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S'pore fails to place in property ranking

Softening market bumps Republic off list of top 20 cities for global real estate investment

Published on Oct 9, 2014 1:17 AM

By Rachael Boon


SINGAPORE, with its softening property market, has fallen out of a ranking of the top 20 cities in terms of the volume of global real estate investment.

The Republic, along with Toronto, Moscow and Seoul, were knocked out of the top 20 by fast-growing Beijing, Shanghai, Miami and Stockholm.

However, the report released on Tuesday by property consultancy Cushman & Wakefield noted that "most of these moves are relatively small".

The global property investment market saw volumes grow 17.2 per cent to US$788 billion (S$1 trillion) in the year to June this year, with New York taking the top spot.

Singapore was placed 14th in last year's report, but as it fell out of the top 20, no ranking was given in the latest report.

Mr Getty Goh, director of property research firm Ascendant Assets, said: "A possible reason why foreign investors are keeping away is they feel that prices have started to come down.

"Some of these foreign investors may expect the lacklustre market conditions to persist for some time, hence they are not rushing in."

The report added that as a core gateway market, Singapore is one of the cities that will "deliver steady growth thanks to constrained pipelines and firming demand". As with other markets - Tokyo, London, Berlin, New York and San Francisco - Singapore has strong potential to grow, but more risk-taking by investors is needed to boost returns.

Singapore scored strongly in the report in terms of investments across five sectors: office, multi-family, hotel, industrial and retail.

The report noted that investor demand in Asia remains strong and liquidity is high, owing to rising real estate allocations from pension funds and insurers.

However, investors are holding back because of economic uncertainty and tighter lending conditions in some markets.

For instance, Singapore's stricter lending ruleshave been successful in cooling the market.

Mr Goh said such regulations have led to foreign investors "finding it onerous to invest in Singapore properties".

The report also looked at the strength of cities as hubs.

It said "Hong Kong and Singapore continue to vie as regional capitals". Singapore benefits from strong infrastructure, greater independence and demand from non-Asian businesses seeking a regional base, it said, while Hong Kong is growing as China's face to the world.

In terms of market power, Singapore ranked high in areas such as tourism appeal, and as technology or global business hubs.

For instance, the Republic placed second in the number of tourist arrivals, while Hong Kong was first. Singapore placed seventh as a technology hub, while Hong Kong placed 14th.

The report was positive about Singapore for the next year, noting that office investments here will be favoured.

"Singapore meanwhile will continue to develop as the key gateway market to South-east Asia and, with tight supply, rising demand will deliver attractive growth," it added.

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