Trends that Shaped the Real Estate Market in 2022 are Here to Stay, with Many Leaving Lasting Impacts

The last few years have changed how we work with hybrid work becoming an increasingly important component that many employees seek, while challenged supply chains and companies rallying behind sustainability goals have pushed once niche real estate markets into the mainstream. Following the world's most important annual climate conference, COP27, talks about retrofitting older buildings for higher energy efficiency along with including green lease clauses have been stressed.

In 2022, Singapore's GIC led all sovereign funds with $40.3B deployed, a climb of 17% year-on-year. The office market in Singapore also saw rent growth doubling in 2022, although it is expected to slow in 2023, with signs of weakening market sentiment among larger occupiers, especially in the tech sector.

What caught our eyes this month?

Trends that shaped real estate in 2022

JLL – In a year of transformation, a few stand-out areas will have lasting impacts, leaving their mark on real estate in 2022. These include hybrid work remaining a sturdy feature of corporate life post-pandemic, companies rallying behind sustainability goals and the rapid rise of inflation across the world.

Singapore's GIC leads all sovereign funds with $40.3B deployed in 2022

Mingtiandi – Singapore’s GIC once again led all sovereign wealth and pension funds with $40.3 billion deployed in 2022, a climb of 17% year-on-year. This is after chalking up the year's biggest real estate deal among sovereign investors: the $14 billion take-private of Store Capital alongside joint venture partner Oak Street.

Uptick in interest in 'Upcycled' B-grade offices

The Urban Developer – B-grade offices tend to be overlooked in favour of A-grade and Premium spaces and new builds. However, this could be changing as investors look more closely at secondary office assets that are suitable for refurbishment and can address demand for high-quality spaces with a focus on sustainability.

Singapore office rent growth doubled in 2022, set to slow in new year

Mingtiandi – Grade A office rents in Singapore’s CBD jumped by 8.3% in 2022, more than double last year’s growth rate, as vacancies fell and more employees returned to their desks. However, the demand for grade A office demand began to cool towards the end of 2022, with signs of weakening market sentiment among larger occupiers, especially in the tech sector.

The cost of energy efficiency in the Dutch housing market

ING - Higher energy prices have recently increased the cost advantage of energy-efficient homes, which is one of the many reasons why such properties are generally sold at above-average prices. Together with the rise in energy costs, the price differential between energy-efficient homes and those with high energy consumption has also increased.

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