Growth forecasts have been adjusted downward from nearly 3% at the beginning of the year. Despite the slower-than-anticipated growth, unemployment remains low and wage growth is strong, indicating economic resilience. Inflation is also expected to decrease in 2024.
Singapore Market Highlights:
- Office: CBD Grade A office vacancy rates increased to 5.4% in Q2 2024, up from 3.6% in Q1 2024. While demand from Banking and Finance occupiers has slowed, the growth of family offices and rising investment interest in Southeast Asia are expected to fuel future expansion in wealth management firms.
- Industrial: Demand varies by property type, with logistics and factories in steady demand, while office-like properties face reduced demand due to hybrid work and space optimization.
- Retail: Orchard prime retail rents grew by 2% YTD in H1 2024, outperforming Suburban and Other City Area prime retail rents. The recovery in tourism, bolstered by the Singapore-China visa-free scheme and a strong line-up of leisure and MICE events, is driving this growth.
- Residential: Buyers are exercising caution due to current cooling measures, loan curbs, high interest rates, and steep price levels. Overall volumes have fallen, with an estimated 9,500 units in H1 2024, similar to H1 2023.
- Hotel: Although occupancy rates are below pre-pandemic levels, hotel Revenue per Available Room (RevPAR) continues to grow moderately. The Average Room Rate (ARR) has also increased, supported by the tourism recovery and higher operating costs.
- Capital Markets: Investment volumes rose 56.6% YoY to $10.4 billion in 1H2024. Investors remain keen to deploy capital, with dry powder in APAC reaching US$68.0 billion in Q1 2024, more than double the 2014 tally.
