2Q2024 Investment Sales 536 Q O Q Bolstered Government Land Sales Savills
According to the quarterly sales and investments report by Savills Research, real estate investment sales in Singapore have increased by 52.6% to $6.48 billion in the second quarter of 2024.
This growth was mainly driven by higher proceeds from government land sales (GLS), with four residential sites and one industrial site being awarded for a total of $3.16 billion during the period. This is more than double the amount recorded in the previous quarter and the highest proceeds from state residential land sales in a single quarter.
The highest quantum recorded for a GLS private residential site was for the Zion Road (Parcel A) site. This 164,439 sq ft site was awarded to a joint venture between CDL and Mitsui Fudosan at $1.107 billion, or $1,202 psf per plot ratio in April.
The private sector saw a 14% increase in investment sales value to $3.32 billion in the second quarter of 2024. Transaction volume also grew by 30.8% from the previous quarter, with 85 deals in the second quarter compared to 65 deals in the first quarter. This growth was largely attributed to a revival in the luxury residential market, with 52 homes, including 40 landed properties and 12 luxury condos, priced at $10 million and above, being sold during the period. This is a 30% increase from the previous quarter and on par with the same period last year.
According to Jeremy Lake, Savills’ managing director of investment sales and capital markets, this suggests that the buying sentiment in the luxury housing market has gradually returned to pre-ABSD (additional buyer’s stamp duty) and money-laundering case levels. The most expensive landed home transaction in the second quarter was the sale of a new bungalow in the Bin Tong Park Good Class Bungalow Area for $84 million, or $2,988 psf based on a land area of 28,111 sq ft.
In the non-landed residential property segment, the most expensive condo deal was the sale of a 7,761 sq ft penthouse on the 57th floor of the 190-unit Skywater Residences for $47.3 million, or $6,100 psf. Including the GLS sites sold, the residential sector accounted for 62.6% of total investment value in the second quarter, surging by 115.8% from the previous quarter.
City Developments Limited has unveiled a brand new residential project that is set to elevate the concept of urban living in the northern region of Singapore. Offering a prestigious address in the evolving Woodlands neighborhood, Norwood Grand is more than just a place to call home – it’s a gateway to a dynamic and fulfilling lifestyle. One of the highlights of this development is its close proximity to a wide array of shopping centers, making it the perfect choice for those who value convenience and vibrancy in their daily lives. With an abundance of dining, entertainment, and retail options just a stone’s throw away, Norwood Grand, now also available at Norwood Grand Condo, truly offers the best of both worlds when it comes to modern city living.
The commercial property sector also saw an increase in sales, rising by 16.7% to $1.52 billion, which made up 23.5% of the quarter’s total transaction value. This was driven by four office block transactions, with the largest being Mapletree Pan Asia Commercial Trust’s sale of Mapletree Anson in Tanjong Pagar for $775 million. However, retail malls saw a slowdown in investment activity, with only one deal in the second quarter – Paragon Reit’s sale of The Rail Mall for $78.5 million due to a limited stock of properties for sale.
Investment sales in the industrial sector also declined by 32.1% to $272 million, while the mixed-use property sector generated $628.9 million in investment sales, driven by the sales of Delfi Orchard, Fraser Residence River Promenade and Sin Ming Centre.
Alan Cheong, executive director of research and consultancy at Savills Singapore, says that while borrowing costs remain high, the prospect of a rate cut this year may lift sentiments. If the sale of large commercial properties continues, the investment market will see a return of momentum. He maintains his forecast of $22 to $23 billion in total investment sales for 2024, up from $19.7 billion in 2023.