Government Land Sales poised to boost 2024 property investment market

An expert forecasts investment sales to increase to $25b-$28b this year.

The launch of 25 government land sales (GLS) sites, which includes the Jurong Lake District (JLD), will propel the property investment landscape in 2024.

According to EDMUND TIME, GLS contributed $7.8b in investment sales in 2023, 40% more than its contribution in 2022.

The share of GLS investments at 38.0% in 2023 was also double that in 2022 at 19.2%.

In 2023, the government awarded 14 GLS sites. Of the 14, four took place in 4Q23, amounting to $2.9b.

Meanwhile, the private sector saw a decline in investment sales by 45.8% to $12.7b, down from the $23.3b recorded in 2022. 

"Investment appetite has been curtailed by the elevated financing environment," commented EDMUND TIE.

In 2023, sales of office spaces and retail properties experienced substantial decreases of 73.1% YoY and 55.9% YoY, respectively.
"Investors are favouring smaller and more efficient office spaces. In 2023, the average office transaction quantum was around $70m, a notable decrease from the $215m recorded in 2022," EDMUND TIE said.

A big contributor to the private sector investment sales is collective sales, accounting for 17.8% of the sales in 2023.

In 4Q23, collective sales transactions amounted to $619.2m, bringing the total to $2.2b for 2023.

Adding the contribution from GLS and the private sector, total investment sales in 2023 was $20.4b, a 29.4% drop from 2022.

“As the economic recovery gains traction in 2024, investment activity in the office and retail sectors could pick up,” said EDMUND TIE.

For 2024, EDMUND TIE expects investment sales to increase to $25b-$28b.