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The property investment sales volume in Singapore slowed by 59 percent quarter-on-quarter to $3.17 billion during the fourth quarter of 2018, according to preliminary data from CBRE.
On an annual basis, the 2018 volume eased 12.5 percent year-on-year to $31.4 billion.
This comes as the recent property cooling measures resulted in muted activity within the residential land sales segment. For instance, residential collective sales activity plunged to just three deals amounting to $484.08 million in H2 2018 from 31 deals at $9.69 billion in H1 2018.
But despite the drop in volume, the office sector continued to attract new foreign investors.
In fact, the city-state remained a favoured investment destination this year. The PWC-ULI Emerging Trends in Real Estate Asia Pacific 2019 survey revealed that Singapore rose one place to the second spot in terms of investment prospects.
“Underpinned by strong rental growth in the occupier market, the office sector continues to gather pace with steady investor interest in office buildings. We noted several new investors making their foray into the Singapore office market this quarter,” said Desmond Sim, CBRE head of research for Singapore and Southeast Asia.
These included the acquisition of a 20 percent stake by Allianz Real Estate in Ocean Financial Centre, the 25 percent stake by Kenedix in Capital Square and the purchase of Manulife Centre by a ARA-Chelsfield joint venture. PGIM Real Estate also led the acquisition of 78 Shenton Way.
Hotels are also back in favour, said CBRE.
Given the growing number of international visitors and increasing demand for hotel rooms, URA revised its approach on development applications for sites not zoned or permitted for hotel use. With this, more developers purchased sites from the private market to convert them into hotel use as only a few hotel sites were made available for sale via the GLS programme.
These included the $276.2 million purchase by Worldwide Hotels of Golden Wall Centre, the $131.1 million acquisition by Fragrance Group of Waterloo Apartments, and Darby Park Executive Suites’ $92.71 million sale to Royal Group Holdings.
“Singapore remains largely a place where investors are motivated by the potential capital appreciation to achieve their target returns. Fundamentals in Singapore’s investment market remain compelling, and it will continue to garner attention from foreign investors,” said Jeremy Lake, CBRE’s managing director of capital markets.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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