The total real estate investment volume in Singapore increased to $16.74 billion in the third quarter of 2019, a 150 per cent jump from the $6.7 billion in 2Q 2019, according to Cushman&Wakefield report.
It is 49 per cent more than the volume of $11.24 billion for 1Q2019 and 2Q2019 combined. The commercial sector led the way with $6.27 billion worth of investment sales.
Transactions in the industrial sector in the third quarter of 2019 totalled $4.07 billion. The residential sector accounted for $3.03 billion while the hospitality sector also had a strong showing of $2.92 billion.
“Year-to-date, investment sales volume currently tracks at $27.98 billion, bumped up by the robust Q3 contribution. It is increasingly likely that the 2019 full-year volume will surpass 2018’s volume of $33.96 billion. Grade A CBD office capital values recorded a marginal increase to $2,930 psf, while yields remained stable at 3.20 per cent. Slight yield compression could occur in 2020 if investor demand for assets in safe havens like Singapore increases amidst greater unrest in Hong Kong and the escalation of the US-China trade war. However, any gains in capital value could be mild as rents are expected to peak in 2019 in view of the subdued economic outlook,” said Christine Li, Head of Research, Singapore and Southeast Asia.
“In a tight commercial supply market such as Singapore’s, it is tempting for assets to chase price gains. That is where the market is headed now, creating a gap between sellers and buyers’ expectations. Still, Singapore’s gateway city status and its stable fundamentals make it an attractive destination for foreign funds,” said Shaun Poh, Executive Director of Capital Markets.
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Significant Private Investment Transactions in 3Q 2019:
