Seasoned observers of the city-state’s commercial real estate markets predicted a rebound in deal volume, premised on expectations of lower borrowing costs and a normalisation of asset pricing, in the final session of the Mingtiandi Singapore Forum on Tuesday.
Investors in the city-state’s commercial markets remain cautious, the capital raised is less cheap, and the return hurdles are higher than they were a few years ago, but Knight Frank still expects a rise in deal activity, said Galven Tan, the consultancy’s Singapore CEO.
“I think a lot of capital has been sitting on the sidelines for a while now,” Tan said. “With the outlook of interest rates coming down, certainly people are re-evaluating to make sure that they are not too late to the party. So certainly there will be a lot more transactions that we are anticipating.”
Tan was joined on a panel by executives from regional private equity firm PAG, Singaporean builder SLB Development and real estate software specialist Yardi, which sponsored the forum, as the session focused on commercial strategies to harness the Lion City’s growing importance as a regional hub for finance and technology.
PAG’s Icebreaker
Attendees were keen to hear from Manwin Sidhu, managing director for Singapore at PAG Real Assets, after his firm made the Lion City’s biggest commercial deal of the second quarter — and of the past two years — with the purchase of the Mapletree Anson office tower for S$775 million ($574 million).
Moderator Caroline Dellasega puts a question to the commercial markets panel
Sidhu was quick to credit Winston Chin and PAG’s local team for the buy, which aligns with the firm’s high-conviction theme of quality office assets regionwide.
“It’s a very well-located asset in the Tanjong Pagar submarket of the Singapore CBD, a submarket that’s seen an incredible amount of positive development,” Sidhu said. “I worked in that part of Singapore from ’08 until recently, and it’s changed a lot. You’ve got a lot of new Grade A office buildings, restaurants, you’re not too far off from Amoy Street and Telok Ayer.”
Matthew Ong, executive director and CEO of SLB Development, praised the Mapletree Anson deal as a “significant transaction at the best possible time” and a sign of confidence in the Singapore market.
Ong, whose firm is revamping some ageing office buildings near the Singapore River, described the local commercial market as very active despite the mismatch between buyer and seller expectations.
“So I think with the incoming interest rate drop, there might be some adjustment, but then that might not be a lot,” he said. “So it’s more about the confidence in the Singapore market than the mismatch in prices.”
Future of Flexible Office
Bernie Devine, senior regional director for Asia Pacific at Yardi, reaffirmed his company’s belief in the future of flexible office space after it took a controlling interest in WeWork earlier this year.
The co-working pioneer had been a Yardi client since 2022, with the software provider having helped the Manhattan-based giant restructure and develop the appropriate tech platform for its business, Devine said.
The proptech firm wanted to maintain the relationship with WeWork and found the acquisition price too good to say no, according to Devine.
“What it’s certainly giving us is an interesting second perspective as an occupier of space and also a landlord, in terms of understanding what customers, what occupiers, really want,” Devine said.
Leave a Reply