Archive for the ‘Property Investment’ Category
Domestic investors drive Asia investment deals
H1 investment sales in region fall 58% to US$12.4b as global institutions sidelined
(SINGAPORE) Domestic investors played a bigger role in Asian property investment sales in the first half of this year as global institutional investors and property funds stayed mostly on the sidelines, says CB Richard Ellis.
Domestic investors were involved in nine of the 10 largest real estate investment deals in the region in H1. The 10 biggest deals totalled US$5.1 billion – a 46 per cent drop from H1 2008.
Overall, inter-regional cross-border investment accounted for only 8 per cent of total Asian investment sales of US$12.4 billion during the first half, down from a 30 per cent share in H1 2008.
The total value of property investment deals in Asia in H1 this year was down 58 per cent from US$29.5 billion in H1 2008. In the second quarter of 2009, US$7.3 billion of deals were sealed, up 41 per cent from US$5.1 billion in Q1.
Looking ahead, CBRE Research Asia’s executive director Andrew Ness says: ‘Cash-rich local investors are most likely to be the main drivers of the investment market over the short to medium term, as many of them are interested in purchasing quality assets for long-term investment. However, it is possible that even domestic investors will find it difficult to find suitable investment opportunities due to the shortage of quality properties put up for sale during the current downturn.’
CBRE’s figures are preliminary and include land transactions.
The biggest transaction in H1 was the sale of AIG Otemachi Building in Tokyo for about US$1.2 billion. Prime office properties continued to attract the strongest interest from investors, accounting for six of the 10 largest deals in the region.
The improved market in Q2 was driven to some extent by debt-funded investors compromising at current price levels and liquidating assets to service near-term debt obligations, CBRE says. Investor sentiment generally turned more positive as the first half of the year progressed.
Hong Kong, Singapore and Taiwan experienced the largest quarterly rebound in transaction volume, up 302 per cent, 297 per cent and 151 per cent respectively in Q2. There was also an increase in land acquisitions in China during the quarter, as big local developers scrambled to snap up sites in anticipation of imminent appreciation in prices.
Foreign institutional investors remained inactive, discouraged by the lack of further discounting, while local investors were more active on account of their easier access to domestic credit. India and Taiwan ended the six-month period with positive year-on-year growth of 339 per cent and 12 per cent respectively.
‘The change in investor sentiment in Taiwan primarily resulted from the expected opening of the domestic market to mainland Chinese investment,’ says CBRE.
‘Meanwhile, the formation of a stable government in India coupled with the utilisation of Qualified Institutional Placement (QIP) by real estate companies to raise new funds provided a boost to the Indian property investment market.’
Tokyo emerged as the location with the largest number of distressed or potentially distressed real estate assets in the region in Q2. Owners came under pressure to refinance deals that have fallen to well below the original loan-to-valuation ratios prescribed by their loan covenants.
‘The period saw a number of major office transactions concluded at US$50 million and above, with Japanese investors and investment institutions accounting for virtually all transactions, proving that appetite still persists in Japan for acquiring quality assets,’ says CBRE.
Property fund snaps up 21 condo units for $65m
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Other big-ticket transactions could rev up investment sales in second half
(SINGAPORE) IN one of the first bulk sales of apartments since the economic crisis unfolded last year, a property fund is understood to have purchased the remaining 21 units at Sui Generis condo at Balmoral Crescent for $65 million.
The price works out to about $1,260 per square foot on average. The units are said to be located throughout the freehold project, which is slated for completion around the second quarter of next year. The condo comprises three blocks – seven, nine and 12 storeys high. It is being developed by a joint venture involving United Engineers and Kajima.
CB Richard Ellis is understood to have brokered the latest sale, but it declined to comment on the transaction.
Market watchers commented, however, that $1,260 psf average price for the latest deal is about half the average price of about $2,460 psf achieved for the earlier 19 units in the 40-unit development that were sold in 2007 and 2008 at prices ranging from $1,991 psf to $2,717 psf.
About $2.2 billion of investment sales deals were struck in the first six months of this year, against $17.9 billion for the whole of last year and the record $53.7 billion in 2007.
However, activity is expected to pick up in the current half. For one, sites on the Government’s reserve list have been triggered for launch, including residential sites at Dakota Crescent and Chestnut Avenue.
Recently, the 50-room Hotel Nostalgia in the Tiong Bahru area was sold for about $22 million. The Indonesian buyer was represented by Rodyk & Davidson. Hotel Nostalgia, a freehold property, is expected to receive Temporary Occupation Permit soon. The seller was Lion Properties Group.
Some big ticket items are also on the market. One is a portfolio of four malls and an office tower owned by Asian Retail Mall Ltd (ARML) 1 fund with a price tag said to be about $1.5 billion – which industry players described as ‘bullish’. An expression of interest closed last week for the portfolio, which comprises White Sands in Pasir Ris, Century Square in Tampines, Hougang Mall, Tiong Bahru Plaza and the next door Central Plaza office block.
The fund’s life actually ended late last year – around the time of the Lehman Brothers collapse – and the investors decided to continue the fund until they could find the right mode of disposal or seek a formal extension to the fund’s lifespan.
ARML 1’s investors include a few Dutch pension funds that are said to favour selling the fund’s malls to realise their investment. However, market watchers say the other investors, which include entities linked to Pramerica Real Estate Investors Asia, Guthrie and NTUC FairPrice, want to wait for a better time to maximise their profit.
The fund bought the five assets for a total of about $943 million and may have invested a further sum of over $80 million enhancing the properties. ‘This leaves less scope for further improvements,’ a market watcher said.
Property consultants generally expect retail rents in suburban malls to dip slightly this year and if yields demanded by investors rise, this will create downward pressure on capital values of suburban malls.
However, on a more positive note, a property consultant said: ‘Shopping centres as an asset class don’t suffer the same weakness as the office market, where there’s too much supply in the horizon and demand is still weak. Institutional investors have a fairly negative view on the Singapore office market.’
Source: Business Times, 4 Aug 2009
No property bubble forming, say developers
They also maintain that the prevailing economic conditions will begin to cool the buying frenzy and stop a bubble forming in its tracks.
‘It’s not a bubble, it’s just a blister after the pain we experienced in the global financial crisis and it comes before a recovery,’ said Cushman and Wakefield managing director Donald Han.
But some developers and industry insiders acknowledge that the comments from National Development Minister Mah Bow Tan this week are timely.
Mr Mah cautioned about a bubble forming, hinted at intervention if speculation got out of hand and advised buyers to tread carefully and not charge headlong into the market.
‘The Government’s message is quite clear: Don’t rush as there is a lot of supply coming onstream,’ said Sing Holdings chief executive Lee Sze Hao.
‘It’s good as a reminder so that people do not over-buy, over-chew. Developers do not want irrational exuberance,’ said Mr Han.
A property consultant who declined to be named told The Straits Times: ‘There shouldn’t be panic-buying. Buyers may pull back a bit, not knowing whether the Government will step in or not. The fact is that the Government has opened its mouth; it can do things indirectly.
‘But if the market hype continues to rise, they will have to do something.’
Many feel the hype, which centres on several condominiums, will likely be short-lived amid a recession.
‘Inevitably, there will be speculative buyers, but they are for the smaller units…If the market is too speculative, you build up a bubble and that’s not real demand,’ said Mr Lee.
The market is seeing cashed-up investors ready to spend, which is different from speculators looking to buy another apartment to make a quick buck, he said.
The Government will do something only if there is a queue at every project and every unit is snapped up, he added.
The Real Estate Developers Association of Singapore (Redas) pointed out on Wednesday that only a selected few launches have been highly successful for various reasons.
Buyers have certainly been out in droves visiting the new showflats and buying new homes off the plan. Queues have been forming and developers have raised prices in response.
The interest was evident last night at Tanah Merah, where crowds gathered at the 297-unit Optima showflat although the public launch is scheduled for today.
The response was so strong that the developer TID held a ballot at midnight for about 300 genuine buyers who were queueing outside the showflat earlier so they did not have to stay overnight.
They had submitted cheques together with their application form by 9.30pm for the 120 units on offer at an average early-bird price of $790 per sq ft (psf), said a spokesman.
Another suburban launch, the 329-unit Centro Residences in Ang Mo Kio apparently attracted more than 80 buyers, even though it is priced at $1,150 psf and above – levels more suitable for prime or city-fringe projects.
Such enthusiasm for new projects, which is reminiscent of boom times, and the sudden spike in prices are likely causes for concern, said a developer who declined to be named.
Prices of some new mass market projects have gone above the peak 2007 levels, he said. ‘But can the market sell 1,500 units every month in the next 12 months? I don’t think so.
‘The Government is observing, but it will cease to be overly concerned when things return to normal.’
CapitaLand chief executive Liew Mun Leong said at its results briefing yesterday that there is ‘exuberance’ in the market but no bubble. ‘If it’s investment driven, you could call it a bubble…but in our case, it is demand driven.’
He also said he would be the first to be worried if this frenzy is being driven by speculative demand.
He said there are buyers flushed with cash from collective sales in the recent property boom.
Mr Liew estimated there were about 13,000 home owners displaced by en-bloc deals from 2005 to 2007 and these buyers have ready cash of anywhere between $1million and $2 million each to spend.
Source: Straits Times, 31 July 2009
No property bubble forming, say developers
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They say buying frenzy hasn’t reached point where Govt needs to intervene
They also maintain that the prevailing economic conditions will begin to cool the buying frenzy and stop a bubble forming in its tracks.
‘It’s not a bubble, it’s just a blister after the pain we experienced in the global financial crisis and it comes before a recovery,’ said Cushman and Wakefield managing director Donald Han.
But some developers and industry insiders acknowledge that the comments from National Development Minister Mah Bow Tan this week are timely.
Mr Mah cautioned about a bubble forming, hinted at intervention if speculation got out of hand and advised buyers to tread carefully and not charge headlong into the market.
‘The Government’s message is quite clear: Don’t rush as there is a lot of supply coming onstream,’ said Sing Holdings chief executive Lee Sze Hao.
‘It’s good as a reminder so that people do not over-buy, over-chew. Developers do not want irrational exuberance,’ said Mr Han.
A property consultant who declined to be named told The Straits Times: ‘There shouldn’t be panic-buying. Buyers may pull back a bit, not knowing whether the Government will step in or not. The fact is that the Government has opened its mouth; it can do things indirectly.
‘But if the market hype continues to rise, they will have to do something.’
Many feel the hype, which centres on several condominiums, will likely be short-lived amid a recession.
‘Inevitably, there will be speculative buyers, but they are for the smaller units…If the market is too speculative, you build up a bubble and that’s not real demand,’ said Mr Lee.
The market is seeing cashed-up investors ready to spend, which is different from speculators looking to buy another apartment to make a quick buck, he said.
The Government will do something only if there is a queue at every project and every unit is snapped up, he added.
The Real Estate Developers Association of Singapore (Redas) pointed out on Wednesday that only a selected few launches have been highly successful for various reasons.
Buyers have certainly been out in droves visiting the new showflats and buying new homes off the plan. Queues have been forming and developers have raised prices in response.
The interest was evident last night at Tanah Merah, where crowds gathered at the 297-unit Optima showflat although the public launch is scheduled for today.
The response was so strong that the developer TID held a ballot at midnight for about 300 genuine buyers who were queueing outside the showflat earlier so they did not have to stay overnight.
They had submitted cheques together with their application form by 9.30pm for the 120 units on offer at an average early-bird price of $790 per sq ft (psf), said a spokesman.
Another suburban launch, the 329-unit Centro Residences in Ang Mo Kio apparently attracted more than 80 buyers, even though it is priced at $1,150 psf and above – levels more suitable for prime or city-fringe projects.
Such enthusiasm for new projects, which is reminiscent of boom times, and the sudden spike in prices are likely causes for concern, said a developer who declined to be named.
Prices of some new mass market projects have gone above the peak 2007 levels, he said. ‘But can the market sell 1,500 units every month in the next 12 months? I don’t think so.
‘The Government is observing, but it will cease to be overly concerned when things return to normal.’
CapitaLand chief executive Liew Mun Leong said at its results briefing yesterday that there is ‘exuberance’ in the market but no bubble. ‘If it’s investment driven, you could call it a bubble…but in our case, it is demand driven.’
He also said he would be the first to be worried if this frenzy is being driven by speculative demand.
He said there are buyers flushed with cash from collective sales in the recent property boom.
Mr Liew estimated there were about 13,000 home owners displaced by en-bloc deals from 2005 to 2007 and these buyers have ready cash of anywhere between $1million and $2 million each to spend.
Overseas land: Getting a foot in the door
Investing in land overseas used to be the domain of the extremely wealthy, but landbanking companies have put an end to that.
The main attraction of investing in land overseas is the hefty payouts investors can expect to reap, with some firms promising returns of around 20 per cent.Such firms buy large parcels of undeveloped land that they feel has development potential. They keep part of the land for themselves and divide the rest into smaller plots for sale to individual investors.
The hope is that the land later attracts the interest of developers. The company then sells the plots on behalf of individual investors.
Companies like Edgeworth Properties offer sites in Western Canada while Profitable Plots deals mainly in land in Britain. The minimum investment for a plot varies but usually ranges from $10,000 to $15,000.
The main attraction of these projects is the hefty payouts investors can expect to reap, with some firms promising returns of around 20 per cent.
‘Land is a hard asset that will always appreciate in value with time and development,’ said Mr Michael Yap, vice- president (Asia Pacific) of Edgeworth Properties.
Edgeworth selects land that has the prerequisites for sustained economic and population growth and is situated next to developed neighbourhoods, added Mr Yap.
Landbanking companies typically give customers an estimate of how long they have to wait before the land is bought. This can be from three to seven years.
However, there is no guaranteed figure and it is possible that customers may have to wait longer.
Most landbanking companies provide detailed information on the land they are offering so investors can get a fair idea of what they are buying.
But there are also risks involved.
‘The first thing that comes to my mind is liquidity – landbanking does not provide much liquidity,’ said Mr William Cai, director of GYC Financial Advisory.
‘As there’s a lack of liquidity, it is hard to say if investors are overpaying for the piece of land in the first place.’
Mr Cai also cited exchange rate fluctuations as a risk in this kind of investment.
Landbanking is also unregulated, which could be a problem if disputes arise between the company and individual investors.
Despite the possibility of getting their fingers burnt, response from Asians has been ‘very encouraging’, said Mr Yap.
Edgeworth’s land lots are sold in Singapore, Malaysia, Taiwan and the Philippines, with Singaporeans constituting about 63 per cent of buyers.
Source: Straits Times, 26 April 2009
Property investment sales plummet 98%
Buyers and sellers are far apart in price expectations, says CBRE
PROPERTY investment sales in Singapore have fallen off the cliff since the start of the year and could slip to levels not seen since the Asian financial crisis.
According to the latest figures from CB Richard Ellis (CBRE), sales so far this year total $184.6 million, down 98 per cent on the same period a year ago and 56.4 per cent lower than the last quarter of 2008.
For the full year, total investment sales could plummet to levels not seen for over 10 years, with buyers and sellers locked in a stalemate and far apart in terms of price expectations, the consultancy warned yesterday.
The only quarters that saw lower investment sales were the first quarter of 1998 – when they were just $49.28 million – and the third quarter of that same year – when they hit $110.62 million. So far this year, the market has witnessed isolated individual deals but there have been no public sales or collective sales.
Residential sector sales accounted for 51.5 per cent of total sales during the period in question.
Apart from $18.2 million worth of deals for three good-class bungalows, Fragrance Properties bought a freehold Pasir Panjang site for $25 million, with plans to develop it into a residential apartment building. CBRE forecasts that such development site sales will be rare this year because most developers are concentrating on their existing projects and are not looking for new sites.
There have been no minimum bid applications from developers for any of the Government land sale sites, it added.
In the commercial market, sales total $77.3 million so far this quarter, with the only major sale being the $35.8 million, or about $900 psf, deal for Le Mercier House in Mohamed Sultan Road.
There was only one transaction in the industrial sector – a Loyang Crescent site that sold for $6.2 million, or $74 psf.
The report suggests that total investment sales for this year might revisit 1998 levels when the total annual quantum was $1.35 billion.
‘The lack of volume will continue to feature until such time when price expectations between buyers and sellers meet,’ CBRE stated.
Real estate investment trusts are unlikely to make many new acquisitions this year as dividend yields have increased significantly and it would be extremely challenging to make purchases that are yield accretive.
Source: Straits Times, 25 Mar 2009
Property investment sales plummet 98%
Buyers and sellers are far apart in price expectations, says CBRE
PROPERTY investment sales in Singapore have fallen off the cliff since the start of the year and could slip to levels not seen since the Asian financial crisis.
According to the latest figures from CB Richard Ellis (CBRE), sales so far this year total $184.6 million, down 98 per cent on the same period a year ago and 56.4 per cent lower than the last quarter of 2008.
For the full year, total investment sales could plummet to levels not seen for over 10 years, with buyers and sellers locked in a stalemate and far apart in terms of price expectations, the consultancy warned yesterday.
The only quarters that saw lower investment sales were the first quarter of 1998 – when they were just $49.28 million – and the third quarter of that same year – when they hit $110.62 million. So far this year, the market has witnessed isolated individual deals but there have been no public sales or collective sales.
Residential sector sales accounted for 51.5 per cent of total sales during the period in question.
Apart from $18.2 million worth of deals for three good-class bungalows, Fragrance Properties bought a freehold Pasir Panjang site for $25 million, with plans to develop it into a residential apartment building. CBRE forecasts that such development site sales will be rare this year because most developers are concentrating on their existing projects and are not looking for new sites.
There have been no minimum bid applications from developers for any of the Government land sale sites, it added.
In the commercial market, sales total $77.3 million so far this quarter, with the only major sale being the $35.8 million, or about $900 psf, deal for Le Mercier House in Mohamed Sultan Road.
There was only one transaction in the industrial sector – a Loyang Crescent site that sold for $6.2 million, or $74 psf.
The report suggests that total investment sales for this year might revisit 1998 levels when the total annual quantum was $1.35 billion.
‘The lack of volume will continue to feature until such time when price expectations between buyers and sellers meet,’ CBRE stated.
Real estate investment trusts are unlikely to make many new acquisitions this year as dividend yields have increased significantly and it would be extremely challenging to make purchases that are yield accretive.
Source: Straits Times, 25 Mar 2009
Funds, banks start shopping for real estate assets
Players laying groundwork to snap up regional assets on the cheap
(SINGAPORE) Institutional funds and private banks are scouting for property assets in the Asia-Pacific, industry players say.
The funds and banks – armed with billions of dollars in cash – are laying the groundwork so they can snap up assets on the cheap later in the year.
SG Private Banking, which just set up a centre in Singapore to focus on real estate, hopes to invest another US$500 million in Asian property by end-2010.
Other firms here have similar plans. For example, Woori Investment & Securities (Woori I & S), part of Korea’s Woori Financial Group, is looking at arranging and investing about US$300-500 million in Asian property over the next two years. And Singapore-based ARA Asia Dragon Fund aims to invest another US$1 billion in Asia over the next two to three years.
Investment sales across Asia fell sharply in 2008 amid financial market turmoil, tight credit and higher funding costs. In Singapore, for example, investment sales last year were $17.8 billion – a 70 per cent drop from $54.02 billion in 2007, according to CB Richard Ellis.
But buying interest is slowly coming back as asset prices fall from their 2007 peaks. ‘The near- term weakness creates a favourable entry point,’ said John Lim, chief executive of ARA Asset Management, which manages the ARA Asia Dragon Fund.
Keiichi Hirano, SG Private Banking’s Singapore-based global real estate head, told BT that asset prices generally are already about 30-35 per cent off their peak. Others put the drop anywhere between 20-40 per cent.
Market players say there is still a difference between asking prices and what buyers are willing to pay.
But Sung Heun Do, director and head of real estate investment and finance at Woori I & S, said: ‘We believe this year will present very good opportunities to acquire key assets, though a lot will depend on other factors like the credit market.’
The amount the firm will invest will ‘depend heavily on whether we are able to secure the right assets at the right risk-adjusted returns’, Mr Sung said.
Others echo this view, saying returns are crucial as they shop around. SG Private Banking’s Mr Hirano said his team will look for physical assets and property-related paper assets that yield about 10 per cent per annum.
He wants to increase SG Private Banking’s exposure to real estate through its new Global Centre of Expertise in Real Estate in Singapore. SG Private Banking had 66.9 billion euros (S$138 billion) of assets under management at end-2008. The bank did not say how much of this was in the Asia-Pacific region, or in real estate. But right now, less than 5 per cent of SG Private Banking’s investments are in real estate. By contrast, most high net worth individuals have 18-25 per cent of their portfolios in real estate, Mr Hirano said.
ARA’s Mr Lim said that for the next six to nine months there will be a continued downward pressure on rents across most sectors and markets. But taking a medium-term view of three to five years, now is a good time to go in, he said: ‘You must be able to take the medium-term view to make serious money.’
Established markets are proving more popular, with firms looking hard at Hong Kong, Tokyo, Singapore and Australia. Woori I & S is also bullish on Korea and said it is seeing a lot of interest from non-Korean associates to partner it in acquiring prime assets in Seoul.
China, on the other hand, is proving more controversial. Some funds BT spoke to said they will stay away from China as the real estate markets there are not well-established. ARA’s Mr Lim, however, is upbeat about the country. ‘We are most confident in China. We still think that the fundamentals are strong,’ he said.
Another development is that many funds are looking at physical real estate, rather than just paper assets. In the past four or five years, clients were more interested in property-linked paper assets such as equities and funds, as these were cheaper and easier to invest in. But interest in physical assets is increasing as their prices slump in the current economic downturn. ‘We will offer our clients the opportunity to invest into any country, and any type of property,’ said SG Private
Banking’s Mr Hirano.
Source: Business Times, 20 Mar 2009
Special measures to lift property sector
Filed under: Commercial Properties, Private Properties, Property Investment, Property Tax |
Leave a comment THE ailing property sector has received a special Budget boost, with a host of measures to help developers wait out the slump in demand.
Property tax will be deferred for two years for land approved for development. This means developers sitting on their land bank will not have to pay this tax – which can amount to millions of dollars – for the time being.
Rules have also been relaxed for developers who bought government land sites and foreign developers who own private residential land here.
Normally, they have to develop the land within six years, and they cannot resell the land without developing it.
But these developers have been given a one-year extension of this period so that they have more flexibility in building and selling their developments according to market conditions.
On top of that, those who have decided they want out of the development can now resell the land or dispose of their interest in it before Jan 21 next year.
Foreign developers have also been given more leeway. Currently, they are required to sell all the units in their project within two years of completion and are not allowed to rent out unsold units.
They have now been given two more years to dispose of the units and they can also rent out unsold apartments for up to four years.
All property owners and firms will also benefit from the Inland Revenue Authority of Singapore’s bringing forward of its assessment on property taxes this year.
Property values rose last year, pushing up tax bills for their owners, but the market has since turned and an updated assessment would yield some savings.
Most developers and tax experts applauded the Budget steps.
‘The measures will provide welcome relief and help to ease funding for the industry, and provide developers with flexibility in scheduling their developments,’ said the Real Estate Developers’ Association of Singapore.
Hong Leong Group, which has property investments through its companies City Developments and Hong Leong Holdings, said the moves ‘are a huge confidence boost to the economy and property market and we welcome it’.
Deferring tax on land for development ‘will help reduce business costs and help the company spread costs over a period of time’, while the other measures ‘will provide more flexibility for developers and will ease pressure on the markets’, it said.
Foreign developers also cheered the measures specifically directed at them.
‘I am very pleased by the pro-active measures taken by the Singapore Government to support foreign property developers,’ said Malaysian tycoon Francis Yeoh, who is managing director of YTL Corporation.
‘I find the measures realistic, and I am confident that they will give the property market in Singapore a much-needed boost.’
YTL owns two plots in Sentosa Cove as well as Westwood Apartments in Orchard Boulevard.
But some industry watchers thought the Government could have gone further.
In the 1998 Budget following the Asian financial crisis, the Government waived, rather than deferred, property tax for land under development for five years.
‘The deferment of property tax will help to ease developers’ holding costs, but is viewed as less desirable compared to previous downturn Budgets where property tax exemptions were handed out,’ said Ms Tay Huey Ying, director for research and advisory at property consultancy Colliers International.
Source: Straits Times – 23 Jan 2009
Property investment sales value hits record low in Q4 2008
The value of property investment sales in Singapore hit a record low in the fourth quarter of 2008.
In its latest report, real estate consultancy Colliers International said total investment sales in the three months to December fell by 93 per cent on-year to nearly S$577 million.
This is the lowest since the property market picked up four years ago. It also represents a drop of 68.8 per cent from the third quarter.
Colliers said this is indicative of the weak economic outlook caused by the global financial turmoil as well as declining property prices. Investors are also more cautious about where they park their funds.
The industrial property sector held the lion’s share of investment sales for the quarter, accounting for 56.6 per cent of the total.
It also saw the largest transaction in the quarter with the purchase of a 4.7-hectare site Changi Business Park by Ascendas Land and Frasers Centrepoint for S$151 million. The site will be developed into an integrated retail, hotel and business park project.
However, the office sector was hit in the fourth quarter as rentals fell 20 per cent. Colliers said this brought an end to 18 consecutive quarters of rental uptrend in the office sector.
For the whole of 2008, investment sales amounted to S$17 billion – a drop of 58 per cent from the record high the year before.
Analysts expect investment sales value to remain thin over the coming quarters. But they added that the rough financial climate may cause firms to offload their properties to improve balance sheets.
There could also be higher foreclosure sales which may offer attractive investment propositions for potential investors.
Source: Channel NewsAsia – 20 Jan 2009
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