2Q2024 Investment Sales 536 Q O Q Bolstered Government Land Sales Savills
2Q2024 saw a significant rise in real estate investment sales, reaching $6.48 billion, a 52.6% growth according to Savills Research’s quarterly report on sales and investments. This surge is accredited to the higher earnings from government land sales, particularly four residential sites and one industrial site. These parcels were obtained for $3.16 billion, more than double the amount from the previous quarter, and is the biggest revenue from state land sales in a single period.
The top quantum recorded for a private residential site was the Zion Road (Parcel A) site that was acquired by a joint venture between CDL and Mitsui Fudosan in April for $1.107 billion, or $1,202 psf per plot ratio. The private sector has seen an increase in investment sales value of 14% quarter-on-quarter to $3.32 billion in 2Q2024, with transaction volume growing by 30.8% from 65 deals in 1Q2024 to 85 in 2Q2024.
This growth is due to the revival of the luxury residential market, with a total of 52 homes, consisting of 40 landed properties and 12 luxury condos priced at $10 million and above, being sold in 2Q2024. This is a 30% increase from the 40 luxury homes sold in 1Q2024 and ties with the 53 transactions seen during the same period last year. Jeremy Lake, Savills’ managing director of investment sales and capital markets, states that these figures suggest that the demand for luxury properties has gradually returned to pre-impact levels from the increased additional buyer’s stamp duty and the money-laundering case last year.
The largest transaction value for a landed property in 2Q2024 was the sale of a new bungalow in the Bin Tong Park Good Class Bungalow Area for $84 million, or $2,988 psf based on a land area of 28,111 sq ft. In the non-landed residential segment, the most expensive condo deal was the sale of a 7,761 sq ft penthouse on the 57th floor of the 190-unit Skywater Residences, reportedly purchased by a US citizen for $47.3 million, or $6,100 psf.
Overall, including the GLS sites sold, the residential sector accounted for $4.06 billion of investment sales in 2Q2024, a 115.8% jump quarter-on-quarter, making up 62.6% of the quarter’s total investment value. The commercial property sector also saw an increase in sales, rising by 16.7% to $1.52 billion in 2Q2024. Four office block transactions contributed to this growth, with the largest being Mapletree Pan Asia Commercial Trust’s divestment of Mapletree Anson for $775 million. The retail market, on the other hand, saw a slowdown in investment activity, with only one deal recorded – Paragon Reit’s sale of The Rail Mall for $78.5 million, due to limited properties available for sale.
Investment sales in the industrial sector declined by 32.1% quarter-on-quarter to $272 million in 2Q2024, contributed by 11 deals, including one industrial GLS site and 10 private sector properties. The industrial sector accounted for only 4.2% of investment sales value last quarter. The mixed-use property sector generated $628.9 million in investment sales, driven by the sales of Delfi Orchard ($439 million), Fraser Residence River Promenade ($140.9 million), and Sin Ming Centre ($49 million). These deals made up 9.7% of the total investment sales in 2Q2024.
Alan Cheong, executive director of research and consultancy at Savills Singapore, observes that while interest rates remain high, the likelihood of a rate cut this year may boost sentiments. If the sale of large commercial properties continues, the investment market will regain momentum. He maintains his 2024 total investment sales forecast of $22 billion to $23 billion, up from $19.7 billion last year.
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