Singapore hot on commercial investment scene: report

by Cheryl Tay

While the Eurozone debt crisis remains a concern, buying momentum across major property investment markets in the Asia Pacific region (APAC) remained vibrant in Q3 2012, revealed a report by CBRE Research.

In Singapore, investor confidence in commercial properties continued to grow despite a weak economy. A total of S$5.2 billion worth of commercial investment properties (excluding development sites) changed hands in Q3 — the largest quarterly volume since Q4 2010.

CBRE Research defines these investment properties as deals valued at a minimum of S$10 million.

Interestingly, acquisitions in Q3 were dominated by local players, including Sun Venture, Alpha Investment Partners and NTUC Income Co-operative, which have actively bought office and retail assets.

On the other hand, S-Reits — notably Cambridge Industrial Trust — dominated acquisitions in the industrial segment, while several developers bought retail, office and mixed-use properties during H1 2012, namely McDonald's Place, KeyPoint and Tower 15.

To-date, developers and property companies remain the top buyers of commercial real estate, followed by Reits and institutional-type funds/players.

"Looking ahead, we expect the retail and hospitality sectors to gain greater favour among investors given the vibrancy of Singapore's tourism market while strata office and industrial assets would continue to do well," said Petra Blazkova, Director, Head of CBRE Research, Singapore and Southeast Asia.

"The third round of Quantitative Easing (QE3) in the US could mean more funds flowing into the S-REITs which could spur commercial investment sales, both in Singapore and in the Asia Pacific region," she added.

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