The largest investment transaction in 1Q22 was Lendlease Global Commercial REIT’s acquisition of the remaining stake in Jem, at approximately $1.4 billion (Photo: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - Singapore registered a total of $9.4 billion in property investment sales in 1Q2022, maintaining the “encouraging pace” set in the later half of last year, according to research by Knight Frank. (Check all latest Singapore property Market Trends)
See also: Singapore investment sales forecast to grow 5% per year in 2019–2024
The uptick in sales in 1Q2022 was underpinned by the award of government land sales (GLS) sites, coupled with significant commercial deals. The largest transaction recorded last quarter was Lendlease Global Commercial REIT’s acquisition of the remaining stake in Jem, at approximately $1.4 billion ($2,329 psf). This brought commercial sales to a total of $5.8 billion in 1Q2022.
“As additional buyers’ stamp duty (ABSD) is not required for commercial properties, investors of various risk appetites moved into this segment of the market,” says Knight Frank’s report. This includes the shophouse market, which saw considerable activity in 1Q2022, especially in the Joo Chiat and Little India areas. A total of $229.1 million in shophouse sales were recorded in 1Q2022. (Find Singapore commercial properties with our commercial directory)
Investments in the residential segment totalled $3.1 billion in 1Q2022. Knight Frank notes that the lack of available inventory led to a narrowed pool of potential accommodation choices for prospective buyers looking to move or upgrade their homes.
While Good Class Bungalows (GCBs) remain highly attractive to the affluent, the segment registered a slowing rate in sales, coming off a high number of transactions in 2021 that shrank the pool of properties left up for grabs. Nevertheless, the total GCB sales of $208.9 million were still generally higher than sales performance pre-pandemic.
Meanwhile, homeowners are still hopeful on collective sales, despite the cooling measures announced last December, notes Knight Frank. A series of strata developments were launched for sale in 1Q2022, including freehold condominium High Point for $550 million and Lakeside Jurong Apartments for $240 million.
While GLS sites provide developers with greater convenience and a quicker timeline in terms of the development process, the parcels of land available for tender this year are of larger sites. To that end, for developers who are on the lookout for sites in prime locations priced at a sweet spot of less than $500 million, the collective sales market remains the only viable alternative for land replenishment.
Knight Frank anticipates the investment market to continue being led by M&A deals by REITs, as well as land sales.
The further relaxation of Covid-19 measures that came into effect on March 29 are also likely to boost the inflow of investors, potentially increasing the demand for luxury non-landed homes as well as reviving the retail and hospitality sectors.
Given the robust investment demand from institutional and retail investors, Knight Frank is projecting total investment sales for Singapore this year to come in between $28 billion and $30 billion.
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