Based on a new report, the large volume of good class bungalow (GCB) boosted the growth of the investment sales market during the third quarter of the year.
CB Richard Ellis (CBRE) said in report yesterday that as far as this quarter, the total investment sales amounted to $3.28 billion, a growth of 71 percent from last quarter.
In June, the total sales by the end of the year were approximated by the property firm to exceed $2 billion. With the escalating growth in the market, CBRE raised its forecast for the total investment sales to as much as $7.5 billion for the whole fiscal year of 2009.
The residential investment sales during the third quarter were mainly composed of the transaction volume. The sales for residential investment, which included the sales for GCB, accounted for 67 percent or $2.2 billion in transacted value of the total investment sales during the quarter. Compared to the recorded residential investment sales of $1.2 billion in the second quarter, the present figure was higher by 92 percent.
With 35 sales in GCB from July to September, amounting to $535 million, one-fourth of the total residential investment sales in the third quarter were made up of GCB sales. Some of the GCBs were sold above $1,000 per sq ft of land, including the sale of 42 Daley Road, 6 Leadon Park for $19.4 million and 12 Bishops gate for $19.0 million each.
Part of the volume in the third quarter for property investment sales was contributed by the programme of government land sales (GLS). During the quarter, three residential sites, a hotel site and two industrial sites were awarded from the programme of GLS.
The comeback of investors purchasing bulk units in residential projects was seen in the present quarter. A group, which Tony Tan of former Parkway Holdings led, purchased at Hilltops condominium around 18 apartments for $48.2 million, while an anonymous buyer bought for $65 million the 21 flats at Sui Generis.
A sum of $261.4 million in office investment market was recorded in transactions, which represented 8 percent of the total sales of investment.
“Although buyers are still cautious on big deals above $200 million, buyers are much more optimistic than in the first quarter of the year when sentiment was poor and economic difficulties loomed large. The credit market has improved and financing is available,” explained CBRE investment property Executive Director Jeremy Lake.
The strong volume in the residential market transactions also signify that developers are watching out for new sites. In view of these upbeat signs, the total investment sales expected in 2009 can reach $7.5 billion. Mr. Lake also affirmed, “Though this total is lower than the $18 billion recorded in 2008, it is significantly higher than what was originally anticipated.”