Property investment sales down 8.5% in Q1 on-quarter to S$2.64b

Investment sales in the property market finally slowed in the first quarter this year.

Property consultant DTZ Research said the value of investment transactions in the first three months this year fell 8.5 per cent on-quarter to S$2.64 billion.

It was the first drop after three straight quarters of increases.

The industrial sector leapfrogged the residential sector to account for the bulk of the investment transactions.

Sales in the industrial sector made up S$1.02 billion or 38.5 per cent of the total transacted value.

DTZ said the sector saw good sales due to the sale and leaseback deals that were made by soon-to-be-listed Cache Logistics Trust, racking up deals worth S$713.2 million.

Residential investments came in second at S$879.2 million or 33 per cent of the total investment value.

The majority of the residential investments was from the sale of sites in the Government Land Sales (GLS) programme.

DTZ noted that with just 6.3 per cent share of total residential transactions, private investment sales were noticeably crowded out.

It predicted that this trend is likely to continue with the GLS programme expected to be the main source of land supply for residential development.

This is due to the variety of GLS sites available and the speed at which they could be tendered for and put on the drawing block for sale in less than a year.

DTZ also forecast that there could be more foreign purchasers in the coming quarters.

This, it said, is evident from the major acquisitions of two office buildings, Robinson Point and One Finlayson Green, both of which were bought by foreign investors.

DTZ said an ongoing economic recovery is expected to lead to increased investment activity this year.

The figures compiled by DTZ Research comprise transactions that are more than S$5 million each.

They exclude S$1.75 billion of transactions in single residential units, or lots that cannot be redeveloped/subdivided into more than one plot, as well as deals that are deemed to be interested person/party transactions.

Source : Channel NewsAsia – 6 Apr 2010

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