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Total property investment sales in Singapore surged by 65.7 percent to S$6.02 billion in Q2 2015 from S$3.63 billion in the previous quarter, according to a report from Savills.
This pushed the figure for the first half of the year to S$9.65 billion, up 5.7 percent from the S$9.13 billion seen in 2H 2014 and 10.8 percent higher than the S$8.71 billion recorded in the same period last year.
The commercial sector accounted for about 65.78 percent of the overall investment sales for the quarter, while the residential segment merely clinched a 26.91 percent share with transaction volume at S$1.62 billion.
“With S$3.96 billion worth of properties transacted in Q2, the commercial sector was clearly the best performer, registering a near three-fold increase from the S$1.35 billion of the previous quarter,” said Savills.
Major transactions during the period include the sale of a 3.9ha mixed-use site in Paya Lebar Road/Sims Avenue via the Government Land Sales (GLS) programme for S$1.67 billion to a joint venture between Lend Lease and sovereign wealth fund Abu Dhabi Investment Authority.
Another was OUE Commercial REIT’s acquisition of a 61.16 percent stake in One Raffles Place, which consists of two Grade A office blocks and a shopping mall, for S$1.29 billion.
Transaction volume in the commercial sector was also boosted by Suntec REIT’s sale of Park Mall to Park Mall Pte Ltd for S$411.8 million, while Alpha Investment Partners sold a 14-storey office in the CBD for S$240 million.
CapitaLand also divested of 30 percent stake in PWC building to DBS Group for S$201.9 million. Upon completion of the deal, the latter will take full ownership of the 28-storey office building at Cross Street.
On the industrial front, property investment sales in Q2 declined by 33 percent to S$441.8 million on a quarterly basis, making up only 7.3 percent of the total transaction volume.
The largest deal in this segment was BlackStone’s sale of StarHub Green at Ubi Avenue 1 for about S$260 million to Basil Property Trust, a private property fund overseen by Singapore-based AEP Investment Management.
Amidst the sluggish residential market, the commercial segment could drive investment sales in 2H 2015 should buyers pounce on properties currently available on the market like the CPF Building and Asia Square Tower 1. Keppel Land’s 50 percent stake in Capital Square is also up for grabs.
“Although weak economic conditions could retard investment activity in the second half of the year, the sale of large ticket assets which are now on the market, could propel total investment sales value to the higher end of our S$17 billion to S$20 billion forecast,” said Alan Cheong, Senior Director at Savills Research.
Image: One Raffles Place
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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