Singapore investment sales drop 55.1% in Q3
No transactions were completed in the public sector in Q3 since no site was sold under the Government Land Sales (GLS) Programme. However, the demand for investment properties in Singapore is expected to increase in the coming months as foreign investors remained keen to expand their operations here.
While investment activity for the third quarter of 2020 was characterised by signs of optimism, particularly in the commercial sector, Singapore saw investment sales decline 55.1% year-on-year to around $4.4 billion, revealed a Knight Frank report.
During the quarter, no transactions were completed in the public sector since no site was sold under the Government Land Sales (GLS) Programme.
Significant commercial deals, on the other hand, were prevalent. Leading the list was Frasers Property’s $550 million sale of a 50% stake in Northpoint City (South Wing) to TCC Group and Tuan Sing Holdings’ $500 million sale of Robinson Point.
“While there remains substantial interest for commercial properties, especially in the Central Business District (CBD) region with the potential of existing buildings tapping into the CBD Incentive Scheme, there is limited saleable stock available on the market,” noted the report.
And given Singapore’s status as a reputable regional hub, foreign investors remained keen on expanding their operations in the Republic.
“The likes of Alibaba acquiring 50% stake in AXA Tower earlier in May, and ByteDance looking to set up in Singapore, is just the beginning of the potential demand coming from China-based technology companies,” said Knight Frank.
With this, it expects interest in the acquisition and occupation of commercial properties by technology firms to increase in the coming years.
The industrial sector also registered an increase in investment sales during the period under review, posting a total of $406.6 million.
Notable deals include the $129.6 million sale of a warehouse at 7 Bulim Street to AIMS APAC REIT, and Equinix Singapore Pte. Ltd’s $125.0 million acquisition of Mapletree Industrial Trust’s business park development at 26A Ayer Rajah Crescent.
Meanwhile, Singapore outbound investment sales contracted 24.3% year-on-year to $2.8 billion in Q3 2020 from $3.7 billion over the same period last year, based on the Real Capital Analytics’ (RCA) data.
“Key deals included the acquisition of a residential development site in Shanghai by a joint venture between Yanlord Land Group and Huafa Industrial Co. Ltd Zhuhai for approximately $0.9 billion (RMB4.5 billion) as well as the purchase of Pinnacle Office Park in Sydney, Australia, by Keppel REIT for $303.3 million (A$306.0 million).”
Looking ahead, Knight Frank expects the growing trend of foreign companies setting up “regional bases in the city to continue into next year, with Asian technology firms leading the way”.
“This is partly attributed to the government’s ability to mitigate the nation’s economy against crisis situations,” it said.
“Thus, demand for investment properties in Singapore is expected to increase in the coming months, as investors are keen to continue leveraging on available opportunities as well as the low interest rate environment.”
Source: CommercialGuru, 12 Oct 2020