Investment sales rise 30.7% in 2Q2019 on major office deals

Major office deals led the way to a stronger showing in the property investment sales market last quarter. The segment saw transactions worth $5.85 billion, and rose 30.7% q-o-q. This comes on the heels of a relatively lacklustre performance in 1Q2019, which recorded transactions of $4.47 billion.
Office investments
Office deals, which accounted for 47.1% of overall investment sales, surged 9.6 times to $2.75 billion. The largest deal was Chevron House, which was sold by Oxley Holdings to AEW Asia for $1.03 billion in April. Another major deal was the sale of the newly completed Frasers Tower, when Frasers Property divested its 50% stake to an unnamed investor in June. The proposed transaction is expected to raise approximately $442.7 million.
Other deals included the sale of 7/9 Tampines Grande for $395 million as well as the collective sale of Realty Centre for $148 million, which both occurred in April.
“Investors continue to be keen to invest in the Singapore office market in anticipation of further rental growth and capital appreciation,” says Jeremy Lake, managing director of capital markets at CBRE. He says that sentiment has been buoyed lately, as most investors feel that interest rates are likely to go down.
He has seen a pick-up in enquiries for strata offices and even entire office buildings. “With a few more deals in the pipeline, office investment volumes are likely to be very strong for 2019,” he says.
Land sales
Investment sales for 2Q2019 were also propped up by government land tenders, which helped make the residential property sector the second highest contributor. Sales volume rose 30.5% q-o-q to $1.60 billion.
Government land sales at Middle Road and Sims Drive were awarded for a total for $875.5 million in April. A subsidiary of Wing Tai Holdings won the Middle Road site with a winning bid of $492 million ($1,458 psf ppr), while members of Hong Leong Group won the site at Sims Drive with the winning bid of $383.5 million ($732 psf ppr). Two other vacant sites at Jervois Road and King Albert Park were sold for...