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Published September 1, 2006

Property sales hit $19.3b in eight months
Boost from investment sales worth $6.2b in July and August, says CB Richard Ellis


(SINGAPORE) A whopping S$6.2 billion of investment sales in July and August took total property sales in Singapore since the start of the year to S$19.3 billion, says CB Richard Ellis.

With the buoyant update for the first eight months of 2006, the firm yesterday revised its full-year investment sales forecast to S$25 billion, from a S$20 billion prediction in late June.

Big investment deals in the past two months include the sale of the Somerset Central site (S$617 million), the en bloc sale of Nassim Park (S$380 million), and the divestment of three portfolios of properties totalling S$2.6 billion relating to the flotation of Frasers Centrepoint Trust, CDL Hospitality Trusts, and Cambridge Industrial Trust.

Investment sales of property are seen as a barometer of developers' and big investors' mid-to-long-term confidence in the market. They refer to major investment transactions like office buildings and shopping centres, as well as sites bought for development including collective sale deals. They do not cover purchases of single property units by indivi duals.

Investment sales of property for the whole of last year totalled S$13.5 billion - a record that surpassed the previous peak of S$12.72 billion in 1996 at the height of the property boom.

However, market watchers point out that the emergence of real estate investment trusts (reits) since 2002 and their sizeable contribution to investment sales in recent years mean comparisons with historical figures may not be entirely accurate.

CBRE says the S$2.1 billion sale of the Raffles City complex to CapitaCommercial Trust and CapitaMall Trust was the biggest investment sales transaction in Asia in the first half of this year.

It was trailed by the US$796.4 million sale of a 50 per cent stake in Festival Walk in Kowloon Tong, Hong Kong, and a US$771.3 million deal on JFE Building in Tokyo's Chiyoda ward.

Another Singapore transaction that made the list of Asia's top 10 investment sales in the first half involved four office buildings bundled together and sold by Keppel Land to its office reit, K-Reit Asia, for US$399.2 million.