Strongest first quarter on record for Singapore investment sales
SINGAPORE, 29 March 2018 – JLL's preliminary estimates showed that Singapore's property investment1 sales market opened the year with a big bang, turning in the best first quarter showing since JLL started tracking such deals in 1994.
Some SGD 10.84 billion worth of investment deals were sealed in 1Q18 – the highest first quarter sales on JLL's record, based on preliminary data collated as of 28 March 2018. The residential sector was the star performer with its sales amounting to SGD 8.93 billion that accounted for more than four-fifth of the quarter's total investment sales value.
Developers' frenzied land banking activity to ride on the recovering residential property market had propelled residential investment sales value to the highest ever on JLL's record, surpassing the preceding quarter's high of SGD 8.34 billion. Specifically, they snagged some 26 plots of residential land (excluding sites yielding more than 20 per cent of gross floor area in other uses) worth SGD 7.27 billion in the first three months of 2018. Of these, SGD 5.83 billion were accumulated from 17 collective sales deals, while the sale of four government land sites (including one Executive Condominium plot) contributed a further SGD 1.24 billion.
The top five residential development deals – all collective sales, which incidentally also represent the top five property investment deals in 1Q18 are:
- Pacific Mansion (SGD 980.00 million)
- Park West (SGD 840.89 million)
- Pearl Bank Apartments (SGD 728.00 million)
- Goodluck Garden (SGD 610.00 million)
- Brookvale Park (SGD 530.00 million)
Investment sales activity in the other sectors was relatively muted in the first three months of 2018, with each garnering less than five per cent share. The only exception was the mixed-use sector which accumulated SGD 929 million worth of deals, accounting for about 8.6 per cent of the quarter's overall investment sales value. The sector's performance was boosted by Perennial's acquisition of Pontiac Land affiliate Chesham Properties' 50 per cent effective stake in Capitol Singapore, and JTC's sale of the Mixed-Use Executive Centre site at Rochester Park to Ascendas-Singbridge.
Mr. Greg Hyland, Head of Capital Markets for JLL Singapore, comments: "Although the commercial sales market was relatively quiet in 1Q18, investors' interest remains high, bolstered by the upbeat outlook for the commercial leasing market. A number of commercial investment deals are in the pipeline and could be concluded over the coming quarters pending agreement on commercial terms."
On the outlook for residential collective sales, Mr. Tan Hong Boon, Regional Director for Capital Markets, JLL Singapore, opines: "The first three months of 2018 already chalked up SGD 5.83 billion worth of residential collective sales deals that is equivalent to over 70 per cent of the SGD 8.19 billion accumulated from 28 such deals in the entire 2017, and about half of the SGD 11.51 billion historical peak sealed in 2007. I will not be surprised if 2018 turns out to be another stellar year for the collective sales market."
This optimism is underpinned by his observation that developers are not yet done restocking their land inventory given the positive medium outlook for the residential property market. And there remains a firm pipeline of potential collective sale sites to whet their appetite given that many owners are keen to ride the current wave.
Mr. Tan adds: "Developers now have ample choices and collective sale owners need to set realistic reserve prices to stay in the competition."
Ms. Tay Huey Ying, Head of Research and Consultancy, JLL Singapore, sums up, "We expect overall property investment sales activity to stay elevated in 2018, bolstered by developers' continued land banking activities. Sales of commercial and industrial investment assets should pick up momentum in the coming months. Singapore remains an attractive destination for investors given her short- and long-term dynamism."
Ms. Tay elaborates: "Firstly, the property market is still at an early stage of recovery and the steady economic growth forecasts for the next few years will provide it with more legs to run. Secondly, Singapore is future-proofing its economy well to manage and benefit from the rapid technological transformation. In fact, Singapore is the only city in Asia and one of only two in the world to be placed on both JLL's top 30 scoreboards for short and long term dynamism in its latest edition of City Momentum Index."
Total Property Investment Sales
|Total Investment Sales (SGD billion)||||||Change|||
|Hotel & Hospitality||0.00||0.15||0.33||115.9%||N.A.|
*Preliminary data as of 28 Mar 2018 Source: JLL Research
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- Comprising private sector sales worth SGD 5 million and above, and all public sector deals including Government Land Sales.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2017, JLL had revenue of $7.9 billion and fee revenue of $6.7 billion; managed 4.6 billion square feet, or 423 million square meters; and completed investment sales, acquisitions and finance transactions of approximately $170 billion. At the end of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of 82,000. As of December 31, 2017, LaSalle had $58.1 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.
JLL has over 50 years of experience in Asia Pacific, with over 37,000 employees operating in 96 offices in 16 countries across the region. The firm won the 'World's Best' and 'Best in Asia Pacific' International Property Consultancy at the International Property Awards in 2016 and was named number one real estate investment advisory firm in Asia Pacific for the sixth consecutive year by Real Capital Analytics. www.ap.jll.com.