EdgeProp - Real estate diversification key to strengthening portfolios as tariffs roil markets

SINGAPORE, Apr. 11 2025 / EdgeProp /- US President Donald Trump’s tariff announcement on April 2, has created a financial tsunami of chaos across the globe — raising costs for businesses and consumers alike — while creating uncertainty in global trade dynamics. These factors, coupled with drastic inflationary pressures and potential retaliatory actions from trading partners, have amplified the unpredictability of returns in investments across global markets.

The US tariffs can profoundly influence Singapore’s real estate market, primarily by driving up construction costs for essential imported materials like steel and aluminium. Such increases inevitably lead to higher property prices and potential delays in development projects, which could deter investment.

Interestingly, while these tariffs present challenges, they could also position Singapore as an attractive oasis for foreign capital seeking a secure investment haven.

Given America’s relatively low tariff rate of just 10% on Singapore exports, the potential for a surge in demand becomes evident. However, we must acknowledge the looming shadow of a global economic slowdown triggered by these tariffs.

Such a downturn could suppress demand for commercial and industrial properties and significantly undermine consumer confidence in residential markets. Furthermore, tariffs are likely to disrupt supply chains, causing construction delays that aggravate existing supply-demand imbalances.

In light of these factors, it is essential for Singapore’s government to proactively introduce measures that can stabilise the market and safeguard its real estate sector for the future.

As such, diversification becomes a vital tool in this environment, allowing investors to spread their exposure across a variety of real estate asset types, sectors and territories. By doing so, investors can mitigate the impact of localised economic shocks and policy-driven disruptions, ensuring a more balanced and resilient portfolio in the face of these challenges.

A digital renaissance in real estate is dismantling barriers to market entry

In the arena of diversification strategies, which are further elevated by the fact that real estate investing has been quietly undergoing a digital renaissance, leveraging digital platforms and technology automation allows investors to unlock access to a broader spectrum of real estate opportunities across various geographies and asset classes — and ultimately dismantling traditional barriers to market entry.

Innovations such as tokenisation and online marketplaces empower investors to allocate capital towards fractional property ownership or venture into global real estate markets without the need for significant upfront capital. These advancements enhance accessibility, bolster portfolio resilience and offer greater flexibility while enabling real-time data-driven decision-making.

As uncertainties in the global economy persist, adopting digital tools within real estate investment strategies becomes essential for building a diversified and resilient forward-looking portfolio.

Data is everything in staying competitive, and digitalisation is the way to go

This dynamic evolution in real estate investing brings both opportunities and challenges, encouraging organisations to embrace innovation and prioritise data-informed decisions to stay competitive.

The digitalisation of real estate encompasses every facet of the property lifecycle, from development and management to investment strategies and tenant experiences.

Stakeholders across the sector, including sponsors, developers and fund managers, recognise that the future of real estate is not just digital — it is intelligent, dynamic and sustainable.

Amid the real estate digital reset, enter AI

Emerging digital trends, particularly those centred around advanced artificial intelligence (AI), are changing the way we invest in real estate.

AI’s transformative power is evident in its revolutionary impact on industries such as healthcare, finance and retail, with real estate undergoing a similar paradigm shift.

While AI-driven data centres are an eye-catching aspect of this digital wave, they represent just one piece of a larger transformation taking place. AI data centres are witnessing an insatiable demand for computing power, which has created a specialised real estate sector — the AI-ready data centre.

These facilities, optimised for high-density computing, advanced cooling, robust connectivity, and adaptable designs, are attracting massive investments and driving a construction boom. This trend highlights the critical link between AI and physical infrastructure, demonstrating how technological advancements directly influence real estate development.

The backbone of a robust digital ecosystem lies at the heart of every AI application and successful real estate innovation. The rapid expansion of AI, combined with other cutting-edge technologies, is driving a real estate revolution that redefines the built environment and how people interact with and experience these spaces.

Tech is changing the way we view structural buildings

Smart buildings and the Internet of Things (IoT) are revolutionising buildings to become intelligent and interconnected. Sensors embedded throughout buildings collect vast amounts of data on everything — from energy consumption to occupancy patterns to air quality inside buildings — monitoring temperature, and ensuring that security is well covered with lapses red-flagged if needed.

These data points are then analysed and used to improve and optimise building operations in real-time, including all aspects of energy use and efficiency, tenant comfort levels and reduction of operational costs.

Imagine a building that anticipates maintenance needs before problems arise or one that automatically adjusts lighting and HVAC (heating, ventilation and air-conditioning) based on real-time occupancy, creating a more sustainable and responsive environment.

Harnessing VR and AR

The proptech (property technology) revolution, including virtual and augmented reality (VR/AR), has been witnessing a slow and steady phenomenon for many years. VR/AR encompasses a broad spectrum of innovations designed to streamline and enhance various aspects of the real estate industry.

For instance, VR tours enable potential buyers and renters to view potential properties remotely — without being physically present — and remove inconveniences due to location distances and other travel impediments.

The tech behind VR also saves potential buyers’ or renters’ time and commute expenses. AR applications project digital content onto real-world scenes, allowing users to envision renovations, furniture arrangements and various design possibilities prior to making any physical alterations.

Online search platforms in the US leading the digital charge

Online property platforms such as Redfin, Rightmove and Zillow have fundamentally changed how people search for properties, providing access to vast amounts of data, empowering buyers and sellers, and increasing market transparency.

Property management software such as cloud-based platforms automate and streamline property management tasks — including rent collection, maintenance requests, tenant communication and financial reporting — thus improving landlords’ and tenants’ efficiency and transparency.

Construction not sitting out on the digital superhighway

Construction technology, which includes 3D printing, building information modelling (BIM) and drones, is revolutionising the construction process, resulting in greater accuracy, accelerated project development schedules, lower expenses and improved worksite safety.

BIM, in particular, allows for creating electronic structural models to better facilitate collaboration between building designers, engineers and contractors.

Big data and blockchain tech

With big data and advanced analytics, real estate companies can gain valuable insights into market trends, demographics and consumer behaviours.

This data-driven approach enables improved and more accurate information for the decision-maker across investments, pricing structures, sales and promotional campaigns, and risk assessments.

Predictive analytics can predict property valuations, identify hotspot neighbourhoods and optimise portfolio management, which is a valuable feature for creating resilient investment portfolios.

Blockchain technology has the potential to disrupt and streamline real estate transactions by enhancing transparency, transactional security protocols, and speed via its decentralised ledger system.

Smart or digital contracts can automate and simplify complex processes like property registration, title deed transfer and escrow management, reducing administrative layers such as paperwork, transaction costs and potential fraud risk.

The metaverse and cybersecurity

Meanwhile, in the virtual real estate ecosystem, the metaverse — a network of immersive digital worlds — is creating new and exciting opportunities for real estate development and investment.

Virtual properties can be bought, sold and leased, opening up new revenue streams and creating engaging experiences for users. While still in its fledgling stage, the metaverse has the means to significantly disrupt traditional real estate models and create entirely new markets.

Cybersecurity is a strictly necessary mandate since the real estate industry is increasingly relying on digital technologies. With the collection of sensitive data, it is key to have protection from cyber theft while ensuring strict compliance with privacy regulations.

Real estate companies must invest in robust security measures and adopt a proactive approach to cybersecurity risk management.

Smart buildings and transformation of retail real estate

The transformation of work dynamics, including the growth of remote working, hybrid work arrangements and the gig economy, is significantly reshaping office environments and increasing the demand for adaptable workspaces.

Smart building technologies, for instance, are allowing for more efficient ways of working, impacting the design, functionality and location of office buildings. In short, the traditional office model is being challenged, with a growing emphasis on flexible, collaborative and amenity-rich spaces.

The transformation of retail real estate is also experiencing the continued growth of e-commerce: The decreased demand for brick-and-mortar stores is offset by the demand for more warehouse space.

As a result, brand principals are taking the omnichannel route but with a twist: conflating offline and online shopping journeys. The brick-and-mortar shops serve as lounge areas, offering innovative food and beverage experiences and logistics centres where online orders may be collected.

Digital technologies play a critical role in promoting real estate sustainability in green buildings with smart building management systems that manage how much energy is consumed, control water use, and minimise waste and, eventually, carbon footprint.

Renewable energy integration, green building certifications — such as LEED (Leadership in Energy and Environmental Design) and BREEAM (Building Research Establishment Environmental Assessment Methodology) — and sustainable building materials are becoming indispensable as the industry strives to reduce its environmental footprint.

The real estate industry is evolving with the increasing influence of digital technology, reshaping the way it operates. This shift is happening now and not in the distant future. As a result, this presents opportunities for investors to adapt and incorporate real estate into a well-rounded portfolio. Understanding and leveraging these changes can add long-term value to investment strategies.

Keith Ong is the co-founder and chief executive officer of RealVantage. The co-author is Victor Chin, vice president of investment and asset management at RealVantage.

About RealVantage

RealVantage is a leading real estate co-investment platform, licensed and regulated by the Monetary Authority of Singapore (MAS), that allows our investors to diversify across markets, overseas properties, sectors and investment strategies.

The team at RealVantage are highly qualified professionals who brings about a multi-disciplinary vision and approach in their respective fields towards business development, management, and client satisfaction. The team is led by distinguished Board of Advisors and advisory committee who provide cross-functional and multi-disciplinary expertise to the RealVantage team ranging from real estate, corporate finance, technology, venture capital, and startups growth. The team's philosophy, core values, and technological edge help clients build a diversified and high-performing real estate investment portfolio.

Get in touch with RealVantage today to see how they can help you in your real estate investment journey.

Disclaimer: The information and/or documents contained in this article does not constitute financial advice and is meant for educational purposes. Please consult your financial advisor, accountant, and/or attorney before proceeding with any financial/real estate investments.