Singapore property market investment sales amassed $977bn in 1Q 2011

The residential sector led the investment sales market, contributing a total of $970 billion.

According to Colliers International, his represents 37.8% of the deals done in the quarter.

Commercial and mixed-use properties accounted for $2.26 billion (23.1%) and $1.83 billion (18.8%) of all investment sales transactions, respectively.

Although the quarter’s sales is a 20.3% moderation from the $12.26 billion garnered in the preceding three months, it is still a marked 67.9% stronger than the level managed in the same period in 2010 when the Singapore investment sales market was on its nascent phase of recovery. This indicates that market fundamentals remained largely positive despite the uncertainties.

In another showcase of players’ unwavering upbeat sentiment and optimism in investment sales, developers went on to set four record prices in the Government Land Sales (GLS) market, even after the Government’s
introduction of the cooling measures during the quarter.

Besides their aggressive bid prices, developers’ appetite for development land also stayed strong. The largest GLS transaction in terms of absolute price quantum in the March quarter was awarded to the 3-ha mixed-residential and commercial-development site located on Punggol Walk/Punggol Central to the joint-venture between Frasers Centrepoint Limited, Far East Organization and Sekisui House Limited for $1.02 billion, or $753 per sq ft per plot ratio.

In all, a total of six residential sites (including a site designated for EC development and two sites for the Design, Build and Sell Scheme), three hotel land plots, four industrial sites, a site for petrol station use and a land parcel for mixed residential and commercial development were awarded by the Government in 1Q 2011. These amounted to a healthy value of $3.38 billion, not far off from the $3.98 billion sold by the Government in the preceding quarter.

The private sector land sales market, too, told the same upbeat story. In fact, sales picked up momentum in 1Q 2011 where some $992.58 million worth of private development sites were sold to developers, a 94.7% improvement from 4Q 2010.

In particular, the collective sales of existing projects for redevelopment amounted to $588.88 million from seven deals in the March quarter, up from $427.20 million from 11 transactions in 4Q 2010. This is the result of the conclusion of higher value deals ranging from $30.50 million to $147.60 million, compared to $12.00 million to $104.77 million in the preceding quarter – an encouraging sign of developers’ growing appetite for collective sales sites.

In the industrial sector, major deals concluded by institutional investors were Cambridge Industrial Trust’s purchase of a warehouse development at 4 and 6 Clementi Loop for $116.80 million and Sembawang Equity Capital’s acquisition of a 50% stake in Big Box Pte Ltd which owns the land and the uncompleted Big Box warehouse project in Jurong for $95.00 million. An industrial building located on Ang Mo Kio Avenue 5 changed hands too at $91.50 million during the quarter.

In the hotel sector, Republic Iconic Hotel Pte Ltd sold Studio M Hotel in Robertson Quay to CDL Hospitality Trust at a price of $154.00 million, or $427,778 per room key.