Property investment sales surged 89% as market beats trade worries

The residential en bloc momentum continued to bolster sales to $11b.

The total property investment sales in Singapore grew 89% YoY to $11b (US$8.4b) in the first quarter of 2018, driven by significantly higher residential land sales, Colliers International data as at 13 April 2018 revealed.

However, this is 12% below a very strong Q4 2017 as commercial deals declined 86% QoQ. In Q1 2018, residential collective sales continued their strong momentum since Q2 2017, rising 29% QoQ to $5.83b.

As a result, the residential segment dominated investment sales in Q1 with an 83% share whilst commercial transactions only made up 4% of the pie, compared to 30% for the whole of 2017. Meanwhile, the industrial sector made up 6% of investment sales in Q1 2018.

Colliers International research director and head Tricia Song noted that there is keen interest in commercial property transactions and she expects more to materialise over the course of the year, supported by a strengthening leasing market.

“Industrial investment sales remained relatively soft during the quarter but we note increasing interest from industrialists and institutional investors as rents bottom. There is also improved interest in the hospitality segment as local hotel occupancy and daily rates improved,” she said.

Despite threats of a trade war, Song noted that Singapore’s property sector remained buoyant in Q1. Previously, US president Donald Trump announced a plan to implement 25% tariffs on steel imports and 10% tariffs on aluminium imports, igniting the risk of escalating trade tensions and sparking a trade war. “Following these developments, equity markets have been more volatile,” she explained.

Amidst all these, Singapore's GDP grew 4.3% YoY, faster than the 3.6% in Q4, driven by the twin engines of manufacturing and services, which grew 10.1% and 3.8% respectively.

Song added that Singapore's property sector continued its positive momentum, on track for another strong year. “Developers' appetite for residential sites remained high, demonstrated by keen participation in both the collective sales market and state land tenders. The five largest deals in Q1 2018 were all residential collective sales,” she added.

Pacific Mansion was sold en bloc for a record $980m, followed by Park West at $840.9m. Colliers also noted the sale of Pearl Bank Apartments ($728m), Goodluck Garden ($610m), and Brookvale Park ($530m).