Property investment jumps 127% y-o-y in 2Q2021: Knight Frank

SINGAPORE (EDGEPROP) - Real estate investment sales in Singapore in 2Q2021 improved on the back of strong land sales and a rebound in demand from retail and institutional investors, according to a Knight Frank report. The quarter saw a total of $5.0 billion worth of investment deals, and this is a 127.3% y-o-y increase compared to the $2.2 billion recorded in the same period last year. (See also: Real estate investments up 11.5% q-o-q in 1Q2021, led by residential)

The bullish bids for three Government Land Sale sites in May and June reflect developers’ appetite for replenishing dwindling landbanks. Demand for land is expected to remain robust on the back of brisk sales in the private home market. Manageable sites with a redevelopment potential for 600 units or less in desirable locations will see keen competition.

Residential sales were also driven by the landed housing segment, particularly the sales of Good Class Bungalows which pulled in $526.4 million worth of transactions. Activity in this segment is likely to increase in 2H2021 from pent-up demand from foreign buyers. Notable GCB transactions include the sale of 71 Grange Road which fetched $48 million and 5 Astrid Hill which sold for $44.3 million.

In the commercial segment, key deals during the quarter include the sale of Suntec REIT's 30% stake in 9 Penang Road for $295.5 million, as well as the collective sale of Maxwell House for $276.8 million. Investment sales in the commercial quarter came in at $1.5 billion with shophouse transactions contributing $268.0 million.

Singapore’s plans to transit back to normalcy should result in a pick-up in the pace of investment activity in 2H2021. Knight Frank says that investment volume could reach about $30 billion for the whole of 2021, after clocking in about $9.5 billion in transaction deals in 1H2021.

Government land sales will remain a significant source of investment deals, followed by boutique collective sale sites, says Knight Frank. High-net-worth investors will also drive the market for GCBs, shophouses, and strata office units. Institutional investors will also scan for commercial and industrial assets.