Property sales total S$8.4b in Q1, up 1% quarter-on-quarter

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Property sales total S$8.4b in Q1, up 1% quarter-on-quarter

By Channel NewsAsia | Posted: 17 April 2008 1619 hrs


SINGAPORE: Investment sales level in the Singapore property market in the first quarter of 2008 was similar to that in the fourth quarter of 2007 despite deepening concerns regarding the US economy.

A report by DTZ Debenham Tie Leung said a total of S$8.4 billion worth of transactions was concluded, a slight increase of one per cent quarter-on-quarter.

The office sector was the best performer with S$3.4 billion in sales, up 134 per cent against the previous quarter.

The office sector was supported by en bloc transactions which saw several major buildings, like One George Street, Hitachi Tower, Singapore Power Building and One Philip Street, being transacted.

The industrial sector also saw increasing interest. Investments in industrial properties rose 31 per cent quarter-on-quarter to S$690.5 million, mainly in en bloc deals purchased by REITs.

However, residential sales fell to S$2.2 billion, down 45 per cent from the last quarter.

DTZ said sales activity in the private residential market slowed significantly in the first quarter due to weakened market sentiments. It added that developers and buyers were taking a wait-and-see attitude.

Preliminary figures showed there were only about 2,000 private residential transactions recorded through caveats in the first two months of 2008.

According to DTZ, there were only 795 developer sales in the first quarter of this year, reflecting a 46 per cent quarter-on-quarter decline. This was the second lowest quarter of developer sales since the SARS-stricken period, which was the first quarter of 2003.

DTZ added that rents have increased marginally due to tight supply. Monthly rents of prime condominiums increased 2.1 per cent quarter-on-quarter to average S$4.90 per square foot.

For non-prime districts, monthly rents of condominiums increased by an average of 2.5 per cent quarter-on-quarter to S$2.10 per square foot.

DTZ said rental increases of private residential properties are likely to moderate due to budget constraints and the slower influx of expatriates. - CNA/vm

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Published April 18, 2008

Investment property sales in Q1 remain steady

By JOANNE CHIEW


INVESTMENT property sales level in first quarter 2008 was unchanged from a year ago despite deepening concerns regarding the US economy.

A total of $8.4 billion worth of transactions was concluded, up one per cent quarter-on-quarter (QOQ), according to the Q1, 2008 Singapore Property Market Report by Debenham Tie Leung (DTZ).

The office sector was the best performer with $3.4 billion in sales, reflecting a significant 134 per cent increase QOQ.

Government state land saw strong response from developers to several sites released for tenders. The transactions showed that developers were willing to pay for sites in good locations, despite the cautious market, DTZ said.

Investments in industrial properties rose 31 per cent QOQ to $690.5 million, mainly in en-bloc deals purchased by real estate investment trusts.

However, residential sales fell 45 per cent QOQ to $2.2 billion. DTZ attributed the slowdown in sales activity to weak market sentiments, adding that developers and buyers are adopting a wait-and-see attitude.

Preliminary figures showed that only about 2,000 private residential transactions were recorded through caveats in the first two months of 2008, down from 5,200 a year ago.

Developer sales in Q1 reflected a 46 per cent QOQ decline, falling to 795. This was the second lowest quarter of developer sales since the Sars-stricken quarter of Q1, 2003.

Said DTZ's senior director for investment advisory services and auction, Shaun Poh, 'With current record high prices, investments by opportunistic investors with short-term approaches are likely to decline. More long-term investors have entered the market and are looking at core assets in good locations.'

The rental market remained stable, with consumer spending remaining stable amid a high employment rate. Retail sales for January 2008 rose 15.5 per cent year-on-year (YOY).

Removing the price effect, retail sales rose 1.5 per cent YOY. DTZ said occupancy of retail space is expected to remain high, at above 90 per cent.

'The outlook for retail rents remains positive on a selective basis. Rents in well-positioned malls are expected to continue to increase, particularly for prime units in Orchard Road,' said Anna Lee, DTZ's retail associate director.