Singapore Real Estate Industry Update Quarter 4 2011

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$ 1 088 - August 2012 - by Business Monitor International - 67

Summary

Table of Contents

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Data Series

Industry

Real Estate

Country

Singapore

Keywords

Commercial Construction
Housing
Commercial Real Estate

Companies

City Developments Ltd.

Executive Summary
The Singapore Real Estate report examines the commercial office, retail, industrial and construction
segments in the context of an increasingly volatile macroeconomic landscape, which is underscoring the
increasingly cautious sentiment in Singapore’s historically stable commercial real estate market.
With a focus on the commercial side of the real estate market, the report covers the city-state’s rental
market performance in terms of rates and yields, and examines how best to maximise returns in the
commercial real estate market while minimising investment risk and exploring the impact of the
government-led cooling on a market particularly susceptible to global dynamics. The key potential
growth areas driven by increasing activity on the part of international investors and the potential of the
domestic market are also explored, with corporate growth strategies looking to geographical
diversification for expansionary opportunities.
Having allayed fears of a sharp slowdown in Q112, posting above-consensus 9.4% quarter-on-quarter
growth, the 1.1% contraction reported for Q212 undermines any return tide which may have quelled
market fears. While reports of a decrease in volume and activity characterise the news flow of 2012, the
underlying attractiveness of the real estate market persists with sound fundamentals and investor demand
anchoring performance. Our newly collected data covering the first six months of 2012 did not reveal any
unpredictable, tangible effects of increasing market pessimism.

Key Points
- We continue to envisage further rounds of cooling measures, which may manifest through either
direct or indirect channels, such as investor schemes.
- It appears that construction activity in 2011 surprised on the upside due to an unexpected surge
in public residential building activities. We believe that public, rather than private, housing could
continue to drive construction activity. This, along with the implementation of other projects in
the commercial construction and urban railways sub-sectors, should lead to a recovery in
Singapore's construction sector. Accordingly, we have revised up our growth forecasts for the
construction sector to 3.8% (previously 3.1%) for 2012.

Executive Summary . 5
SWOT Analysis 6
Singapore Real Estate/Construction SWOT . 6
Singapore Political SWOT 7
Singapore Economic SWOT . 8
Singapore Business Environment SWOT .. 9
Market Overview .. 10
Market Analysis – Office . 14
Supply And Demand . 14
Rents And Yields 15
Table: Historic Rents – 2011-2012 (SGD per m2/month) 16
Table: Net Yield, 2011-2013 (%) 16
Table: Terms Of Rental Contract/Lease – H112 . 16
Industry Forecast Scenario .. 16
Table: Forecast Rents (SGD per m2/month).. 16
Table: Forecast Net Yield, 2008-2016 (%) 17
Market Analysis – Retail . 18
Supply And Demand . 18
Rents And Yields 18
Table: Historic Rents – 2011-2012 (SGD per m2/month) 19
Table: Net Yield, 2011-2013 (%) 19
Table: Terms Of Rental Contract/Lease – H112 . 19
Industry Forecast Scenario .. 20
Table: Forecast Rents (SGD per m2/month).. 20
Table: Forecast Net Yield, 2008-2016 (%) 20
Market Analysis – Industrial .. 21
Supply And Demand . 21
Rents And Yields 21
Table: Historic Rents – 2011-2012 (SGD per m2/month) 21
Table: Net Yield, 2011-2013 (%) 22
Table: Terms Of Rental Contract/Lease – H112 . 22
Industry Forecast Scenario .. 22
Table: Forecast Rents (SGD per m2/month).. 22
Table: Forecast Net Yield, 2008-2016 (%) 22
Forecast Scenarios 23
Construction And Infrastructure Outlook . 23
Table: Singapore Construction And Infrastructure Industry Data, 2008-2016 . 23
Table: Singapore Construction And Infrastructure Long Term Forecasts, 2013-2021 . 24
Table: Key Projects Awarded For 21km Downtown Line Stage 3 (Dtl3) Project 29
Macroeconomic Outlook 30
Table: Singapore – Economic Activity, 2011-2016 33
Singapore Real Estate Report Q4 2012
© Business Monitor International Ltd Page 4
Real Estate Risk Reward Ratings .. 34
Real Estate/Construction Risk/Reward Ratings . 34
Table: Asia Pacific Real Estate Risk/Reward Ratings.. 34
Singapore’s Business Environment .. 34
Table: BMI Business And Operation Risk Ratings . 35
Institutions . 35
Table: BMI Legal Framework Rating .. 38
Infrastructure 39
Table: Labour Force Quality 41
Market Orientation 41
Table: Asia, Annual FDI Inflows 43
Table: Trade And Investment Ratings .. 44
Table: Top Export Destinations, 2002-2009 . 45
Operational Risk . 46
Competitive Landscape .. 48
Company Monitor 50
CapitaLand 50
City Developments Limited (CDL) . 52
Dragages Singapore . 53
Keppel Land .. 54
Singapore Land (SingLand) .. 55
UOL Group 56
Demographic Data .. 57
Table: Singapore's Population By Age Group, 1990-2020 ('000) 58
Table: Singapore's Population By Age Group, 1990-2020 (% of total) 59
Table: Singapore's Key Population Ratios, 1990-2020 60
Table: Singapore's Rural And Urban Population, 1990-2020 .. 60
BMI Methodology 61
How We Generate Our Industry Forecasts 61
Construction Industry .. 62
Bank Lending 63
Real Estate/Construction Business Environment Rating . 63
Table: Weighting Of Indicators .. 64
Sources 66

Real Estate in Singapore

Singapore Exchange Rate, Sgd/chf, Eop

$ 250
Industry data
February 2013

Yearly, From 2001 To 2016
By Business Monitor International
Source: BMI/Monetary Authority of Singapore

Industries : Real Estate
Countries : Singapore

Singapore Exchange Rate, Sgd/chf, Ave

$ 250
Industry data
February 2013

Yearly, From 2001 To 2016
By Business Monitor International
Source: BMI/Monetary Authority of Singapore

Industries : Real Estate
Countries : Singapore

Singapore Exchange Rate, Sgd/us$, Ave

$ 250
Industry data
February 2013

Yearly, From 2001 To 2016
By Business Monitor International
Source: BMI/Monetary Authority of Singapore

Industries : Real Estate
Countries : Singapore

Singapore Exchange Rate, Jpy/sgd, Ave

$ 250
Industry data
February 2013

Yearly, From 2001 To 2016
By Business Monitor International
Source: BMI/Monetary Authority of Singapore

Industries : Real Estate
Countries : Singapore

Singapore Exchange Rate, Sgd/eur, Ave

$ 250
Industry data
February 2013

Yearly, From 2001 To 2016
By Business Monitor International
Source: BMI

Industries : Real Estate
Countries : Singapore

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