Colliers International Asia Market Snapshot Q2 2018 shows Singapore’s investment market remains active following acquisitions in both the residential and commercial sectors on the back of strong economic performance and an improving business outlook. 

Asia Market Snapshot Q2 2018 - Major Deals at a glance 

• Mainboard-listed China developer Yanlord Land Group and MCL Land, a unit of Hongkong Land Holdings, jointly acquired a prime freehold collective sale site at Tulip Garden for SGD906.889 million (USD692.84 million), reflecting an SGD1,790 per sq ft per plot ratio (psf ppr). The deal represents the second highest collective sale value in Singapore in 2018.
• A consortium led by Far East Organization was awarded a prime leasehold commercial and residential site in Holland Road under a dual envelope (Concept and Price) tender launched by the government, with a winning bid of SGD1.213 billion (USD0.90 billion), or SGD1,888 psf ppr.
• A consortium comprising UOL Venture Investments Pte Ltd, UIC Homes Pte Ltd and Kheng Leong Company (Private) Limited was the sole bidder for a part-residential and part-residential with commercial at first storey development site at SGD1.035 billion (USD0.77 billion). The land price translates to SGD1,138 psf ppr. The 22,851.6 sqm development site can yield 1,125 units.
• Sembawang Shopping Centre was sold to Lian Beng-Apricot (Sembawang) Pte Ltd by HSBC Institutional Trust Services (Singapore) Limited in its capacity as trustee of CapitaLand Mall Trust for SGD248 million (USD189.2 million). This transaction value was the largest value achieved for a stand-alone 999-year leasehold tenure retail mall in Singapore in recent years.

Sembawang Shopping Centre, Source: Colliers International Singapore

Wei Leng Tang, Managing Director, Colliers International Singapore, told WILLIAMS MEDIA that “Overall real estate investment sales remained healthy in Q2. Transactions were especially robust in the residential segment as developers acquired sites to replenish their land bank amid healthy demand for homes and more positive market sentiment. However, we may potentially see a pause or a slowdown in land acquisition activities in the near-term following the implementation of new cooling measures by the Singapore Government on July 6, 2018."

The report suggests that the Singapore residential and commercial property sectors will remain in favour among developers and investors alike. Investment sales are expected to be robust in H2 2018, against a backdrop of an improving business outlook and stronger economic growth. Strong economic fundamentals together with a rental recovery could drive more interest in commercial assets.

"Developers will now have to reassess the market, evaluating the supply and demand conditions in the wake of the new measures before deciding on further land acquisition via collective sale.

"In particular, the hike in additional buyer’s stamp duty rate to 25% (from 15%) plus an extra 5% that is non-remittable for entities buying property has altered the operating environment, and developers would have to consider how to best mitigate any additional risks - either through re-evaluating land price or via more careful site assessment and selection. That said, well-located sites that are competitively priced – taking into consideration new market realities - should still garner some interest," Tang said. 

"While the residential investment sale segment may potentially face some headwinds in the second half the year, other sectors will likely continue to do well. We could see an increase in commercial office transactions as rents start to recover. Investors may also gravitate towards commercial and perhaps even industrial properties as they take a breather from the residential sector which is affected by the cooling measures,” she concluded.

Click here to view the Colliers International Asia Market Snapshot Q2 2018 report. 

For more information or to discuss the report phone or email Wei Leng Tang, Managing Direct of Colliers International Singapore, via the contact details listed below.

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