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Property investment sales in Singapore slumped by 34.8 percent from $6.04 billion in the previous quarter to $3.94 billion in Q4 2014 – its lowest level since Q2 2009, according to the latest report from Colliers International.
As a result, property investment sales dived by 36.6 percent to $20.90 billion for the whole of 2014 compared to $32.96 billion a year ago.
The property consultancy explained that “the steep fall in property investment sales was led by a sharp $1.47 billion decline in private investment sales to hit a five-and-a-half-year low of $3.05 billion in Q4 2014, reflecting a fall of 32.5 percent from the $4.52 billion amassed in Q3 2014.”
Specifically, sales in the private sector were dragged down by the 86.3 percent quarter-on-quarter slump in commercial deals that merely reached $275.81 million during Q4 2014 from $2.02 billion in the preceding quarter.
“This can be attributed to the absence of large commercial transactions in the October to December 2014 period, compared to the conclusion of three big-ticket deals totalling some $1.87 billion in Q3 2014,” it said.
Nevertheless, sales of strata-titled office units with a minimum price of $5 million each soared to $182.74 million in Q4 2014 versus the figures recorded sequentially for the first three quarters of the year, namely $24.50 million, $46.25 million and $107.59 million.
Similar with private sector, property investment sales in the public sector fell sharply by 41.2 percent to $893.19 million during the fourth quarter from $1.52 billion previously.
In contrast, property investment sales in the industrial segment more than doubled to $1.36 billion during the quarter under review from $550.01 million in Q3 2014.
As for the hospitality sector, property investment sales reached $495.50 million, representing 12.6 percent of $3.94 billion, or the total volume for the quarter.
Moving forward, property investment sales in Singapore are expected to increase in 2015 on an annual basis as investors are generally more confident and are ready to expand their investments this year, according to Colliers International’s Global Investor Sentiment Report.
Furthermore, Singapore emerged as second most popular investment destination among Asian investors with 36 percent of them saying so. Specifically, office properties located in the Central Business District (CBD) are favoured by 61 percent of Asian investors, followed by residential property (42 percent) and development opportunities (39 percent).
“As such, the completed office property segment in Singapore is expected to remain on investors’ radar in 2015 given the sector’s upbeat outlook on the back of limited new supply amid strengthening demand over the next 12 months,” added Colliers International.
However, total property investment sales for the entire year could fall below 2014’s level to between $15 billion and $20 billion, given the lower supply of land that will be auctioned off via the Government Land Sales (GLS) Programme for 2015.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
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