2Q2024 Investment Sales 536 Q O Q Bolstered Government Land Sales Savills
The real estate market in Singapore has seen a significant increase in investment sales in the second quarter of 2024. According to Savills Research’s sales and investments quarterly report, there has been a 52.6% rise to $6.48 billion.
This growth can be attributed to the higher proceeds from government land sales (GLS) which include four residential sites and one industrial site. These sales were worth $3.16 billion, more than double the amount recorded in the previous quarter. It also represents the highest proceeds from state residential land sales in a single quarter.
The largest quantum recorded for a GLS private residential site was for the Zion Road (Parcel A) site. The site, measuring 164,439 sq ft, was awarded to a joint venture between CDL and Mitsui Fudosan for a whopping $1.107 billion, or $1,202 psf per plot ratio.
Luxury home sales have also seen a revival, with a 14% increase in investment sales value in the private sector, reaching $3.32 billion in 2Q2024. This is backed by a growth of 30.8% in transaction volume from 65 deals in 1Q2024 to 85 in 2Q2024.
The report also notes that the buying sentiment in the luxury housing market has gradually returned to the level before the impact of the increase in additional buyer’s stamp duty and the money-laundering case last year. In 2Q2024, a total of 52 homes, including 40 landed properties and 12 luxury condos priced at $10 million and above, were sold. This is a 30% increase from the 40 luxury homes sold in 1Q2024 and on par with the 53 transactions seen in the same period last year.
The largest landed home transaction by absolute value in 2Q2024 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 sale of a 7,761 sq ft penthouse on the 57th floor of the 190-unit Skywater Residences was the most expensive condo deal in 2Q2024. The unit was reportedly purchased by a US citizen for $47.3 million, or $6,100 psf.
Overall, the residential sector accounted for $4.06 billion of investment sales in 2Q2024, a surge of 115.8% from the previous quarter and making up 62.6% of total investment value for the quarter.
The commercial property sector also saw an increase in sales in 2Q2024, rising by 16.7% to $1.52 billion. This accounted for 23.5% of the quarter’s total transaction value. The expansion was driven by four office block transactions, with the largest being Mapletree Pan Asia Commercial Trusts’ divestment of Mapletree Anson for $775 million. However, there is a slowdown in retail mall investment activity, with only one deal recorded in 2Q2024, that of Paragon Reit’s divestment of The Rail Mall for $78.5 million. This is due to the limited stock of properties for sale.
The industrial sector, on the other hand, saw a decline of 32.1% in investment sales value to $272 million in 2Q2024, with only one industrial GLS site at Plot 8 Jalan Papan in Jurong and 10 properties in the private sector contributing to this. The industrial sector accounted for only 4.2% of investment sales value in 2Q2024.
The mixed-use property sector generated $628.9 million in investment sales last quarter, driven by the sales of Delfi Orchard, Fraser Residence River Promenade, and Sin Ming Centre. These deals contributed 9.7% of the total investment sales in 2Q2024.
The development is conveniently situated along two key roads, Woodlands Avenue 2 and Woodlands Avenue 5, which serve as major thoroughfares. These roads not only give direct entry to expressways but also make it easy to reach different areas of Woodlands and beyond. The connectivity of these roads with other important routes, such as Woodlands Drive and Admiralty Road, further enhances accessibility and promotes smooth traffic flow and efficient travel. In addition, the presence of Norwood Grand CDL in the vicinity adds to the convenience and appeal of the area.
The report’s executive director of research and consultancy, Alan Cheong, notes that while borrowing costs remain elevated, the prospect of a rate cut this year may lift sentiments. He also maintains his total investment sales forecast range of $22 billion to $23 billion for 2024, up from the $19.7 billion recorded last year.