http://www.straitstimes.com/archive/...deals-20140102

Property investment sales tumble in Q4 despite big deals

Published on Jan 02, 2014

By Cheryl Ong


A HANDFUL of big-ticket deals failed to prevent a drastic fall in the amount of property investment sales in the final quarter of last year.

A total of $3.67 billion worth of investment deals were sealed for the three months to Dec 31 - down 72.9 per cent on the record $13.3 billion transacted in the preceding quarter.

These figures include the sale of land, buildings and multiple residential or commercial units worth at least $5 million each.

Consultants say the dip should be viewed against a stand-out third quarter, which was underpinned by the listing of three real estate investment trusts (Reits) on the Singapore Exchange.

They also noted that sales for the whole of 2013 were still healthy, if a tad lower than 2012.

Two deals concluded over the Christmas weekend helped drive up investment sales for the fourth quarter.

The TripleOne Somerset building was sold to a consortium led by Perennial Real Estate Holdings for $970 million - the third-largest deal of 2013.

The Westin Singapore hotel was sold to Japanese property developer Daisho Group for $468 million in the same week.

As big as they were, these deals paled in comparison with the previous quarter's activity.

Data from consultancy CBRE showed that the biggest deal this year came in July, when the Paragon shopping mall was injected into SPH Reit for $2.5 billion.

OUE Hospitality Trust later bought Mandarin Orchard for $1.18 billion - the year's second largest deal - when the trust was listed in the same month.

Deals in the hospitality sector also helped drive up the third quarter's investment sales, with seven hotels sold for a total of $2.86 billion.

This surge in private-sector acquisitions helped trump the previous quarterly record of $12.4 billion set in the third quarter of 2007, said property firm DTZ.

Overall, the total investment sales volume for 2013 was about $29.71 billion - a 3.7 per cent dip from 2012, CBRE noted.

Mr Desmond Sim, associate director of CBRE Research, expects total investment sales for 2014 to hit $20 billion.

He noted that the Government's move to reduce the supply of private residential land for the first half of the year may impact investment sales volumes.

"The performance of the Singapore investment market in the coming year will still have to depend on the meeting of expectations between vendors and purchasers," he said.

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