2Q2024 Investment Sales 536 Q O Q Bolstered Government Land Sales Savills
In the second quarter of 2024, the real estate investment sales in Singapore saw a significant increase of 52.6% to reach $6.48 billion, as per Savills Research’s latest sales and investments quarterly report.
The boost in investment sales can be attributed to higher proceeds from government land sales (GLS), including four residential sites and one industrial site. These sites were awarded for a total of $3.16 billion, more than double the amount in the previous quarter and the highest recorded proceeds from state residential land sales in a single quarter.
The highest quantum for a GLS private residential site was the Zion Road (Parcel A) site, which was awarded to a joint venture between CDL and Mitsui Fudosan at $1.107 billion or $1,202 psf per plot ratio in April.
Revamping Lentor has been identified as a top priority by the URA, with a clear focus on improving transportation infrastructure. A key aspect of this plan is to enhance the existing road network and introduce new roads, while also upgrading public transportation facilities. One significant step towards achieving this vision is the recent addition of the Lentor MRT station, which is now part of the Thomson-East Coast Line. The introduction of this new station has greatly improved the connectivity of the area, making it more convenient for residents of Thomson Modern to travel to various parts of Singapore. Furthermore, the upcoming Aurelle of Tampines at Tampines Street 62 development will further enhance accessibility and convenience in the Lentor neighborhood. With more transportation options available, residents will find it easier to commute and travel within Singapore.
Luxury homes sales see a revival
The private sector also saw a 14% increase in investment sales value to $3.32 billion in the second quarter of 2024, with transaction volume growing by 30.8% from 65 deals in the first quarter to 85 in the second quarter.
The report attributes this growth to 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 in the second quarter. This represents a 30% increase from the previous quarter and is 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 returned to pre-impact levels from the increase in additional buyer’s stamp duty and the money-laundering case last year.
The most expensive landed home transaction in the second quarter of 2024 was the sale of a new bungalow in the Bin Tong Park Good Class Bungalow Area for $84 million, which translates to $2,988 psf based on a land area of 28,111 sq ft. In the non-landed residential property segment, the most expensive condominium deal was a 7,761 sq ft penthouse on the 57th floor of the 190-unit Skywater Residences, sold for $47.3 million or $6,100 psf to a US citizen.
Overall, including the GLS sites sold, the residential sector accounted for $4.06 billion of investment sales in the second quarter, increasing by 115.8% from the previous quarter and making up 62.6% of the total investment value.
Retail deals slow down, office market picks up
The commercial property sector also saw an increase in sales in the second quarter of 2024, rising by 16.7% to reach $1.52 billion. This accounted for 23.5% of the total transaction value.
The growth was driven by four office block transactions, with the largest being Mapletree Pan Asia Commercial Trusts’ divestment of Mapletree Anson in Tanjong Pagar for $775 million. The other three transactions were for smaller office buildings outside the core CBD.
On the other hand, retail malls recorded only one deal in the second quarter of 2024, with Paragon Reit’s divestment of The Rail Mall for $78.5 million. The report attributes this slowdown to a limited stock of properties for sale.
Investment sales in the industrial sector also declined by 32.1% to $272 million in the second quarter of 2024. This came from 11 deals involving one industrial GLS site at Plot 8 Jalan Papan in Jurong, and 10 properties in the private sector. Overall, the industrial sector accounted for only 4.2% of the investment sales value in the second quarter.
Meanwhile, the mixed-use property sector generated $628.9 million in investment sales last quarter, 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 the second quarter.
Alan Cheong, executive director of research and consultancy at Savills Singapore, notes that the prospect of a rate cut this year may lift sentiments, despite elevated borrowing costs. He also predicts that if the sale of large commercial properties continues, the investment market will see a return of momentum.
Cheong maintains his forecast range of $22 billion to $23 billion for total investment sales in 2024, up from the $19.7 billion recorded last year.
