Your browser does not support JavaScript! Pls enable JavaScript and try again.

Singapore Quarter 4, 2020

SINGAPORE 30 Apr 2021
Share with

Market commentary

Commercial activity picking up with economic recovery.



Market commentary

Key economic indicators

  • Based on estimates released by the Ministry of Trade and Industry (MTI) on 15 February 2021, the Singapore’s economy contracted by 2.4% y-o-y in 4Q 2020, moderating from the 5.8% decline in 3Q 2020 (Table 1). The economy expanded by 3.8% q-o-q in 4Q 2020, compared to an expansion by 9.2% q-o-q in 3Q 2020.


Table 1: Singapore’s Gross Domestic Product (GDP)



  • As Singapore moved into Phase 3 of its recovery from 28 December 2020, up to 8 persons for social gatherings and household visitors are allowed at any point in time. The majority of industries, except for the entertainment sector, had restarted operations. The manufacturing sector expanded by 10.3 % y-o-y in 4Q 2020, a slight slowdown from the 11.0% pace recorded in 3Q 2020. The construction sector declined by 27.4 % y-o-y in 4Q 2020, an improvement from the 52.4% contraction in 3Q 2020.
  • As more economic activities resumed, inflationary pressures picked up slightly in 4Q 2020, while the labour market improved slightly too. Inflation eased from -0.3% in 3Q 2020 to -0.1% in 4Q 2020. The unemployment rate declined to 3.2% in 4Q 2020, from 3.6% in 3Q 2020 (Table 2).


Table 2: Inflation, unemployment rate and fixed asset investments



  • Singapore attracted $3.0bn in FAI in 4Q 2020, an increase from the $2.1bn in 3Q 2020. The service cluster saw continued decline in 4Q 2020 while the manufacturing sector reported a significant increase of 131% q-o-q in 4Q 2020 to $2.2 bn. The electronics cluster saw a 19% contraction in FAI in 4Q 2020, other clusters such as chemicals, biomedical manufacturing, precision engineering and transport engineering saw a significant pickup after a low base of nil or minimal activity in 3Q 2020. The services sector declined by 34% q-o-q to $727.2mn in 4Q 2020.



Investment sales

On a quarterly basis, total investment sales nearly halved from $4.8bn in 3Q 2020 to $2.5bn in 4Q 2020 (Figure 1). The near-halving of total investment sales in 2020 was a likely by-product of the COVID-19 situation, which resulted in reduced activities in the construction sector as well as the Government Land Sales (GLS) programme. The public investment sales market saw the award of a single site at $0.62bn for a Residential with Commercial at 1st Storey development in 4Q 2020. By sector, residential investment sales took the lead in 4Q 2020, 64.3% of total sales. The second largest sector was industrial investment sales at 14.6%, followed by shophouse (9.8%), retail (8.0%), and lastly office (3.3%) (Table 3).


Figure 1: Total investment sales (S$bn)



Table 3: Investment sales summary*



Sector trends and outlook

  • There were no significant office transactions in 4Q 2020. Five transactions of $30mn each took place in various office developments sited within the CBD in 4Q 2020.
  • Industrial investment sales were at $0.37bn in 4Q 2020. First, the sale of Lucas Real Estate Singapore’s iconic facility, the Sandcrawler, to US private equity giant Blackstone Group, with the occupancy rate to be at the high-90 percent range was transacted at $175.8mn. Second was the acquisition of Big Box, a shopping mall in Jurong East, by Perennial Real Estate Holdings for $118.0mn. Perennial will be redeveloping the site into a business park named Perennial Business City. The majority stake of the new development will be held by Perennial with the remaining stake shared by other investors such as HPRY Holding, which is the investment vehicle of Perennial.
  • For retail investment sales, there was just one significant transaction for 4Q 2020: FCT’s divestment of Anchorpoint shopping centre for $110mn to unrelated parties. The shopping centre has around 50 tenants spread over close to 7,000sqm of NLA.
  • For residential investment sales, the sole significant transaction of 4Q 2020 came from Mediacorp’s sale of the site occupied by the former Caldecott Broadcast Centre for $280.9mn (Figure 2). It will explore redevelopment options for the site that was previously granted an Outline Approval to be redeveloped into a cluster of 2-storey bungalows with a minimum land area of 800sqm per house. Apart from the Caldecott site, there were 13 other landed residential transactions greater than $20mn each in 4Q 2020.


Figure 2: Total investment sales by asset type



The decline in transaction activity in 4Q 2020 showed the uncertainties given the ongoing weakness in the economy. However, according to the Singapore Commercial Credit Bureau’s Business Optimism Index, business optimism improved for the second consecutive quarter to -1.03 percentage points in 1Q 2021 from -4.97 percentage points in 4Q 2020. As the economy resumes greater normalcy, the financial, manufacturing and service sectors anticipated a slightly better outlook in 1Q 2021.


Table 4: Key private investment sale transactions in 4Q 2020




Market commentary

Key economic indicators

  • According to the URA All Residential Property Price Index (PPI), overall private home prices rose for the third consecutive quarter in 4Q 2020, rising by 2.1% q-o-q. Compared to a year ago, prices at the end of 2020 are 2.2% higher (Table 5).


Table 5: URA Private Residential Price Index



  • In 4Q 2020, landed home prices fell by 1.6% q-o-q while non-landed prices rose by 3.0% q-o-q. On a full-year basis in 2020, landed homes prices rose by 1.2% while non-landed prices rose by 2.5%. Within the non-landed segment, prices in the CCR fell by 0.4% in 2020, while those in RCR and OCR rose by 4.7% and 3.2% respectively.
  • Housing loans value rose for the sixth consecutive quarter by 17.5% y-o-y in 4Q 2020 (Figure 3). However, on a q-o-q basis, housing loans fell by 2.7% in 4Q 2020, compared to 15.1% growth in 3Q 2020.


Figure 3: New housing loans limits granted



  • New sales declined slightly to 2,603 units in 4Q 2020. This can be attributed to the URA announcement in September 2020 of a clampdown on the re-issuance of OTPs by developers to the same buyers for the same unit within 12 months of the expiry of the earlier OTP.
  • New sales in 4Q 2020 were 6.5% higher than that a year ago. Full-year sales of 9,982 units in 2020 were similar to that of 2019 (9,912 units).
  • New home sales volumes declined slightly from 3,517 units in 3Q 2020 to 2,603 units in 4Q 2020. This can be attributed to the URA announcement in September 2020 of a clampdown on the re-issuance of OTPs by developers to the same buyers for the same unit within 12 months of the expiry of the earlier OTP. New sales by developers increased to 774 units in November and 1,217 units in December 2020. New sales in 4Q 2020 were 6.5% higher than that a year ago.
  • Resale volumes increased from 3,530 units in 3Q 2020 to 4,326 units in 4Q 2020. This was attributed to home viewings being allowed once again.
  • After a robust 3Q 2020, transaction volumes dropped slightly in 4Q 2020, to 6,929 units in 4Q 2020 from 7,048 units in the previous quarter. On a y-o-y basis, transaction volumes was 42.0% higher (Figure 4).


Figure 4: Private homes sales volume (excluding ECs) and URA All Residential Price Index



  • Foreign purchases remained broadly unchanged at 200 units in 4Q 2020 from 222 units in 3Q 2020. This is a slight fall of 10% from 3Q 2020, however, this is a growth from 116 residential properties in 2Q 2020.
  • In the private residential leasing market, total rental volumes declined by 11.6% q-o-q to 23,854 transactions in 4Q 2020 (Figure 5). Amid pressures on the expatriate employment market, rents are anticipated to stay soft moving into 2021.


Figure 5: Private home rental transactions (excluding ECs)



  • As at 4Q 2020, the residential supply pipeline stood at 52,403 units. Most completions are expected to occur in 2023 and 2024 (Figure 6). The annual projected completions from 2022 to 2024 are estimated to be higher than the 3-year (2018 to 2020) annual average net supply of 3,915 units. Around 47.7% of the supply pipeline (25,011 units) have been sold, while the remaining 27,392 units are still unsold.


Figure 6: Number of private homes in the pipeline (excluding ECs)




  • Despite the plunge in property demand in 1H 2020, housing demand picked up in 2H 2020 with healthy sales for both landed and non-landed segments. Notwithstanding the new policy relating to OTP re-issuance by the URA, homebuyers will adapt to the new policy and manage their finances. Homebuyers who are in a better financial position will be driving the demand
  • The number of flats reaching five-year MOP is expected to rise. Coupled with the low interest rate environment, this is expected to support residential demand. Market sentiment will continue to be optimistic for both domestic and international investors with the nation accelerating the rollout of the Covid-19 vaccine.



Market commentary

Key indicators

  • As Phase 3 of Singapore’s reopening begun on 28 December 2021 dine-in activities of up to 8 persons for social gatherings were allowed. The capacity limit had increased from 10 sqm per person to 8 sqm per person. However, overall retail sales are not back to pre-Covid-19 levels yet.
  • With the rise in e-commerce, brick and mortal retailers are jumping on to the bandwagon of online shops. CapitaLand and Shopee will debut Singapore’s first virtual shopping centre, IMM mall, featuring popular retailers and discounts for shoppers to enjoy. Additionally, retailers who participate in the campaign will receive subsidies and marketing channels for their products.
  • Retailers are finding new ways to attract consumers. Example, Zall Bookstore from Hubei, China opened its first outlet here located at Wheelock place. The 2-storey space features a café and an art gallery.
  • The 3-month moving average of y-o-y change in retail sales (excluding motor vehicles) improved slightly to -5.7% in December 2020 from -9.5% in September 2020 (Figure 7). While retail sales continued to fall, the decline has been more moderated, implying a stabilization in retail sales since the reopening of Singapore’s economy.


Figure 7: Retail sales growth (Three-year moving average) (excluding motor vehicles)



  • For 2020, supermarkets & hypermarkets reported the greatest growth in sales of 31.0% (Figure 8). However, department stores sales declined the most by 41.0%. Apart from cautious spending by consumers, the large decrease can also be attributed to more people purchasing goods online instead. The second largest drop in retail sales index is Apparel and Footwear, decreasing by 37.0%.


Figure 8: Retail sales index (2020), y-o-y change



  • For the food and beverage services index for 2020, food caterers reported the greatest decline of 54.1%, due to the restriction of large gatherings, resulting in the low demand for event catering (Figure 9).


Figure 9: Food and Beverage index (2020), y-o-y change



Private demand and occupancy

  • Based on EDMUND TIE Research, islandwide net absorption improved to 258,000 sq ft in 4Q 2020 from -538,000 sq ft in 3Q 2020. The occupancy rate increased by 0.8% pts q-o-q to 91.2% in 4Q 2020 from 90.4% in 3Q 2020.
  • In 2020, notable brands such as Robinsons, Topshop, Esprit, Sportslink, KidZania, STA Travel and Bakerzin have all officially closed in Singapore.




Figure 10: Retail occupancy rates (4Q 2020)




Based on EDMUND TIE Research’s definition of retail spaces, retail rents were stable across all subzones in 4Q 2020 (Table 6).


Table 6: Average monthly gross rents (S$ per sq ft)



Supply pipeline

Based on EDMUND TIE Research, around 1mn sq ft of NLA is expected to be completed islandwide from 2021 to 2024. The bulk of the supply pipeline is expected to be completed in 2021 (39.0%) and 2023 (39.0%) (Figure 11). The majority (87.0%) of the supply pipeline will emerge from the Fringe/Suburban Areas.


Figure 11: Retail development pipeline




With the COVID-19 pandemic, many retailers were forced to shutter their outlets in 2020, reflecting the challenges in the retail industry. Traditional brick and mortar retailers are moving towards online sales with more consumers opting for delivery services rather than patronising retailer stores. Moving forward into 2021, retailers could face better prospects when consumers are more confident in terms of their income and in the recovery of Singapore economy.

The trend of experiential retail is being accelerated, as retailers find ways to attract consumers to continue patronising their stores. Additionally, businesses can also reassess their digital strategies and adopt sound multichannel strategies to connect their physical stores and e-commerce presence.



Office demand and occupancy rates

  • Based on EDMUND TIE Research statistics, overall net absorption also improved from -374,000 sq ft in 3Q 2020 to 369,000 sq ft in 4Q 2020. The islandwide occupancy rate inched up slightly by 0.2% pts q-o-q to 88.2% in 4Q 2020 (Figure 12). The demand in office spaces can be attributed to the technology sector due to the conducive business environment in Singapore. The occupancy rate in CBD rebounded by 1.1% pts q-o-q to 93.1% in 4Q 2020.


Figure 12: Office occupancy rates* and q-o-q % point change (in arrows) in 4Q 2020



  • The technology and financial sectors were some of the sectors that supported demand in 4Q 2020 (Table 7).


Table 7: Key tenant movements in 4Q 2020




Monthly rents in the various subzones of the office sector showed q-o-q declines in 4Q 2020 (Table 8). Within the CBD, premium grade buildings in Shenton Way/Robinson Road/Tanjong Pagar ungraded rents at Shenton Way/Robinson Road/ Tanjong Pagar faced the greatest pressures and decline by 1.5% q-o-q. In Decentralised Areas, office rents in the various subzones remained stable q-o-q in 4Q 2020.


Table 8: Average monthly gross office rents (S$ per sq ft)



Supply pipeline

Based on EDMUND TIE Research, there is nearly 4.5mn sq ft of new office space that will be completed from 2021 to 2024 (Figure 13). Most of the office developments will be completed in 2021 (28.03% or 1.36mn sq ft) and 2024 (28.05% or 1.4mn sq ft). Close to half (47.2%) of the supply pipeline from 2021 (28% or 1.4mn sq ft) to 2024 will be in the CBD, followed by 32.2% in Decentralised Areas. In the CBD, Afro-Asia I-Mark is estimated to complete by end 2021 and currently has a 70% pre-commitment rate, with Delivery Hero, The Great Room and Foodpanda leasing space.


Figure 13: Office development pipeline




The office market outlook should gradually improve with the rollout of the Covid-19 vaccines. Trends which are underway such as the proliferation of working from home arrangements that started since the Circuit Breaker period may also further encourage the decentralisation trend. With the recent announcement of Google co-founder Sergey Brin opening a family office in Singapore, this signals investors’ continuous confidence of Singapore as a financial hub. We expect that co-working space will continue to be favoured, even amid the pandemic, as it provides companies with the flexibility to amend their workspace needs and not be tied down to long-term leases.




This report should not be relied upon as a basis for entering into transactions without seeking specific, qualified, professional advice. Whilst facts have been rigorously checked, Edmund Tie & Company can take no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this report. Information contained herein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited to Edmund Tie & Company.

© Edmund Tie & Company April 2021
Source: Edmund Tie & Company. Reproduced with permission.

Citibank Disclaimers and Important Notices


The market data and information herein contained (“Information”) is the product or service of a third party not affiliated to Citibank Singapore Limited (“CSL”) or its related entities. None of the Information represent the opinion of, counsel from, recommendation or endorsement by CSL, its related entities and their respective officers, employees, directors and agents (collectively, the “CSL Group”).

The Information is provided for general information and/or educational purposes only. No part of the Information may be reproduced without the prior written permission of CSL.

The Information is provided “as is”, without warranty of any kind, it has not been independently verified by CSL Group and use of the Information is at your sole risk. The CSL Group shall not be liable and expressly disclaim liability for any error or omission in the content of the Information, or for any actions taken by you or any third party, in reliance thereon. The Information is not guaranteed to be error-free, or to be relied upon for investment purposes, and the CSL Group makes no representation or warranty as to the accuracy, truth, adequacy, timeliness or completeness, fitness for purpose, title, non infringement of third party rights or continued availability of the information.

To the maximum extent permitted by law, the CSL Group shall not be liable for any loss or damage of any kind whatsoever (including, without limitation, any special, consequential, incidental or indirect damages, or damages for loss of profits, business interruption, and any and all forms of loss or damage, regardless of the form of action or the basis of the claim, whether or not foreseeable) arising out of the use of the information (provided in any medium), even if any member of the CSL Group, has been advised of the possibility of such loss or damage.