Preliminary Q2 property investment sales volume anchoredb y heavy weight deals

Singapore 28 June 2017 - Singapore’s investment property market put in a very strong showing in the second quarter of 2017. Preliminary investment property sales volume increased by 76.2 per cent quarter on quarter to S$9.019 billion, surpassing the previous high of S$8.014 billion in Q4 2016. The largest deal for the quarter which bolstered investment sales was Mercatus Cooperative’s purchase of Jurong Point for $2.199 bn. This led to a higher domestic investment volume of $6.231 bn in this quarter, an increase of more than 3.5 times quarter on quarter. The residential collective sales market also saw some momentum with four transactions by domestic players, amounting to S$1.507 billion. This is the highest investment volume of collective sales amassed since Q2 2011 exceeding the total of three collective sales that were concluded last year. The largest private collective sale transaction in Q2 2017 was the sale of Eunosville to MCL Land for $765.78 million.

“Under tight residential supply conditions from the GLS scheme, going the private collective sales route is an alternative way to shore up land banks. Not surprisingly, the recent successful sales have kick-started the collective sale process for a number of projects” said Desmond Sim, Head, CBRE Research, Singapore and South East Asia.

Foreign investors made up 22.5 per cent of the sales tally in the second quarter of 2017, in a mix of public and private development sites by Malaysian groups and property companies from China in addition to Hong Kong. Awarded government land sale sites which exceeded $1 bn include the land parcel along Upper Serangoon Road ($1.132 bn) and land parcel along Stirling Road ($1.003 bn). Bidding participation by foreign players were high for both sites.

Amongst foreign investors, Hong Kong investors were dominant players as they were involved in joint ventures or direct acquisitions of real estate worth $1.670 bn in the last three months from April to June 2017.

Jeremy Lake, Executive Director, Capital Markets said “Sentiment is very positive now with both developers and investors looking forward to a recovery in the office and residential markets. The turnaround has been very dramatic and noticeable over the last six months and the market place is quite crowded with multiple buyers looking at most assets, assuming they are priced correctly. We expect the strong interest from HK based investors and developers to continue for the foreseeable future”.

Transactions involving Hong Kong investors

Date	Property	Sector	Price($ mil)	Buyer	Seller
Jun 17	Land Parcel along Lorong 1 Realty Park	Residential	75.8	Fantasia Investment (Singapore) Pte Ltd, Sun Renwang and Yang Xinping	URA
May 17	Land Parcel along Stirling Road	Residential	1,002.72	Logan Property (Singapore) Company Pte Ltd, Nanshan Group Singapore Co, Pte Ltd	URA
May 17	One George St (50% stake)	Office	591.6	OGS (II) Limited	URA

“With current capital controls curbing the Chinese capital market, it is not surprising that some of this Chinese capital has been deployed to other markets via the Hong Kong route.” said Desmond Sim, Head, CBRE Research, Singapore and South East Asia.

At the half-way point, Singapore’s investment sales currently stand at $14.139 bn. We expect investment sales to remain healthy for the rest of the year.

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Preliminary Q2 property investment sales volume anchoredb y heavy weight deals

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