Property investment sales hit S$4 billion in the third quarter, down 55 percent quarter-on-quarter, the lowest level since Q1 2010, according to a report published by DTZ Research.
DTZ attributed this mainly to the decline in the stock market and global uncertainties.
The bulk of investment sales came from the industrial and residential segments, which comprised almost 75 percent of all investment sales. This was primarily attributed to the sale of residential sites under the Government Land Sales (GLS) programme and the second phase of Jurong Town Corporation (JTC)’s divestment of its industrial properties.
The government’s sales amounted to S$2.2 billion, accounting for 55.6 percent of total investment sales in Q3 2011.
Investments in the office market declined by over 60 percent in Q3 2011 to S$668.2 million.
Meanwhile, investor sentiment has become more cautious due to the declining global outlook.
The GLS exercise obtained fewer offers, while the winning bids were either lower than the seller’s expectations or lower than those of nearby sites sold earlier in the year.
In addition, collective sales with high asking prices cannot find buyers and various office buildings in the central business district (CBD) are now up for sale.
“In a reflection of the more cautious sentiment in the market, investment deals were smaller in value in Q3 2011. Other than the JTC portfolio and some residential GLS sites, the rest of the deals were below S$200 million. The average deal size of S$62.8 million in Q3 2011 was about 21 percent lower than that in Q2 2011,” said Chua Chor Hoon, Head of DTZ SEA Research.
“There were 14 deals of over S$100 million each in Q3 2011, almost half of the previous quarter. Investment sales were dominated by local buyers who are more familiar with the market, as foreign interest declined from 16.3 percent in Q2 2011 to only 8.0 percent of all investment sales in Q3 2011.”
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