Commercial & Industrial Property News Update

Singapore - SGD 9 billion Property Investment Sales Recorded In Q3


October 15, 2012

The latest Sales & Investment Briefing Report by Savills said that commercial property investment sales reached SGD 9 billion in the third quarter.


Singapore's commercial property investment market grew further in Q3 2012, with investment sales growing to reach SGD 9 billion. This was primarily driven by the success of an initial public offer (IPO) by Far East Hospitality Trust, said Savills in its latest Sales & Investment Briefing report.


"Boosted by the successful listing of Far East Hospitality Trust, the investment sales market in Q3 2012 recorded transaction values totalling SGD 9.0 billion," said Alan Cheong, Research Head at Savills Singapore.

Going forward, a fresh influx of liquidity is expected to enter Singapore's property market with the unveiling of QE3 by the US Federal Reserve, Cheong added.


As expected, the IPO by Far East Hospitality Trust exerted the greatest impact on the hospitality submarket, where transactions of investment sales leapt to SGD 2.7 billion from SGD 151 million in the second quarter. With four serviced residences and seven hotels, the portfolio of the trust has a combined worth of about SGD 2.1 billion.


However, for commercial investment sales excluding hospitality, there was a decline of 24.1% to SGD 1.8 billion for the third quarter. The office property market also experienced a slowdown in investment activity, prompting a rise in vacancy rates and a softening of rents.


There were only two block transactions for Q3 in the CBD. These were the sale of Robinson Point for SGD 284 million (equating to SGD 2,123 psf as per net lettable area) as well as the transfer of a 50% stake in 78 Shenton Way for SGD 304 million (SGD 1,682 psf) to Alpha Investment.


In the retail submarket, buying remained resilient, with suburban retail malls coming into the spotlight. Two deals worth a combined SGD 1.08 billion was completed during the quarter, namely the sale of a 50% stake in nex for SGD 825 million (SGD 2,679 psf) to Mercatus Co-operative Ltd, and the acquisition of an additional stake in Parkway Parade Partnership Limited for SGD 255 million (SGD 1,888 psf) by NTUC.


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