2Q2024 Investment Sales 536 Q O Q Bolstered Government Land Sales Savills
The property investment market in Singapore experienced a significant boost in the second quarter of 2024, with sales rising by 52.6% to reach a total of $6.48 billion, according to Savills Research’s sales and investments quarterly report. This growth was driven by the higher proceeds from government land sales (GLS), with four residential sites and one industrial site fetching a total of $3.16 billion during this period. These numbers more than doubled those recorded in the previous quarter, marking the highest proceeds from state residential land sales in a single quarter. One of the biggest GLS transactions was for 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.
Moreover, the private sector also saw a 14% increase in investment sales value to $3.32 billion in the second quarter. The number of transactions also rose by 30.8% compared to the previous quarter, with a total of 85 deals recorded. This can be attributed to the revival of the luxury residential market, with 52 homes sold for prices above $10 million, including 40 landed properties and 12 luxury condos. This represents a 30% increase from the number of luxury homes sold in the first quarter of 2024 and is on par with the figures recorded in the same period last year. Savills’ managing director of investment sales and capital markets, Jeremy Lake, believes that these numbers indicate a gradual return of buying sentiment in the luxury housing market to pre-impact levels of the increase in additional buyer’s stamp duty and the money laundering case from last year.
In the landed residential property segment, the biggest transaction was for a new bungalow in the Bin Tong Park Good Class Bungalow Area, which sold for $84 million, or $2,988 psf based on a land area of 28,111 sq ft. In the non-landed residential property segment, a penthouse on the 57th floor of the 190-unit Skywater Residences sold for $47.3 million, making it the most expensive condo deal in the second quarter. Overall, the residential sector accounted for $4.06 billion of investment sales, representing a 115.8% increase from the previous quarter and making up 62.6% of total investment value for the quarter.
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On the other hand, the commercial property sector also saw an increase in sales, rising by 16.7% to $1.52 billion in the second quarter. This was driven by four office block transactions, with the largest being the sale of Mapletree Anson in Tanjong Pagar for $775 million. However, retail property sales slowed significantly, with only one deal recorded in the second quarter – Paragon Reit’s divestment of The Rail Mall for $78.5 million. According to the report, this slowdown can be attributed to the limited stock of properties available for sale. Investment sales in the industrial sector also saw a decline, dropping by 32.1% to $272 million in the second quarter. This included 11 deals involving one industrial GLS site and 10 private sector properties. The industrial sector accounted for only 4.2% of investment sales value in the second quarter.
Furthermore, the mixed-use property sector generated $628.9 million in investment sales, with the sale of Delfi Orchard, Fraser Residence River Promenade, and Sin Ming Centre contributing to 9.7% of total investment sales. Alan Cheong, executive director of research and consultancy at Savills Singapore, suggests that the possibility of a rate cut this year could boost sentiments, potentially leading to a return of momentum in the sale of large commercial properties. Despite the elevated borrowing costs, he maintains his forecast of $22 billion to $23 billion for total investment sales in 2024, an increase from the $19.7 billion recorded in 2023.