Property investment sales down 10.9% in Q2: Colliers

Singapore's property investment sales market posted a lacklustre performance in Q2 2014 due to the lack of impetus to sustain the upturn during the preceding quarter, according to a latest report by Colliers International.

On a quarterly basis, total investment sales fell 10.9 percent to S$4.98 billion in Q2, after rebounding 26.6 percent to S$5.59 billion in Q1.

Colliers noted that "the falter in sales momentum resulted in the shrinking of total investment sales value tallied for 1H 2014 by 43.6 percent to S$10.57 billion, from the S$18.74 billion concluded in the second half of 2013."

Nonetheless, the fast-returning investors' interests in office properties ñ given that the sector is on a firm recovery path ñ saw commercial investment sales climb 26.2 percent quarter-on-quarter to S$2.29 billion in Q2. This helped to cushion the fall in the overall investment sales value record in Q2.

Notably, four big-ticket deals worth above S$100.00 million each were concluded in the commercial sector during the quarter, three of which are situated on Cecil Street - a prime office location in the Central Business District.

Aside from these four deals, the commercial sector also witnessed the S$65.00 million sale of a three-storey Housing and Development Board (HDB) commercial property at Tampines Central to Sheng Siong Group.

"An entire strata-titled floor on the 14th storey of Samsung Hub was also acquired by a mainland Chinese company from Arch Capital Management, a Hong Kong-based private equity real estate firm linked to Ayala Group of the Philippines, for S$39.72 million or S$3,030 per sq ft, over its strata-titled floor area," said the report, noting that the 30-storey strata-titled office building has been popular among investors due to its rare leasehold tenure of 999 years and its prime location near the Raffles Place MRT Station.

Over at the public sector, a 99-year leasehold commercial Government Land Sales (GLS) site on Woodlands Avenue 5/Woodlands Square was awarded to a consortium comprising Far East Organization, Tannery Holdings and Sekisui House for S$634.00 million or S$906 per sq ft per plot ratio.

As the first commercial site for predominantly office use in Woodlands, the 199,873-sq ft site received healthy interest from eight bidders - indicating that the contenders are likely to be seeking first-mover advantage to leverage the growth story of the Woodlands Regional Centre since the site is expected to serve as the catalyst to kick-start the development of the Woodlands Regional Centre.

Notably, the award of the site was the most sizeable investment sale during the quarter in terms of quantum value.

Overall, the commercial sector accounted for majority or 46.0 percent of the S$4.98 billion closed in Q2 2014, while the residential and industrial sector contributed 39.4 percent (S$1.96 billion) and 13.3 percent (S$660.67 million), respectively.

Image Source: Wikimedia Commons, user Merlion444



Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this and other stories, email nikki@propertyguru.com.sg



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