The Royal Institution of Chartered Surveyors (RICS) has released its Global Commercial Property Monitor for the fourth quarter of 2024, highlighting a dip in demand for commercial properties in Singapore. Despite this, the market remains robust, with stable credit conditions and an increase in new development projects.
The survey, which gathers insights from RICS professionals in Singapore, recorded a net balance of -16 in the Commercial Property Sentiment Index, the lowest since the first quarter of 2024. While the availability of commercial properties remains healthy, with a +31 reading, demand has dropped to -14, down from +6 in the previous quarter. This imbalance could affect supply and demand dynamics in the future.
New commercial development projects showed improvement, with a net balance of +0, recovering from a -24 in the third quarter. Credit conditions remained stable at +33, unchanged from the previous quarter. However, investment enquiries saw a significant decline, with a reading of -27, marking the lowest since the second quarter of 2021.
Rent expectations over three and twelve-month periods recorded net balances of -6 and +22, respectively. The survey also revealed that 50% of respondents consider current market valuation levels as ‘fair value’, while 42% view them as ‘expensive’.
Data centres, aged care facilities, student housing, and hotels are projected to be the most promising in terms of capital value over the next year. Donglai Luo, Senior Economist at RICS, noted, “The Singapore commercial property market is anticipating a soft landing as monetary tightening concludes. However, demand may remain weak due to subdued cross-border investment.”
