Investment sentiment in the Singapore property market remains positive but there are few core assets for sale, according to property consultants DTZ Research.
It found that investment in properties held firm in the second quarter, with S$8.3 billion of value transacted, higher than the S$8 billion worth of transactions recorded in the first quarter.
On a year-on-year basis, DTZ said investment sales in the first half of this year amounted to about 59 per cent of total investment sales last year.
Investment figures compiled by DTZ Research comprise transactions that are more than S$5 million each and exclude S$1.6 billion worth of transactions in single residential units and lots that cannot be redeveloped or subdivided into more than one plot.
Purchases of Government Land Sales sites made up the bulk of investments in the second quarter, amounting to S$4.6 billion, which is about 55 per cent of the total investment activity in the quarter.
There were 26 transactions over S$100 million each, slightly more than the 24 deals in the first quarter.
Foreign investors were more active in the second quarter as they accounted for 17.6 per cent of investment deals, compared to 10.5 per cent in the previous quarter, largely driven by foreign capital from Asian economies such as China, Hong Kong and Malaysia.
Investors from China and Hong Kong were the most active, as they bought three collective sale sites and two government land sites for a total of S$746.4 million.
DTZ said it expects similar investment activity in the second half of the year, as rental and capital growth outlook remains positive.
But while there is ample liquidity, there are few core assets for sale, particularly in the commercial sector, and investors are shifting their focus to the industrial sector or secondary buildings with potential for asset enhancement, it added.
Source : Today – 8 Jul 2011