Real estate investment deals up 26.7% in Q1, 2021

Residential properties led the investment sales, Knight Frank Singapore has reported.

Investment sales activity amounted to $3.8b in the first quarter of the year, reflecting a 26.7% year-on-year increase from $3b in 2020, according to Knight Frank SIngapore.

This was linked to the residential sector, that attracted some $1.7b investment during the said period.

“The Good Class Bungalow (GCB) segment continued to draw strong interest due to its rarified and coveted status, as well as the entry of more family offices setting up in Singapore,” the report read.

Amongst the major deals during the quarter was the record-breaking sale of a GCB at Nassim Road, that amounted to $128.8m, or around $4,005 per square foot in March.

Knight Frank also noted that developers are looking to replenish their land banks through partnerships - as seen in the sale of Surrey Point by an Amara Holdings joint venture, and the purchase of two residential plots at Institution Hill through a consortium involving the Macly Group, Roxy Pacific Holdings and LWH Holdings.

The said transactions amounted to $47.8m and $33.6m, respectively. The property firm noted it expects more partnerships will be formed for the purpose of purchasing land. 

Moreover, the commercial and shophouse sectors also saw an increase, recording some $1.2b in investment deals. Amongst the major deals in the sector was the acquisition of a 50% interest in OUE Bayfront by Allianz Real Estate ($633.8m), and the Certis Cisco Centre by RBC Investor Service Trust Singapore ($150m).

The industrial sector, meanwhile, more than doubled its growth with some $906.1m worth of investment purchases. This was also driven by the acquisition of the Breadtalk IHQ by Lian Beng Group ($118m), and Sime Darby Business Centre by AIMS APAC REIT ($102m).

Further, outbound investment deals surged 45.6% YOY to $9.9b during the quarter, largely attributed to investors to develop data centres overseas.

Knight Frank said it sees capital outflow will expand in light of opportunities in other countries. In the local market, Knight Frank said property sales are put on hold as sellers wait for better prices.

“In the local real estate market, while sales activity has picked up, the stock of investment properties put up on the market is limited as most sellers are holding on to their assets in anticipation that these properties would be able to fetch a better price in the near future given that economic recovery seems more certain,” the report said.