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For the first half of 2020, investment sales fell 48.9% year-on-year to $6.14 billion – the worst since the Global Financial Crisis – as investors delay investments amid rising uncertainties.
Singapore saw real estate investment sales drop 43.4% quarter-on-quarter and 69.8% year-on-year to $2.22 billion in the second quarter of 2020, revealed Colliers International.
For the first half of 2020, investment sales fell 48.9% year-on-year to $6.14 billion – the worst since the Global Financial Crisis – as investors delay investments amid rising uncertainties.
Colliers Research noted that Q2 investment sales were dominated by the commercial and industrial sectors. The biggest commercial deals in Q2 include Alibaba’s acquisition of “a half stake in AXA Tower, valuing the property at $1.68 billion; and Shun Tak Holdings buying the remaining 30% stake it did not already own in TripleOne Somerset — the whole of which was valued at S$1.14 billion”.
Two large warehouses were sold during the quarter under review, one each to DWS and LOGOS, indicating growing confidence in the logistics property sector prospects.
“These transactions reflect the long-term attractiveness of Singapore to foreign investors. The most recent General Election results still show broad-based support for the government. Investors can be assured of policy continuity and business stability going forward,” said Tricia Song, Head of Research for Singapore at Colliers International.
Commercial investment sales slipped 1.2% quarter-on-quarter to $748.8 million in Q2, buoyed by the TripleOne Somerset, AXA Tower and 30 Raffles Place retail and banking units transactions.
Jerome Wright, Senior Director of Capital Markets and Investment Services at Colliers International, said commercial and mixed-use deals accounted for 72% of the total tally for Q2, as foreign investors acquired sizeable stakes within several Central Business District (CBD) properties.
Industrial investment sales, on the other hand, fell 69.9% quarter-on-quarter to $334.3 million. However, volumes in the first half of 2020 increased 30.5% year-on-year, as investors increasingly focused on warehouses, data centres and business parks.
In fact, 1H investment volumes was “anchored by two large logistics warehouses and one data centre deal in Q2, as well as Frasers Logistics and Industrial Trust (FLT)’s acquisition of Alexandra Technopark and Ho Bee Land’s tender for Biopolis Phase 6 site in Q1 2020”.
Looking ahead, Colliers Research expects Singapore investment sales to slightly recover in the second half of 2020, with the economy reopening, “for a 24% full-year decline”.