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Record $9.23b of properties sold in first quarter, says CB Richard Ellis

DEVELOPERS and investors continued to snap up properties in the first three months of this year, setting yet another record for investment sales.

They bought $9.23 billion of investment properties, the highest quarterly value in at least 11 years, said property consultancy CB Richard Ellis (CBRE) yesterday.

This comes on the heels of a bumper year for investment sales, which amounted to a decade-long high of about $27 billion last year.

And the momentum is likely to continue, leading to a new record this year, said Mr Jeremy Lake, CBRE’s executive director of investment properties.

‘We’re at a rare point in time where all the sectors are experiencing strong demand,’ he said.

‘In any market at any point, you normally find one sector that stands out and another that is weaker, but right now in Singapore, all five engines are roaring away.’

These five ‘engines’ are the residential, office, retail, hotel and industrial sectors, said Mr Lake.

For each sector, investment sales - comprising property sold for more than $5 million - are often used to measure medium- to long-term confidence from the view of developers and major investors.

Although all five sectors did well in the quarter, residential sales took the lion’s share of deals, accounting for 60 per cent of total investment sales, said CBRE.

This was boosted by the record amounts paid for Gillman Heights, Horizon Towers and Anderson 18.

The three estates, which were all sold this year, alone accounted for $1.5 billion of the quarter’s investment sales. They now hold the top three spots in terms of dollar value paid for a residential collective sale site.

In all, 26 residential sites were sold en bloc, fetching a total value of $3.84 billion.

But the office sector saw the biggest deal of the quarter - the $1.04 billion sale of Temasek Tower to a fund.

Trailing that in the sector were the Singapore Exchange’s sale of its SGX Centre stake for $271 million, and OCBC Bank and CapitaLand’s sale of their stakes in Samsung Hub for $275.3 million.

In total, commercial deals made up 36 per cent of investment sales in the quarter, or $3.15 billion, said CBRE.

Hotel sales also remained ‘very healthy’, said Mr Lake.

He expects activity in the hotel and office sectors to keep buzzing in the light of the limited supply of properties in both categories.

Even the industrial sector, which has remained relatively low-key so far, did well. It was buoyed by active acquisitions by real estate investment trusts, Mr Lake said.

In the public sector, the sale of five Government sites and some Sentosa Cove land parcels boosted its share of investment deals to $1.55 billion. And this sector is likely to do better in the months to come, with more Government sites slated to come on the market, said Mr Lake.

These include highly anticipated commercial sites such as the former Non-Commissioned Officers Club on Beach Road and a land plot at Marina Bay.

So far, there has been ‘positive response to the sites in the confirmed Government land sales list’, said Mr Lake.

He added that in general, it is ‘extremely likely that investment sales for this whole year will set another record’.

It will probably surpass last year’s record, ‘which was in itself a quantum leap over the previous record’, he said.

Source : Straits Times - 30 Mar 2007