The value of property investment deals during the first three months of the year fell 8.5 percent quarter-on-quarter to $2.64 billion, after three straight quarters of growth.
Based on figures gathered by DTZ Research, investments in the industrial segment stood out in Q1 2010 compared to last year, when residential sales dominated the investment market.
Industrial property investments accounted for 38.5 percent or $1.02 billion of the total value of transactions. The bulk of this was attributed to the sale and leaseback deals made by soon-to-be-listed Cache Logistics Trust with the owners of six industrial properties. These deals amounted to some $713.2 million in all.
Residential investment transactions came in second at $879.2 million. About 94 percent of it was due to the sale of sites in the government land sales (GLS) programme. Private investment sales of residential property were markedly crowded out. DTZ said that with the GLS programme anticipated to be the key source of land supply for residential development, that trend is expected to continue until the second quarter of 2010.
Investment by local firms continued to dominate the market due to the acquisitions made by local property developers and real estate investment trusts (REITs). However, DTZ said that there could be more foreign purchasers in the coming quarters.
Ongoing economic recovery is also anticipated to spur an increase in this year’s investment activity.
“Besides the purchase of land for residential development, acquisitions by REITs are resuming. More office buildings are also expected to be transacted for redevelopment into residential use for owner occupation or rental yield,” said Shaun Poh, senior director for investment advisory services and auction.
Figures released by DTZ comprise transactions that are over $5 million each. They exclude $1.75 billion of deals in single residential units, or lots that cannot be subdivided or redeveloped into more than one plot, as well as deals which are considered as interested person party transactions.