CBD revitalisation and integrated resort investment to drive up local commercial property investment

The commercial property sector in Singapore will continue attracting investors this quarter, riding on a government scheme to unlock the investment potential of older buildings in the CBD, as well as a $9 billion investment to expand Marina Bay Sands and Resorts World Sentosa, says a quarterly report by Colliers International forecasting the property market performance of 15 Asian markets including Japan, Korea, and select submarkets in China.
Transactions of prime commercial properties in Singapore worth $4.5 billion led investment sales in 2Q2019, while the investment into the two integrated resorts will have positive knock-on effects on growth and employment, says the report.
“There is ample evidence of resilience in markets like Singapore, where additional investment in the commercial and leisure sectors will underline the city-state’s status as a commercial haven; and China, where ongoing policy and infrastructure improvements in key markets including Shanghai and the Pearl River Delta should offset global volatility concerns,” says Terence Tang, managing director of capital markets and investment services, Asia, at Colliers International.
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Over the next few quarters, logistics properties will be the clear investment pick in Tokyo, where the total occupied logistics space is expected to grow by more than 10% annually over the next five years. Increasing demand for logistics centres by e-commerce firms in Seoul is also expected to drive up acquisition activity.
In Beijing, the rental apartment market is likely to increasingly come into focus for investors, since the state council has approved a plan to permit the conversion of commercial properties into residential rental units. Foreign investors are expected to become more active in this market. Meanwhile, tax and fee reductions aimed to encourage integration of the Yangtze River Delta could also drive up demand for commercial and office properties in Shanghai.