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Real estate investments in the Republic fell by 8 percent to S$3.8 billion in Q2 2015 compared to the previous quarter, according to a report from DTZ.
The decline is mainly attributed to a 69 percent slump in private sector transactions. However, DTZ said the drop was cushioned by Government Land Sales (GLS) during the period that surged by 1.7 times to S$2.74 billion.
“The sale of the land parcel at Paya Lebar land via the GLS programme was the largest real estate investment deal concluded in Q2 2015,” said the consultancy.
“The site, which was awarded to Lend Lease and Abu Dhabi Investment Authority for a winning bid of S$1.67 billion, can generate about 1.78 million sq ft of gross floor area. Of which, at least 969,000 sq ft must be set aside for office use, with the rest for commercial, retail and residential use,” it added.
Meanwhile, investment volume in the private sector declined sharply on a quarterly basis. For instance, transactions in the office segment dived to S$182.5 million in Q2 2015 from S$1.28 billion in the previous quarter, while that in the industrial market plummeted by 56 percent to S$288.2 million.
Similarly, real estate investment trusts only injected S$97 million in the local property industry during the period under review, about S$510 million less than the figure seen in the first quarter.
Notable property transactions from the private sector include Suntec REIT’s sale of Park Mall for S$411.8 million. Another notable transaction is DBS Group Holdings’ S$150 million purchase of a 30 percent stake in DBS China Square Limited, which owns the PwC Building.
Looking ahead, property investment in Singapore is expected to pick up in 2H 2015 with the completion of OUE C-REIT’s proposed acquisition of a stake in One Raffles Place.
Commercial buildings on the market such as CPF building, Capital Square, Asia Square Tower 1 and the Scorpio East Building on Tai Seng Avenue, have also attracted the interest of investors.
“Singapore real estate continues to appeal to global investors, given Singapore’s long-term stability and good governance,” said Swee Shou Fern, DTZ’s Senior Director of Investment Advisory Services
“However, the time required to conclude a deal is longer as the price gap between buyers and sellers remained wide,” she 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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