Home Latest News Property investment deals surged 127.3% in Q2, may hit $30bil by end-2021

Property investment deals surged 127.3% in Q2, may hit $30bil by end-2021

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Property investment deals increased 127.3% year-on-year to $5 billion in Q2 2021.

Singapore saw property investment deals soar 127.3% to $5 billion during the second quarter of 2021, from $2.2 billion over the same period last year, revealed a Knight Frank report.

“Investment sales in the second quarter of 2021 continued to improve, with developers looking to acquire land for development and as retail and institutional investors begin to scan the market for real estate opportunities with post-pandemic potential,” said Knight Frank.

It noted that the “recent frenzy of bullish bids for three Government Land Sale (GLS) sites in May and June signified developers’ appetite for development land to replenish dwindling landbanks”.

Specifically, the Northumberland site attracted ten bids in May, while the two parcels of land at Tengah Garden Walk and Ang Mo Kio Avenue 1 received seven and 15 bids, respectively, in June.

With this, Knight Frank expects demand for land sites to remain robust, especially for sites that are not too large with a potential for 600 units or less, and found in desirable locations.

The residential sector also continued to attract interest, fuelled by deals within the landed housing segment.

The report noted that investment deals of this asset class “was primarily driven by the sale of Good Class Bungalows (GCB), totalling some $526.4 million”. Notable GCB deals include the sale of a detached house at 71 Grange Road and 5 Astrid Hill, which were transacted for $48.0 million and $44.3 million, respectively.

Over at the commercial sector, investment sales reached $1.5 billion in Q2 2021, led by the $295.5 million sale of Suntec REIT’s 30% stake in 9 Penang Road building and the $276.8 million collective sale of Maxwell House.

Investment interest within the industrial sector also remained high, amid increased demand for semiconductors and expansions within technology-based manufacturing. Notable deals included ESR REIT’s $112.0 million acquisition of a warehouse facility at 46A Tanjong Penjuru and the $74 million sale of single-user factory TBC Building.

“Although not out of the woods just yet, Singapore plans to transit to normalcy where the COVID-19 virus is relegated to a common malaise through mass vaccinations, and even more sectors of the economy that have been repressed by pandemic-related restrictions will open up in H2 2021,” said Knight Frank.

“With signs that the worst might be behind us, investment activity should pick up pace in the second half of the year, and could potentially reach about $30 billion in deals for the whole of 2021, despite totalling some $9.5 billion at the half-way mark.”

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: [email protected] 

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