Investment property sales grow 86% on-year

The property investment market in Singapore recorded S$5.91 billion in sales for the third quarter of 2010.

This is an 86 per cent on-year growth, according to property research firm Jones Lang LaSalle (JLL).

However when compared to the previous second quarter, investment property sales slipped eight per cent.

Still, there are several deals under conditional contracts worth more than S$590 million and this can prop-up third quarter sales to close even higher than last quarter, JLL said.

JLL pointed out that there was a shift in investors’ profile, with significant contribution from bigger players and also increased activity in the non-residential sector.

It added the office sector was a standout, with only seven transactions, but sales numbers hit S$1.91 billion.

This is almost a five-time increase on-quarter.

It said this was due to returning investors’ confidence as some real estate indicators suggest that the office market is bottoming out.

The largest transaction came from the sale of DBS Towers, purchased by Overseas Union Enterprise at S$870.5 million.

Government land sales also performed well.

A commercial site at North Buona Vista Drive was awarded to Singapore-listed developer Ho Bee Developments at S$411 million.

JLL added the hotel sector also seemed more upbeat with a 23 per cent increase in investment sales to S$519 million on-quarter.

Going forward, the firm expects investors to continue their focus on non-residential sector given the recent measures targeted at cooling the residential property market.

JLL’s head of research for South East Asia Dr Chua Yang Liang said: “With improving market sentiments and office rental growth gaining strength, investment sales in this sector will likely remain positive and face upside.

“Already brewing in the pot are potential deals by Goldman Sachs Funds for Hitachi Tower and Chevron House”.

Source : Channel NewsAsia – 20 Sep 2010

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