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Thread: Investment sales of property reach $28.7b this year

  1. #1
    Join Date
    Oct 2011

    Default Investment sales of property reach $28.7b this year

    Published December 13, 2012

    Investment sales of property reach $28.7b this year

    Year could end at $29.5 billion; Savills forecasts cooling in 2013 citing world economy, price gap

    By Kalpana Rashiwala

    [SINGAPORE] Investment sales of property - which refer to transactions of $10 million and above - have fallen to about $6.9 billion so far this quarter (up to Dec 11), from the $9.3 billion in Q3, estimates Savills Singapore.

    The slowdown came amid a halving in deals originating from the private sector to $3.7 billion so far in Q4 from $7.2 billion the previous quarter.

    "The weak global economy and a still-wide bid-ask gap remained key reasons for the tepid investment activities in the private sector. As well, the year-end holiday season has stretched negotiations and decision-making," Savills said.

    Big-ticket deals originating from the public sector - predominantly Government Land Sales (GLS) - climbed to $3.2 billion in the Oct 1-Dec 11 period from $2.2 billion in Q3.

    "To replenish their land banks, local and even foreign developers contested aggressively at GLS tenders. In particular, riding on the current buoyant sales market for executive condos (ECs), strata offices, shops and medical suites, record prices were set for some sites slated for such use," it added.

    Savills said that including outstanding state tenders, caveats for other transactions which have yet to be lodged and the expected sale of 79 Anson Road, Q4's final tally could hit $7.6 billion.

    Year-to-date (up to Dec 11), $28.7 billion of investment sales deals have been transacted, though 2012 could end at around $29.5 billion, it estimated. That would be slightly shy of the $30.1 billion last year and $32 billion in 2010.

    Steven Ming, deputy managing director of Savills Singapore, expects a slight cooling in investment sales next year to $25-$27 billion. "The world economy is far from being out of the woods, and this in turn will affect investment sentiment. A still wide bid-ask gap will remain, lengthening negotiations."

    On a brighter note, he said: "We expect the government to continue to launch a substantial number of sites under the 2013 GLS Programme and this should keep developers actively bidding on the back of strong balance sheets and extremely low interest rates. Overseas property funds are also keen on Asian acquisitions."

    The en bloc sale market has been anaemic this year, with 24 deals totalling just under $2 billion, down from 51 transactions at $3.2 billion last year.

    Said Jones Lang LaSalle head of investments Karamjit Singh: "The stock of 'en bloc-able' developments within the sweet spot of less than $200 million started to dry up this year. This tighter supply of viable deals led to a drop in en bloc sales in 2012.

    "With the gap in residential land prices between the mass-market and mid/upper segments beginning to narrow, we can expect some shifting of investments from state tenders (which supply mostly mass-market sites) towards en bloc sales, which are mostly in mid-prime and prime districts."

    Savills' Mr Ming predicts a "marked improvement" in developers' appetite for en bloc sales following a recent fine-tuning of rules to give developers who buy residential en bloc sites more time to meet deadlines to finish developing their sites and selling all the units in the new projects. The changes factor in the time taken to get a collective sale order from the Strata Titles Board or High Court.

    "Going into 2013, with the option of deals from the collective sales market to consider, developers may take their foot off the pedal slightly when bidding for GLS sites, easing the current intense competition," said Mr Ming.

    Although Savills defines investment sales as deals of at least $10 million, it includes transactions below this threshold for GLS sites, residential en bloc sites and acquisitions by real estate investment trusts.

    Of the $28.7 billion transacted year-to-date, the residential sector continued to make up the lion's share - of about 45 per cent amounting to $13.1 billion. Including today's tender closing of a Sembawang EC plot and caveats for other residential transactions that will be lodged by Dec 31, the full-year figure could be close to 2011's $13.5 billion.

    Commercial (office and retail) property deals have reached $7.5 billion year-to-date, down from $8.2 billion in 2011.

    Private-sector office transactions declined from $6.2 billion in 2011 to $4.9 billion so far this year. Savills attributes this to global economic uncertainty, a moderation in office leasing and the buyer-seller price gap. DBS' purchase of a 30 per cent stake in Marina Bay Financial Centre Tower 3 at $1.035 billion has been the biggest office deal this year.

    Retail property deals in the private sector doubled from $1.1 billion in 2011 to $2.3 billion year-to-date, buoyed by the sale of several shopping centres, including a half stake in nex in Serangoon for $825 million and the $519 million sale of Compass Point.

    Investment sales of hospitality assets in private and public (GLS) segments combined jumped from $1.6 billion in 2011 to $3.8 billion so far this year, thanks to the flotation of Far East Hospitality Trust. This involved the sale of seven hotels and four serviced residences worth $2.1 billion to the trust by its sponsors.

    Industrial property deals slipped from $4 billion in 2011 to $3.4 billion year-to-date, amid a decline in the public sector's contribution. The fall is from a high base in 2011 which saw the second phase of JTC's divestment, along with shorter-tenure GLS sites.

  2. #2
    Join Date
    Jun 2009

    Malaysian National News Agency

    Hishammuddin Hits Out At LKY For Statement On WPI
    July 01, 2007 18:17 PM
    KLUANG, July 1 (Bernama) -- The statement by Singapore's Minister Mentor Lee Kuan Yew that Johor Umno did not welcome Singapore investors to the Iskandar Development Region (WPI) was based on his personal perception which was unfounded.

    In fact, Umno Youth chief Datuk Seri Hishammuddin Hussein said Lee's perception of the Johor Umno leaders' stand on Singapore's investment in the special economic zone was also influenced by historical factors.

    "To accuse that we (Johor Umno leaders) do not welcome (Singapore's investment in WPI), I feel is purely his personal perception and his (Lee's) perception is influenced by history," he told reporters here.

    Hishammuddin, who is also the Member of Parliament for Sembrong and the Sembrong Umno chief, said this after the opening of the Sembrong Umno divisional meeting by Pahang Menteri Besar Datuk Seri Adnan Yaakob.

    Hishammuddin said Johor Menteri Besar Datuk Abdul Ghani Othman and Prime Minister Datuk Seri Abdullah Ahmad Badawi had repeatedly clarified that the WPI was a national agenda with the federal and state governments welcoming all types of investments, whether local or foreign.

    Hishammuddin, who is also the Education Minister, said the federal government wanted to see the WPI project successfully implemented.

    Lee, who was also a former prime minister of Singapore, when interviewed by Singapore's Berita Harian in conjunction with its 50th anniversary, claimed that Johor Umno leaders did not welcome investors from Singapore in the WPI.

    Lee, who is the father of Lee Hsien Loong, the republic's current prime minister, also said that Singapore investors should not expect special treatment from the Malaysian government.

    Hishammuddin believed that if the investment climate in the WPI was conducive and profitable, it would attract investors, including from Singapore, to the special economic zone no matter what the senior Lee said.

    "The economic development in the WPI does not depend on the statement by an individual (Lee Kuan Yew). I don't know what was the basis of his statement," he said.

    Abdul Ghani, who is also Johor Umno Liaison chairman, had stated several months ago that all investors, including from Singapore, were welcome to invest in the WPI.

    -- BERNAMA

  3. #3
    Join Date
    Jun 2009


    Johor Umno speaks up! We had to wait, but the Umno in Johor, the birthplace of the great party, has finally spoken up. Utusan Malaysia has the story HERE.

    In a nutshell, the MEN in Johor have asked the Abdullah Administration to:

    1/ cancel all projects that would benefit Singapore more than it would benefit Malaysia, especially the proposed KL-Singapore Bullet Train.

    2/ stop taking into consideration Singapore's interest when implementing projects under the RM15 billion Johor South Corridor. [Abdullah has already appointed Singapore's Parkway Holdings Ltd, which runs Pantai Hospital, as consultant for the setting up of a mega medical hub in the South Corridor. see The Star Aug 12]

    3/ to review overall relations with Singapore.

    Lee Kuan Yew's disparaging statement about this country's "compliant" Chinese is the obvious excuse for these demands by the Johor Umno.

    Slightly less obvious is the fact that Johoreans have been very unhappy with Abdullah's decision to cancel the crooked bridge because of Singapore's potential opposition and because, according to the PM, "the rakyat wanted it cancelled".

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