Property investment sales fall 48.9% QoQ to $4.8b  in Q3

Knight Frank said investment activity in the investment market has turned cautious.

Amidst recession fears, the property investment market saw a drop in total sales for the third quarter, falling 48.9% QoQ and 38.5% YoY to $3.8b.

“A deterioration of economic conditions globally and rising interest rates exacerbated concerns over persisting headwinds, as business sentiments worldwide dialled down in the third quarter,” said Knight Frank.

Across property sectors, sales also declined in the shophouse investment market (-37.7% QoQ to $228.7m).

Knight Frank said the decline in the sector suggests that “elevated prices have met resistance by prospective buyers.”

“While most owners are under no pressure to sell, the increasingly clouded economic outlook pushed buyers to adopt a cautious stance as fears of a recession spread across the globe. With a widening gap in price expectations, sellers should be cognizant of the shifting sentiment due to increasingly uncertain economic conditions,” the expert added.

The largest deals transacted from July to September were three Government Land Sales (GLS) sites which comprised two non-landed residential parcels (Lentor Central, Lentor Hills (Parcel B)), and an executive condominium plot at Bukit Batok West Avenue 5.

The sites racked up $1.1b in investment volume.

Other notable deals in the quarter include the acquisitions of a logistics property at 1 Buroh Lane ($191.9m) and Phillips APAC Centre ($104.8m) by Ascendas REIT, followed by the en-bloc sale of BHL Factories ($130.5m). 

Apart from GLS sites, residential en-bloc sales also accounted for some of the most significant transactions in Q3, said, Knight Frank.

“Collective sales activity in Q3 was the highest thus far on a quarterly basis this year, primarily due to Chuan Park changing hands for a substantial $890.0 million, accounting for some 58.8% of the total en-bloc sales value in Q3 2022,” Knight Frank added.

By end 2022, Knight Frank expects property investments to reach $30b to $32b, lower than its previous estimate.