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Thread: Investment sales could hit $25b this year: CBRE

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    Default Property investment market robust but outlook ahead challenging

    Property investment market robust but outlook ahead challenging

    By Timothy Ouyang, Channel NewsAsia | Posted: 17 March 2008 2227 hrs


    SINGAPORE : Singapore's property investment market remained robust in the first two and a half months of this year, with investment sales totalling S$5.9 billion in that period.

    The is according to a survey by consultant CB Richard Ellis.

    It said strong economic fundamentals and the positive long-term outlook in Singapore underpinned property investment activity.

    This is despite uncertain global economic conditions and a slowdown in the US economy.

    The private sector led the property sales, raking in S$3.27 billion and accounting for more than half of the total investments here.

    Public land sales contributed the remaining 45 percent or S$2.6 billion.

    The office sector performed well in the first quarter of 2008, with about a third of total investment sales or S$2 billion so far.

    Investment activity in the residential sector slowed considerably in the first quarter.

    It contributed 38 percent of total investment sales or S$2.23 billion to date.

    CBRE noted that developers are no longer as keen to acquire more sites for redevelopment compared with last year.

    Investment in the industrial sector amounted to some S$333 million so far in the first quarter, driven largely by purchases by real estate investment trusts.

    For the rest of the year, CBRE said it expects conditions for investment sales to be challenging.

    It believes that investors are likely to take a longer time to assess the market before making any deals.

    Going forward, CBRE said a healthy level of investment activity in the Singapore property market is expected to continue amidst strong growth in Asia and Singapore's position as a financial services hub. - CNA/ms

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    Default Re: Property investment market robust but outlook ahead challenging

    Quote Originally Posted by mr funny
    Property investment market robust but outlook ahead challenging

    By Timothy Ouyang, Channel NewsAsia | Posted: 17 March 2008 2227 hrs


    SINGAPORE : Singapore's property investment market remained robust in the first two and a half months of this year, with investment sales totalling S$5.9 billion in that period.

    The is according to a survey by consultant CB Richard Ellis.

    It said strong economic fundamentals and the positive long-term outlook in Singapore underpinned property investment activity.

    This is despite uncertain global economic conditions and a slowdown in the US economy.

    The private sector led the property sales, raking in S$3.27 billion and accounting for more than half of the total investments here.

    Public land sales contributed the remaining 45 percent or S$2.6 billion.

    The office sector performed well in the first quarter of 2008, with about a third of total investment sales or S$2 billion so far.

    Investment activity in the residential sector slowed considerably in the first quarter.

    It contributed 38 percent of total investment sales or S$2.23 billion to date.

    CBRE noted that developers are no longer as keen to acquire more sites for redevelopment compared with last year.

    Investment in the industrial sector amounted to some S$333 million so far in the first quarter, driven largely by purchases by real estate investment trusts.

    For the rest of the year, CBRE said it expects conditions for investment sales to be challenging.

    It believes that investors are likely to take a longer time to assess the market before making any deals.

    Going forward, CBRE said a healthy level of investment activity in the Singapore property market is expected to continue amidst strong growth in Asia and Singapore's position as a financial services hub. - CNA/ms

    Challenging is an understatement, with US and global economies so shaky, the property will definitely get a hit if this continue....

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    Default Investment sales could hit $25b this year: CBRE

    Published March 18, 2008

    Investment sales could hit $25b this year: CBRE

    This would be about half of the record $54.5b of deals done last year


    DESPITE the current subdued mood, property investment sales this year could be substantial - about half of the record $54.48 billion clocked last year, CB Richard Ellis estimates.

    It bases the estimate on a tally of $5.91 billion of investment sales deals struck in the first two-and-a-half months of this year.

    'Assuming Q1 2008 ends with $6 billion, the full-year figure could be around $24-25 billion. That would still be the third most active year on record, after $54.48 billion in 2007 and $30.59 billion in 2006,' says CB Richard Ellis executive director (investment properties) Jeremy Lake.

    Investment sales are seen as a gauge of major players' confidence in the sector's mid- to long-term prospects.

    CBRE's definition of investment sales includes those with a value of at least $5 million, comprising government and private sales, buildings and land, strata and en bloc. It also includes change of ownership of real estate via share sales.

    Mr Lake reckons momentum this year will be generated by the sale of income-producing completed properties like malls, office blocks and industrial buildings, as well as the sale of sites through the Government Land Sales Programme, while the collective sales market has stalled.

    'Continued strong growth in Asia, coupled with Singapore's position as a financial services hub and popular business destination for MNCs, will help maintain a healthy level of investment activity in the Singapore property market,' CBRE said in a report issued yesterday.

    CBRE's analysis shows the private sector made up 55 per cent or $3.27 billion of the $5.91 billion investment sales deals sealed in the first two-and-a-half months of 2008.

    Land sales by the public sector contributed the remaining 45 per cent or $2.64 billion.

    The biggest land deal so far this year was the award of a hospital site at Novena Terrace/Irrawaddy Road to Parkway Holdings for $1.25 billion ($1,600 per square foot per plot ratio).

    Splitting deal value by sectors, CBRE said the residential sector accounted for $2.23 billion or 38 per cent of total investment sales.

    'Compared with the heightened investors' interest in en bloc acquisition witnessed in 2007, investors' demand for private residential land continued to be lukewarm in the first quarter of 2008,' it said.

    'Developers are no longer as keen to acquire more sites compared to last year as most of them have built a relatively strong inventory of freehold residential sites from the robust collective sales market in 2007.

    'Developers have already taken the cue to act cautiously. The buying of sites has been so far limited to specific choice sites since the response to recent new launches has been subdued.

    'In addition, the release of more affordable 99-year leasehold residential sites by the government for sale in the first half of 2008 may sway some buying interest away from prime freehold residential sites in the private sector.

    'The only successful collective sale deal in Q1 08 was Ban Guan Park, which was acquired by Link THM Holdings for $31.10 million ($870 psf per plot ratio).'

    The office sector accounted for 34 per cent or $2.01 billion of investment sales so far in 2008, on the back of big transactions like Hitachi Tower for $811 million or $2,901 psf, Singapore Power Building ($1.01 billion or $1,820 psf) and One Phillip Street ($99.02 million or $2,749 psf).

    'Going forward, strong office demand and potential for further rental escalation would lead to more acquisitions of office properties in 2008.' CBRE said. 'The sustained influx of foreign investors should continue to lead to steady activity in the office investment market.'



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