Singapore retail transaction volumes down 78.3% to US$420m in H1

Notable deals include Fraser Centrepoint Trust’s sale of YewTee Point for SGD220m. 

In H1 2021, Colliers reveals total retail transaction volumes declined 78.3% HOH to SGD564 million (USD420) million from a high base, due to Frasers Centrepoint Trust (FCT)’s purchase in H2 2020 of the remaining 63.1% stake in the Asia Retail Fund which owns five suburban retail malls in Singapore as part of its portfolio. 

Nonetheless, there were a few notable deals, including the divestment of YewTee Point by Frasers Centrepoint Trust, and Low Keng Huat’s acquisition of a 45% stake in Paya Lebar Square in a stake swap deal with Sun Venture. 

“Prime floor capital values in the Orchard area stayed flat HOH in H1 2021 at SGD6,473 (USD4,815) per sq foot, after a 5% decline in 2020. According to the Colliers Valuation and Advisory Services (CVAS) team, average island-wide retail cap rates remained unchanged in H1 2021, ranging from 4.25% to 4.75%, but could compress by 25 bps by end-2021 to reflect rental declines, while capital values hold up. In the long run, investors should continue to favour retail assets due to their relative scarcity and increasing capital allocation to quality assets in Asian gateway cities,” Colliers said.