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Thread: Current quarter sees big jump in property investment sales

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    Default Current quarter sees big jump in property investment sales

    http://www.businesstimes.com.sg/sub/...46340,00.html?

    Published June 26, 2009

    Current quarter sees big jump in property investment sales

    By KALPANA RASHIWALA


    (SINGAPORE) Investment sales of Singapore real estate so far this quarter have hit $953.9 million, a jump of 248 per cent from $273.8 million in the first quarter, says CB Richard Ellis (CBRE).

    The increase came as residential investment sales quadrupled on the back of a growing number of high-end condo purchases, a pick-up in transactions of Good Class Bungalows (GCBs) and the acquisition of a few small residential sites.

    The sale of three office blocks - Parakou and VTB buildings on Robinson Road, and Anson House - for a total of $259.6 million also helped breathe some life into the moribund office investment sales market.

    Investment sales are a gauge of developers' and investors' medium to long-term confidence in the property sector. The pick-up in Q2 was against the backdrop of a dramatic stock-market rally that has led to an improvement in home buying.

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

    With a tally of $1.2 billion so far in the first half, CBRE executive director (investment properties) Jeremy Lake reckons full-year investment sales could come in at $2 billion to $2.5 billion, 'depending on how long the burst of activity in the residential sector lasts'.

    The figure for the whole of last year was about $18 billion, down from the record $54 billion in 2007.

    As for the latest Q2 showing, 63.5 per cent or $605.6 million was from the residential sector.

    This sum included 14 GCB deals, up from just three GCB transactions in the first quarter.

    'For the Singapore investment market, the first movers are the Asian private investors who are willing to buy at current prices which they deem reflect an attractive discount from the peak,' Mr Lake said.

    'Their sweet spot is $20 million to $85 million and their focus is office and/or residential investments.'

    On the other hand, institutional investors are mostly adopting a wait-and-see strategy for Singapore, judging that the fundamentals are weak and better opportunities will arise in six to 12 months.

    'For second-half 2009 there will be more investment deals, although most of the owners who wanted or needed to sell have already done so, and accordingly the choice of investment opportunities could be limited,' Mr Lake said.

    Agreeing, DTZ's senior director for investment advisory services Shaun Poh said investment sales activity may ease slightly in Q3 because of a limited supply of small investment-quantum commercial properties available for sale.

    'However, we may see some deals that are currently cooking being sealed in Q3,' he said.

    'For the residential sector, some developers who have enjoyed strong sales at their showflats over the past few months are looking to restock their residential land bank selectively,' he added.


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    http://www.businesstimes.com.sg/sub/...40871,00.html?

    Published July 8, 2009

    Q2 property investment sales triple: DTZ

    Investment value for the quarter up 254% to $662m


    PROPERTY investment sales more than tripled in Q2 this year as sentiment improved on the back of easing credit and the stockmarket rally, says DTZ.

    The firm says in its Q2 Singapore property market report that total investment value during the quarter jumped 254 per cent to $662 million - the first increase after two quarters of decline.

    Other property firms, including Jones Lang LaSalle and CB Richard Ellis, have reported the same trend in recent weeks. However, DTZ's data shows that for the first half of 2009, total investment sales were $849 million.

    This was still the lowest level in a decade, since $703 million in H2 1998.

    Small-quantum deals continued to dominate, with all deals below $100 million apiece in Q2.

    Most investments were by locals. Foreign investors remained cautious.

    Investments by foreign companies or private investors, excluding buyers of unknown nationality, contributed only 13 per cent of total investments in H1 - much lower than the 41 per cent in 2008.

    Participation by institutions and property vehicles also remained inactive.

    Just one transaction, the built-to-suit development deal of a high-tech industrial building for SingTel, was made by a property trust - Ascendas Real Estate Investment Trust or A-Reit.

    Although office rents are falling and not expected to recover until 2011, buying interest in the sector picked up in the latest Q2.

    Office investment value was up 310 per cent, mainly due to two major sales - Anson House and Parakou Building.

    The Anson House transaction in May was the biggest deal in the quarter.

    It changed hands at 34 per cent below the price that it fetched two years ago.

    Residential transactions also increased significantly - by 190 per cent to a total of $203 million.

    But the collective sale market remained quiet, with no sale since Q4 2008.

    DTZ expects that transactions in H2 2009 will be mostly involve local corporations and high net worth individuals who have a longer investment horizon.

    The picture will start changing next year as the Singapore property market reaches fair value, the firm reckons.

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