Surge in Singapore's commercial investment sales market

Property analysts said Singapore's commercial investment sales market soared in the first half of the year with the closing of several big-ticket deals.

Mr Wong Xian Yang, head of research at Cushman & Wakefield, said the commercial property market has garnered around $9.8 billion in investments, in deals of at least $10 million each in the first half of the year. This is about 72 per cent higher than the total volume for the whole of 2021.

"Despite rising interest rates, high-quality commercial assets which can deliver stable cash flow remain well sought-after by investors," he said.

Colliers Singapore head of research Catherine He noted that office capital values saw a 7 per cent growth in the second quarter of this year compared with the second quarter of 2021, while prime retail rose 3 per cent over the same period, based on the real estate firm's data.

Mr Wong said that pricing levels remain robust, on a par with that before the interest rate hikes. For instance, the entire eighth storey of Samsung Hub was sold at $4,050 per sq ft (psf) last month, the same psf price as the record-breaking sale of the ninth storey in May 2021.

The highest transaction by quantum in 2022 was about $1 billion for Income@Raffles, a 999-year leasehold office with 37 storeys, in June.

More foreign investors are interested in commercial assets in Singapore, with the sale of Income@Raffles, at $3,617 psf, being the highest psf price for a commercial property sold to a foreign buyer this year, Ms He noted.

Other parties interested in acquiring commercial properties include institutional funds, family offices and high-net-worth investors, she added.

Mr Wong said investors are willing to invest in the top end of the office market as the supply of Grade A offices remains tight and rents continue to rise.