Serviced apartments emerge as prime investment in Singapore: report

Unlike other developed markets, Singapore’s serviced apartment sector has lagged in supply growth, despite increasing demand.

Singapore’s serviced apartment sector is emerging as a prime investment opportunity, with short- and long-stay serviced apartments facing a critical supply shortage.

In the latest report, M&G Investments said unlike other developed markets, Singapore’s serviced apartment sector has lagged in supply growth, despite increasing demand from business travellers, expatriates, and long-term visitors.

The combination of limited availability and strong rental demand positions this segment for steady price appreciation and high occupancy rates.

Retail real estate in Singapore is also experiencing strong investor interest, with the sector climbing to 4th from 8th place in investor preference rankings.

M&G’s report cites Compass One Shopping Centre in Sengkang and other prime retail assets as key contributors to its success in the market.

As global retail continues to evolve, Singapore’s shopping centres remain resilient, offering stable rental income and strong consumer footfall. This has reinforced confidence amongst investors looking for income-generating assets in a competitive real estate landscape.

Whilst logistics remains a high-priority investment across Asia-Pacific, M&G is less focused on Singapore’s logistics sector compared to markets like Australia, where vacancy rates are exceptionally low and rental growth is stronger.

M&G also takes a selective approach to data centre investments in Singapore, citing high capital costs, significant operational risks, and rapid technological shifts as key concerns.

The real estate component of data centres accounts for only 20-30% of total investment, making them a less suitable fit for core investment strategies that focus on long-term, stable income.

Investor sentiment towards Singapore’s real estate market remains positive, with growing interest from European institutional investors. The country’s reputation for delivering stable returns with lower volatility makes it a preferred destination for capital deployment.

As cross-border investment activity rises, experts believe Singapore’s serviced apartment and retail sectors will remain key areas of focus, offering both short-term growth potential and long-term resilience in an evolving real estate market.