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Property investment sales in Singapore increased by 5 percent to S$3.63 billion in Q1 2015 on a quarterly basis, but fell by 8.4 percent compared to the same period a year ago, according to a report from Savills.
From this, 40 transactions with a combined value of S$2.63 billion or 72.5 percent of the total volume came from the private sector.
Although this is a significant drop from the 60 deals posted in Q4 2014, the overall value only dipped by 0.9 percent from the previous quarter’s S$2.66 billion thanks to the S$1.17 billion sale of AXA Tower.
Meanwhile, the public sector sold ten sites under the government land sales (GLS) programme for S$999.5 million, representing 27.5 percent of the overall property investment sales.
By asset category, the commercial segment accounted for the largest market share of 37.2 percent in the first quarter.
“The transaction value amounted to S$1.35 billion, an astounding four-fold increase from the S$269.7 million recorded in the last quarter and 64.1 percent higher than Q1 2014’s S$824.4 million,” said Savills.
Under the commercial segment, only three office properties were transacted in Q1 2015. These include the 50-storey AXA Tower which was sold to Perennial Real Estate Holdings for S$1.17 billion or S$1,735 per sq ft, the 41st level of Suntec City Tower One which changed hands for S$14.5 million or S$3,009 per sq ft, and the sale of the 8th level at Samsung Hub for S$42.6 million or S$3,250 per sq ft.
Shophouse investment activities also picked up in the period under review as S$125.5 million worth of fully commercial-zoned shophouses were sold versus S$90.1 million in Q4 2014 and S$10.1 million a year ago.
In a report from DTZ citing the latest data from the Urban Redevelopment Authority, about S$358 million were invested into shop houses between Q4 2014 and Q1 2015.
“The largest shop house deal recorded in Q1 2015 was the investment sale of 6 shop houses along Peck Seah Street by K Line for S$42.8 million, which was reportedly to be around S$2,155 per sq ft on a gross floor area basis,” it added.
At the industrial front, investment sales plunged by 46.2 percent to S$659.1 million in Q1 2015 from of S$1.2 billion in the preceding quarter.
“In terms of transaction value, the top two deals were acquisitions made by industrial Real Estate Investment Trusts (REIT) in March. Soilbuild Business Space REIT purchased 72 Loyang Way for S$97 million while Ascendas Real Estate Investment Trust (A-REIT) acquired The Kendall at 50 Science Park Road for SS$112.0 million,” said Savills.
However, only one transaction was recorded in the hospitality segment during the first quarter – the sale Capri by Fraser Changi City to a Frasers Centrepoint subsidiary for S$203.4 million. The price of the 313-room hybrid serviced apartment/hotel works out to S$649,840 per key.
Moving forward, property investment sales in Singapore is expected to remain subdued due to the existing cooling measures, amidst concerns over rising interest rates and lack of investment-grade assets, Savills projected.
“On a brighter note, the tender of the commercial site at Paya Lebar, which closed on 31st March with a top bid of S$1.67 billion, may revive interest in what otherwise looks to be a dull market in the second quarter of 2015,” it added.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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