The number of real estate transactions in Asia will grow substantially next year, according to Collier International’s Asia Property Outlook 2015.
This is because pent-up demand from investors will be gradually satisfied by a growing volume of new supply anticipated in 2015, said Mr Dennis Yeo, Interim Chief Executive Officer (Asia) of Colliers International.
Besides new stock, there will also be more willing sellers of institutional-grade real estate because “considerably more” real estate funds will expire in 2015, Colliers said in a news release on Tuesday (Dec 9).
Globally, investors have also re-examined their allocations and are set to devote more capital to Asia, Colliers added.
However, Colliers said conditions will be tougher for Asian investors to put their money to work. One challenge is the narrowing of the gap between yields in Asia and in overseas markets.
OUTLOOK FOR SINGAPORE
According to Collier’s report, the capital, office and retail markets in Singapore are expected to grow and remain stable for the next year. The local industrial sector, however, is expected to slow down in 2015.
Ms Chia Siew Chuin, Director of Research and Advisory of Colliers International, attributed this trend to new government measures and policies that continue to filter through the market.
She raised the example of JTC’s revised sub-letting policy and other earlier policy changes which are expected to slow down en bloc sale transactions of properties built on JTC land, as well as to increase the difficulty in executing Sale and Leaseback transactions.
These “could hurt the rents and yields achievable by third-party facility providers in the medium term,” said Ms Chia.