Property investment sales hit record $13.3b

PHOTO: Property investment sales hit record $13.3b

Private-sector spending helped push property investment sales to a record level of $13.3 billion in the third quarter.

The bumper total trumped the previous high of $12.4 billion set during the corresponding period in 2007, said a DTZ report on Thursday.

Property investments include the sale of land, buildings and multiple residential or commercial units worth at least $5 million each.

Private-sector acquisitions made up 70 per cent of investment activity in the three months to Sept 30, largely because three real estate investment trusts (Reits) were listed on the Singapore Exchange. The result was $3.1 billion worth of investments in mixed-use developments and $2.8 billion in hotels, said DTZ.

In July, Paragon shopping mall was injected into SPH Reit for $2.5 billion. OUE Hospitality Trust bought Mandarin Gallery for $525 million when it listed shortly after.

DTZ noted that if investments from Reits were excluded, overall property investment would have come in at $7.7 billion - still 31 per cent higher than levels in the second quarter.

Deals in the hospitality sector helped drive up investment sales too. Seven hotels were sold for $2.86 billion in total - about $1 million per room.

Sale prices recorded were $1.16 billion for the Grand Park Orchard hotel, $232 million for Gallery Hotel, $211 million for The Sentosa Resort & Spa and $35 million for Hotel 1929.

Investments in the public sector outdid levels in the previous quarter by 80 per cent as developers competed fiercely for sites under the Government Land Sales programme.

DTZ said there were six to 16 bids for each residential site tender during the quarter, and a tender for an executive condominium site in Yuan Ching Road smashed records when it drew a record price of $481 per sq ft (psf) per plot ratio (ppr).

In terms of investor profile, domestic investors accounted for about 88 per cent of property investment sales in the last quarter.

Although foreign investments made up a smaller proportion, they rose 9.3 per cent from levels in the previous quarter to $1.6 billion, said DTZ. Thus, foreign property investment volumes rose to $3.2 billion for the nine months to Sept 31 - already exceeding the $3.1 billion seen for the whole of last year.

"Investment volume for the full year is now expected to come in on a par with or slightly higher than the $29.3 billion invested last year," said DTZ Singapore research head Lee Lay Keng.

ocheryl@sph.com.sg


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