Here's one reason to stay bullish on Singapore's property market

2016 investment sales predicted to hit a 3-year high.

The uplift in investor sentiment witnessed in 2Q16 that translated into the conclusion of several headline deals including the SGD 3.4 billion Asia Square Tower 1 and the SGD 638 million collective sale of Shunfu Ville was sustained into 3Q16.

JLL Research’s preliminary estimates showed that Singapore’s total real estate investment sales posted a 16% year-on-year growth in value to SGD 4.61 billion in 3Q16 following the 73% y-o-y surge in the preceding quarter. The total sales amassed in the first nine months of 2016 amounting to an encouraging preliminary estimates of SGD 15.41 billion had also surpassed the SGD 14.49 billion recorded for the full first nine months of 2015 by some 6.3%.

Ms Tay Huey Ying, Head of Research for JLL Singapore added: “Sales tally aside, the triggering of the Central Boulevard Government Land Sales (GLS) White site, the sheer number of bids received, as well as the neck-to-neck bids submitted for recent GLS residential sites further attests to the upbeat investor sentiment.”

Ms Tay further explained: “The Anchorvale Lane Executive Condominium GLS site received 16 bids while the Fernvale Road non-landed GLS site received 14 bids when their tenders closed in August and September, respectively. In what is likely the most intense competition ever seen for a GLS site, the top three bids for the Fernvale Road land parcel were less than 0.1% apart.”

On a quarter-on-quarter (q-o-q) basis, however, total investment sales value in 3Q16 was 41.2% lower than 2Q16 which received a huge lift from the SGD 3.4 billion sale of Asia Square Tower 1. Excluding this deal, 3Q16 sales value is 3.8% higher. The largest deal sealed in 3Q16 was the SGD 1.78 billion acquisition of the office and business park components of Mapletree Business City (Phase 1) by Mapletree Commercial Trust. This is also the second largest property deal in Singapore this year after Asia Square Tower 1.

Mr Greg Hyland, Head of Capital Markets, Singapore, JLL explained: “This q-o-q fall in sales is expected as sizeable assets such as that of Asia Square Tower are limited in Singapore. The few that are available are tightly held by their owners.

Moving forward, Ms Tay concluded: “While 2016 started on a low note, it is expected to end on a high. The final lap of 2016 can expect to see the tender closing of the Central Boulevard GLS white site which we foresee to attract bids in excess of SGD 2 billion. Other deals potentially in the pipeline include the sale of Capital Square and 77 Robinson Road, just to name a few. Given that the sales tally to-date already amounted to some SGD 15.41 billion, barring unforeseen circumstances, there is a high likelihood that full-year property investment sales value could stage a rebound and hit the highest in three years, surpassing 2014 and 2015’s SGD 20.62 billion and 20.35 billion, respectively.”