Singapore commercial investment sales hit record highs since 2008

Sales reached S$5.81b in the first quarter of 2022.

A recent report by Savills notes that the sharp upward recalibration of stamp duties in the private residential market rechannelled investment demand to the commercial sector. 

Consequently, commercial investment sales surged from S$2.19 billion in Q4/2021 to S$5.81 billion in Q1/2022, the largest since Savills first collated the data from Q1/2008. 

Here’s more from Savills:

While investment sales in both the office and retail sectors increased in the quarter, the latter sector registered a larger growth, with investment sales coming in at S$1.69 billion, more than five times the S$306.1 million in the previous quarter. This was largely attributable to four block transactions in Q1/2022. 

Apart from the sale of three shopping malls in the suburban areas, the quarter also saw the collective sale of Tanglin Shopping Centre. The freehold shopping mall was successfully sold to Pacific Eagle Real Estate in its fourth collective sale attempt for S$868.0 million (S$2,769 per sq ft ppr assuming full commercial usage), 10% above the reserve price. 

Similarly, office investment sales expanded for a third consecutive quarter, rising 119.5% QoQ to nearly S$4.13 billion in the quarter. The sector remained attractive amongst investors due to the limited supply in the pipeline. 

With the office leasing market improving and a gradual renormalisation of economic activity, buying interest in the office sector is expected to remain in favour with investors favouring quality assets in prime CBD locations. This was evident from the block transactions transacted in Q1/2022. 

Of the five block transactions in the quarter, four are located in the CBD. These buildings are 79 Robinson Road and Cross Street Exchange, which were sold for S$1.26 billion and S$810.8 million respectively. The largest deal in the quarter was the acquisition by Lendlease Global Commercial REIT of the remaining 68.2% stake in Jem for about S$1.42 billion.