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Savills: Real estate investment volume totals $24.7 bil in 2022, down 1% y-o-y

/ EdgeProp Singapore |

January 30, 2023 2:46 PM SGT

While higher borrowing costs may hamstring institutions, there still exists the possibility of a big-ticket deal or a series of medium-sized transactions through this year, says Savills. (Picture: Samuel Isaac Chua/The Edge Singapore)

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SINGAPORE (EDGEPROP) - Investment sales value in Singapore came in at $24.7 billion for 2022, a decline of 1% y-o-y, according to an investment report by Savills Singapore. For 4Q2022, the market clocked $2.81 billion in investment sales, slipping 36.1% q-o-q — the third consecutive quarter of decrease — due to slowing market conditions, the report adds.

Residential sales continued to account for the most significant sales value, making up 49.9% of total investment sales value last quarter. However, sales in this segment halved to $1.4 billion in 4Q2022. This was the second consecutive quarter of decline this segment recorded last year.

The commercial segment saw a rebound in transactional activity, expanding 28.4% q-o-q to $1.02 billion in 4Q2022 after two straight quarters of decline. The rebound is primarily attributed to a 166.1% q-o-q growth in office investment sales from $251.4 million in 3Q2022 to $668.9 million in 4Q2022, says Savills.

On the other hand, retail and industrial investment sales both declined 34.9% and 48.1% q-o-q. Retail sales came off a relatively high base in 3Q2022 and the last quarter of the year saw a decline in retail strata sales and lower transaction values of shophouses.

In 2023, Savills expects that the greater number of Government Land Sales (GLS) sites on offer, the $2.16 billion sale of Jurong Point, and the sale of strata units at Thomson Plaza will uplift the baseline average investment sales volume.

“Despite unfavourable economic and interest rate climate, given the openness of the economy and a positive perception of Singapore, total investment sales value should still be afloat in 2023,” says Alan Cheong, executive head of Savills Research. “While higher borrowing costs may hamstring institutions, there still exists the possibility of a big-ticket deal or a series of medium-sized transactions through this year.”

Savills expects total investment sales value for 2023 to total $24 billion to $25 billion, and activity to be damped by economic and interest rate headwinds.

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