Investment sales of property reach $28.7b this year

Investment sales of property reach $28.7b this year

SINGAPORE - Investment sales of property - which refer to transactions of $10 million and above - have fallen to about $6.9 billion so far this quarter (up to Dec 11), from the $9.3 billion in Q3, estimates Savills Singapore.

The slowdown came amid a halving in deals originating from the private sector to $3.7 billion so far in Q4 from $7.2 billion the previous quarter.

"The weak global economy and a still-wide bid-ask gap remained key reasons for the tepid investment activities in the private sector. As well, the year-end holiday season has stretched negotiations and decision-making," Savills said.

Big-ticket deals originating from the public sector - predominantly Government Land Sales (GLS) - climbed to $3.2 billion in the Oct 1-Dec 11 period from $2.2 billion in Q3.

"To replenish their land banks, local and even foreign developers contested aggressively at GLS tenders. In particular, riding on the current buoyant sales market for executive condos (ECs), strata offices, shops and medical suites, record prices were set for some sites slated for such use," it added.

Savills said that including outstanding state tenders, caveats for other transactions which have yet to be lodged and the expected sale of 79 Anson Road, Q4's final tally could hit $7.6 billion.

Year-to-date (up to Dec 11), $28.7 billion of investment sales deals have been transacted, though 2012 could end at around $29.5 billion, it estimated.

That would be slightly shy of the $30.1 billion last year and $32 billion in 2010.

Steven Ming, deputy managing director of Savills Singapore, expects a slight cooling in investment sales next year to $25-$27 billion.

"The world economy is far from being out of the woods, and this in turn will affect investment sentiment. A still wide bid-ask gap will remain, lengthening negotiations."

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