Real estate investment sales rise 22% in 3Q2021: Cushman & Wakefield

SINGAPORE (EDGEPROP) - Singapore’s real estate investment sales rose 22% q-o-q to nearly $8 billion in 3Q2021, boosted by transactions in the residential sector, highlights Cushman & Wakefield in a report.

This was mainly due to the sale of two mixed-used sites — Jalan Anak Bukit and Marina View — via the Government Land Sales (GLS) programme for over $1 billion each, taking the overall investment sales volume to $18.8 billion in the first nine months of 2021, representing nearly 80% of the sales registered in 2020, it notes.

Residential investment sales made up about 47.5% of the total investment volume in 3Q2021, at around $3.8 billion, up by 28% from the $3.0 billion transacted in 2Q2021.

Altogether, four GLS sites were sold in 3Q2021: Lentor Central with a top bid of $784 million or $1,204 psf per plot ratio (psf ppr), Slim Barrack Rise Parcel A ($320 million or $1,246 psf ppr), Slim Barrack Rise Parcel B ($162 million or $1,210 psf ppr), and Tampines Street 62 executive condominium site ($422 million or $659 psf ppr).

All these sites were keenly contested with the numbers of bidders ranging between nine and 10, it highlights.

“The healthy public land tender bids reflected developers’ hunger for land amid an upbeat market when prices are rising, and unsold inventory are fast-depleting,” says Wong Xian Yang, head of research, Singapore, at Cushman & Wakefield.

On the other hand, private residential investment sales hit $2.2 billion during 3Q2021, up from $1.8 billion seen in the preceding quarter, due to “strong sales activities in the high-end apartments, landed market as well as an uptick in en bloc sales”, Wong adds.

In 3Q2021, retail investment sales surged by nearly five-fold to register around $0.6 billion worth of deals, after dipping in the previous quarter. Notable transactions included the acquisition of a 31.8% stake in Jem for $337 million by Lendlease Global Commercial REIT, and the sale of a suburban retail mall, Le Quest Mall, in Bukit Batok to Firmus Capital for $139 million.

“Suburban malls that can cater to a healthy residential catchment and are positioned for food deliveries, as well as large-scale malls which can integrate both offline and online users’ experiences, are still on the radar of investors,” comments Shaun Poh, executive director and head of capital markets at Cushman & Wakefield.

“Amid the challenging retail scene due to the pandemic and e-commerce boom, investors can keep a lookout for short-term repricing opportunities in retail assets, especially those in the CBD,” he says.

In the office space, notable moves included the sale of 61 Robinson Road by ARA Private Fund to Rivulets Investments – a homegrown private-equity fund management group - for $422 million. After enhancement works are completed, the property will have a larger net lettable area of 141,958 sq ft, up from 133,221 sq ft previously.

Cushman & Wakefield holds a positive outlook for the Singapore office investment market, which is supported by recovery in the leasing market, with CBD Grade-A rents returning to growth at 0.5% q-o-q in 2Q2021 and continuing to rise in 3Q2021, it says.

“Against the backdrop of tight supply and steady demand from technology and wealth management firms amid a robust economic rebound, CBD Grade-A office rents are poised to grow further for the rest of 4Q2021 and 2022,” it notes. “Rising office rents, low interest rates and excess liquidity are fuelling investment market activities and office prices, which are set to rise further over the next few years.”