Residential and industrial investment sales rise 26% in 2Q2021: CBRE
By Timothy Tay
/ EdgeProp Singapore |
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SINGAPORE (EDGEPROP) - Preliminary real estate investment volume in Singapore for the first six months of 2021 stood at $9.17 billion, according to CBRE Research. This figure is already 78.8% of the real estate investment volume in 2020. The volumes take into account real estate transactions above $10 million only. (See also: Asia Pacific real estate investment to rebound 15-20% y-o-y in 2021: JLL)
The second quarter of 2021 generated investment volume worth $5.11 billion, which is a 26% q-o-q increase. The increase is largely attributed to residential and industrial transactions.
Residential investment sales climbed 64.6% q-o-q to $2.65 billion, mainly due to the sale of Government Land Sales (GLS) sites at Northumberland Road, Ang Mo Kio Avenue 1, and Tengah Garden Walk (an executive condo site).
Excluding government land sales, residential sales in the last quarter raked in $1.42 billion. This was attributed to strong activity in the luxury apartments and Good Class Bungalows markets.
“The active real estate investment sales scene in Singapore indicates that there is abundant liquidity waiting to be deployed, and investors are undeterred by the travel restrictions and the recent heightened measures,” says Michael Tay, CBRE head of capital markets, Singapore.
He adds that technology, in the form of virtual viewings and presentations, has helped significantly to facilitate deals.
Industrial transactions clocked in $992.06 million in 2Q2021 which is a 7.9% fall q-o-q. Last quarter saw the acquisition by Ascendas REIT of the remaining 75% interest in Galaxis for $534 million, and ESR Reit's acquisition of Global Trade Logistics Centre for $119.6 million. Separately, the period also saw eight factories and five warehouses that were transacted.
The office sector recorded a 23.3% q-o-q decline but preliminary volume came up to $755.23 million. This was attributed to Suntec Reit divesting its 30% stake in 9 Penang Road for $295.5 million, the sale of Maxwell House for $276.8 million, and the sale of a 40% stake in Westgate Tower to Sun Ventures.
“There has been little or no signs of distress, with prices supported by the macro-stability and effective handling of the pandemic by the Singapore government,” says Tay. Investors are also banking on Singapore’s projected recovery on the back of a calibrated reopening strategy, vaccination roll-outs, and the gradual lifting of travel restrictions, he says.
Looking ahead, CBRE expects investment sales volume to rebound strongly for the whole of 2021, led by residential, office, and industrial sales. GLS sites will continue to account for a significant portion of real estate investment volume this year.
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