Property consultancy Savills said the real estate investment sales market recorded S$13.4 billion worth of deals in the third quarter of 2013, as of September 24 — that is the highest quarterly transaction value in the the past five years.
The sales were partly driven by the divestment of several commercial properties into the SPH Real Estate Investment Trust as well as the OUE Hospitality Trust. Savills said investment sales in the commercial sector accounted for a lion’s share of transactions in Q3 at nearly 36 per cent.
The hotel segment made up about 21 per cent of the deals in Q3, followed by mixed development accounting at 17.5 per cent, the residential sector at 14.1 per cent, and industrial at 10.9 per cent.
Analysts said the commercial sector, especially the retail segment could see more investment activity. For example, two retail malls was put on the market this week — Serangoon Plaza, priced at between S$360-368 million; and Cityvibe mall in Clementi, with an asking price of over S$130 million.
Alan Cheong, research head of Savills Singapore, said: “The commercial market, except office, the retail yields are still pretty attractive relative to residential or office sector, so we see some institutional buying of retail malls, because they still yield 4.9 per cent to 5.1 per cent on a nett basis if you are priced at something like S$2,500 psf.
“Serangoon Plaza, Broadway Plaza and Katong Shopping Centre — I think these are just three example of malls which have the potential to see enhancement of value, they are all trading way below the average of typical strata titled mall development.”
Source : Channel NewsAsia – 27 Sep 2013