If the recent report from Aviva Plc. is to be believed, the shopping malls of Singapore offer the best returns among all the retail investments in Asia-Pacific region. The economic and demographic growth in the region has played a very important part in boosting the consumption, as mentioned in the report.
The suburban retail units which cater to the demand of local residents should be offering better yields if compared with the central shopping centers, as mentioned in the report of Aviva Investors Asia Pte. Incidentally, Aviva Investors Asia is a unit of the 2nd biggest insurer of UK and manages property assets worth $2.5 billion. Malls in Singapore are expected to yield an average annual return of around 8% over the next couple of years. In case of those in the suburbs, the yield should be between 9% and 10% annually, as mentioned in the published report.
Incidentally, because of the strength shown by the construction industry, the economy of Singapore unexpectedly expanded in the last quarter. Hence, the investors are currently betting on the economy of this island country. As far as a statement of Standard Chartered is concerned, the retail sales figure in the central business district of Singapore may rise to 60% within the next 5 years. On the other hand, the suburbs should be witnessing a sort of influx of retailers and new malls should be completed right within this year, as forecasted by Colliers International UK Plc.
As mentioned by the Senior Vice President of Strategy and Research Department for Asia Pacific Real Estate of Aviva Investors, Elysia Tse, they will continue to favor the suburban retail industry in Singapore. Tse added that retail seems to be a stable asset class for the time being. The suburban sector of Singapore is slowly capturing the demographic growth and a stable yield should be experienced there. Apart from that, there are good enough reasons for proper growth as well.
When it comes to the report published by Aviva on risk adjusted returns, Australia and New Zealand have got the 2nd and 3rd positions respectively. Incidentally, the other top ranked retail markets mentioned by Aviva are China, Hong Kong and Japan. Incidentally, the officials of Aviva have declined to provide any information of specific performances of the other markets, Singapore being exception.