Impacted by a global slowdown, Singapore’s GDP growth is expected to moderate in 2019. Domestically, the office market performed above expectations in 2018 with healthy indicators on most fronts. Despite potential headwinds, prospects over the next couple of years looks positive, spurred by tightening vacancy and a tapering pipeline. For the retail sector, rental erosion has eased off and the market is showing signs of stabilisation after a prolonged period of rental correction. The industrial market appears to be stabilising where most of the supply pressure has been alleviated. On the residential front, the introduction of additional cooling measures are expected to dampen the market. Overall, with increasing interest rates, investors appear to be adopting a defensive investment strategy, as they seek stable assets with long term income growth. Read more about the outlook of these sectors in the Singapore Real Estate Market Outlook 2019 Report.

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Economy

Some Turbulence Expected


Singapore’s GDP growth is expected to moderate in 2019 on the back of changing dynamics in key demand drivers. The cyclical slowdown in electronics demand alongside trade frictions will weigh heavily on the manufacturing sector as well as the trade-related clusters.

 

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Office Sector

Continued Growth Ahead


The office market performed above expectations in 2018 with healthy indicators on most fronts. Moving into 2019, co-working and the wave of venture capital to find the next ‘unicorn’ are expected to feature in office demand. Despite potential headwinds, prospects over the next couple of years looks positive, spurred by tightening vacancy and a tapering pipeline.

 

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Retail Sector

Back to Basics


Rental erosion has eased off and the retail market is showing signs of stabilisation after a prolonged period of rental correction. As the needs of consumers become more sophisticated, it will be optimal for both landlords and retailers to work alongside each other and capitalise on existing infrastructure to meet this demand.

 

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Logistics Sector

Advantage Technology


The industrial market reached a point of stabilisation where most of the supply pressure has been alleviated. With the rise in e-commerce and expectations of faster delivery time, there is a strong focus on shortening the last mile delivery time. Further, there is an increasing need to consolidate retail and warehouse space to keep costs competitive for retailers and consumers.

 

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Residential Sector

Brakes On


Following a strong recovery in the residential market in the first half of 2018, this momentum was subsequently doused with the introduction of a new set of cooling measures and revised guidelines from the URA. Going into the new year, these events are expected to dampen the market, as developers turn their focus from acquiring land to clearing the inventory they have on hand.

 

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Capital Markets

Seeking the Right Product


The market is transitioning to a regime of higher financing costs along with the U.S. federal reserve hikes. With expectations of more hikes in the U.S. federal reserve rate in 2019, this fuels further increase in domestic borrowing rates. As a result, investors appear to be adopting a defensive investment strategy, as they seek stable assets with long term income growth.

 

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