Property investment sales value hits record low in Q4 2008

The value of property investment sales in Singapore hit a record low in the fourth quarter of 2008.

In its latest report, real estate consultancy Colliers International said total investment sales in the three months to December fell by 93 per cent on-year to nearly S$577 million.

This is the lowest since the property market picked up four years ago. It also represents a drop of 68.8 per cent from the third quarter.

Colliers said this is indicative of the weak economic outlook caused by the global financial turmoil as well as declining property prices. Investors are also more cautious about where they park their funds.

The industrial property sector held the lion’s share of investment sales for the quarter, accounting for 56.6 per cent of the total.

It also saw the largest transaction in the quarter with the purchase of a 4.7-hectare site Changi Business Park by Ascendas Land and Frasers Centrepoint for S$151 million. The site will be developed into an integrated retail, hotel and business park project.

However, the office sector was hit in the fourth quarter as rentals fell 20 per cent. Colliers said this brought an end to 18 consecutive quarters of rental uptrend in the office sector.

For the whole of 2008, investment sales amounted to S$17 billion – a drop of 58 per cent from the record high the year before.

Analysts expect investment sales value to remain thin over the coming quarters. But they added that the rough financial climate may cause firms to offload their properties to improve balance sheets.

There could also be higher foreclosure sales which may offer attractive investment propositions for potential investors.

Source : Channel NewsAsia – 20 Jan 2009

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