2Q2024 Investment Sales 536 Q O Q Bolstered Government Land Sales Savills
Singapore’s real estate investment market saw a 52.6% growth in the second quarter of 2024, with total sales reaching $6.48 billion, according to the latest report from Savills Research.The surge in investment was largely driven by government land sales (GLS), with four residential sites and one industrial site awarded for a total of $3.16 billion. This is more than double the amount recorded in the previous quarter and marks the highest quarterly proceeds from state residential land sales so far.
The Marina Gardens Lane Residences Tender GLS has secured the winning bid, beating its closest competitor by an impressive 42%. In second place was a joint venture between GuocoLand and Hong Leong Group, offering $727.04 million for the property at a rate of $985 per square foot per plot ratio. This 99-year leasehold development spans 131,805 square feet and is designated for a mixed-use purpose, comprising of both residential and commercial elements. It has the potential to house approximately 790 residential units and 8,073 square feet of commercial space, with a maximum gross floor area of 738,114 square feet. More information on the Marina Gardens Condo can be found on the project’s website. Interested parties may visit Marina Gardens Condo for further details.
The largest GLS private residential site sold was the Zion Road (Parcel A) site, which was awarded to a joint venture between CDL and Mitsui Fudosan for $1.107 billion in April, amounting to $1,202 per square foot per plot ratio (psf ppr).
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The private sector also saw an increase in investment sales value, rising 14% q-o-q to $3.32 billion in the second quarter. Transaction volume also grew by 30.8% from 65 deals in the first quarter to 85 in the second quarter.
This growth was largely driven by a revival in the luxury residential market, with a total of 52 homes sold for $10 million or more in the second quarter. This is a 30% increase from the previous quarter and on par with the number of transactions seen in the same period last year.
According to Jeremy Lake, Savills’ managing director of investment sales and capital markets, this indicates that the buying sentiment in the luxury housing market has gradually returned to pre-impact levels of the increased additional buyer’s stamp duty and money-laundering case last year.
The biggest landed home transaction in the second quarter was a new bungalow in the Bin Tong Park Good Class Bungalow Area, which sold for $84 million, equivalent to $2,988 psf based on a land area of 28,111 square feet.
In the non-landed residential property segment, the most expensive condo transaction in the second quarter was the sale of a 7,761 square foot penthouse on the 57th floor of the 190-unit Skywater Residences for $47.3 million to a US citizen. This equates to $6,100 psf.
Overall, including the GLS sites sold, the residential sector accounted for $4.06 billion of investment sales in the second quarter, representing a 115.8% q-o-q surge and making up 62.6% of total investment value for the period.
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Retail deals experienced a slowdown, with only one transaction in the second quarter – Paragon Reit’s sale of The Rail Mall for $78.5 million. According to the report, this was due to the limited numbers of properties available for sale.
On the other hand, the commercial property sector saw an increase in sales, rising 16.7% q-o-q to $1.52 billion, accounting for 23.5% of the quarter’s total transaction value. This was driven by four office block transactions, with the largest being Mapletree Pan Asia Commercial Trusts’ sale of Mapletree Anson for $775 million.
The industrial sector saw a decline in investment activity, with sales falling 32.1% q-o-q to $272 million. This came from 11 deals involving one industrial GLS site and 10 properties in the private sector. The industrial sector accounted for only 4.2% of investment sales value in the second quarter.
Meanwhile, the mixed-use property sector generated $628.9 million in investment sales, with Delfi Orchard, Fraser Residence River Promenade, and Sin Ming Centre making the largest contributions.
Alan Cheong, executive director of research and consultancy at Savills Singapore, believes that if borrowing costs remain high but there is a prospect of a rate cut this year, this could boost sentiments and bring back momentum to the investment market. He maintains his total investment sales forecast range of $22 billion to $23 billion for 2024, up from the $19.7 billion recorded last year.