Investment sales grow by 88.7% y-o-y in 1H2022: Knight Frank

By Hailey Yu / EdgeProp Singapore | July 5, 2022 5:49 PM SGT
Westgate Tower, which recently sold for $677.5 million (Credit: Samuel Isaac Chua)
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SINGAPORE (EDGEPROP) - Singapore property investment sales continued on the growth trajectory in the second quarter to reach $8.2 billion, according to Daniel Ding, head of capital markets at Knight Frank. Investment for the first half of the year totalled $20.2 billion, standing at 88.7% higher as compared to the previous year.
“Private deals accounted for 76.1% of the total sales in the second quarter, taking up a significant proportion of transactions,” says Ding.
Large-ticket transactions in the commercial sector drove sales, including the sale of Westgate Tower for $677.5 million, Twenty Anson for $600 million, and a freehold luxury commercial development at 28 and 30 Bideford Road for $515 million.
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Many investors are increasingly diverting their focus towards commercial assets to hedge against economic uncertainties, banking on capital appreciation and organic growth through recurring rental income. (Find Singapore commercial properties with our commercial directory)
Investors in the luxury residential segment are on the rise as travel measures eased. Most notable are the sale of 20 units at CanningHill Piers to a Chinese national for $85 million and the sale of 22 units at Draycott Eight to an Indonesian family for $168 million.
Interest in the en bloc market also picked up in the second quarter, according to Chia Mein Mein, the head of capital markets (land and collective sale) at Knight Frank. (See potential condos with en bloc calculator)
Chia believes that developers are increasingly willing to explore larger land sizes, venturing beyond the Government Land Sales (GLS) Programme for land sites, despite generally preferring “bite-sized land parcels due to its palatable quantums”.
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The recent collective sale of Lakeside Apartments to Wing Tai Holdings for $273.9 million and an offer for Chuan Park of $860 million points to interest in larger plots of land. “Sites with attractive attributes such as close proximity to amenities like MRT stations and good views from new housing units could generate more interest, especially so for those that can potentially yield up to 300 units,” Chia says.
The latest closing tender bids reached as high as $1.3 billion (or $1,350 psf per plot ratio or ppr) and $671.5 million (or $1,318 psf ppr) at Dunman Road and Pine Grove Parcel A GLS sites respectively,
Overseas, office and industrial developments remained the top choice for Singapore investors, with total outbound investment sales reaching $13.5 billion in the second quarter.
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“The acquisitions of prime freehold properties, including a commercial asset in London by Sinarmas Land for $334 million and a logistics development in the United Kingdom by Frasers Logistics & Commercial Trust for $171.7 million, are some of the largest deals transacted,” says Ding.
Ding expects total investment sales for 2022 to surpass initial estimates and reach between $32 billion and $35 billion, barring major external headwinds that could drastically alter overall business sentiment. He expects interest in the Singapore real estate market to continue throughout the remaining half of the year in spite of a possible upcoming recession.
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