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Total property investment sales in Singapore plunged by 52 percent on quarter to S$2.37 billion in Q1 2016 due to a dearth of big-ticket deals in the private sector, according to the latest report from Cushman & Wakefield.
During the first quarter, investment volume in the private sector only reached S$1.14 billion, while the public sector accounted for the bulk of investments at S$1.23 billion. This is a reversal of the situation in the preceding quarters, when the former made up the bulk of the transactions.
In particular, property investment sales in the commercial sector slumped by 79 percent to S$576.7 million on a quarterly basis.
The largest deals in this segment include Alpha Investment Partners’ acquisition of 78 Shenton Way by purchasing the remaining 50 percent stake it did not previously own in the office building for S$301.5 million from Commerz Real. In 2012, it bought the initial half-stake from the same seller for S$304 million.
Scor Reinsurance also picked up multiple floors at the upcoming SBF Center for S$85.5 million from developer Far East Organization.
At the industrial segment, investment volume fell sharply by 77 percent to S$134.7 million as compared to the level seen in the last quarter of 2015.
During the period under review, a Nanshan Group-led consortium paid S$51.1 million to acquire Harper Kitchen, a freehold industrial property in Tai Seng which the buyer plans to redevelop to maximize the unused gross floor area.
Moving forward, property investment sales in the city-state are expected to remain weak in the upcoming quarters as buyers shun pricey real estate amidst the uncertain global economic outlook.
“It appears that investors’ preference is shifting towards properties with more affordable quantum, as almost all private transactions during the first quarter had price tags of less than S$100 million,” the property consultancy 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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