Property investment sales market up in Q4 last year

Property consultant Colliers International said Singapore’s property investment sales market strengthened further in the last quarter of 2010, ringing in sales of S$12.26 billion.

That was up 29 per cent quarter-on-quarter, but remained lower compared to the record S$12.69 billion chalked up during the peak in the third quarter of 2007.

Colliers released the information in its latest Knowledge Report on Monday.

The Colliers report said the investment sales market in the quarter ended December last year was driven predominantly by large-sized transactions worth at least S$100 million apiece.

In fact, some S$8.6 billion from 24 of such big-ticket deals contributed 70.1 per cent to total investment sales value during this period.

This was a 34.8 per cent improvement from the previous quarter and more than fourfold the value seen in the same period in 2009.

However, it was still 19.1 per cent lower than the S$10.62 billion recorded from the 22 big-ticket sales transactions seen at the height of the investment sales market in the third quarter of 2007.

Meanwhile, Colliers said the large-sized deals during the quarter mainly involved commercial properties, which accounted for 48 per cent of all large-sized transactions.

This was followed by mixed-use properties accounting for 26.5 per cent, and residential properties accounting for 23 per cent of all large-sized transactions.

Of these big-ticket transactions, three were billion-dollar deals – the largest being the sale of a white site located on Peck Seah Street and Choon Guan Street under the Government Land Sales Programme.

Suitable for developing into a mixed development with private housing units, hotel rooms and commercial space, the 1.5-hectare site was won by GuocoLand which bid a whopping S$1.71 billion, or S$1,006 per square foot per plot ratio.

The next largest billion-dollar deal was Suntec REIT’s acquisition of a one-third stake in phase one of Marina Bay Financial Centre (MBFC) from Cheung Kong Holdings and Hutchinson Whampoa for S$1.5 billion.

This translated to S$2,568 per square foot on total net lettable area (NLA), including rental support.

Following close behind was a deal that similarly involved a one-third stake acquisition in phase one of MBFC by K-REIT Asia from Keppel Land for S$1.43 billion, or S$2,450 per square foot on NLA, including rental support.

Going forward, Colliers said the low interest rate environment, which is expected to continue, together with the high liquidity and easing of credit here will set the stage for property purchases.

It expects REITs, in particular, to continue their acquisition spree as they capitalise on the recovering property market cycle for further asset portfolio enhancements and growth.

Colliers added that the investment sales market is poised to benefit from foreign buying interests redirected to the Republic as a result of the stringent curbs in property markets in the region.

Source : Channel NewsAsia – 24 Jan 2011

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