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Commercial real estate investment sales totalled S$4.6 billion in Q3 2019, an increase of 3.2 percent quarter-on-quarter (QOQ) and more than doubled year-on-year (YOY).
Investment demand for Singapore real estate continues to be resilient in Q3 2019 despite growing global uncertainties and macroeconomic headwinds, according to Colliers International’s latest quarterly research report.
According to Colliers Research, real estate investment sales amounted to S$11.2 billion for Q3 2019, representing a 53.7 percent rise from the previous quarter including the corresponding period last year.
“Amid unprecedented levels of uncertainty in the global environment, Singapore remains firmly on investors’ radar owing to its growth potential, stable government, and pro-business policies,” said Tricia Song, Colliers International head of research for Singapore.
“Therefore, we expect Singapore real estate – particularly commercial and hospitality assets – to continue to attract interest. Colliers Research projects that total investment sales could reach S$33.8 billion for the full year 2019 – on par with that of 2018,” she added.
The commercial sector led the way for investment sales growth, comprising 41 percent of the total volume in Q3 2019.
Commercial real estate investment sales totalled S$4.6 billion in Q3 2019, an increase of 3.2 percent quarter-on-quarter (QOQ) and more than doubled year-on-year (YOY). This was mainly due to deals for 313@Somerset, 71 Robinson Road and Duo.
These figures made the commercial tally in 2019’s first nine months amount to S$10.3 billion, a 174 percent increase YOY.
“There was strong demand for commercial (office and retail) properties in Q3, with increasing foreign interest. Given Singapore’s strong market fundamentals and the favourable interest rate environment, we should expect investors’ interest to remain elevated,” said Jerome Wright, Colliers International director of capital markets.
Hospitality deals in Q3, meanwhile, reached S$2.8 billion, more than 19 times YOY and a growth of 545 percent QOQ. This was brought about by sizeable transactions which included Crowne Plaza Changi Airport, Mandarin Orchard and Bay Hotel.
Colliers Research also noted that the S$2.8 billion worth of transaction in Q3 2019 was the highest figure recorded on a quarterly basis.
Taking in to account the strong sales in the first half of 2019, hospitality transactions in 9M2019 amounted to S$4.2 billion, larger than all previous full-year figures recorded by Colliers International since 2006.
“We believe the hospitality segment presents good prospects amid robust international visitor arrivals and generally healthy tourism outlook. Singapore continues to be an attractive destination and additional investments in the MICE and leisure sectors should attract both corporate and leisure travelers in the next three to five years,” said Song.
On the other hand, industrial investment sales in Q3 2019 rose 12 percent QOQ to S$681 million, mainly because of Keppel DC REIT’s acquisition of two data centres. The sales volume, however, was down by 41.2 percent on a YOY basis.
For the first nine months of 2019, the sales figure for industrial properties amounted to S$1.8 billion.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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