Investment sales in Singapore seen matching last year's record high

Colliers's latest projection is revised downwards from an earlier forecast of S$46 billion

Tue, Aug 14, 2018


REAL estate investment sales in Singapore is expected to match last year's record of S$40 billion, thanks to bumper sales already clocked in for the first half this year.

This is according to a latest quarterly report by Colliers International, which tracked all private property sales transacted at S$5 million and above, as well as successfully awarded state land tenders across all property segments.

The latest projection however, has been revised downwards from an earlier forecast of S$46 billion, following the introduction of property cooling measures in July.

Real estate investment sales grew 19 per cent year-on-year (y-o-y) to S$12.2 billion in Q2, led mainly by residential sales which accounted for 67 per cent of total investment sales during the quarter.

Residential sales rose 60.7 per cent to S$8.2 billion y-o-y, driven by brisk collective sales which made up nearly half of the investment sale volume in Q2. This brought residential investment sales to an all time half-year higRh of S$17.3 billion, Colliers said.

In particular, a total of 16 residential collective sales with a combined value of S$3.9 billion were transacted in the quarter, bringing the half-year tally to 33 deals valued at some S$9.7 billion.

Said head of research at Colliers International, Tricia Song: "In view of the latest cooling measures which would raise taxes for investors and developers in the residential sector, we foresee a slowdown for the residential en bloc market in the near-term."

"However, commercial and industrial real estate could pick up the slack in the second half of the year, on the back of healthy commercial properties deal pipelines, and rising interest from real estate investment trusts (Reits) and institutional investors for industrial assets."

After a quiet first quarter, the commercial sector "sprang back to life" in Q2 with a few major wholebuilding transactions, Colliers said.

These included Twenty Anson which was sold for S$516 million, Sembawang Shopping Centre for S$248 million, and MYP Plaza for S$247 million.

Total investment sales for the quarter came in at S$1.4 billion, up nearly three-fold from Q1, but down 59.3 per cent from last year - which saw mega deals such as the S$2.2 billion acquisition of Jurong Point, and the 50 per cent divestment of One George Street for S$592 million.

There was also stronger demand for industrial properties in Q2 as sales value surged 295.1 per cent to S$797.4 million y-o-y, largely attributable to strong private investment sales. Major deals included the sale of a 99 per cent stake in Kingsland Data Centre for S$295.1 million to Keppel DC Reit, and Admirax for S$106 million to BlackRock.

Separately, mixed-use properties remained popular, with investment sales for the segment rising 30.2 per cent to S$1.5 billion.

This comprised mainly the public land sale of a commercial and residential site in Holland Road for S$1.2 billion, and the private investment sale of Chinatown Plaza for S$260 million.

Added Colliers: "Shophouses are fast emerging as an alternative asset class among high net worth individuals, property funds and investment companies, especially in the light of the fresh cooling measures implemented on the purchase of residential properties from July 6 this year."