The 1Q2023 investment volume was $4 billion, the smallest quarterly total since the 4Q2020
Investment management and professional services firm Colliers has published their 1Q2023 Singapore Investment Market Report. In the study around $4 billion in investment sales were reported during the quarter. This is an 19.9% decrease q-o-q and an 63.6% decrease y-o-y. This is the lowest investment volume for a quarter that has been recorded since 4Q2020 during the midst of the pandemic.
Novo Place condo floor plan sits on a 12,4449.3 sq m site with a maximum Gross Floor Area (GFA) of 37,348 sq m. Once complete, the development is expected to house 375 elegant and spacious family-friendly units with a maximum height of 60 meters to 70 Metres in the Singapore height datum.
The lower sales suggest the lowering of investor sentiments in light of these macroeconomic concerns. However, Colliers reports that investment increased in the first quarter of 2023 due to some residential collective sales like Meyer Park, Bagnall Court and Holland Tower, and industrial deals like the leaseback and sale of Jardine Cycle and Carriage’s showroom portfolio of warehouses and warehouses, as well as the disposal of Ho Bee Centre 1 & 2 and J’Forte Building.
Looking towards the future, Colliers expects transaction volumes to increase towards the end 2023, when the rate of interest becomes more predictable, thereby giving investors more certainty in their decisions.
Colliers also believes that early market participants like prospective investors seeking price volatility, will increase investment volumes. In turn, prices are likely to rise and transactions to slow as investors choose to remain in the background and wait for high-quality assets that provide security to be introduced into the market.
On the macro economic climate, Colliers notes that the recent financial crisis along with slower growth and inflation, might assist in slowing rates and provide greater insight into the rising rate of interest. On the other hand, the current environment has heightened the risk of a the spread of contagion and a credit crisis. Although direct effects on property valuations hasn’t been seen, Colliers says that slower growth could lead to decreased investment and leasing.
“Although this volatility could restrict liquidity due to the increased risk-aversion, as assets get closer to refinancing and deadlines for their exit There are likely to increase the number of motivated buyers, and opportunities emerge,” says Tang Wei Leng, who is the head of investment and capital markets solutions at Colliers.
Catherine He, head of research at Colliers Catherine He, Colliers’ head of research “In the current economic climate investors are still able to achieve their desired returns by upgrading and operating assets to boost their income and remain current, particularly in the ESG front.”