Investment sales in the Singapore property market have reached $11.26 billion so far this year, exceeding the $10.62 billion recorded for the whole of 2009, according to CB Richard Ellis.
The property consultancy firm said the figure is likely to exceed its initial estimate of $15 billion and possibly hit the $17.9 billion mark achieved in 2008.
This great momentum comes after strong interest for residential projects have been recorded, as well as more buyers snapping up commercial investment properties, said Jeremy Lake, executive director (investment properties) at CBRE.
Property investment sales mark the confidence of major players of the mid- to long-term prospects in the sector. The firm defines investment sales as transactions with at least $5 million worth of value, inclusive of apartments and landed residential property, as well as private and government sales of land and building, both en bloc and strata. It also includes change of property ownership through share sales.
The star performer of the investment sales market is the residential sector, accounting for almost $7.7 billion or 68 percent of the total YTD H1 tally. The en bloc sales market also actively participated in the second quarter, with six properties worth $278.9 million in total being sold for residential redevelopment. The most outstanding transaction was Pender Court, which was sold for $95 million.
“In the months ahead, there should be a steady flow of collective sales projects and private land sites being transacted, typically of land parcel sizes less than 100,000 sq ft,” said Mr. Lake.
Karamjit Singh, managing director of Credo Real Estate, also predicted more successful en bloc sales in the second half of 2010.
“While the government will continue to release 99-year leasehold land in the suburbs, there’s a shortage of sites in the mid-prime and prime locations, especially large freehold sites. This can be met by en bloc sales – as long as owners’ expectations are set realistically,” he said.
Mr. Lake stressed that “a significant new entrant to real estate in Singapore are developers from China who have been active in acquiring sites.”
It started with the $283-million purchase of China Sonangol Land for a freehold former Parisian site from OUE in October, followed by Metallurgical Corporation of China (MCC Group)’s acquisition of two 99-year leasehold private residential sites this year, and a 99-year leasehold condo plot near the Potong Pasir MRT Station this month for $607 psf ppr.
The Good Class Bungalow (GCB) market also saw robust sales, with 26 properties being sold at $571 million from April to June.
The figure for H1 2010 has crossed the $1 billion mark, with notable transactions for Q2 including 20B Nassim Road, which was sold for $43.53 million ($1,800 psf), 4 Ewart Park for $39.8 million ($1,045 psf), 14 Bishopsgate for $36.3 million ($1,120 psf on land area) and 1 Brizay Park for $35 million ($941 psf).