Property investment sales plummet 47% to S$4.51b in 3Q11

And guess which property sector was the star performer for the quarter?

The industrial sector was the star performer, surging 170.5% from S$418.6 million in Q2 to S$1.13 billion in Q3, according to Savills’ report.

Investment transactions worth approximately S$4.51 billion were recorded in Q3/2011, falling 46.9% quarter-on-quarter from Q2’s total of S$8.51 billion.

Private-sector investment sales accounted for a bigger share of total investment sales at 65.7% or S$2.97 billion, while the public sector chalked up the remaining 34.3% or S$1.55 billion. On a quarterly basis, the private sector saw a decline of 26.7% from S$4.05 billion in Q2. The residential, commercial and hotel sectors saw declines in transaction values in the order of 46.1%, 56.1% and 43.9% quarter-on-quarter.

On the other hand, the industrial sector was the star performer, surging 170.5% from S$418.6 million in Q2 to S$1.13 billion in Q3. The increase was boosted by the divestiture of the second phase of JTC Corporation’s industrial properties and industrial REITs’ portfolio acquisitions.

In the public sector, ten government land parcels, comprising six residential sites, three industrial sites and one commercial site, were bought by developers.

Similarly, sales volume was 65.3% lower than the previous quarter, partly due to the high base in Q2 when 15 state land parcels were sold.

Weaker prospects for the US and eurozone economies, coupled with the volatile stock market, have dampened market sentiment among developers, funds, individual investors and end users alike. Caution prevailed in the market, as evidenced by the thinning number of big deals that were transacted and subdued responses to the state land tenders, which received more realistic bids.

For example, there were only 11 private-sector transactions over S$50 million each in the reviewed quarter, significantly less than the 20 deals in Q2. The top bids for several sites from the GLS Programme, such as the industrial site at Woodlands Avenue 12 (parcel 3), two residential sites at Upper Serangoon and a commercial site at Robinson Road/Cecil Street, were noticeably lower than prices of nearby plots sold at earlier dates.