Published December 14, 2006

Investment sales hit record $26.9b
Total sales double 2005's high; sentiment still buoyant: CBRE


PROPERTY investments sales this year have hit $26.9 billion to date, surpassing by 51 per cent the historical high of $13.5 billion reached in 2005, according to data released yesterday by property consultancy CB Richard Ellis (CBRE).

Big deals: The two integrated resort sites at Marina Bay (above) and Sentosa were sold for a total of $1.8 billion this year

And next year, the investment sales market is expected to be buoyant as well, CBRE said in its report. 'With the Singapore economy poised for another year of positive growth, the investment climate will continue to attract foreign capital from investors looking to diversify their portfolio,' said Jeremy Lake, CBRE's executive director of investment properties.

He added: 'Investor sentiment in the commercial sector will continue to be positive in 2007 due to healthy leasing demand and limited supply in the medium term.'

For this year, the private sector accounted for 83 per cent of the investments ($22.5 billion) while the public sector made up the remaining 17 per cent ($4.4 billion), CBRE said.

The public sector sales figure comprised purchases of government land sales sites and the tender award of waterfront residential land parcels. Altogether, 11 government sites have been bought by developers so far this year. In addition, the two integrated resort sites at Marina Bay and Sentosa were sold for a total of $1.8 billion, and Sentosa land sales added up to $807.4 million, said the report.

In terms of sectoral performance, the residential sector is expected to take the lead in investment sales value this year as development sites sold through collective sales made up a large proportion of transactions.

Total residential investment sales have amounted to $13.7 billion so far this year - or 51 per cent of total investment sales, and an increase of 75 per cent year-on-year. A total of 65 collective sales worth a combined $7.7 billion have changed hands so far, more than triple the $2.0 billion worth of sales done in 2005.

Driven by strong economic growth, investment activity in the commercial sector remained strong throughout the year, clocking in at $9.6 billion to date - or 36 per cent of total investment sales. The figure is up 46 per cent over 2005's.

'The transaction of the year was the joint acquisition of Raffles City by CapitaMall Trust (40 per cent stake) and CapitaCommercial Trust (60 per cent) for $2.2 billion, representing the highest price for any investment transaction in 2006 to date,' said CBRE.

The industrial sector also enjoyed good sales momentum in 2006, driven largely by purchases by real estate investment trusts (Reits) - contributing $1.8 billion or 6.5 per cent to total investment sales. This was followed by the hotel sector, which accounted for $1.5 billion of investment sales, and the good class bungalow (GCB) market, which generated $859.2 billion of sales.