Residential investment sales plunge 50.4% to S$2.20b in 3Q11

However, this sector still accounted for the highest share of 48.6% in total investment sales.

In the public sector, six residential sites under the GLS Programme were sold for a total of S$1.1 billion, according to Savills’ report. While choice sites with good locations continued to receive overwhelming responses from developers, bids have been more reasonable, indicating developers’ cautious stance in view of ample supply from the GLS Programme and price resistance for private residential properties. For example, while the non-landed parcel at Upper Serangoon Road/ Pheng Geck Avenue attracted a total of 15 bids, Tuan Sing Holdings’ top bid of S$185 million or S$567 per sq ft per plot ratio was 6.6% lower than the price of an adjacent site which was awarded in June 2010.

The collective sale market has moderated in Q3 with five transactions worth S$453.5 million. The largest transaction was the S$171.1 million sale of Hong Leong Garden Shopping Centre, followed by Whitley Heights which was sold for S$159 million. The other three deals – Grand Tower, Daisy Apartments and Permai Court, were below S$100 million each. Uncertainty surrounding the property market, together with sellers’ unrealistic price aspirations, has limited the number of successful sales. This is particularly so for the large leasehold sites competing for the same capital as GLS sites, which have the advantage of offering a more certain and expedient sales process. Therefore, smaller sites might still be well-received, albeit at prices that are reflective of prevailing conditions.