BMI View: Singapore is a global financial and retail hub, with a strong tourist trade and a resilient economy. The commercial real estate market is mature, and has a large number of domestic and international players. However, Singapore's economy is externally oriented, and as such growth in the commercial real estate sector could be dampened by a global slowdown.
Economic growth was slow over 2015 due to a slowdown in major trade partner China. Although a recovery in global markets is expected to boost the Singaporean economy in 2016, we expect growth in the commercial real estate sector to be subdued. The office sub-sector should be more dynamic than the other two sub-sectors that we cover, retail and industrial. Indeed, the industrial sub-sector is currently affected by oversupply, and rental values may fall.
Singapore's economy managed to stave off technical recession in Q315. Nevertheless, the Monetary Authority of Singapore (MAS) found sufficient basis to ease the Singapore dollar exchange rate policy by reducing its appreciatory slope against its trade-weighted basket of currencies, constituting a modest stimulus for the economy. The central bank uses the Singapore dollar as its main monetary policy tool, and a reduction to the unit's appreciatory slope is the equivalent of monetary easing. W e forecast real GDP growth of 2.5% in 2016, up from 2.2% in 2015.
Demand for prime office space continues to be a primary driver in the commercial real estate market, with particular business sentiment focused on the central business district. A large amount of new space will come onto the market in 2016, with rental rates likely to remain stable as a result balanced supply and demand are balanced.
Retail will see growth as the tourism industry begins to picks up again. High levels of affluence will also support the segment. A growing trend is demand for pop-up style shops rather than larger retail formats. Rental rates are expected to remain stable over the course of our forecast period.
The industrial real estate sub-sector will continue to suffer from reduced demand in the wider region and an oversupplied market in Singapore, and rental rates may fall in 2016. Trade is a significant contributor to the Singaporean economy, and with major trade partners such as China currently suffering a downturn, demand for Singapore's exports is down, limiting growth in demand for industrial space. In the medium term, however, we expect demand to increase and the balance between supply and demand to be redressed.
Singapore's investment potential is still good. The economy is resilient and established, and home to globally recognised financial markets. A continued openness to foreign investment will draw international companies, attracted by Singapore's transparency and stability. In the real estate sphere, the country has one of the world's most established and mature real estate investment trust (REIT) frameworks.
The Singapore Real Estate Report features BMI Research's market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.
BMI's Singapore Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Singapore.
- Benchmark BMI's independent real estate industry forecasts for Singapore to test other views - a key input for successful budgeting and strategic business planning in the Singaporean real estate market.
- Target business opportunities and risks in Singapore through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
- Assess the activities, strategy and market position of your competitors, partners and clients via our company profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.
Industry Forecasts Outlook
Historic data series (2010-2013) and forecasts to end-2019 for the domestic real estate industry and for the local and global finance industry.
- Real Estate: Office, retail and industrial real estate yields for all major cities (%); short term forecasts on minimum and maximum real estate rental prices by sub-sector (USD per square metre and local currency per square metre).
- Construction: Industry value (USDbn); contribution to GDP (%); employment (‘000); real growth (%).
- economy: Economic growth (%); nominal GDP (USDbn); unemployment (%); interest rates (%); exchange rate (against USD).
BMI’s Real Estate Risk Reward Index
BMI’s Risk Reward Indices provide investors (real estate vendors, construction companies and financial investors) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.
Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors
Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.