Singapore real estate investment sales plummet 25.2% to S$4.3b in Q1

Residential deals accounted for almost half of the investment activity.

According to a report from Knight Frank, with Singapore real estate investment activity ending 2023 on a quieter note, hamstrung by elevated interest rates, the doubling Additional Buyer’s Stamp Duty (ABSD) rate for foreign buyers, and the outbreak of military conflict that has escalated geo-political tensions, 2024 started off in a similar fashion as sales activity remained subdued.

Total investment sales value declined 25.2% to S$4.3 billion q-o-q from S$5.8 billion in the last quarter (Exhibit 1).

Here’s more from Knight Frank:

In Q1 2024, residential deals constituted the largest proportion of investment sales activity at 47.1% with a total sales value of S$2.0 billion. A large proportion consisted of awarded government land sales (GLS) sites for residential uses located at Orchard Boulevard, Plantation Close, and Media Circle, totalling S$1.2 billion. Compared to the previous quarter, residential investment sales activity declined 41.9% from S$3.5 billion as foreign buyers stayed away due to the prohibitive ABSD rate that was implemented in April 2023.

Commercial property deals recorded a similar sales value of S$1.3 billion in Q1 2024 compared to the previous quarter, with a decrease of 0.1%. Despite the slowdown in activity, January was an active month for the commercial sector as several sizable deals changed hands. The acquisition of The Seletar Mall by Allgreen Properties for S$550.0 million and the purchase of a 24.5% stake in Nex by Frasers Centrepoint Trust for S$521.9 million take the top two spots in the top five investment sale transactions during the quarter (Exhibit 2).

Transactional activity in the industrial sector grew 39.4%, with several notable deals that took place in the quarter. For instance, the sale of a data centre named OneTen Paya Lebar to BDx Data Centres from Hwa Hong Corporation Group for S$140.0 million in March and the award of a GLS site at Tuas Link Close to Soon Hock Land Pte Ltd for S$89.0 million in March.

Additionally, three hotels successfully changed hands in Q1 2024, leading to an increase of 208.9% q-o-q. For example, Hotel G was transacted in January for S$238.0 million to The Ascott Limited and CapitaLand Wellness Fund (C-WELL). Additionally, Capri by Fraser, Changi City was purchased by TPG Angelo Gordon, Hong Kong’s Far East Consortium and Atelier Capital Partners for S$170.0 million in March.

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