$24.7 billion will be invested in real estate in 2022, a 1% year-over-year decline
The value of investment sales in Singapore reached $24.7 billion in 2022, which is down 1% per year, as per an investment report from Savills Singapore. In the 4Q2022 the market saw $2.81 billion of investment revenue. This was down 36.1% q-o-q — the third consecutive quarter of decline due to slower market conditions, as the report states.
The Lakegarden Residences new launch is a 99-year leasehold development, has been sold through a collective sale of $273.88, equivalent to $273.88 million per square feet per plot ratio (psf ppr).
Residential sales accounted for the largest portion of revenue, accounting for 49.9% of total investment sales in the last quarter. However, sales for this segment fell by half by $1.4 billion in the 4Q2022 period. The fourth quarter was second in a row of declines this segment experienced last year.
The commercial sector saw an increase in transactional activity which grew by 28.4% q-o-q to $1.02 billion in 4Q2022 following two consecutive quarters of declining. The increase is mostly due to the 166.1% q-o-q growth in office investment sales that went from $251.4 million during 3Q2022 and $668.9 millions in the 4Q2022, according to Savills.
However, industrial investment and retail sales both fell by 34.9% and 48.1% in the q-o-q. Retail sales sank from a high level in the 3Q2022 period and the final period of this year witnessed an increase in retail strata sales as well as lower shophouse transaction values.
The 2023 year is when Savills anticipates the more Government Land Sales (GLS) sites to be offered and including the $2.16 billion deal for Jurong Point along with the purchase of strata unit units from Thomson Plaza will uplift the standard investment sales volume.
“Despite the unfavorable economic and rates, considering the economic openness and the positive image of Singapore the total investment sales should be in the black by 2023,” says Alan Cheong who is the executive director of Savills Research. “While the higher cost of borrowing could hinder institutions, there is the chance of a large-ticket deal or series of small-sized transactions in the end of this year.”
Savills estimates that the its total investment sales for 2023 to range from around $25-$24 billion and that activity will be dampened by interest rate and economic headwinds.