Plunged 15% in Singapore Property Investment

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Property investment sales in Singapore plunged 15 percent year-on-year to $16 billion in 2015, the cheapest sales volume in six years, according to a DTZ Research report.

Property sales by government agencies fell 13 percent to $5.8 billion while private investment sales dropped eight percent to $10.3 billion.

The report said the fall in investment sales was largely because of the mismatch of cost expectancies between buyers and sellers, and the slowdown in starts of new websites from the Government Land Sales (GLS) programme.

The uncertainty in global markets also impacted sales, as local investors seek to diversify their portfolio by growing their asset pool overseas.

However, there was much interest for Singaporean properties in 2015 given the good government and dynamic economic environment in the state, said DTZ.

The largest bargain completed last year was the sale of a site in Paya Lebar for $1.67 billion to Abu Dhabi Investment Authority and Lend Lease. The developers plan to build a mixed development that will have gross floor area of office space, 43,740 sqm 91,340 sqm of retail space and 429 flats.

The sale of a land tract at Dundee Road in Queenstown was the priciest residential site sold in 2015 via the GLS programme, bringing in the maximum price of $483 million. Awarded to Hao Yuan Investment, the website also saw the highest residential price per square foot per plot ratio (psf ppr) in the year at $871 psf ppr. The breakeven price for the planned development is anticipated to be at least , noted psf $1,240 DTZ.

The consultancy included that investors are willing to bid for leasehold projects which are priced fairly and have redevelopment potential. Check out the New executive condo by Qing Jian, The Visionaire EC

For instance, The Brink, which was sold for $317 million in Q4 2015, could be redeveloped into a mixed-use development.

Going DTZ expects the property investment market in Singapore to present interesting opportunities to investors.

“2016 is expected to be a rocky year for the commodities and stock market, so real estate will become an attractive asset class for investors.