Strong investment property market in Singapore, latest quarterly report reveals

Written by Ray Clancy

Tuesday, 28 September 2010 07:51

The property investment market in Singapore recorded S$5.91 billion in sales for the third quarter of 2010, an 86% year on year growth, according to real estate consultants.

But when compared to the previous second quarter, investment property sales slipped 8%, the report from property research firm Jones Lang LaSalle also reveals.

However, there are several deals under conditional contracts worth more than S$590 million and this could take third quarter sales to close even higher than the previous last quarter, the report also says.

The report pointed out that there was a shift in investors’ profile, with significant contribution from bigger players and also increased activity in the non residential sector, particularly in the office sector where just seven transactions accounted for S$1.91 billion in sales, a five time increase quarter on quarter. It said this was due to returning investors’ confidence as some real estate indicators suggest that the office market is bottoming out.

The largest transaction came from the sale of DBS Towers, purchased by Overseas Union Enterprise at S$870.5 million. Government land sales also performed well.

A commercial site at North Buona Vista Drive was awarded to Singapore listed developer Ho Bee Developments at S$411 million and the hotel sector also seems more upbeat with a 23% increase in investment sales to S$519 million quarter on quarter.

Looking ahead, JLL analysts expect investors to continue their focus on the non residential sector given the recent measures targeted at cooling the residential property market.

‘With improving market sentiments and office rental growth gaining strength, investment sales in this sector will likely remain positive and face upside. Already brewing in the pot are potential deals by Goldman Sachs Funds for Hitachi Tower and Chevron House,’ said JLL’s head of research for South East Asia Chua Yang Liang.