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News Release

Singapore

Investment Sales Market Continues Its Charge

Residential transactions accounted for majority of the total sales quantum


Singapore, 16 September 2009 – Buoyed by improved market and investor sentiments, preliminary data has indicated investment sales in the third quarter (July – September) of 2009 has improved by 13% over the previous quarter. Based on the data collected to date, the total investment sales volume is calculated to be at approximately $1.83 billion.

Similar to the previous quarter, the dominant sector is the residential sector which accounted for 52% of the total sales quantum or $958 million. As at the time of publication, there was a total of 24 Good Class Bungalows amounting to a total of $413.5 million transacted. As for the other landed residential transactions worth above $5 million, there were 47 such properties transacted at the total of approximately $408 million. The GCB market has seen increased activity with more sellers putting up their properties for sale to tap on the current interest levels and upswing in pricing in this market.

Following their purchase of VTB Building in the previous quarter, the joint venture of Yi Kai Group and Fission Group acquired Aviva Building and Cecil House for $65 million and $36 million respectively. There have been plans to redevelop both these sites for a residential development.

With affordability remaining a key factor, most investment transaction deals were still concluded below the $100 million mark. The only exception were the two largest transactions in this quarter that came from the commercial sector, somewhat involving REITs. The Suntec Convention Centre was injected into the ARA Harmony Fund, a fund with a 20% stake by Suntec REIT, for $235 million. K-REIT also joined the acquisition spree by purchasing six (20th to 25th) floors of its partially-owned Prudential Towers for $106.3 from Asia Property Fund. This transaction boosted K-REIT’s ownership of this building from 44% to 73%.

This quarter has also seen boutique developers snapping up bite-sized land parcels and developments to beef up their land banks. Subsidiaries of the Fragrance Group have in total acquired approximately $170 million worth of investment deals. Similarly, subsidiaries of Aspial Corporation Limited have been also acquiring development sites close to a total of $57 million this quarter. These acquisitions are transacted under the umbrella bearing the common group name of “World Class”. Stella Hoh, Jones Lang LaSalle’s Head of Investments notes that “with improvement in sentiments, we see more interests for residential land acquisitions by developers. However, with the limited private land parcels for sale, there will be revival of collective sales. Nevertheless, it is important for the sellers to price their site realistically so that it will capture the interests of developers.”

The encouraging performance of the investment sales market is testament to the liquidity still available in the market. Along with improving economic sentiments, this market is expected to improve with more transactions expected by the end of the year.

Jones Lang LaSalle has been appointed by the Singapore Housing and Development Board (HDB) to market a suburban retail mall in Clementi. Known as “Clementi Mall” for marketing purposes, the mall is situated next to the Clementi MRT station and is expected to attract keen interest from developers/ investors seeking opportunities to penetrate the traditionally tightly held suburban retail market.

Interested parties are encouraged to contact Jones Lang LaSalle for more information and tender packages relating to Clementi Mall.