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2021 Property Outlook Research - Staying Invested
1. COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
RESEARCH
2021 PROPERTY OUTLOOK
– STAYING INVESTED
Tricia Song
Head of Research
2. COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
Source: Colliers International Singapore Research Report “RESILIENCE AND REBOUND RANKING” dated 29 May 2020
1. Manufacturing
- V-shaped recovery in Electronics, Precision Engineering and Biomedicals; state-
led “Industry 4.0”
2. Technology
- Fastest earnings growth over the next three years
- Tech giants setting base in Singapore
- Accelerated E-commerce drives logistics warehouses
3. Hospitality
- Large impact today with sharp rebound forecast
- Attractive opportunities
RESEARCH
TOP “RESILIENT AND REBOUND” SECTORS
3. COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
RENTAL PERFORMANCE BY SECTORS
Residential, Industrial, Office have been relatively more resilient
Source: URA Non-landed Residential Rental Index in Core Central Region, JTC All-industrial Rental Index, JTC Warehouse Rental Index, URA Office Rental Index in Central
Region, URA Retail Rental index in Central Region, Singapore Tourism Board Hotels’ Standard Average Room Rates in September 2020.
-1.2% -1.6% -1.5%
-5.2%
-10.0%
-48.9%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
Residential Industrial Warehouse Office Retail Hotel
Year-to-September 2020 Average Rental Change (%)
RESEARCH
4. COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
1. Recovery/Reflation
With a sharp rebound in global economy and low interest rates, real estate should benefit, but will the
worst hit sectors recover?
14.5%
0.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
-10%
-5%
0%
5%
10%
15%
20%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
(F)
2021
(F)
2022
(F)
2023
(F)
2024
(F)
2025
(F)
Real GDP growth 3M SIBOR (RHS)
Source: Colliers International Singapore Research, URA, MTI, Oxford Economics forecasts as of 18 December 2020
RESEARCH
5. COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
Environmental
Conservation of the
natural world
Social
Consideration of people
& relationships
Governance
Standards for running
a company
• Climate change and carbon
emissions
• Air and water pollution
• Biodiversity
• Deforestation
• Energy efficiency
• Waste management
• Water scarcity
• Customer satisfaction
• Data protection and privacy
• Gender and diversity
• Employee engagement
• Community relations
• Human rights
• Labour standards
• Board composition
• Audit committee structure
• Bribery and corruption
• Executive compensation
• Lobbying
• Political contributions
• Whistleblower schemes
2. Sustainability and ESG
Our global investor survey shows most investors believe ESG will be a
strong factor in their investment decisions in 2021. What does it mean for
owners, occupiers and investors?
Source: CFA Institute
RESEARCH
6. COLLIERS INTERNATIONAL | PRIVATE & CONFIDENTIAL
Outram Road Shophouse
Shaw Towers Orchard Hills Leedon Green (former Tulip Garden)
3. Flexibility and Redevelopment
RESEARCH
Editor's Notes
We want to throw back to last May our Sink and Swim webinar, and our proprietary “resilient and rebound” ranking, we identified Manufacturing and technology as the top 2 sectors with the best sector GDP growth, stock returns and future earnings growth.
Fast forward to end of 2020, how have these sectors fare? Residential has been resilient, as everyone works from home; Industrial, warehouse did well from ecommerce and manufacturing; as we predicted; Retail and Hotels have done the worst. So what will 2021 bring?
We see 3 key themes for this year: first, a global and domestic macroeconomic recovery and low interest rates will lead to real estate reflation. However, not all sectors have been hit equally, so will the worst hit sectors – Hotels and Retail recover? And how fast will that be?
The 2nd theme in 2021 is sustainability or ESG. The US under Biden and China will have ambitious goals for carbon neutrality, as do Japan and other APAC nations.
Our global investor survey shows most investors believe ESG will be a strong factor in their investment decisions in 2021. But who is bearing the cost of sustainability and what are the real "returns" for sustainability? Colliers experts will debate this.
The pandemic has taught us the importance of Flexibility: businesses have to pivot; assets can be flexible too! Shophouses have been popular as it has flexible uses. Building codes are still rigid. Land is scarce. We think this year should also see more redevelopments in the CBD office as well as residential collective sales. But these are not without challenges.