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Singapore office investment sales continue to lead in 3Q2014

October 12, 2014 12:00 AM SGT

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Similar to 2Q2014, the office sector continued to drive the investment sales momentum, with $1.77 billion achieved in 3Q2014, according to a CBRE report. This amounted to 36% of the total sales volume for the year to date, notes the property consultant. That was mostly accounted for by the acquisition of one-third of MBFC Tower 3 (left) by Keppel REIT from Bayfront Development, a wholly- owned subsidiary of the REIT’s sponsor, Keppel Land, for a total sum of $1.25 billion. During the quarter, The Straits Trading Company sold Straits Trading Building for $450 million to Nine Battery, a company under Sun Venture Group.

The remaining two office transactions in 3Q2014 were bulk purchases of strata office units. Church Street Holdings sold the entire 18th floor of Samsung Hub for $42.35 million, while ProVest Realty bought 12 units of GB Building for $31.69 million. Demand for strata office units, especially completed ones, remains healthy as they appeal to mature investors and owner occupiers. REITs were seen to be active in acquiring properties to strengthen their portfolios. Keppel REIT’s acquisition aside, the market also saw A-REIT adding Aperia Complex to its industrial portfolio, at a cost of $458 million.

In addition, Far East Hospitality Trust acquired a 30% stake in the development of two Sentosa hotels for an estimated $138.5 million, with the remaining 70% stake held by its sponsor, Far East Organization Group. This was the only hotel investment deal in 3Q2014. The preliminary total investment volume for 3Q2014 stood at $4.93 billion. This reflects a marginal increase of 1.2% compared with the previous quarter, but a drop of 38.9% compared with 3Q2013.

Private-sector deals have surpassed public- sector sales, contributing $3.42 billion (69.4%) of total investment sales in 3Q2014.

This article appeared in the City & Country of Issue 647 (Oct 13) of The Edge Singapore.

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