Property investment sales worth $38.3 bil expected this year, buoyed by non-residential sales

Pacific Mansion (centre) was sold for $980 mil, the second largest collective sale deal on record (Picture: CBRE)
Real estate investment sales in Singapore are expected to reach $38.3 billion this year, a 0.7% increase from $38 billion recorded in 2018, says Colliers International. Non-residential deals are expected to mitigate the expected slower residential market. Last year, investment sales fell 5.1% y-o-y due to unexpected property cooling measures in July that caused a slump in residential investment sales, and a lack of public land sales across all sectors.
“The yield spread (of Singapore real estate) continues to be one of the more attractive across markets,” says Tang Wei Leng, managing director at Colliers International. Pro-business policies and the Smart Nation push will drive up demand for office, industrial and hospitality properties, she says. “In particular, hospitality will be an interesting sector to watch.”
A strong showing in 1H2018 pushed up overall residential investment sales by 1.4% y-o-y to reach $22.1 billion. It is also the highest-ever investment volume growth on a yearly basis. Collective sales, at 35 deals worth $10.01 billion, accounted for 45% of investment sales last year.
Developers will be cautious and will focus on their upcoming new launches this year, and residential investment sales are expected to be relatively subdued in 1H2019, says Tricia Song, Colliers’ head of research for Singapore. Investment volume and buyer sentiment are expected to pick up from 2H2019, but some en bloc developments have adjusted their asking prices down, she says.
The $980 million en bloc deal for Pacific Mansion done by a GuocoLand-Hong Leong joint venture in March last year. (Picture: URA)
The largest transaction last year was the government land tender for the Holland Road mixed-use site, awarded to...