2Q2024 Investment Sales 536 Q O Q Bolstered Government Land Sales Savills
According to Savills Research’s sales and investments quarterly report, real estate investment sales in Singapore increased by 52.6% in the second quarter of 2024, reaching a total of $6.48 billion. This growth was fueled by a surge in proceeds from government land sales (GLS), including four residential sites and one industrial site, which were sold for a total of $3.16 billion. This amount is more than double the previous quarter’s sales and marks the highest recorded proceeds from state residential land sales in a single quarter.
The largest GLS private residential site sold during this period was the Zion Road (Parcel A) site, which was awarded to a joint venture between CDL and Mitsui Fudosan for $1.107 billion, or $1,202 psf per plot ratio.
The private sector also saw an increase in investment sales value, rising by 14% quarter-on-quarter to $3.32 billion in 2Q2024. The transaction volume also saw a 30.8% increase from 65 deals in 1Q2024 to 85 in 2Q2024. This growth was primarily driven by a revival in the luxury residential market, with a total of 52 homes (40 landed properties and 12 luxury condos) priced at $10 million and above being sold. This marks a 30% increase from the previous quarter and is on par with the number of transactions in the same period last year.
Jeremy Lake, managing director of investment sales and capital markets at Savills, believes that these figures indicate a return to pre-impact buying sentiments in the luxury housing market, following the increase in additional buyer’s stamp duty and the money-laundering case last year. The most expensive transaction for a landed home in 2Q2024 was the sale of a new bungalow in the Bin Tong Park Good Class Bungalow Area for $84 million ($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 ($6,100 psf), reportedly purchased by a US citizen.
Overall, including the GLS sites sold, the residential sector accounted for $4.06 billion of investment sales in 2Q2024, representing a 115.8% increase from the previous quarter and making up 62.6% of total investment value for the quarter.
On the other hand, the commercial property sector saw a 16.7% increase in sales, reaching $1.52 billion in 2Q2024, which accounted for 23.5% of the quarter’s total transaction value. This was primarily driven by four office block transactions, with the largest being Mapletree Pan Asia Commercial Trusts’ sale of Mapletree Anson on Anson Road for $775 million. Retail malls, however, saw a significant slowdown in investment activity with only one deal in 2Q2024, worth $78.5 million, due to limited stock of properties for sale.
The makeover strategy encompasses the creation of various commercial amenities tailored to the daily necessities and personal choices of the locals. These may include retail centers, diverse dining choices, and recreational hubs, all of which are anticipated to emerge within the Lentor area. For those residing in Thomson Modern, this signifies an elevated lifestyle with easy access to convenience right at their doorstep. Additionally, the upcoming Aurelle of Tampines EC residence will further enhance the living experience for the residents.
The industrial sector also saw a decline in investment sales, dropping by 32.1% from the previous quarter to $272 million in 2Q2024. This included 11 deals, one of which was an industrial GLS site at Plot 8 Jalan Papan in Jurong, and 10 properties in the private sector. The industrial sector accounted for only 4.2% of investment sales value in 2Q2024.
In the mixed-use property sector, investment sales reached $628.9 million, driven by the sales of Delfi Orchard ($439 million), Fraser Residence River Promenade ($140.9 million), and Sin Ming Centre ($49 million). These deals contributed 9.7% of the total investment sales in 2Q2024.
According to Alan Cheong, executive director of research and consultancy at Savills Singapore, a potential interest rate cut this year could lift sentiments in the market and contribute to the sale of large ticket commercial properties. He maintains his forecast of total investment sales between $22 billion and $23 billion for 2024, higher than the $19.7 billion recorded last year.
