Some $4.99b worth of real estate investment deals were sealed in the first three months of the year, up 67.4% higher than $2.98b recorded a year ago.
According to JLL Singapore, the engine of growth for the private investment market sales was the office sector, whose investment sales took the lion share of 47.5%, worth $2.12b. This is the highest first quarter investment sales for the sector since 2008, when it saw $2b worth of deals involving One George Street and Singapore Power Building, which propelled overall sales to $3.41b.
JLL said the top two office deals in 1Q17 were entity sales. The entire interest in the holding company of PwC Building was sold to an indirect subsidiary of Manulife Financial Corporation for $760.6m, and the entire interest in Plaza Ventures Pte Ltd, the registered owner and developer of GSH Plaza, was sold to Hong Kong-listed Fullshare Holdings for $725.21m.
JLL Singapore Head of Research and Consultancy Tay Huey Yung said only the office sector posted a quarter-on-quarter growth in 1Q17.
"The $2.12b amassed in the private office sector in the first three months of 2017 already accounted for almost a third of the whole of 2016's sales of $6.49b. Taking into consideration recently concluded deals such as that for One George Street, as well as sizeable assets available in the market including Asia Square Tower 2, there is potential for 2017 full-year sales of private office assets to surpass that of 2016's," she said, as reported.
Tay is also upbeat about this year's outlook for retail and residential sectors' investment deals. Residential investment deals ended the quarter with $1.69b yield whilst retail investment deals clocked in at $0.28b.
For the retail sector, a major driver of sales growth may come from the successful sale of Jurong Point to Mercatus Co-operative for $2.20b. Meanwhile, the combination of upbeat buyer sentiment and attractive incentive packages, offered by developers for high-end properties, could prop up the strata sales market despite the recently-introduced Additional Conveyance Duty putting a damper on bulk deals.
"Singapore property investment sales is poised to have a strong run in 2017. Macroeconomic and geopolitical uncertainties are working to Singapore's favour as investors look to Singapore as a safe haven to park their capital. Investors are also optimistic that Singapore's property market is close to the bottom and are confident that entering the market now will position them well to ride on the impending growth," Tay said.
She added, "Barring unforeseen circumstances, private sector investment sales stand a good chance to outshine 2016. All eyes will now be on the upcoming 2H2017 GLS programme for clue on how 2017 will pan out for the overall investment sales market."