Investment sales in Singapore seen matching last year's record high

The Business Times - 14 Aug
Real estate investment sales in Singapore is expected to match last year's record of S$40 billion, thanks to bumper sales already clocked in for the first half this year.
 
This is according to a latest quarterly report by Colliers International, which tracked all private property sales transacted at S$5 million and above, as well as successfully awarded state land tenders across all property segments.
 
The latest projection however, has been revised downwards from an earlier forecast of S$46 billion, following the introduction of property cooling measures in July.
 
Real estate investment sales grew 19 per cent year-on-year (y-o-y) to S$12.2 billion in Q2, led mainly by residential sales which accounted for 67 per cent of total investment sales during the quarter.
 
Tricia Song, Head of Research:
In view of the latest cooling measures which would raise taxes for investors and developers in the residential sector, we foresee a slowdown for the residential en bloc market in the near-term. However, commercial and industrial real estate could pick up the slack in the second half of the year, on the back of healthy commercial properties deal pipelines and rising interest from real estate investment trusts (REITs) and institutional investors for industrial assets.
 
REITs have remained active in reconstituting their portfolio, divesting their non-core assets and recycling proceeds into potentially higher growth ones. As industrial rents and prices are expected to bottom out and stabilise, we notice a growing institutional interest to acquire more industrial spaces, especially in niche sectors such as data centres, hi-spec facilities and modern ramp-up logistics buildings. As such, we foresee a pick-up in interest from institutional investors for this class of asset in the remaining of 2018. Click here to view the report.
 

Tender for exec condo site at Anchorvale Crescent launched

The Business Times - 11 Aug
The tender for an executive condominium (EC) site along Anchorvale Crescent in Sengkang has been launched from the reserve list of the Government Land Sales (GLS) Programme.
 
Its tender was triggered last month with a successful application by an unnamed developer committed to a bid of at least S$255 million for the 99-year leasehold site.
 
The Housing & Development Board (HDB), acting as state land sales agent for this site, said on Friday that any tender below that price will not be accepted.
 
The minimum price works out to nearly S$461 per square foot per plot ratio (psf ppr).
 
Tricia Song, Head of Research:
We expect ECs to still be popular as it caters to the “sandwiched” class and prices are affordable at/ or below SGD1,000psf. The site is between two EC projects sold by developers which have transacted around SGD800-1,000 psf over the past 12 months.  Recently, Prive - the first EC in Punggol - has also transacted at around SGD900-1,000 psf on the secondary market, having fulfilled the five-year minimum occupation period for ECs. We expect this site to garner a top bid of SGD550 psf per plot ratio or SGD300 million, and we could see 8-12 bidders vying for the site. The last EC land tender at Sumang Walk saw 17 bidders and a top bid of SGD583psf ppr. 
 

Latest cooling measures to bite harder than earlier ones: CDL

The Business Times - 09 Aug
The group chief executive of City Developments Ltd (CDL), Sherman Kwek, says the impact of the property cooling measures rolled out last month will be rather different from that in the 2010-to-early-2013 period.
 
Despite successive rounds of cooling measures being rolled out during those years, private home buyers managed to get round the negativity and continue pushing on, he recalled.
 
Developers sold about 16,000 private homes in each of the years 2010 and 2011 before the figure peaked at 22,197 units in 2012. These figures exclude executive condos (ECs), a public-private housing hybrid.
 
Tricia Song, Head of Research:
We believe this round of measures will first reduce transaction volumes as buyers adopt a “wait-and-see” attitude. We feel that there is not a lot of room for prices to come down and the recent recovery had been supported by a better economic outlook as well as favorable demand-supply dynamics. However, the measures will probably prevent prices from a continued surge. Hence, barring an external shock, we expect prices to hold relatively flat for the rest of the year. From the recent launch take-up, there is still demand for properties that are well-located and priced realistically.