Property investment sales up 2% to $9.5b in Q2

The 18.4% decline in residential investment sales arrested more potential growth.

Singapore’s property investment sales climbed by 2% to $9.5b in Q2 2018 from $9.4b in Q1, Edmund Tie & Company (ET&Co) revealed.

It noted that residential investment sales already recorded an 18.4% decline for the quarter, which may be due to a lower quantum of the residential collective sales that was transacted. Nevertheless, they were still the largest contributor to the total investment sales, constituting 61.6%

There was only one en bloc sale in the range of $500m to $1b (Tulip Garden, for $906.9m), whilst there were five such transactions last quarter.

Despite the lower quantum of the en bloc sales, the sale of the freehold Park House for $375.5m to Shun Tak Holdings translated to a record collective sale price of $2,910 psf ppr based on the maximum allowable gross floor area (GFA) of 129,000 sq ft, excluding the 10% bonus for balconies. This exceeded the previous record price of $2,526 psf ppr for the freehold Hampton Court site at Draycott Park, which was sold to Hong Kong’s Swire Properties.

Apart from residential investment sales, hotel investment sales also registered a decline. Despite the QoQ declines in both sectors, investment sales in the other sectors rose significantly.

The largest increase was in the office sector, expanding largely from $142.6m in Q1 2018 to $910.4m in Q2 2018. This was mainly due to the sale of Twenty Anson from CapitaLand Commercial Trust (CCT) to an undisclosed buyer for $516m and MYP Plaza from MYP Ltd to Filipino billionaire Lucio Tan’s group of companies for $247m.

Separately, investment sales from Government Land Sales (GLS) also rose significantly in Q2, increasing by 81.6% QoQ to $2.9b. This was attributed to the large price tags of the sites at Holland Road and Silat Avenue, with a bid price exceeding $1b each.

ET&Co added that whilst the residential site at Silat Avenue only attracted one bid of around $1.04b, the commercial and residential site at Holland Road attracted 15 bids under the Concept and Price Revenue Tender and was eventually awarded to Far East Organization for $1.2b.

Under the H2 2018 GLS Programme, there will be six sites on the Confirmed List and nine sites on the Reserve List. The six sites on the Confirmed List comprise four residential sites (which includes one Executive Condominium site), one “white” site and one hotel site.

This expected new residential supply was similar to the H1 2018 GLS Programme, which may allow the Government to control rising property prices and not create an oversupply, ET&Co said.

“With the continuation of the en bloc fever, there appears to be a growing tendency towards well-located developments, particularly in the prime areas,” it added. “As more options are available in the market, developers are more selective in strategically located sites that are realistically-priced.”