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Thread: Property investment sales plunge 74% in Q1: DTZ

  1. #1
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    Default Property investment sales plunge 74% in Q1: DTZ

    http://www.propertyguru.com.sg/prope...e-74-in-q1-dtz

    Property investment sales plunge 74% in Q1: DTZ

    Romesh Navaratnarajah • April 26, 2016


    Real estate investment sales in Singapore, which corresponds to the sale of land, buildings and multiple units valued above $5 million, plunged by around 74 percent to $1.75 billion in Q1 2016, from $6.7 billion in Q4 last year, according to a DTZ report.

    The sharp decline is partially attributed to uncertainty in the global economy, arising from volatile oil prices, mixed signals on China’s economic growth, and the UK’s potential exit from the European Union.

    Another factor is the disappointing economic data since January 2016, which further weakened investor sentiment, widening the price gap between cautious buyers and forward-looking sellers.

    The sluggish local property market also contributed to the drop in sales, with the existing cooling measures continuing to discourage investment sales in the private residential market.

    In the commercial market, the huge upcoming supply of office space in 2016 and 2017 further slowed down transaction levels.

    In the first quarter, property investment volume in the private sector plummeted by around 90 percent to $521.9 million, compared to $5.1 billion in the previous quarter.

    But it was the public sector that dominated the market, with Government Land Sales (GLS) accounting for about 70 percent of the overall figure.

    The largest sale involved a 19,309.6 sq m site near East Coast Park to a consortium comprising Frasers Centrepoint, Sekisui House and KH Capital for $624.2 million, or $858 per sq ft per plot ratio (psf ppr).

    Other state-owned sites transacted during the period include a land parcel at New Upper Changi Road / Bedok South Avenue 3 that was purchased for $419 million ($760.50 psf ppr), while an EC site at Yio Chu Kang Road was acquired for $183.8 million ($331 psf ppr).

    Despite the dismal market activity, DTZ’s Senior Director for Investment Advisory Services, Swee Shou Fern, believes that Singapore is still on the radar of property investors.

    “Although there were fewer transactions concluded in Q1, both local and foreign investors remain keen in Singapore properties and are on a constant lookout for interesting propositions. However, the negotiation process is longer due to the mismatch of expectations.”

    Moving forward, GLS is expected to continue driving investment sales in the coming months. The sites remaining on the confirmed list include a land parcel at Martin Place, and a commercial / residential site at Bukit Batok West Avenue 6.

    The proposed development of the site could attract potential HDB upgraders from Bukit Batok, and the catchment for the commercial component will come from upcoming public housing projects.

    “The site is also attractive as it is likely to capture some positive externalities from the development of Jurong Lake District,” added DTZ.

  2. #2
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    Default Real estate investment in Singapore falls 74%

    http://www.selectproperty.com/2016/0...pore-falls-74/

    26 Apr 2016

    Real estate investment in Singapore falls 74%

    Singapore’s property market continues to stagnate as investment sales dropped by almost 75% in the first three months of the year.

    Summary:

    • The number of investment deals in Singapore hit the lowest level since 2009
    • Uncertainty in the global economy saw sales fall from almost £3.5 billion to £890 million in Q1 2016
    • Singapore property investors are finding value overseas, investing at least £1 billion in international property markets



    Real estate investment sales in Singapore fell by 74% in the first three months of 2016. Sales fell from £3.4 billion to £890 million, according to research by consultancy DTZ.

    In terms of volume, the number of investment deals in Q1 2016 was the lowest since the third quarter of 2009 – during the financial crisis – when investment sales hit a low of £98 million.

    Factors involved in the current decline in investment sales include uncertainty in the global economy stemming from mixed signals on China’s economic growth and volatile oil prices.

    “The release of a series of disappointing economic data in Singapore since January 2016 further weakened investors’ sentiments, widening the price gap between cautious buyers and forward-looking sellers.

    “The cooling measures continue to discourage investment sales of residential properties in private market, while the huge supply of office space slated to come on board in 2016 and 2017 further slowed down sales in the commercial market,” DTZ commented on the research.

    Despite the poor performance of property investment in Singapore, data showed Singapore investors continue to show interest in overseas real estate. While investment sales in the private market fell from £2.6 billion to £265 million in the first quarter of 2016, the total amount invested in overseas real estate amounted to at least £1 billion.

    One of the largest deals reported was in the UK, a stable and profitable choice for international investors. The UK offers consistent capital growth and demand that continues to far outstrip supply, generating high yields for investors.

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    Default Singapore property investment sales tumble 74% to $1.75b in Q1 from previous quarter:

    http://www.straitstimes.com/business...evious-quarter

    Singapore property investment sales tumble 74% to $1.75b in Q1 from previous quarter: DTZ

    Apr 25, 2016

    Ann Williams


    SINGAPORE - Real estate investment sales fell 74 per cent to S$1.75 billion in the first three months of the year from S$6.7 billion in the final quarter of 2015, said consultancy DTZ.

    In terms of volume, or number of investment deals in Q1 2016 was the lowest since the third quarter of 2009, which was during the global financial crisis. Investment sales hit a low of S$192 million in Q1 2009, said DTZ in its report released on Monday (April 25).

    DTZ defines investment sales as the sale of land, building and multiple units with value above S$5 million. It excludes single strata or residential units, except for landed sites large enough to be redeveloped into two or more residential units.

    The firm blames the current decline in investment sales partly to the uncertainty in the global economy stemming from mixed signals on China's economic growth, Britain's potential exit from the European Union and volatile oil prices.

    "The release of a series of disappointing economic data in Singapore since Jan 2016 further weakened investors' sentiments, widening the price gap between cautious buyers and forward-looking sellers," DTZ added.

    "The cooling measures continue to discourage investment sales of residential properties in private market, while the huge supply of office space slated to come onboard in 2016 and 2017 further slowed down sales in the commercial market," said the firm.

    Government Land Sales (GLS) dominated real estate investment sales in Q1 2016, accounting for about 70 per cent of total sales or S$1.2 billion.

    The largest sale recorded in the quarter was for a land parcel near East Coast Park. The 19,309.6 square metre site was awarded to a joint venture by Frasers Centrepoint, Sekisui House and KH Capital (a unit of Keong Hong Holdings), which placed a top bid of $624.2m ($858 per sq ft per plot ratio).

    DTZ data showed Singapore investors going for overseas real estate. While investment sales in the private market fell from S$5.1 billion to S$521.90 million in the first quarter of 2016, the total amount invested in overseas real estate amounted to at least S$2.05 billion. One of the largest deals reported was Mapletree's investment in student housing. It bought a portfolio of 25 student accommodation assets, comprising 5,500 beds, in the United Kingdom.

    Noted Ms Swee Shou Fern, DTZ's senior director for investment advisory services: "Although there were fewer transactions concluded in Q1, both local and foreign investors remain keen in Singapore properties and are on a constant lookout for interesting propositions. However, the negotiation process is longer due to the mismatch of expectations."

    Looking forward, DTZ said it expects GLS to continue to drive investment sales.

    Said Dr Lee Nai Jia, its regional head of research: "Besides the land parcels in the H1 2016 GLS confirmed lists, the Holland Village and the Beach Road sites in the Reserve List offer interesting propositions to potential developers and investors.

    "The Holland Village site is attractive because of its cultural identity and its proximity to the growing research and development and technology cluster at onenorth. The proposed commercial development at Beach Road is also expected to do well as it is able to leverage on the rejuvenation of the Bugis/ Beach Road area, which is becoming a hip place for firms to attract talent."

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