Strong residential sales thanks to genuine demand from homebuyers, and the rise of big Tech in the office market.
Big Tech firms are snapping up office space in Singapore, taking advantage of crimped rents amid the recession set off by the Covid-19 pandemic. These include a gaggle of Chinese tech giants seeing Singapore as a base to expand into Asean.
Bloomberg reported on Friday that Tencent Holdings has chosen a co-working space for its first office in Singapore. Citing unnamed sources, Bloomberg said Tencent is expected to take up 10,000 square feet (sq ft), translating to about 200 seats at JustCo's co-working space in OCBC Centre East at Raffles Place.
Meanwhile, TikTok owner ByteDance has reportedly agreed to lease three floors measuring over 60,000 sq ft at One Raffles Quay, in line with its plans to hire hundreds of staff in Singapore over the next few years.
Rick Thomas, Executive Director and Head, Occupier Services:
Singapore is fast becoming the location of choice for tech firms to locate their APAC or regional technology hub, given its strategic location as well as attractiveness to investors. While they may have a small presence in Singapore now, we can expect some of these tech giants to expand in the years to come and improve the tech sector representation in the occupier market.
The flexible workspace sector has also grown more sophisticated; they are leveraging opportunities in the current tenant-favourable environment and are offering more bespoke service and product offerings. We are seeing more landlords willing to negotiate as occupiers hunt for greater real estate value in the market.
Related content: Tech Occupiers Remain Bright Spot | Office Q3 2020 report
Developers in Singapore sold 1,329 new private homes in September, 5.6% more than the 1,258 units in August with affordable homes making up the bulk of sales. The bestseller project was The Penrose with almost 75 per cent of the 389 units sold priced below S$1.5 million, said Ong Teck Hui, JLL senior director, research & consultancy.
Last month's transactions were the highest sales volume notched since July 2018's 1,724, and marks the fifth consecutive month of increase in monthly sales since the "circuit breaker" in April 2020. The figure is also 4.6% higher than the 1,270 units sold in September 2019.
Steven Tan, Senior Director, Capital Markets and Investment Services:
The increase in sales volume of residential properties for the past few consecutive months looks very encouraging. The confidence level of the general public on the recovery of this pandemic is positive.
From the sales record, many buyers are buying units that are priced below S$1.5 million. At this price, many HDB upgraders will find it affordable as well – in fact, some HDB flats have been transacted at above a million dollars recently.
If the buying trend continues, we can expect the enbloc market will come back towards 2nd half of 2021.
Tricia Song, Director and Head of Research:
The strong sales in the last four months since the exit of the Circuit Breaker pointed to genuine demand and confidence in the property market.
While this may seem at odds with the economic downturn and rising unemployment, the resilience of the underlying property market can be attributed to the unprecedented fiscal stimulus including job support schemes, low-interest rate environment and the buoyant public housing market that enables upgraders to afford new private homes.
September’s sales continued August’s trend where buyers favoured attractively-priced city fringe projects. Read our comments and analysis of the URA home sales for September 2020 here.