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Commercial sector a hot target for investors in Q4 2015

PropertyGuru

Investment volumes in the Singapore property market soared to S$5.96 billion in Q4 2015, up 39.3 percent from Q4 2014, showed a Colliers International report.

This brought the full-year figure to S$20.32 billion, down by only 3.8 percent from 2014s S$21.12 billion.

Notably, the commercial sector emerged as a hot target for investors in Q4 2015, with S$3.37 billion worth of assets transacted.

According to the report, the single, most sizeable commercial transaction in terms of absolute sale quantum involved three office assets owned by CDL the Manulife Centre which was sold for S$487.50 million, Central Mall office tower which went for S$218.00 million and 7&9 Tampines Grande which was sold for S$366.00 million.

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Another notable transaction was CPF Boards tender sale of the CPF Building to Southernwood Property, a fully owned unit of Southernwood Holding, which is also a fully owned unit of Ascendas Land (Singapore).

Completed in the 1970s, the 46-storey office building received a top bid of S$550 million (inclusive of an estimated differential premium of S$75.50 million), which works out to a unit land price of S$1,032 per sq ft ppr.

Colliers noted that the strata-titled en bloc commercial sales market was quiet in Q4 2015, with the biggest strata office transaction being the S$101.60 million sale by Maybank Kim Eng Properties of three floors at Suntec Tower Two to Suntec Real Estate Investment Trust under a sale and leaseback arrangement.

Meanwhile, sentiment among investors and developers for industrial space has waned significantly.

In fact, industrial transaction volumes in Q4 2015 fell 37.9 percent to S$365.52 million from S$588.36 million in Q3 2015.

The drop in investment values was mainly attributed to a shortage of big-ticket industrial deals above the S$100.00 million mark in both the private and public segments during the quarter.

Looking ahead, Colliers expect this years transactional activity to be modest.

Investment volumes in 2016 will be similar to those seen in 2015 and is forecast to be around S$18.00 billion to S$20.00 billion, it said.

Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories emailnikki@propertyguru.com.sg

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