Hotel assets sales up a whopping 200% in 3Q14

Major deals from InterContinental Singapore and Frasers Suites.

The investment sales market picked up in Q3 with about S$5.96 billion of investment sales recorded, up 25.9% from S$4.73 billion in Q2/2014. Amid the sluggish primary residential sales market, which resulted in restrained bids for development sites, the private hospitality segment emerged as the key driver for the huge growth this quarter.

According to a report by Savills, the public sector contributed S$1.81 billion, reflecting a smaller share of 30.3% and a further decline of 11.1% QoQ. Thirteen state land parcels were awarded, comprising five residential sites, seven industrial sites and one mixed (commercial and residential) site.

Savills adds that the hospitality segment saw more than a tripling of last quarter’s value of hospitality assets sold, amounting to S$1.10 billion, or 18.5% of total investment sales. Major hospitality deals were from InterContinental Singapore (S$497.0 million) and Frasers Suites Singapore (S$327.0 million). The mixed use and industrial segments contributed the remaining 15.6% (S$929.6 million) and 7.8% of total investment sales (S$464.8 million) respectively.

On the other hand, private sector investment sales accounted for the remaining 69.7% or S$4.15 billion. This represents a surprisingly strong QoQ growth of 53.7% from S$2.70 billion in Q2/2014, albeit a long way from Q3/2013’s record of S$9.83 billion.