http://www.straitstimes.com/Money/St...ry_741582.html
Singapore still top market for property investments: Survey
Published on Dec 6, 2011
By Esther Teo, Property Reporter
SINGAPORE is regarded as the region's most favourable market for commercial real estate next year despite a gloomy global economic outlook, according to a new report.
It also noted that development capital here remains healthy, indicating continued investor confidence. '(Its top position is) largely due to the city's continued transformation into a truly global city with a burgeoning asset and wealth management sector,' the report added.
Singapore retains its popularity due to its 'strong connections to the global economy, good governance and rational and relatively transparent development processes', said Mr Patrick Phillips, chief executive of the Urban Land Institute, which compiled the report with PricewaterhouseCoopers (PwC).
This is the second year running that Singapore, buoyed by strong immigration and tourism growth, has led the pack for investment prospects.
Shanghai and Sydney are in second and third spot respectively, while Hong Kong has fallen out of the top 10 due to its 'high-priced market with slim investment returns'.
But some participants in the survey, which covered 21 regional markets, say the sector in Singapore may have peaked. There are suggestions that investor returns will be hit by the large supply of Grade A office space in the pipeline and moderating rents.
Investors are also getting cautious as Singapore is an open economy and sensitive to global volatility, said Mr Choo Eng Beng, PwC Singapore's partner and real estate leader.
But he also noted that market transparency is Singapore's key strength, helping investors anticipate what might be coming - such as a possible oversupply - and factor it into their prices.
The report also found that investors in the Asia-Pacific as a whole are increasingly returning to core investments, typically lower-risk projects with slower capital appreciation but solid cash flow.
Domestic capital is also increasingly supporting the market, which bodes well for the region as it allows for a more sustainable and durable property market, Mr Phillips said.
However, the report acknowledged that the economic woes in the United States and Europe are weighing upon regional economies as well as investor sentiment in real estate markets. This will continue to put pressure on property pricing, transaction activity and financing.
The report surveyed more than 360 real estate professionals in September and October.
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