As a prelude to Colliers' Singapore Market Outlook 2020 report, Head of Research Tricia Song shares market trends over the last three 'Rat' years, and what investors and occupiers can expect in 2020 for these sectors: 1) Real Estate Investment Sales 2) Office Sector 3) Industrial Sector 4) Retail Sector 5) Hotels Sector 6) Residential Sector #ColliersSG #ColliersExpertise

2. 01
02
How did property fare in the last few Rat years?
What has changed
03 Market trends & outlook

3. The last three Rat years -- 1984, 1996 and 2008 were good years for the economy… followed by corrections
Singapore real GDP growth
Source: Oxford Economics
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
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
2021
2022
2023
2024

4. Office, retail, industrial and residential rents all peaked in 2008; Office and residential rents peaked in 1996
Followed by Asian Financial Crisis in 1997 and Global Financial Crisis in 2009
Singapore Property rental indices
Source: URA, JTC
0
50
100
150
200
250 Rental Index of Private Sector Office Space in Central Region
Rental Index of Private Sector Shop Space in Central Region
Rental Index of Private Sector Residential Properties (Whole Island)
Rental Index of All Industrial Property

5. In terms of capital markets, all sectors did remarkably well in the 1996 and 2008
Property price indices / capital values
Source: URA, JTC
0
20
40
60
80
100
120
140
160
180
1980Q4
1981Q4
1982Q4
1983Q4
1984Q4
1985Q4
1986Q4
1987Q4
1988Q4
1989Q4
1990Q4
1991Q4
1992Q4
1993Q4
1994Q4
1995Q4
1996Q4
1997Q4
1998Q4
1999Q4
2000Q4
2001Q4
2002Q4
2003Q4
2004Q4
2005Q4
2006Q4
2007Q4
2008Q4
2009Q4
2010Q4
2011Q4
2012Q4
2013Q4
2014Q4
2015Q4
2016Q4
2017Q4
2018Q4
2019Q3
Property Price Index of Office Space in Central Region Property Price Index of Shop Space in Central Region
Property Price Index of Residential Properties Price Index of All Industrial Property

6. Stock market typically a leading indicator
The stock market has not been overly exuberant
The Singapore stock market – The FTSE Straits Times Index
Source: Yahoo FInance

7. Global monetary policies, lower interest rates for longer, increased institutional investor allocation to Asia
Source: Colliers International, RCA. *”Colliers Q1 2019 Global Capital Diversification”
Note: All property types” refers to office, retail, industrial, hotel, apartment and land site.
Americas All Property Types
Volume ($)
EMEA All
Property Types
Volume ($)
Asia Pacific All Property
Types Volume ($)
0
250
500
750
1,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Interest rates likely to remain low; negative real interest rates in 2022 Global Investment Volumes: by Global Region (USD billion)
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
Interest rate, short-term, end of period Real interest rate

8. Government has been more embracing and open to market participation

9. Some of the risks have paused or abated…
▪ Brexit - Since the referendum in June 2016, UK is due to leave the European Union (EU) on
31 January 2020, after Prime Minister Boris Johnson's Brexit deal was backed by MPs.
▪ US-China Phase 1 trade deal signed on 15 Jan 2020 – puts the economic conflict on pause,
after two years of escalating tariffs and trade war. Beijing will purchase an additional USD 200
billion of US goods and services over the next two years. In exchange, Washington has agreed
to reduce tariffs on USD120 billion in Chinese products from 15% to 7.5%.
▪ Gradual recovery of the global electronics cycle - the normalisation of inventory in the
global electronics supply chains, and the adoption of 5G technologies in telecommunication
equipment and smartphones.

10. Note: The combined score is a weighted average, with a 40% weighting
for Finance, a 40% weighting for Tech ,and a 20% weighting for Law.
Source: Colliers
62.0% 60.3% 58.7%
58.2% 57.7%
Hong Kong
Singapore
Shanghai
Aggregate rankings – Top five cities from Colliers’ “Top Locations in Asia” series (H2 2018)
Tokyo
Seoul

11. ▪ Singapore has benefited from an uptick in interest from
investors who are currently diverting capital from
mainland China and Hong Kong SAR
▪ Investors’ willingness to sell into the stronger market also
helped the liquidity
*Source: Emerging Trends in Real Estate Asia Pacific 2020 by PWC & ULI
World class infrastructure, pro-business policies, efficient systems

12. Investment sales volume robust in 2019, we expect full year 2020 to increase 6%
Singapore investment sales market
25.81
41.12
16.53
8.18
30.98 31.05
29.75 29.51
19.12 17.70
22.99
35.29 33.80
29.51
31.29
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
0
5
10
15
20
25
30
35
40
45
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020F
YOYChange
TransactionValue(SGDbillion)
Commercial Residential Industrial Hospitality Mixed Use Shophouse Others YOY Change
Investment sales transactions include a) all private property sales at transaction prices of SGD10 million and above; and b) all successfully awarded state land tenders.
Source: Colliers International Singapore Research

13. CBD Grade A vacancy to increase to 5.0%
in 2020 as net demand declines. Limited
supply in 2020-2021 should keep vacancy
below the 10-year average of 6.2%.
CBD Grade A and B rents
Demand will continue to be led by the
technology and flexible workspace sectors,
albeit at a slower rate than 2019.
552,000
sq ft
790,000
sq ft
Full Year
2020
Annual
Average
2020–24
Muted CBD Grade A supply in 2020-2021,
with annual expansion averaging 3% of
stock versus 5% for the last 5 years. The
next supply hike (7% of stock) is in 2022.
1,000,000
sq ft
852,000
sq ft
Marginal rental growth in 2020 on lower
net demand given a weaker economy.
Subsequently, we expect rents to decline
4% in 2021 in anticipation of higher supply
in 2022.
SGD10.19
(+1%
YOY)
SGD11.89
(+3.3%
CAGR)
5.0%
(+1.6pp
YOY)
4.0%
(+0.1pp
CAGR)
Source: Colliers International. Note: “pp” refers to percentage point.
Net absorption, Supply and Vacancy
Source: Colliers International
Source: Colliers International
0%
5%
10%
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020F
2021F
2022F
2023F
2024F
VacancyMillion sq
ft
Net Supply
Net Absorption
Vacancy
10.09
8.47
$6
$7
$8
$9
$10
$11
$12
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020F
2021F
2022F
2023F
2024F
CBD Premium & Grade A
CBD Grade B
SGD psf
Office

14. Flexible workspace and technology to continue to drive new demand. Flexible
workspace demand to grow at a pace, as operators focus more on sustainability
and profitability and partly constrained by limited vacancy . The MAS’s issuance
of up to 5 digital bank licenses by mid-2020 may also contribute to net
absorption, though impact now is unclear.
Grade A rental growth to slow to 1% YOY in 2020 as rents are on a 10-year high
and tenants resist further rent hikes in view of macro-economic uncertainty.
On the back of rejuvenation, Shenton Way/Tanjong Pagar and Beach Road/ Bugis
micro-markets to post the highest rental growth in the mid to long term. We
recommend cost conscious occupiers to consider value options such as Grade B
offices or City Fringe offices.
Office

15. 0%
5%
10%
15%
0
10
20
30
Insqftmillion
Net new demand
Net new supply
Vacancy rate (RHS)
Net new demand, net new supply and vacancy
Average gross rents by type
Source: Colliers International, JTC. * Independent High-Specs refer to top quality modern multi-level, multi-
tenanted space that includes the latest or recent generation of building services, prestigious lobby finish and
good views. ** Warehouse-Logistics rents refer to average of ramp-up and cargo lift warehouses rents.
4.37
2.94
1.81
1.23
1
6
2013
2014
2015
2016
2017
2018
2019
2020F
2021F
2022F
2023F
2024F
InSGDpersqftpermonth
Business park
Independent high-spec*
Factory
Warehouse-Logistics**
Industrial/
logistics
Island-wide overall vacancy rate to edge
up in 2020 as net demand should lag
behind net supply. Vacancy should
decrease from 2021 onwards as demand
improves.
Leasing demand to remain soft in on
weaker trade, before outpacing supply in
2021, supported by a projected gradual
recovery in the global electronics cycle.
Total net new supply to intensify in 2020 to
18.5M sqft, led by factory segment at 77%,
before tapering off from 2021 onwards.
Warehouse rent to remain soft, stabilizing
in 2020-2021 before recovering from 2022
as supply diminishes. Business park and
high-specs rents could improve slightly.
Source: Colliers International, JTC. Note: “pp” refers to percentage point.
*On a net lettable area basis #Rental values refer to warehouse-logistics rents
15.6 mil
sq ft *
11.0 mil
sq ft *
18.5 mil
sq ft *
10.5 mil
sq ft *
SGD1.23 #
(-1.6%
YOY)
SGD1.28 #
(0.8%
CAGR)
10.9%
(+0.2pp
YOY)
9.4%
(-0.3pp
CAGR)
Full Year
2020
Annual
Average
2020–24

16. Leasing demand to remain soft before a projected gradual recovery in the global
electronics cycle could potentially support the factory segment.
Warehouse segment - third-party logistics (3PLs), transport agencies, e-
commerce and manufacturing sectors to remain the top occupier sectors for
logistics spaces.
Continued two-tier performance between older lower-specifications and newer
higher-specifications facilities. Location and supporting infrastructure could also
be differentiating factors for specialised industries such as food factories and data
centres.
We recommend landlords upgrade their assets to align with Industry 4.0 needs
such as automation, artificial intelligence and the Internet of Things to improve
productivity and space efficiency.
Industrial/
logistics

17. Source: Colliers International. Note: “pp” refers to percentage point.
* rental values refer to ground floor rents at Orchard Road.
Net absorption, Supply and Vacancy
Retail Rental Indices
Source: Colliers International, URA
Source: Colliers International
-2%
3%
8%
-1.0
0.0
1.0
2.0
3.0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020F
2021F
2022F
2023F
2024F
VacancyMillion sq
ft
Net Supply (LHS)
Net Absorption (LHS)
Vacancy (RHS)
75
85
95
105
2011 2013 2015 2017 2019F2021F2023F
Index(2011=100)
Regional Centres (ground-floor)
Orchard Road (ground-floor)
Central Region (overall)
Retail
Island-wide vacancy to improve in 2020-
2023 as front-loaded supply in 2018 and
2019 gets absorbed. Vacancy should trend
towards 7.0% as supply tapers off.
Net demand in 2019 was supply-led with
the completion of a few major malls. We
expect 2020 demand to be more muted.
New supply in 2020 is tight at 0.3% of total
stock versus the 10-year historical average
of 1.7%. Supply is also concentrated in the
suburbs with a well-defined catchment area.
Ground-floor rents at Regional Centres to
stay flat in 2020, while that of Orchard
Road could rise marginally (+0.3% YOY).
260,000
sq ft
320,000
sq ft
209,000
sq ft
272,000
sq ft
SGD40.52*
(+0.3%
YOY)
SGD42.00*
(+0.8%
CAGR)
7.5%
(-0.1pp
YOY)
7.0%
(-0.1pp
CAGR)
Full Year
2020
Annual
Average
2020–24

18. Continued bottoming of the overall retail market in 2020 with relatively flat
rental growth, as the market digests the large new supply completed in 2019.
We see any rental recovery likely to be subdued given the lack of catalysts.
Nonetheless, Orchard Road malls should lead in rental growth as a key
beneficiary of the rejuvenation theme and any recovery in tourism receipts.
While consolidation, “reinventing” retail, and omni-channel retail remain key
themes, we see an increasing adoption of technology by retailers to enhance
customer experience. Many retailers are also diversifying their business models
and expanding their product offerings or services to provide more options for
consumers. For the landlords, F&B expansions and the inclusion of flexible
workspace is likely to continue into 2020.
Retail

19. 65.00
70.00
75.00
80.00
85.00
90.00
95.00
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
Occupancy (%)Units New hotel rooms
Occupancy
0
5
10
15
20
25
120
140
160
180
200
220
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020F
Arrivals
(million)
SGD Visitor Arrivals (million)
RevPAR (SGD)
Hotel room supply and occupancy
Revenue Per Available Room (RevPAR) and visitor arrivals
Source: Colliers International, STB
Source: Colliers International, Singapore Tourism Board, URA
Hotels
Hotel occupancy has improved since 2016,
absorbing most of the supply that came
onstream in 2015-2017. Occupancy should
improve with tight supply in 2020-2022F.
Demand will be driven by rising visitor
arrivals, new tourist attractions and MICE
events. Long term drivers include a new
airport terminal and expansion of the
Integrated Resorts.
The total new completions over 2020-2024
would average around 1,400 units per
annum, still well below the last ten-year
average of circa 2,800 rooms per annum.
RevPAR has recovered since 2017 and
should continue to improve on tight near
term supply and continued growth in visitor
arrivals.
1,300
rooms
Per day
1,900
rooms
Per day
800
rooms
1,400
rooms
SGD193*
(+1.0%
YOY)
SGD214*
(+2%
CAGR)
12.2%
(-0.9pp
YOY)
11.0%
(-0.5pp
CAGR)
Full Year
2020
Annual
Average
2020–24

20. 2020 attractions include large scale bi-annual MICE events such as The
International Trademark Association’s 142nd Annual Meeting and the 103rd Lions
Clubs International Convention.
Hoteliers should continue to use technology to enhance the guest experience
and improve productivity and service, such as facial recognition check-in, and
using robots to service in-room dining and some housekeeping functions.
RevPAR should recover gradually with rising visitor arrivals and limited supply of
rooms over 2020-2022. There may be an increase in hotel rooms in 2023 with the
recent spate of conversions of commercial buildings into hotels. However, the 5-
year average supply will still be about half of that in the past decade
Healthy investor interest in hotel assets could continue in 2020 given the
positive sector fundamentals and redevelopment opportunities.
Hotels

21. 0
2
4
6
8
10
0
5,000
10,000
15,000
20,000
25,000
Vacancy
(%)
Units Annual chg in Private
housing supply
Vacancy
70
90
110
130
150
170
190
Price Index Rental Index
Source: Colliers International. Note: “pp” refers to percentage point.*refers to median rent of non-landed private residential property
Private housing supply and vacancy
Price and rental index
Source: Colliers International, URA
Source: Colliers International, URA.
Vacancy has declined steadily to 6.4% since
Q3 2017’s 9.3%. We expect it to improve to
6.0% by end-2020 before increasing over
2021-2023 as new stock completes.
Steady household formation, low
unemployment and favourable interest
rates to drive occupier demand; while
investment remains deterred by the cooling
measures.
We expect the record high supply in 2014-
2017 to taper off over 2018-2021; and peak
in 2022-2023 on the collective sales wave
(2017-2018).
Gross rental yield of residential properties
ranges from 2-4%. With vacancy declining,
we expect rents to grow 5% in 2020. Rents
may decline in 2022-2023 on rising vacancy.
9,800
units (new
sales)
10,000
units (new
sales)
5,122 units
(completion
)
10,368 units
(completion)
SGD3.47*
(+5.0%
YOY)
SGD3.40*
(+1%
CAGR)
6.0%
(-0.4pp
YOY)
7.0%
(+0.1pp
CAGR)
Residential
Full Year
2020
Annual
Average
2020–24

22. Cautious land bids. From the land sale tender results since the cooling
measures in July 2018, we observed developers have been active but
cautious in their bidding. We expect developers to remain cautious in land
bidding, and to focus on moving inventory in most of 2020.
Resilient primary sales in 2019 have helped developers pare inventory. We
estimate developers sold 9,850 units in 2019, 12% higher than the year
before. In 2020, we estimate about 44 projects to be launched, of which
45% would be in the prime districts. We note foreigners are still attracted to
selected super luxurious projects.
Infrastructure developments such as Greater Southern Waterfront, Jurong Lake
District, new MRT lines would drive also end-user interest.
We recommend developers to selectively acquire land and also consider mixed
developments with community and commercial components.
Residential

23. Recommendations
• Office, hotel to see multi-
year upcycle
• Retail, industrial stabilized –
landlords consider asset
upgrades, tenant remix
• Developers should still
selectively acquire landbank
in 2020 as resilient demand
has pared some landbank
Auspicious year of the Rat
• Historically peakish,
followed by a downturn
in the year of the Ox –
1984, 1996, 2008
• Why not 2020?
Key drivers in 2020
• Low interest rates
• Some global risks/
uncertainty abating
• Singapore tops as both
an occupier and
investment market

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or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the
accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for
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