Bookmark & Share
Singapore dominated the property investment activity in Southeast Asia, accounting for 66 percent of the combined investment volume in the city-state, Malaysia and Thailand for Q4 2014, according to latest report from DTZ.
However, the total real estate investment in the three markets slumped by 50 percent to US$2.7 billion (S$3.58 billion) during the fourth quarter. Although investment volume for the entire year reached US$17.9 billion (S$23.71 billion), this is 32 percent lower than 2013’s US$26.4 billion (S$34.97 billion).
It is noted that the figures from 2013 cover both landed and non-landed deals in Singapore and Thailand, and only non-landed transactions in Malaysia.
Specifically, property investments in Malaysia surged by nearly 160 percent to US$1.62 billion (S$2.15 billion) in 2014 compared to the previous year, while that in Thailand and Singapore declined by 9 percent and 40 percent respectively.
In terms of average deal size, it dropped by 51 percent to US$44.5 million (S$58.94 million) in Q4 2014 from US$91.3 million (S$78.07 million) in the previous quarter. For the whole of 2014, average deal size dipped by about 5 percent to US$67.5 million (S$89.41 million) versus US$70.9 million (S$93.91 million) in 2013.
Additionally, around 47 percent to the transaction were under US$20 million (S$26.49 million, while 21 percent ranged from US$100 million (S$132.46 million) to US$500 million (S$662.30 million).
The industrial sector accounted for 41 percent or US$1.2 billion (S$1.59 billion) of the deals during Q4 2014. This includes the sale of TICON’s industrial portfolio to TICON Freehold and Leasehold REIT for US$105 million (S$139.08 million), while Keppel DC REIT Management acquired two data centres for US$201 million (S$266.24 million). Another major deal was the Blackrock’s sale of Integra Tower Intermark in Kuala Lumpur to KWP for US$ for US$351 million (S$464.93 million), while China- and Hong Kong-based developers purchased three land sites for US$519 million (S$687.47 million)
But it was the office sector which led the investment activity for the whole of 2014, accounting for 30 percent or US$5.2 billion (S$6.89 billion) of the total amount, followed by industrial properties which comprised 17 percent or US$3 billion (S$3.97 billion).
Significant office transactions in 2014 include the sale of Platinum Sentral for US$227 million (S$300.68 million), a proposed mall at Mt Kiara and mixed development project at TRX in Klang Valley; Westgate Tower, as well as Singapore’s TripleOne Somerset and OUE Bayfront.
Private real estate firms were the biggest buyers of properties in Q4 2014, accounting for 26 percent or US$686 million (S$908.68 million) of the total investment volume. But real estate investment trusts (REITS) dominated the investment activity for the whole year, comprising 38 percent or US$6.27 billion (S$8.31 billion) of the investment volume.
“This was due to the listing of 10 REITs and Property Funds in Thailand and Singapore. Among those listed included, IMPACT Growth Real Estate Investment Trust and Keppel DC REIT, the second largest listing in Singapore in 2014. Private property companies and listed property vehicles were consequently the largest net buyers of properties in 2014,” said the consultancy.
Looking ahead, REITs particularly from Thailand are expected to be the main driver of investment sales in Southeast Asia, DTZ added.
(Image source: Wikimedia Commons, user: Merlion444)
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg.
Related Articles:
Keppel REIT posts full occupancy for 9 of 11 office towers
Property investment sales plunged 34.8% in Q4
Weak office, gov't land sales contribute to investment sales decline