Property investment sales fall in Q2 but expected to end 2022 stronger: Colliers

Jul 20, 2022

Total property investment sales in Singapore dropped 36.9 per cent in the second quarter to S$6.8 billion as sales fell for all asset classes from a high base in Q1, according to a report from real estate consultancy Colliers.

Colliers noted also that deals took longer to conclude in the April-June quarter. But the Q2 tally brought total property investment value to S$17.7 billion for the first half of 2022, up a hefty 46.3 per cent over the same period last year.

The firm believes the market will show 15 per cent year-on-year growth for the whole of 2022 to reach S$32.6 billion, it said in its H1 report released on Wednesday (Jul 20).

While residential sales were down 17.6 per cent from the previous quarter, Colliers pointed to strong total transaction value of S$2.5 billion. The second quarter’s performance was supported by luxury sales, government land sales, as well as an active collective sales market including the S$273.9 million transaction of Lakeside apartments.

Other significant transactions included the sale of a state land parcel at Dunman Road for S$1.28 billion and a reported purchase by a Chinese high-net-worth individual of 20 units at Canninghill Piers for S$85 million.

“We expect more of such activity to continue with the launch of more attractive sites and projects,” said Colliers.

“With unsold residential inventory at a historical low and encouraging new home sales, we expect developers to continue acquiring sites through government land sales and the private market.”

Although commercial sales in Q2 fell 58 per cent quarter on quarter to S$2.1 billion, Colliers expects volumes to increase in H2 2022 as “several sizable assets and portfolios come onto the market in light of buoyant prices”.

The firm is particularly positive on office assets given rising rents and tight supply. It also expects keen interest in prime retail assets as tourism recovers.

While it was a “relatively quiet quarter” for industrial sales as smaller deals transacted led to a 29 per cent decline from Q1, Colliers continues to see strong demand for industrial assets on the back of structural tailwinds, especially in the logistics space.

“Mixed-used developments continued to attract keen interest during the quarter with the successful sale of Golden Mile Complex and 28 & 30 Bideford Road,” added the firm.

It believes the strong investment momentum demonstrated in H1 2022 will continue given investors’ inclination to pursue recession-proof assets - such as prime office space, logistics assets and suburban retail premises – to hedge against uncertainties.

“Despite the geopolitical headwinds and external uncertainties that continue to plague the economy, Singapore’s safe haven status, as well as investors’ confidence in Singapore as a competitive and attractive business destination will continue to lend support to the market,” said Catherine He, director and head of research for Singapore at Colliers.

“Based on our current observations, we expect full-year 2022 transaction volume to register a growth of 15 – 20 per cent from the previous year.”

https://www.businesstimes.com.sg/rea...onger-colliers