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Singapore’s total real estate investment sales increased 16 percent year-on-year to S$4.61 billion in Q3 2016, according to JLL Research’s preliminary estimates.
Mapletree Commercial Trust’s S$1.78 billion acquisition of the business park and office components of Mapletree Business City (Phase 1) emerged as the largest deal during the period under review.
Total sales for the first months of the year amounted to S$14.41 billion, up 6.3 percent from the S$14.49 billion recorded over the same period last year.
However, total sales value fell 41.2 percent quarter-on-quarter from the S$7.84 billion posted in Q2 2016. It has to be noted that the Q2 figure received a huge lift from the S$3.4 billion sale of Asia Square Tower 1. Excluding this deal, Q3 2016 sales value is 3.8 percent higher.
“This quarter-on-quarter fall in sales is expected as sizeable assets such as that of Asia Square Tower are limited in Singapore. The few that are available are tightly held by their owners,” said Greg Hyland, head of capital markets, Singapore, JLL.
JLL revealed that the mixed-development sector – which is solely made up of the Mapletree Business City (Phase 1) deal – accounted for 38 percent of the total investment sales. This effectively made the sector the second biggest contributor to investment sales in Q3 2016.
The retail sector accounted for nine percent of the Q3 investment sales, while the office and industrial sectors contributed four percent and two percent, respectively.
Hyland noted that the drop in sales of office buildings in Q3 2016 does not necessarily signify waning interest from investors.
“On the contrary, investors continue to eye Singapore’s office properties, particularly those located in the CBD. A number of deals are on the block and could potentially be sealed in the coming months,” he said.
“The triggering of the Central Boulevard GLS white site is a further testament to the continued robust investment demand for office properties.”
Looking ahead, Tay Huey Ying, head of research for JLL Singapore, expects the final lap of 2016 to “see the tender closing of the Central Boulevard GLS white site which we foresee to attract bids in excess of S$2 billion. Other deals potentially in the pipeline include the sale of Capital Square and 77 Robinson Road, just to name a few.”
With the sales tally to-date already at around S$15.41 billion, “barring unforeseen circumstances, there is a high likelihood that full-year property investment sales value could stage a rebound and hit the highest in three years, surpassing 2014 and 2015’s S$20.62 billion and S$20.35 billion, respectively,” added Tay.
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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