Real estate investment sales up 49% in Q2 2019
Commercial deals accounted for 52 percent of the total real estate investment sales volume at $3.5 billion. The residential sector registered $1.7 billion and $0.5 billion for the industrial sector.
Singapore saw total real estate investment sales soar 49 percent quarter-on-quarter to $6.7 billion in the second quarter of 2019. This brings the total volume for the first half of 2019 to $11.2 billion, revealed a Cushman & Wakefield report.
Commercial deals accounted for 52 percent of the total real estate investment sales volume at $3.5 billion. The residential sector registered $1.7 billion and $0.5 billion for the industrial sector.
AEW’s $1 billion purchase of Chevron House, which is undergoing asset enhancement works, from Oxley Holdings emerged as the biggest deal of the quarter. It is followed by the $982.5 million acquisition of a half stake in Frasers Tower by South Korea’s National Pension Service. The suburban office segment also saw Metro Holdings and Evia Real Estate acquire 7 & 9 Tampines Grande for $395 million
“The favourable interest rate environment with potential Fed rate cuts in the coming quarters should continue to boost interest in real estate investment. Prices are riding on the expectation that yield-hungry investors will be diverted from the bond market to the commercial property market due to the widening yield spread,” said Cushman & Wakefield head of research for Singapore and Southeast Asia Christine Li.
“The momentum seen in the commercial sector during 1H2019 is expected to continue with the sale of more big ticket items in the pipeline, such as DUO Tower, 71 Robinson Road, and Anson House.”
Arch Capital Management is currently undertaking due diligence to buy Anson House for around $210 million, while Gaw Capital Partners and Allianz Real Estate are in advanced negotiations to purchase DUO Galleria and DUO Tower for about $1.6 billion.
Cushman & Wakefield head of capital markets Shaun Poh noted that the recommendation under the URA 2019 Draft Master Plan to rejuvenate the central business district created some buzz in the commercial investment market, with the introduction of the CBD Incentive Scheme attracting the attention of commercial landlords looking to redevelop their properties.
“This has led to some owners of adjacent smaller plots contemplating the possibility of joining forces to qualify for the scheme,” he said.
Looking ahead, Cushman & Wakefield expects real estate investment volume to reach $25 billion for the whole of 2019.
Source: 11 Jul 2019, CommercialGuru