Mega deals drive Singapore real estate investment sales to a 25.4% jump in Q3

The total sales value reached S$8.05b during the quarter.

Investment sales in Singapore’s real estate sector increased for a second consecutive quarter, rising 22.7% QoQ and 25.4% YoY to S$8.05 billion in Q3/2024, according to a recent Savills report. 

“Private investment sales were boosted by a few mega deals, including the sale of a 50% interest in ION Orchard (S$1.85 billion) and a portfolio of industrial assets (S$1.60 billion). These private deals accounted for 70.9% of Q3’s total investment value, contributing to a 67.9% QoQ increase in the private sector’s value,” the report said.

Here’s more from Savills:

Despite this rise in value, momentum in the private market slowed, with transaction volume dropping 21.1% QoQ to 71 deals in the reviewed quarter. The drop was mainly attributed to weak activity observed in the residential segment throughout much of the quarter. 

As the market anticipated a Federal Reserve interest rate cut in September, some investors adopted a cautious stance and refrained from making investment decisions until the cut took place. Additionally, the persistent price gap between buyers and sellers combined with the impact of the Hungry Ghost month, further stymied market activity. 

The remaining 29.1% of total investment sales for the quarter consisted of five state sites sold under the Government Land Sales (GLS) Programme, which fell by 25.9% QoQ from the previous quarter to S$2.34 billion. The public sector’s struggle to achieve higher investment sales was exacerbated by the unsuccessful tender for a 99-year leasehold master developer site in the up-and-coming Jurong Lake District. The bidding price of S$640 per sq ft (psf) of gross floor area (GFA) from the shortlisted proposal for this 6.5-hectare White site was assessed to be too low by the authority.

In terms of sectoral breakdown, the residential sector continued to make up the largest proportion, at 39.1%. However, this was substantially down from the 61.5% recorded in the previous quarter. In contrast, the share of commercial and industrial investment sales expanded by 5.8 percentage points (ppts) QoQ to 30.4% and 26.2 ppts QoQ to 30.5% respectively during the quarter.