According to CBRE Research, preliminary real estate investment volume in Singapore for the first half of 2021 came to S$9.17 billion, which is already 78.7% of 2020’s volume.
Q2 2021 alone generated S$5.11 billion, which reflects a 26.0% increase quarteron-quarter, and 1.3 times increase year-on-year from the depths of the pandemic in Q2 2020.
Michael Tay, Head of Capital Markets, Singapore, says, “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. Undeniably, technology had a big part to play with facilitating deals through virtual viewings and presentations.”
He adds, “Further, 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. It also appears investors are banking on a recovery story with Singapore’s calibrated reopening, vaccination rollouts, and the gradual lifting of travel restrictions.”
Investment volume for Q2 2021 was boosted by residential and industrial transactions.
For the residential sector, investment sales increased by 64.6% quarter-on-quarter to S$2.65 billion, mainly due to the sale of three Government Land Sales (GLS) sites (Northumberland Road, Ang Mo Kio Ave 1, and Tengah Garden Walk (EC). Excluding these GLS sites, residential sales volume still stood at S$1.42 billion, attributed to healthy activity in the luxury market for Good Class Bungalows (GCB) and luxury apartments. This reflects the confidence both private buyers and developers have in the long-term future and potential of Singapore real estate market.
Industrial transactions kept its pace at S$992.06 million this quarter. This reflects just a slight 7.9% drop q-o-q from the large transactions and Boustead portfolio deal recorded last quarter. AREIT acquired the remaining 75% interest in Galaxis for S$534 million, while ESR REIT acquired Global Trade Logistics Centre, a prime logistics facility for S$119.6 million. In addition to these two major transactions, another eight factories and five warehouses were transacted.
While the office sector registered a 23.3% q-o-q decline, it still turned in a strong performance, with preliminary volume coming in at S$755.23 million. This was attributed to Suntec REIT divesting its 30% stake in 9 Penang Road for S$295.5 million, Maxwell House being sold for S$276.8 million to a joint venture, and the sale of a 40% stake in Westgate Tower to Sun Ventures.
Mr Tay concludes, “Looking ahead, investment sales volume for 2021 is likely to see a strong rebound, led by residential, office, and industrial sales. This will largely be attributed to the upcoming three three attractive and relatively large GLS sites (at Jalan Anak Bukit, an executive condominium site at Tampines Street 62, and Lentor Central) scheduled for launch with tender closing next quarter.”