Investment sales soar 86.8% YoY to $26.1b in Q4 2021

This is on the back of major commercial deals.

Investment sales soared to $26.1b in the fourth quarter (Q4) of 2021, representing an 86.8% year-on-year (YoY) and 3.8% quarter-on-quarter (QoQ) jump, data from investment management firm Colliers showed.

In its Investment Market Outlook 2022 report, Colliers said the growth was driven by major commercial deals, government land sites, and a resurgent collective sales market.

Across sectors, the biggest contributor to investment sales for the whole year was residential, making up 43% of the total sales for Q4, followed by office (17%), and industrial  (16%).

In terms of growth, however, the big winner was industrial which saw its investment sales increase close to five times QoQ from a low base in the third quarter of 2021. (Read more on our Chart of the Day story).

Despite only contributing 4% in the full-year total investment sales, Shophouses was also amongst the sectors which posted the highest growth for the last quarter of 2021, recording a 118.3% QoQ increase in its transaction volume to $355.9m. This brought shophouse sales volume for 2021 to $962.6 m, a 105.9% YoY jump.

“Shophouses, specifically those granted commercial use, will likely get more attention as they offer flexible property usage, a stable rental income and capital appreciation potential at a palatable investment quantum,” Colliers said.

The commercial sector likewise posted sales growth reaching $1.93b in Q4, which is a 62.9% QoQ increase. Investment in this sector was boosted by the sale of One George Street for $1.3b.

“There were several transactions of offices with redevelopment potential, as investors look for ways to unlock value. For retail, we expect continued demand for suburban retail assets, which have proven their resilience during the pandemic, as well as some opportunistic buying,” the firm said.

Unlike other sectors, residential saw a decline in its sales, dipping 1.8% QoQ to $3.4b. Looking at its full-year sales, however, the sector was able to double its 2020 volume, reaching $11.5bn on the back of healthy luxury sales, the resurgent collective sales market, as well as government land sales.

This growth, however, is likely to moderate going forward given the “new cooling measures and higher property taxes introduced in the 2022 budget,” the firm said.

“We believe these policies will reduce the appeal of larger residential sites, high-end residential, and residential assets as an investment,” Colliers added.

Meanwhile, the hospitality sector had no meaningful change in Q4 2021.

Overall, Colliers said investment sales in 2022 to be higher on the back of large commercial deals in the pipeline.