Real estate investment sales leapt 53.7% to $11.2b in Q3

Deals in the hospitality sector surged five times over.

Real estate investment sales soared 53.7% QoQ to $11.2b in Q3 with all segments of the property market recording stronger sales, Colliers International reported.

Investments in the commercial sector took up the most total volume at 41%, rising 3.2% QoQ and skyrocketing 121% YoY at $4.6b, anchored by deals for Duo, 313@Somerset and 71 Robinson Road.

For 9M 2019, the commercial tally surged 174% YoY to $10.3b. Sales are projected to hit a record high for the whole 2019, beating $12.5b in 2007.

Also read: Chart of the Day: Real estate investment sales volume dropped 43% to $13.5b in H1

It was however the hospitality sector that saw the biggest growth in deals, surging over five times QoQ and over 18 times YoY to $2.8b, the highest recorded on a quarterly basis. Transactions in the sector for 9M 2019 also totaled a record-breaking $4.2b.

Residential investment sales likewise soared 90.1% QoQ and 4.7% YoY to $3.1b and accounted for 27% of total transactions, bringing the 9M 2019 volume to $5.8b. Public land sales represented 62% of the total, with four sites valued at a combined $1.9b awarded. Transactions in luxury homes, including Good Class Bungalows (GCBs), also jumped 62.4% QoQ and 53.8% YoY to $1.1b in the quarter.

However, with a weaker collective sale market, investment is expected to fall 55% from the record level in 2018 before recovering in 2020.

Industrial investment sales edged up 12.0% QoQ to $681m, mainly on Keppel DC REIT’s acquisition of two data centres. On a YoY basis, the sales volume plunged 41.2%. Over the first nine months, the sales tally for industrial properties remained modest at $1.8b.

Sales for the full year is expected to grow 30% YoY on big-ticket transactions, with more industrial assets to be transacted by REITs.

"Amid unprecedented levels of uncertainty in the global environment, Singapore remains firmly on investors’ radar owing to its growth potential, stable government, and pro-business policies," Colliers head of research for Singapore Tricia Song said.