After a sharp rebound in the first quarter of 2021, Singapore’s property investment volume is set to recapture pre-COVID levels in the coming periods, according to research by Colliers.
The global consultancy said total investment sales in the first quarter rose 25.8 percent from the previous quarter and 47.9 percent from a year earlier to S$3.8 billion ($2.9 billion) as sentiment improved amid the reopening of the city-state’s economy.
In the commercial segment, investment sales surged 377 percent from the previous quarter and 43.8 percent from a year earlier to S$1.1 billion. All calculations exclude mergers and government land sales, Colliers said.
“Mobility and economic activities going forward should further increase due to more easing measures introduced to allow 75 percent of employees at the workplace at any one time from 5 April onwards,” said Tricia Song, head of research at Colliers Singapore.
Big Deals Back
The year’s biggest office deal so far was closed in January with Allianz Real Estate’s acquisition of a half-stake in OUE Bayfront on behalf of a fund invested in by Allianz Group and South Korea’s National Pension Service at a price of S$634 million.
The 399,846 square foot (37,147 square metre) property overlooks Marina Bay along Collyer Quay and is currently 99.9 percent occupied, according to Allianz, which paid S$3,170 per square foot of net lettable area.
As the first quarter drew to a close, a joint venture backed by Australian property firm Lendlease purchased a pair of ageing buildings in the Paya Lebar area for S$150 million, with plans to build a sustainable commercial project on the site.
Lendlease undertook the project through a joint trust set up with Singaporean security firm Certis, agreeing to buy the property at 20 Jalan Afifi, known as Certis Cisco Centre, for S$384 per square foot of buildable gross floor area.
Jerome Wright, senior director of capital markets and investment services at Colliers Singapore, said commercial assets remain attractive as more tech giants set up local bases to take advantage of the country’s safe-haven status, pro-business environment and economic growth.
Snacking on Luxe Condos
Colliers said the absence of government land sales in the first quarter resulted in lower residential investment sales. Excluding prior-year government land sales, residential investment volume in the quarter grew by 12.9 percent from the previous quarter and 154 percent from a year earlier to S$1.6 billion.
The largest residential transaction in the quarter was the Taiwanese Tsai family’s purchase of all 20 units at Swire’s recently completed Eden project at 2 Draycott Park.
The S$293 million deal for the freehold luxury development involved three tranches, with Tsai Eng-Meng, chairman of Hong Kong-listed snack food maker Want Want China Holdings, grabbing one apartment for himself, the Business Times reported. His son Shao Chung, who is also an executive director of the company, picked up 18 units in one deal, as well as the remaining unit in a separate transaction.
In the industrial sector, first-quarter investment sales jumped 141 percent from the previous three months to S$976 million, boosted by the establishment of the 14-property, S$469 million Boustead Industrial Fund. Boston-based fund manager AEW also contributed to the industrial total with its S$142 million purchase of the Admirax building in Woodlands from asset management giant BlackRock.
The quarter’s biggest retail transaction, meanwhile, was Frasers Centrepoint Trust’s March sale of YewTee Point mall in western Singapore for S$220 million, the latest in a string of divestments for the SGX-listed REIT.
The buyer of the suburban mall was undisclosed but is understood to be a fund managed by DWS, an asset management division of Germany’s Deutsche Bank.