Property investment turnover jumps 49% in Q2 on larger deals

Investors are directing more capital towards core office assets.

Singapore real estate investment turnover rose 49% year on year (YoY) in the second quarter (Q2), as large transactions lifted activity in the city-state, according to Savills.

“Singapore has been the region’s primary market for core office deals this year. The investment pipeline also remains strong, with a number of large assets coming to market,” Savills said.

Khazanah and Temasek had reportedly selected a preferred bidder for Marina One at a valuation of about $5.59b (US$4.4b).

The increase comes as investors focus on larger transactions. Savills said transaction numbers have grown more slowly than turnover across Asia-Pacific, indicating that average deal sizes are increasing.

Deals above $635m (US$500m) more than doubled in the first half (H1), supporting investment activity across Singapore, South Korea, Japan, and other markets.

“Singapore stands out in this environment, with lower funding costs, strong operating fundamentals and a pipeline of large assets supporting investment activity,” said Nicholas Wilson, Senior Director, Strategic Research & Advisory, APAC Capital Markets at Savills.

Singapore’s growth formed part of an uneven recovery across APAC. Mainland China’s investment turnover rose 140% YoY in Q2, Hong Kong SAR increased 120%, and Australia rose 24%. South Korea fell 22% and Japan declined 27%.

APAC investment turnover reached $58.42b (US$46b) in Q2, up 18% YoY, whilst H1 turnover increased 25%.

Cross-border investors accounted for 35% of APAC acquisitions in H1, up from 28% a year earlier. Investors are also using more partial-stake transactions, including partner buyouts, minority stake sales, and recapitalisations.

“APAC’s investment recovery is gathering momentum, but it is being led by scale rather than a broad-based increase in activity,” Wilson said.

(US$1 = SG$1.27)

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