S'pore property investment sales more than double to $16.7b in Q3

The largest office transaction of the year went to Allianz Real Estate and Gaw Capital Partners acquiring Duo Tower and Galleria from M+S.
The largest office transaction of the year went to Allianz Real Estate and Gaw Capital Partners acquiring Duo Tower and Galleria from M+S.PHOTO: M+S

Commercial sector leads with $6.27b in sales, driven by several huge office deals: Report

Real estate investment sales more than doubled in the third quarter to $16.74 billion, from $6.7 billion in the previous quarter, on the back of big-ticket office transactions.

This was also 49 per cent up on the volume in the first and second quarters combined, said a Cushman & Wakefield report yesterday.

The commercial sector led the way with sales of $6.27 billion. The largest office transaction of the year so far went to Allianz Real Estate and Gaw Capital Partners, which acquired Duo Tower and Galleria in the Bugis area from M+S for $1.58 billion or $2,570 per sq ft. Another Bugis deal was Angelo Gordon and TCRE Partners' purchase of Bugis Junction Towers from Keppel Reit for $547.5 million or $2,200 per sq ft.

The retail sector also saw activity, with Lendlease injecting 313@Somerset into its Reit (real estate investment trust) for $1 billion.

Lendlease Global Commercial Reit's initial public offering was also well received with a share price rise of 4.5 per cent on the first day, the Cushman report added.

Industrial sector transactions hit $4.07 billion in the third quarter, driven largely by Reits.

Mapletree Investments injected Mapletree Business City II into Mapletree Commercial Trust for $1.55 billion or $1,308 per sq ft.

Keppel DC Reit continued to grow its data centre portfolio by buying 1-Net North Data Centre for $201.8 million, as well as a 99 per cent stake in Keppel DC Singapore 4 for $384.9 million.

Residential deals accounted for $3.03 billion, while the hospitality sector recorded $2.92 billion with higher investment volumes.

Mr Shaun Poh, Cushman & Wakefield's executive director of capital markets, noted that in a tight commercial supply market such as Singapore's, it is tempting for assets to chase price gains - which is where the market is headed now, creating a gap between sellers' and buyers' expectations.

Royal Group sold Darby Park Executive Suites for $160 million to Indonesian tycoon Bachtiar Karim, after its initial purchase from Sime Darby Group last year. This resulted in a 72 per cent profit after the site was rezoned from residential to hotel use.

PAM Holdings and Datapulse Technology bought Bay Hotel Singapore for $235 million, while a joint venture by Hong Kong financial services firm AMTD Group and Far East Consortium International acquired Oakwood Premier OUE Singapore for $287.1 million.

The total amount of sales this year is around $27.98 billion and is "increasingly likely" to surpass last year's level of $33.96 billion, said Ms Christine Li, Cushman & Wakefield's head of research for Singapore and South-east Asia.

Mr Shaun Poh, Cushman & Wakefield's executive director of capital markets, noted that in a tight commercial supply market such as Singapore's, it is tempting for assets to chase price gains - which is where the market is headed now, creating a gap between sellers' and buyers' expectations.

"Still, Singapore's gateway city status and its stable fundamentals make it an attractive destination for foreign funds," he added.

A version of this article appeared in the print edition of The Straits Times on October 15, 2019, with the headline 'S'pore property investment sales more than double to $16.7b in Q3'. Print Edition | Subscribe