GCB) transactions.

EDMUND TIE’s Head of Research and Consulting, Mr Lam Chern Woon said, “The Good Class Bungalow (GCB) market is expected to continue to be abuzz with strong interest and activity, such as from new economy entrepreneurs and wealthy families purchasing for the next generation.”

“Due to the limited supply of land from the Government Land Sales programme, developers are turning to the en bloc market to acquire land due to their dwindling unsold inventory of private housing units and stock up on their land banks amidst robust housing demand,” he added.

Investment performance in the industrial sector was uplifted by the manufacturing and logistics sectors. Against the backdrop of the growing manufacturing and e-commerce sectors, the industrial sector is poised for a further growth trajectory. The COVID-19 pandemic has shone a spotlight on the growing demand and importance for logistics assets such as cold storage facilities for vaccine supplies storage and transport.

Lastly, the growing commitment to Environmental, Social and Governance (ESG) has paved the way for asset owners to reallocate capital to push towards sustainability agenda. For instance, DBS will be investing $5 million to convert its office building at Bukit Timah into a net-zero energy building. Through means such as green financing, their assets will be in a better position to be attract investors in the future.


Rents for prime and grade A spaces in the CBD were bottoming out with the improving economic outlook in the quarter, due to the lifting of workplace restrictions. However, rents for grade B office spaces dipped slightly as tenants looked for better quality offices. 

Based on EDMUND TIE Research statistics, overall net absorption islandwide fell from 306,000 sq ft in 2Q 2021 to a negative 43,200 sq ft in 3Q 2021. However, prime office spaces experienced a positive net absorption as leasing demand in this segment gradually picked up.

Mr Lam commented, “With older office stock such as Fuji Xerox Towers, AXA Tower, Realty Centre, and Maxwell House also slated for redevelopment into mixed developments, office demand in the CBD is currently being boosted from the displaced tenants seeking alternative office premises.”

Growth sectors include co-working spaces and technology companies continue to drive the demand for quality office spaces, for example, IWG expansion at PLUS and IBM RedHat relocating and expanding their space to CapitaSpring.  

“Moving forward, we can expect landlords to continue sprucing up and utilizing technology at their properties to attract tenants as the market gradually recovers,” Mr Lam added.


The overall manufacturing sector has recorded the 15th month of expansion in September 2021. Overall industrial net absorption increased from 1.5mn sq ft in 1Q 2021 to 3.9mn sq ft in 2Q 2021. The drivers were warehouse segment (1.4mn sq ft), multiple-user factory segment (1.3mn sq ft), single-user factory segment (1.0mn sq ft) and business park segment (0.2mn sq ft). 

Island-wide, only the multiple-user factory occupancy rate increased in 2Q 2021 (0.8% qoq). The rest of the occupancy rates for other industrial segments decreased, with business park declining the most at 0.4% qoq. 

Mr Lam commented: “The full-year trajectory for manufacturing remains sound. Barring a worsening of the Covid-19 situation, the manufacturing sector is expected to be one of the key pillars of growth, as export-oriented industries ride on global trade growth. As the nation moves up the manufacturing value chain, modern and high-specs properties will see an uplift in demand.”

The outlook for the industrial sector is optimistic, as prices and rentals of industrial space are likely to remain stable for 2021 as improving demand soaks up new supply.


Based on EDMUND TIE Research, islandwide net absorption has improved from 151,000 sq ft in 2Q 2021 to 301,000 sq ft in 1Q 2021. The overall occupancy rate remained relatively constant at 91.5% in 2Q 2021.

The 3-month moving average of yoy change in retail sales (excluding motor vehicles) has fallen from 40.1% in June 2021 to 7.0% in August 2021 due to the tightening of safe management measures during the recent Heightened Alert phases.

With the rise in Covid cases, more families are opting to be more vigilant and are spending less time patronising malls. Retailers in the central region continue to be affected more by their suburban counterparts as work-from-home practices remain prevalent.

For the food and beverage services index for 2Q 2021, food caterers continued to report the highest decline due to the continued restriction of large social gatherings. Restaurants experienced the most significant improvement compared to a year ago, followed by Cafes, Food Courts & Other Eating Places which rose due to the low base in 2Q 2020.

Mr Lam commented, “The new norm for F&B players includes reinventing themselves and adopting deliveries as part of their business model. We expect the food delivery trend to be a new norm in the F&B culture post-COVID, as the pandemic entrench habits of ordering food delivering.”

The ongoing safe management restrictions will weigh on the retail outlook in the near-term, although shopper traffic and retail sales is likely to pick up in the coming months should the Covid situation come under better control and sentiment improves.


In 3Q 2021, according to URA’s flash estimate, the Property Price Index (PPI) for all private residential properties rose for the sixth consecutive quarter by 0.9% qoq to 165.0. The performance of non-landed prices across market segments was uneven, with prices in the Core Central Region (CCR) and Outside Central Region (OCR) falling by 0.6% and 0.2% respectively, and the Rest of Central Region (RCR) rising by 2.2% in 3Q 2021.

Overall transaction volume dropped by 3.8% qoq to 8,129 units in 3Q 2021. New sales volume grew by 20.8% qoq to 3,584 units, driven by the OCR’s strong growth in new sales, suggesting robust interest for suburban homes which are relatively affordable and larger.

There were three new non-landed project launches in 3Q 2021, namely Pasir Ris 8 in Jul 2021, and The Watergardens At Canberra and Klimt Cairnhill in Aug 2021. Pasir Ris 8 and The Watergardens At Canberra, both sited in the OCR, have achieved around 90% take-up rate to date, indicating robust interest for homes in the suburbs.

Mr Lam commented, “Prices have remained relatively steady, and demand in both the primary and secondary markets has remained robust relative to the last few quarters. While fundamentals remain sound, the current Covid restrictions would impede the viewing process and could cap the sales momentum moving into 4Q 2021.”

“Homebuying demand remained buoyant especially in the suburban locations where the pricing quanta are lower and relatively more affordable. While location and price remain the key drivers of demand, buyers will increasingly factor in other project features such as flexible unit design and layout efficiency, communal areas and facilities, and smart-living features,” he concluded.


For further information, please contact:

Chan Yee Yin (Ms)
Head, Corporate Communications
O: + 65 6393 2369

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