Property investment sales fall to 10-year low

http://www.businesstimes.com.sg/sub/...11140,00.html?

Published March 25, 2009

Property investment sales fall to 10-year low

Q1 2009 sales drop 56.4% from previous quarter and plunge 98% year-on-year

By ARTHUR SIM


PROPERTY investment sales have fallen to levels last seen in 1998, registering a 10-year low.

CB Richard Ellis says that total investment sales have so far amounted to $184.6 million in the first quarter of 2009. The last time quarterly investment sales were lower, was in Q1 1998 at $49.28 million, and in Q3 1998 at $110.62 million.

The Q1 2009 sales figures also represent a decline of 56.4 per cent from the previous quarter and a fall of 98 per cent compared to a year ago.

Sales from the residential sector accounted for the most number of transactions.

Total residential investment sales including Good Class Bungalow (GCB) sales have so far accounted for 51.5 per cent of the quarter's total investment sales or $95.1 million in transacted value. This was 60.7 per cent lower than the $241.79 million residential investment sales recorded in the last three months of 2008.

Interestingly, the sale of just three GCBs accounted for almost 20 per cent of total residential sales.

The GCBs, at 28A Olive Road, 39 Cornwall Gardens and 8 Queen Astrid Gardens, were sold for a combined total of $18.2 million with 8 Queen Astrid Garden sold for $11.4 million in February, some 12.3 per cent lower than the $13 million previously transacted some 19 months ago in July 2007.

Noting that prices have fallen at a relatively slower pace compared to the luxury non-landed segment, Douglas Wong, CBRE director, luxury homes residential services, said: 'Owners are still holding on despite the financial situation. And there are a lot of buyers waiting on the sidelines.'

CBRE does expect average GCB prices to fall 10 per cent in 2009.

While there were no collective sales in Q1 2009, Fragrance Properties bought a 49,969 square foot site in Pasir Panjang together with two units of strata-titled town houses of 2,680 sq ft each for a total acquisition cost of $25 million.

The commercial investment market accounted for 41.9 per cent of total investment sales in the quarter, or $77.3 million. The only major sale was for Le Mercier House at 65 Mohamed Sultan Road for $35.8 million or about $900 psf on 39,000 sq ft of gross floor area.

There was only one sale in the industrial sector - 29 Loyang Crescent, with a site area of 83,367 sq ft, which was sold in February for $6.2 million or $74 per square foot on land. This contributed to 3.4 per cent of total investment sales.

CBRE believes that the total investment sales for 2009 might eventually be a revisit of 1998 levels where the total annual quantum came to $1.35 billion.

CBRE executive director (investment properties) Jeremy Lake added: 'As the market corrects and price expectations close, transaction volumes will pick up again.'

http://www.straitstimes.com/Money/St...ry_354290.html

March 25, 2009 Wednesday

Property investment sales plummet 98%

Buyers and sellers are far apart in price expectations, says CBRE

By Joyce Teo, Property Correspondent


PROPERTY investment sales in Singapore have fallen off the cliff since the start of the year and could slip to levels not seen since the Asian financial crisis.

According to the latest figures from CB Richard Ellis (CBRE), sales so far this year total $184.6 million, down 98 per cent on the same period a year ago and 56.4 per cent lower than the last quarter of 2008.

For the full year, total investment sales could plummet to levels not seen for over 10 years, with buyers and sellers locked in a stalemate and far apart in terms of price expectations, the consultancy warned yesterday.

The only quarters that saw lower investment sales were the first quarter of 1998 - when they were just $49.28 million - and the third quarter of that same year - when they hit $110.62 million. So far this year, the market has witnessed isolated individual deals but there have been no public sales or collective sales.

Residential sector sales accounted for 51.5 per cent of total sales during the period in question.

Apart from $18.2 million worth of deals for three good-class bungalows, Fragrance Properties bought a freehold Pasir Panjang site for $25 million, with plans to develop it into a residential apartment building. CBRE forecasts that such development site sales will be rare this year because most developers are concentrating on their existing projects and are not looking for new sites.

There have been no minimum bid applications from developers for any of the Government land sale sites, it added.

In the commercial market, sales total $77.3 million so far this quarter, with the only major sale being the $35.8 million, or about $900 psf, deal for Le Mercier House in Mohamed Sultan Road.

There was only one transaction in the industrial sector - a Loyang Crescent site that sold for $6.2 million, or $74 psf.

The report suggests that total investment sales for this year might revisit 1998 levels when the total annual quantum was $1.35 billion.

'The lack of volume will continue to feature until such time when price expectations between buyers and sellers meet,' CBRE stated.

Real estate investment trusts are unlikely to make many new acquisitions this year as dividend yields have increased significantly and it would be extremely challenging to make purchases that are yield accretive.

[email protected]