Property investment sales could rebound to hit a three-year high in 2016, says JLL

By Tan Chee Yuen / JLL | October 3, 2016 5:25 PM SGT
Singapore’s total real estate investment sales grew 16% y-o-y from $3.99 billion in 3Q2015 to $4.61 billion in 3Q2016, according to JLL’s preliminary estimates. However, it fell 41% q-o-q from $7.84 billion in 2Q2016. The total sales amounted to $15.41 billion in the first nine months of 2016.
Tay Huey Ying, head of research for JLL Singapore says, “Sales tally aside, the triggering of the Central Boulevard Government Land Sales (GLS) white site, the sheer number of bids received, as well as the neck-to-neck bids submitted for recent GLS residential sites further attests to the upbeat investor sentiment.”
The largest deal seen in 3Q2016 was the $1.78 billion acquisition of the office and business park components of Mapletree Business City (Phase 1) by Mapletree Commercial Trust. This is also the second largest property transaction in Singapore this year after the $3.4 billion sale of Asia Square Tower 1.
The residential sector saw about $2.07 billion of sales in 3Q2016, accounted for a majority 45% of the total investment sales. Landed home purchases and developers’ landbanking activities dominated residential investment sales. About 36% of landed home sales came from the Good Class Bungalow segment with a total sales of $242 million in 3Q2016.
In addition, developers snapped up some $649 million worth of development land in 3Q2016. Notably, two GLS residential sites at Fernvale Road and Anchorvale Lane were sold for $287.10 million and $240.95 million respectively in 3Q2016. Another significant deal involved the purchase of the freehold 30,745 sq ft Harbour View Gardens site at Pasir Panjang Road for $33.25 million by developer Roxy-Pacific Holdings. This is the second collective sale in 2016.
Meanwhile, the mixed-development sector contributed 38% of the total investment sales in 3Q2016, making it the second largest contributor. The sector was made up solely of the Mapletree Business City (Phase 1) deal.
The retail, office and industrial sectors accounted for 9%, 4% and 2% of the total investment sales respectively in 3Q2016.
JLL estimates that there is a high likelihood that full-year property investment sales value could stage a rebound and hit the highest in three years, surpassing $20.62 billion and $20.35 billion achieved in 2014 and 2015, respectively.