Real estate investment sales surge in Q2: Savills

Sales reached $3.29b.

Transactional values of real estate investment sales jumped 50.7% quarter-on-quarter (QoQ) to $3.29b in the April to June period, Savills Research said.

Broken down, residential investment sales dipped 9.8% QoQ to $1.56b whilst commercial investment sales recorded a 77.9% slump to $940.7m.

The sale of strata-titled offices and conservation shophouses in Singapore has been dominated by ultra-high net-worth individuals (UHNWI) and family office buyers. 

This trend is evident in the significant increase in sales quantum observed in the recent quarter. 

Strata offices recorded a resilient sales quantum of $298.5m, while shophouses saw a substantial 43.1% increase in sales, amounting to $390.3m.

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Savills said a reason for this trend could be the recent 60% additional buyer's stamp duty (ABSD) imposed on foreigners buying residential properties, which may have led some buyers to shift their interest from residential to commercial properties, specifically strata offices and shophouses.

During the quarter, eight transactions of strata offices worth a total of $298.5m were made. 

Notably, there was a significant sale of Levels 10 and 14 in Solitaire on Cecil to three entities affiliated with the Thye Hua Kwan (THK) Group of Charities for $103.2m, and several high-priced deals were also made for Suntec City.

The shift in preference from residential to commercial properties has led to an increase in the number of deals for shophouses, rising from 10 in the first quarter to 16. 

However, the ABSD hike has prompted more sellers to raise their asking prices or withhold their properties from the market in anticipation of better prices, which resulted in a larger bid-ask price gap and relaxed buying activities.