Singapore’s real estate transaction volumes plunge 44.4% to US$ 2.2b in 2Q11

Jones Lang LaSalle says that even though transaction volumes were down q-o-q, it soared by an amazing 225% on a y-o-y basis.

Strong double‑digit growth in the financial services sector continued to drive gross prime Raffles office rents up 1.5%.

Here’s more from Jones Lang LaSalle:

Although direct real estate transaction volumes are down 44.4% q‑o‑q in 2Q11 due to seasonal reasons, it is nearly 225% up on a y‑o‑y basis. Strong double‑digit growth in the financial services sector continued to drive gross prime Raffles office rents up 1.5%, even with significant supply coming on‑stream. Likewise, strong tourist arrival growth is proving to be the main driver in the prime Orchard retail markets with gross retail rents up 0.8%. Capital values in both markets are growing faster than rents, leading to yield compression in both markets.

Our direct real estate transaction volumes charts are also skewed down by the absence of significant equity deals. For example, national insurance company NTUC Income purchased prime office asset Capital Square in an SGD 833 million or USD 684 million deal from Ergo Insurance Group.

In terms of direct real estate transactions, the trophy Raffles Hotel and its accompanying shopping arcade was sold by Fairmont Hotels to Qatari Inc. for SGD 341 million or USD 275 million at an estimated yield of 5.2%. This deal was started in 2010 but has recently been completed this year in June. Hotel deals played a big role last quarter with the Crowne Plaza Hotel near Changi Airport sold to unlisted developers OUE by LaSalle Asia Opportunity II fund
and LC Development. This Jones Lang LaSalle‑brokered deal was worth SGD 225 million or USD 181 million.

After a heady first quarter, the biggest non‑hotel direct buyers are domestic unlisted developers and listed REITs, with a particular focus on industrial assets and secondary transactions as prime office and retail stock continues to remain scarce. We expect capital values for prime plays to continue to grow as strong investor demand chases limited investable stock.

Also Read

One Sophia sells 30% of units at weekend launch

SLA launches tender to revitalise Tanjong Katong Complex

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit