{"id":28986,"date":"2021-04-30T08:07:00","date_gmt":"2021-04-30T15:07:00","guid":{"rendered":"https:\/\/www.yardi.com\/blog\/?p=28986"},"modified":"2021-04-30T08:19:24","modified_gmt":"2021-04-30T15:19:24","slug":"market-insights","status":"publish","type":"post","link":"https:\/\/www.yardi.com\/blog\/market-insights\/","title":{"rendered":"Market Insights"},"content":{"rendered":"\n<p>Last year was a tough one for commercial real estate in Singapore and Malaysia. But with record-breaking transaction volumes rounding out 2020 and Covid-19 vaccines rolling out at speed, there\u2019s hope on the horizon.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignright size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.yardi.com\/blog\/wp-content\/uploads\/sites\/15\/2021\/04\/AdobeStock_318747177.png\" alt=\"\" class=\"wp-image-28988\" width=\"500\" height=\"333\" srcset=\"https:\/\/www.yardi.com\/blog\/wp-content\/uploads\/sites\/15\/2021\/04\/AdobeStock_318747177.png 999w, https:\/\/www.yardi.com\/blog\/wp-content\/uploads\/sites\/15\/2021\/04\/AdobeStock_318747177.png?resize=768,512 768w, https:\/\/www.yardi.com\/blog\/wp-content\/uploads\/sites\/15\/2021\/04\/AdobeStock_318747177.png?w=400 400w, https:\/\/www.yardi.com\/blog\/wp-content\/uploads\/sites\/15\/2021\/04\/AdobeStock_318747177.png?w=500 500w, https:\/\/www.yardi.com\/blog\/wp-content\/uploads\/sites\/15\/2021\/04\/AdobeStock_318747177.png?w=600 600w, https:\/\/www.yardi.com\/blog\/wp-content\/uploads\/sites\/15\/2021\/04\/AdobeStock_318747177.png?w=720 720w, https:\/\/www.yardi.com\/blog\/wp-content\/uploads\/sites\/15\/2021\/04\/AdobeStock_318747177.png?w=800 800w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/figure><\/div>\n\n\n\n<p>Yardi recently brought together some of the region\u2019s brightest economic brains to unpack the data and unearth the trends. Here are their top five insights to help guide investment decisions in 2021 and beyond.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Both markets are on the move<\/strong><\/li><\/ul>\n\n\n\n<p>Oxford Economics is predicting a GDP growth rebound of 7.1% in Singapore and 5.4% in Malaysia. Singapore is likely to return to pre-Covid levels in the second quarter and Malaysia in the fourth.<\/p>\n\n\n\n<p>But \u201cgrowth recovery is dependent on health success\u201d and is tied to each country\u2019s efforts to contain Covid infections, warned Oxford Economics\u2019 lead economist for Asia, Sian Fenner.<\/p>\n\n\n\n<p>The vaccine rollout is key to recovery, Fenner emphasised. In Singapore, just under 24% of the population has received its first dose. A 80% vaccination rate \u2013 and with it herd immunity \u2013 will be achieved in Singapore by the third quarter. While just 2-3% of Malaysians are currently vaccinated, 70% of the population will be fully vaccinated by the end of the year, Fenner said.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Economic scars will take time to heal<\/strong><\/li><\/ul>\n\n\n\n<p>Rebound and recovery in both nations will be influenced by \u201ceconomic scarring,\u201d Fenner told Yardi\u2019s engaged audience of property professionals. It will take time for businesses to repair their balance sheets and for the labour market to address skills mismatches, she explained.<\/p>\n\n\n\n<p>Singapore has followed a V-shaped recovery after an historic fall in GDP. \u201cSingapore has almost recouped its loss in output and its GDP is now close to its pre-pandemic level,\u201d Fenner\u2019s colleague and Oxford Economics economist Sung-Eun Jung said. But this headline figure masks sectoral differences. Manufacturing has posted a \u201cstellar performance\u201d due to strong demand for consumer electronics and pharmaceutical products. The services sector, hit hard by restrictions, will \u201ccontinue to underperform\u201d. The finance sector, meanwhile, continues to expand.<\/p>\n\n\n\n<p>Tightening restrictions in January, while not as disruptive as those in 2020, dipped Malaysia back into recession and \u201cweighed heavily on the services side\u201d of the economy, Fenner added. Infrastructure projects in Malaysia are a bright spot, with both short and long-term projects expected to have a \u201cstrong multiplier effect through the economy\u201d.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Asia Pacific investment volumes broke records last year<\/strong><\/li><\/ul>\n\n\n\n<p>We finished a horror 2020 with Asia Pacific investment volumes down 19% on the previous year, but with a record fourth quarter. \u201cPeople were saving up their money for the final push,\u201d said David Green-Morgan, managing director of Real Capital Analytics in Asia Pacific. \u201cThe deals just kept coming in.\u201d This brought 2020 back into line with a respectable US$150 billion in investment.<\/p>\n\n\n\n<p>Nevertheless, Singapore was one of the region\u2019s weakest real estate markets in 2020, with transaction volumes falling 60% year-on-year. Malaysia was not much better, posting a 56% drop, Green-Morgan added.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Real estate performance is not just a Covid story<\/strong><\/li><\/ul>\n\n\n\n<p>Singapore was one of the most active commercial real estate markets in the region pre-Covid, Green-Morgan said. The city state was sixth placed in 2018 and 2019, but last year slid to 11<sup>th<\/sup> place on Real Capital Analytics\u2019 rankings. Singapore\u2019s $3.2 billion in sales volume was down 73% year-on-year. Kuala Lumpur, meanwhile, didn\u2019t even scrape into the top 20.<\/p>\n\n\n\n<p>Rather than a Covid story, Singapore\u2019s slip indicates a natural decline that the pandemic has simply \u201caccelerated and heightened,\u201d Green-Morgan said. Singapore enjoyed a \u201crecord year\u201d in 2019, so \u201c2020 was always going to be a struggle to match\u201d.<\/p>\n\n\n\n<p>Covid-19 continued a downward trajectory in Malaysia\u2019s commercial real estate activity that was already well underway. What has driven that decline? Green-Morgan said the most notable factor was ongoing fluctuations in the political environment that created uncertainty, followed by capital looking further afield to Vietnam. The Malaysian Government is looking to enact policies to make movement of capital easier, and that will be a \u201cbig boost\u201d he said.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>There\u2019s a deep pool of capital looking for deals<\/strong><\/li><\/ul>\n\n\n\n<p>Real Capital Analytics is expecting an increase in Singaporean activity this year. Green-Morgan pointed to deals at Samsung Hub, a 30-storey strata building completed in 2005, as a sign of the times. Prices have climbed and recent transactions have secured almost US$3,000 a square foot \u201cquite a significant milestone for the Singapore market,\u201d Green-Morgan added.<\/p>\n\n\n\n<p>Despite the challenges, the money continues to flow into Malaysian commercial real estate. The biggest deal last year was for a former air base in Kuala Lumpur, purchased in a joint venture between the Malaysian Government and China\u2019s state-owned enterprise China Railway Engineering Corp. \u201cThe land deal was worth US$1.5 billion but it\u2019s got a development value of $36 billion if it all pushes ahead. It\u2019s a huge scheme in the ASEAN context,\u201d Green-Morgan concluded.<\/p>\n\n\n\n<p>Wrapping up the webinar, Yardi\u2019s Devine observed the outlook for both markets is \u201cpositive yet challenging but still uncertain\u201d. \u201cOne of the main things we&#8217;ve learnt over the last 12 months is that certainty is a fairly rare commodity\u201d.<\/p>\n\n\n\n<p><em>The best way to increase your investment certainty is with market intelligence. <em>Missed Yardi\u2019s latest Executive Briefing? Don\u2019t miss the next one! <\/em><a href=\"https:\/\/www.yardi.asia\/about-us\/request-information\/\"><em>Subscribe to our updates<\/em><\/a><em> to keep your finger on the property market pulse.<\/em><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last year was a tough one for commercial real estate in Singapore and Malaysia. But with record-breaking transaction volumes rounding out 2020 and Covid-19 vaccines rolling out at speed, there\u2019s hope on the horizon. Yardi recently brought together some of the region\u2019s brightest economic brains to unpack the data and unearth the trends. Here are [&hellip;]<\/p>\n","protected":false},"author":442,"featured_media":28988,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_s2mail":"yes","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2844,4],"tags":[1849,34],"class_list":["post-28986","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-global","category-news","tag-apac","tag-international"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Yardi Blog<\/title>\n<meta name=\"description\" content=\"Last year was a tough one for commercial real estate in Singapore and Malaysia. 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