5 Top Commercial Realty Segments for Investment in 2022
The 7.1% economic growth in Singapore surpassed the estimated 6.5% in the third quarter of 2021, with the property sector rising by 16.8%. The ripened economy is encouraging more people to invest in the commercial realty segment of Singapore. But much has changed since the pandemic because of the new trend of working from home, online arms of businesses and cutting edge tech introduced in businesses.
As such watch out for these 5 top commercial realty segments for investment in 2022:
1. En bloc properties
The three-year-long sluggish en bloc market picked up last year as developers were keen to stock up their land bank. A total of S$2.19 billion worth of collective sales took place in 2021. True that the recent cooling measures have made the developers more cautious on big en bloc projects. However, two freehold sites in Thiam Siew Avenue were sold for S$815 million, which ensures that the upward trend of demand will follow through in 2022.
2. Grade A Offices in Central Business District (CBD)
Though the threat of Omicron is there, Singapore foresees a way back to normalisation this year. More people are returning back to offices as businesses are back to operating full time. Many multinational companies and giant techs are also opening regional offices in Singapore, so they are on the lookout for Grade A offices to accommodate their staff.
Co-working spaces will also be a large part of the working community in the new normal as the pandemic has given birth to increased freelancers, entrepreneurs and startups. Hence, 2022 is foreseeing a rapid rise in Grade A offices in the Central Business District (CBD) with the rental yield at least twice the growth of the previous year.
3. Digital real estate
When the pandemic confined everyone to their respective homes, digital communication gave businesses a lifeline to keep afloat. From online conference meetings to e-commerce purchases, it was the only way to connect with the outside world. In 2022, this trend will continue as Covid is here to stay and the world has to learn to live with it. So, data centres, cell towers and logistic facilities will be among the top demanding commercial realty sectors to cater to the digital market.
4. Shophouses with F&B licence
Food and Beverage (F&B) operations have split into two since the pandemic. While they need a physical store to cater to their dine-in customers, they also need storage space to stock up for online orders. Shophouses with F&B licences offer a perfect avenue for them. The unique architecture and heritage value of shophouses attract dine-in customers. Plus, they are big enough to act as their side storage as well.
5. Hotels with Hygiene Certificate
Hotels are foreseeing a comeback as Singapore accelerates recovery from the pandemic in 2022. The borders are reopening and more foreigners are Singapore bound for investment and business. The demand for hotels expects to rise to cater to these segments of professionals. However, hygiene and safety will be at the forefront of their growth. If they can welcome guests adhering to the necessary measures for Covid, acquiring the Hygiene Safeguard certificate, this commercial realty segment will bounce back after hibernating in the last two years.
Where to put your money?
Commercial realty has evolved massively in the last two years. The pandemic has changed the way business operates, so businesses’ choice of commercial property is also different. The 5 commercial realty segments above are the hotspots for investors as they cater to the businesses picking up amid the pandemic.
If you seriously consider investing, consult me, an expert in the field with a proven track record of cracking profitable deals for my clients. To know more about the industry secrets that back up the demand for the above commercial properties, subscribe below!