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Property investment deals down 8% in Q2: DTZ

By Tan Chee Yuen

/ DTZ, The Edge Property |

July 13, 2015 5:48 PM SGT

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Total real estate investment in Singapore declined 8% quarter-on-quarter (q-o-q) to $3.8 billion in 2Q2015. In particular, private investment sales contracted 69% q-o-q to $931.7 million.

Private investments in the office sector fell from $1.28 billion in Q1 to $182.5 million in Q2. Big-ticket transactions include the divestment of Park Mall by Suntec REIT for $411.8 million and acquisition of 30% stake of DBS China Square Limited by DBS Group for $150 million. Notably, REITs only invested $97 million in the Singapore property market in Q2, which was $510 million less than in Q1.

Notwithstanding, acquisitions via Government Land Sales Programme cushioned the decline in investment deals. The largest deal accrued to the sale of site at Paya Lebar Central to Lend Lease and Abu Dhabi Investment Authority for $1.67 billion. The mixed-use plot can generate about 1.78 million sq ft of gross floor area, of which at least 969,000 sq ft must be set aside for office use, with the rest for commercial, retail and residential use.

Investment volume is expected to pick up in 2H2015 with the completion of OUE C-REIT’s proposed acquisition of a stake in One Raffles Place. Additionally, the commercial buildings on the market have also attracted much interest among the investors. These properties include Asia Square Tower 1, Scorpio East Building on Tai Seng Avenue, Capital Square (50% stake) and the CPF building.

Ms Swee Shou Fern, Senior Director of Investment Advisory Services at DTZ says: “Singapore real estate continues to appeal to global investors, given Singapore’s long-term stability and good governance. However, the time required to conclude a deal is longer as the price gap between buyers and sellers remained wide.”

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