Commercial investment sales plummet 53.1% to S$848.3m in 3Q11

The sector accounted for 18.8% of total investment sales in the quarter.

According to Savills’ report, the market response to the state tender of a 0.29-ha commercial site located at Robinson Road/Cecil Street was tepid, with just three bids and a top bid of S$311.8 million or S$882 psf ppr, which is reasonable in view of the increasing vacancies and moderating rents experienced in the CBD office market.

Two office buildings changed hands in the reviewed quarter – RCL Centre on Keppel Road for S$175 million and a small office building at 182 Clemenceau Avenue for S$74 million. It was noted that the buyers for these two properties were Asia-based private investors. Unlike institutional funds who have dominated the market in the previous years, these regional high net worth buyers do not only look at investment yields, but more at capital preservation, particularly under the current high-inflation environment.

Three strata office properties were transacted above S$10 million in Q3, down from six recorded in the previous quarter. Despite the subdued activity, the transacted prices by square footage – S$2,800 per sq ft for the 20th storey of Samsung Hub and S$2,880 per sq ft for the 42th storey of Suntec City Tower 1 – were the highest in the last ten years.

The retail investment market remained relatively active with the sale of five shophouses, one strata-titled shop unit in People’s Park Centre and the entire Bedok Point.

Frasers Centrepoint Trust bought Bedok Point, the first mall in the Bedok area from Frasers Centrepoint Limited for S$127 million, S$1,568 per sq ft on a net lettable area of 80,985 sq ft.