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Published January 15, 2007

Far East Organization the biggest property investment buyer in 2006

Its purchases total about $1.6b, says CBRE analysis


(SINGAPORE) Property tycoon Ng Teng Fong's Far East Organization was the biggest buyer in the property investment market in Singapore last year with about $1.6 billion worth of deals under its belt, according to the latest analysis by CB Richard Ellis (CBRE).

CapitaCommercial Trust was the next biggest buyer with its purchases valued at $1.3 billion. The Singapore-listed real estate investment trust (Reit) was catapulted to the top buyers' list with its acquisition of a 60 per cent stake in Raffles City.

Las Vegas Sands was in third spot, with its $1.2 billion purchase of the Marina Bay integrated resort (IR) site.

City Developments, controlled by Kwek Leng Beng and his family, was in fourth position, with $1.127 billion, according to CBRE.

Following closely behind was the Riady family's Lippo Group (inclusive of Auric Pacific and Overseas Union Enterprise), with $1.067 billion. Other local players making it to the list of top buyers last year include Ho Bee (about $820 million), Frasers Centrepoint (also above $800 million), SC Global (about $720 million), GuocoLand ($510 million), MCL Land (about $420 million) and Wing Tai (about $380 million).

UOL Group bought about $340 million worth of properties, while United Industrial Corp and its subsidiary Singapore Land were involved in deals totalling around $240 million.

Also noteworthy was the strong inflow of foreign investment in the local real estate market last year. Besides Las Vegas Sands and Genting Group which bagged the Marina Bay and Sentosa IR plots respectively, other big foreign buyers were Australia's Lend Lease (over $650 million), CLSA-linked entities (which purchased SIA Building and HB Robinson), Lehman Brothers, Hong Kong's Park Hotel Group and Macquarie Global Property Advisors.

Latest updated figures from CBRE show the total investment sales of property in the Singapore market hit $28.19 billion last year, more than double the previous historical high of $13.5 billion in 2005.

Investment sales of property - seen as a barometer of developers' and big investors' mid-to-long-term confidence in the real estate market - refer to large investment transactions like office buildings and shopping centres, as well as sites bought for development, including collective sale deals. CBRE's figures also include sales of strata residential and commercial units costing $5 million or more.

For Far East's Mr Ng, the property buying spree last year began right from the word go, when the group placed, on the same day (Jan 18), top bids for two properties - the former Glutton's Square site on Orchard Road ($421.1 million) and Amberville ($183 million) in Katong. The latter marked the group's first private residential land purchase in Singapore for almost 10 years. Far East followed that up with a string of other residential site purchases throughout the year - Angullia Mansion, Skyline Angullia, Rose Garden, Pacific Court and a group of properties at Keng Chin Road in Bukit Timah. Mr Ng's Hong Kong arm, Sino Land, also clinched the coveted Collyer Quay site at a state land tender in December.

Properties sold by the private sector accounted for $23.6 billion, or 84 per cent of the total investment sales deals last year. The remaining $4.6 billion originated from public sector sales, including the land parcels for the two integrated resorts at Marina Bay and Sentosa.

By sector, the residential market accounted for the lion's share of $14.5 billion (roughly 51 per cent of 2006's total investment sales), up 91 per cent from the preceding year. Last year's $14.5 billion figure included a whopping $8 billion worth of collective sales deals - four times the $2 billion for the preceding year and the highest in the past decade.

It was also an active year for Good Class Bungalow sales, with nearly $1 billion worth of deals struck, up 33 per cent from 2005. The commercial property sector saw $9.9 billion of deals last year, up 49 per cent from 2005.

The hotel sector also recorded an unprecedented level of investment sales at $1.5 billion, reflecting the buoyant mood in the industry on the back of record visitor arrivals.

In terms of buyer profile, developers were tops with a total of about $11 billion worth of acquisitions, either done solo or jointly with other parties. Next were Singapore-listed Reits, accounting for $6.12 billion or almost 22 per cent of 2006's total investment sales.