Investment sales rise by 33.8% in 3Q2019

SINGAPORE (EDGEPROP) - The total investment sales value in the property market jumped 33.8% q-o-q to $8 billion in 3Q2019, with private sector deals accounting for 76.5% of total investment sales. Public investment sales in the form of the Government Land Sales (GLS) Programme doubled in value to $1.9 billion due to the award of four residential sites

These include the site at Tan Quee Lan Street sold for $800.2 million ($1,535 psf per plot ratio or ppr) to a joint venture between GuocoLand and Hong Leong Holdings. Another site at Clementi Avenue 1 was awarded to UOL Group for $491.3 million ($788 psf ppr).

Investment sales in the hospitality sector declined by 2.5% q-o-q, but the period also saw more development sites transacted. Min Yuan Apartments was sold to Fragrance Group in a collective sale for $141 million ($2,613 psf ppr) including an estimated development charge of $19.6 million. The company also purchased the neighbouring Waterloo Apartments last November for $131 million. In June this year, the former Darby Park Executive Suites received written permission from URA to be redeveloped into a hotel, after it was sold for $92.71 million last November.

The total value of investment sales has already exceeded Edmund Tie’s earlier forecast, and the consultancy expects to see between $3 billion and $5 billion worth of deals this quarter. This will bring the total sales value this year to $22 billion to $24 billion.

While the latest URA flash estimates show that private non-landed prices climbed 1.7% q-o-q in 3Q2019, this does not imply that the private residential market is buoyant or that developers are necessarily profiteering, according to a market report by Edmund Tie.

New unit prices today have increased, given the higher land prices developers paid during the 2017 en bloc cycle. In addition,...