Singapore’s total investment sales could hit S$20b by year-end

The real estate sales volume is already at S$16.95 as at Q3 2021.

Singapore’s investment sales are expected to recover sooner rather than later. The previous six quarters have shown that despite the resurgence of COVID-19 cases and the resulting restrictions, the total value of transactions were still resilient and maintained an upward trend.

“However, the climb back to pre-COVID levels will probably need a longer runway because the desynchronised approaches global and regional economies have been adopting towards combating the disease is retarding the rush of liquidity back to the market,” Savills says.

Here’s more from Savills:

Furthermore, the almost simultaneous clampdown by the Chinese government on many sectors of the economy is likely to introduce friction to the flow of investments from China to Singapore, especially on the private luxury residential segment of the market. But still, we expect the general trend of investment activity to still be vectored up. For the rest of this year, how foreign direct investment sales will perform depends heavily on when Singapore expands her vaccinated travel lanes to more countries. 

In September, two countries were accorded this status and another nine (Canada, Denmark, France, Italy, the Netherlands, Spain, the UK and the US) will be added from October 19 with South Korea included from November 15. As for overall investment sales, we believe that domestic capital will be the mainstay, particularly developers seeking to replenish their residential landbanks as new sales have been very strong after the lock down in Q2/2020. 

With three quarters of the year gone, total investment sales volume has already hit S$16.95 billion. This has already exceeded the low end of our forecast range of S$16 billion to S$20 billion. Given the strong performance in the third quarter, we believe that total investment sales value for 2021 may be close to S$20 billion, the upper end of our estimated range. 

Therefore, unless a large deal gets consummated in the fourth quarter of this year, the remaining months of 2021 may see a marked slowdown in investment sales. The ones almost in the bag for the fourth quarter are just two GLS sites worth about S$482.5 million which remain unawarded. 

The rest are collective sales sites, the largest of which is for International Plaza that closes on November 30 with a hefty reserve price of S$2.7 billion. Given the possibility that not all of them will be successfully sold, the fourth quarter numbers may be more muted than the third.