Singapore real estate investment sales up 65.7% in 2H 2010

A total of $21.77 billion worth of sales transactions were concluded during the second half of 2010.

According to Colliers International, supported by a strengthening local real estate market, increased liquidity and availability of financing, the Singapore real estate investment sales market rebounded in the second half of 2010.

The sales transactions increased 65.7% from $12.97 billion in the first half of 2010. Developers picked up some $7.74 billion worth of development sites in the second half of 2010, representing 35.5% of the total investment sales value during the period.

Real estate investment trusts also made a comeback in acquisitions during the period, with most having addressed major financing requirements. They amassed a total of $4.22 billion worth of properties in the second half of 2010, accounting for 19.4% of total investment sales value. The acquisitions were led by Suntec REIT’s acquisition of a one-third stake in phase one of Marina Bay Financial Centre from Cheung Kong (Holdings) Limited and Hutchinson Whampoa Limited for $1.50 billion, translating into an average price of $2,568 per sq ft on net lettable area basis including rental support. Meanwhile, K-REIT Asia (K-REIT) snapped up a one-third stake in phase one of MBFC from Keppel Land for S$1.43 billion or $2,450 per sq ft on NLA including rental support. The remaining acquisitions by REITs in the second half of 2010 were mainly made by industrial REITs.

Looking ahead, the prevailing economic environment will continue to favour real estate investments in 2011. The local investment market will benefit from foreign buying interests redirected to the Republic arising from the stringent curbs in property markets in the region and the prospect of a large capital inflow following the US Federal Reserve’s quantitative easing measures in November 2010. REITs are expected to capitalise on the current property cycle to expand further their portfolios. Meanwhile, acquisitions by potential new REITs will also boost investment sales volume in 2011.

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