The start of 2023 saw a slow start in Singapore’s real estate investment market, with only $4.2 billion in recorded sales in the first quarter, according to the global real estate company Knight Frank. This marked a 61% decrease when compared to first quarter of 2022. It is also the lowest q-o-q total since 2Q2020, when the government imposed the “circuit breaker” due to the pandemic.
Residential investment totaled $1.6 billion during the first quarter of 2023, with the notable collective sales for Meyer Park, Bagnall Court and Holland Tower amounting to $583.8 million. The sale of Holland Tower is the first successful residential en bloc transaction in the Core Central Region (CCR) since property cooling measures were imposed in December 2021, marking a return of investment interest in prime locations, according to Chia Mein Mein, head of capital markets (land & collective sale) at Knight Frank Singapore.
Despite this, the en bloc environment is proving to be a challenge, with success rates of around 33% in the past two years, compared to a rate of 63% between 2017 and 2018. Chia believes that the key for collective sales to work in the current cycle is for owners to adopt reasonable expectations on prices.
The commercial market saw little activity in 1Q2023, yet the sale of 39 Robinson Road to Yangzijiang Shipbuilding for $399 million, and Frasers Centrepoint Trust and Frasers Property’s acquisition of a 50% stake in Nex for $652.5 million gave the sector a total of $1.9 billion in sales.
Industrial sector investments rose 62.8% q-o-q to $681.1 million in 1Q2023, due to buyers shifting focus while waiting on potential repricing in the commercial sector. Of note are the acquisition of four Cycle & Carriage properties by M&G Real Estate at approximately $333 million, and the disposal of 12 and 31 Tannery Lane by Ho Bee Land for $115 million.
Going into the remainder of the year, Knight Frank is predicting a slower investment market due to economic uncertainties and banking sector volatility. They are forecasting a range of $20 billion-$22 billion for full-year investment sales, down from their previously predicted range of $22 billion-$25 billion. As investors monitor for any signs of a dip in pricing, it is expected that caution will continue to be the prevailing sentiment.