The first quarter of the year has seen total real estate investment sales drop to S$4 billion, 49 percent lower than the previous quarter and 53 percent less than the whole of 2011.
According to a report by CBRE Research, weaker sentiment in the global capital markets, along with recent cooling measures have taken their toll on private investment sales, although public tenders of development sites remained healthy.
The report also highlighted that the additional buyer’s stamp duty (ABSD) has likely impacted high-end residential investment sales. In contrast, mass-market home sales were robust, encouraging a more active participation from developers in land tenders.
Meanwhile, developers from Malaysia and China have been aggressive in their price bids. A total of six en-bloc deals worth S$454.6 million have been signed since the year started.
In the office investment sector, turnover was at S$581.4 million, down 76 percent from the previous quarter. Despite lesser occupier demand, some quality en bloc buildings managed to draw interest particularly from Asian investors.
Strata commercial space also remained strong, especially among properties priced from S$1 million to S$5 million following the switch in focus from the residential to commercial sector.
“Strata-titled office units remained highly sought-after by private companies, high-net worth individuals and other investors switching from the residential sector following the introduction of cooling measures,” said Petra Blazkova, Head of CBRE Research for Singapore and South East Asia.
“Financing for strata-titled deals remains easy to obtain and this sector will continue to witness plenty of activity this year.”
Amidst a generally muted climate within the quarter, Asian investors are expected to be “on the lookout for quality assets. Among other sectors, retail assets remain attractive to investors but are tightly held by their existing owners whilst strata-titled industrial units continue to be the subject of strong interest,” she added.
“Private Asian investors from Malaysia, Indonesia, Taiwan and Singapore will stay active and indeed account for the bulk of demand in the market at present. Many have sufficient funds to complete sizable deals,” noted the report.
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