Property investment sales for this quarter so far have plunged to a two-year low of about S$3.4 billion as of 12 March 2012, but Q1 figures could still rise to around S$3.8 billion, according to Savills Singapore.
The 12 March tally is notably 57 percent lower than Q4 2011’s S$7.7 billion and 60 percent down from the S$8.4 billion recorded in Q1 2011.
Savills said the decline of investment sales may be attributed to weaker market sentiment backed by uncertainty in the global economy in addition to the rules for selling industrial development sites under the GLS (Government Land Sales) Programme and the impact of recent cooling measures such as the ABSD (additional buyer’s stamp duty).
Investment sales mirror the major property players’ confidence towards the sector’s mid- to long-term prospects. These are defined as deals of at least S$10 million but also include residential collective sales below the amount, sales of GLS sites, and acquisitions by REITs (real estate investment trusts), according to Savills.
Steven Ming, Executive Director (Investment Sales) at Savills, still expects a healthy investment sales market in the near term, as players become cautious amid the macroeconomic volatility.
“Investors keen on Asia will not ignore Singapore, given its safe and transparent markets,” said Ming, adding that 2012 could be divided in two halves. The first half could see tepid investment sales led mostly by GLS, while H2 may see more private deals as the bid-ask gap closes if global macroeconomic stability improves.
The year could end with S$20 billion to S$23 billion of investment sales, down from last year’s S$29.5 billion and S$31.4 billion for 2010, noted Ming.
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