Singapore is top market for real estate investment next year, says Emerging Trends in Real Estate® Asia Pacific 2011

SINGAPORE (December 8, 2010) – Singapore is rated as the best real estate investment market in the Asia Pacific region for 2011, according to Emerging Trends in Real Estate® Asia Pacific 2011, a real estate forecast jointly published by the Urban Land Institute (ULI) and PwC. Shanghai, Mumbai, New Delhi and Hong Kong round out the list of the five most favoured investment markets in the report.

Emerging Trends, released in Singapore today, is optimistic about the overall prospects for the Asia Pacific real estate industry. The “cloud has been lifted” from Asia Pacific markets, with the fiscal outlook for most of the Asian countries more promising than that for Europe or the United States, the report says.

“Many, if not most, Asian economies have rebounded to pre-crisis levels, and real estate markets, although mostly slower, are headed toward some semblance of normalcy,” ULI Asia Pacific Chairman C.Y. Leung said. “The distress that was so widely predicted a year ago for most of the region’s largest markets has by and large failed to materialise.” He noted that steady activity by buyers indicates that Asia’s real estate markets “are strong enough to grow into the high expectations current pricing trends imply,” particularly because of the shortage of both housing and commercial properties that persists in many areas.

Among Asian economies, Singapore shines as the region's top real estate investment destination for 2011.

"Singapore has jumped from fourth place in 2010 to take top spot in 2011. This growth is mainly attributed to foreign awareness of the prospects that Singapore has to offer, and its healthy rebound from the global financial crisis. But domestic capital involvement seems to have increased as well," observes David Sandison, Tax Partner of PwC Singapore.

"The Singapore government is clearly taking a long-term, sustainable view to the property market here, assisted by measures that have earned the city state the number one spot as the world's easiest place to do business, its political stability and the putting in place of cooling measures to curb speculation, particularly in the liquid residential market," he adds. "Altogether a potent combination."

The report characterises top-rated Singapore as a “market that has survived the economic fall and currently offers investors many opportunities” as its financial and high-tech industries flourish. The city’s gross domestic product (GDP) growth rate is expected to finish this year in the double digits, and remain in the four-percent range the next three years. Capital is flowing from both foreign and domestic sources, and Singapore is the Asian centre for real estate investment trusts (REITs), with the REIT activity helping to spread risk and stabilise prices. In terms of development prospects, Singapore’s rating jumped to fourth for the 2011 report, up seven spots from 2010. Development of both commercial and residential properties, particularly mixed-use properties, is of high interest.

Emerging Trends provides an outlook on Asia Pacific real estate investment and development trends, real estate finance and capital markets, and trends by property sector and metropolitan area. It is based on the opinions of more than 280 internationally renowned real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.

Other Top Markets:

Shanghai is ranked second for investment potential, falling from its top position in the 2010 report, which indicates that sharp increases in property prices in the city may have dampened some investor interest. Still, overall sentiment is that the city is set firmly for recovery and will remain a favoured investment target.

  • Mumbai ranked third as the most promising investment market, and first as the most favoured development market. “Mumbai is clearly the best performing and most active real estate market,” the report says. Despite some concerns about oversupply, development potential for most real estate sectors remains promising in this city.
  • Hong Kong ranked fourth for investment prospects; its global appeal is a strong factor in its economic rebound, and robust demand is driving up rents. Although the development outlook is less positive (Hong Kong ranked 12th overall for development prospects), Emerging Trends notes that the residential sector shows potential. Among the choices of “buy, sell or hold” by property type, “hold” is the top choice among survey respondents for each sector. However, more than one-third of the respondents place the retail and hotel sectors in the “buy” category.
  • New Delhi – New Delhi ranked fifth for investment prospects and second for development prospects. The driving force: the government’s plans to boost infrastructure with new roads, railways and airports; and its approval of development plans for tens of thousands of acres of land for urban development.

On the whole, survey participants regard Asia as the part of the world that is showing the most growth, in terms of the real estate industry. “The area’s economic expansion should be the key driver to help propel commercial real estate investments and developments across the region,” Emerging Trends says. “The real estate market is back, fund raising is strong in Asia, local banks are providing financing, and capital is everywhere.”

The report is the fifth Asia Pacific edition of the highly regarded Emerging Trends in Real Estate® annual investor survey.

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