Lower investment property sales in first 6 months of 2020

Yesterday’s report showed that during the pandemic, investment property sales declined in the first half, although the market showed signs of stabilization in the second quarter.


According to preliminary data compiled by Cushman & Wakefield, total investment sales for the six months to Tuesday were $ 6.13 billion, down 45% from $ 11.24 billion in the year-ago period.


The investment in the first three months of this year was US $ 3.07 billion, more than a third lower than in the fourth quarter of last year, but Q2 sales volume remained stable, with total sales of US $ 3 .06 billion.


Christine Li, head of research in Singapore and Southeast Asia at Cushman & Wakefield, said, “With a lack of catalysts, market sentiment is expected to remain sluggish and sales are unlikely to increase significantly in the next 6 months of the year.”


Ms. Li predicts that investment turnover will be between $ 12-15 billion this year. However, if the participant supports the merger between CapitaLand Commercial Trust and CapitaLand Mall Trust, he will increase the total treasury for the year by $ 10 billion to $ 22 billion to $ 25 billion. By comparison, last year it was $ 32.87 billion.


Cushman & Wakefield said the second-quarter investment market was driven by large-scale commercial transactions, and the total value of transactions increased to $ 2.02 billion, more than ten times than the first quarter. The transaction sales was at $183.4 million then. The commercial sector accounts for 66% of total investment sales. The biggest transaction this quarter was the 50% purchase of AXA Tower by leading e-commerce company, Alibaba Group, which valued the property at $ 1.68 billion.


Perennial sold its 30% stake in TripleOne Somerset to Sind Group for $ 155.1 million, while Olaya Group acquired the retail and banking division of 30 Raffles Place, the former Chevron Building, for $ 315 million. Much of the investment for the quarter came from the merger of Frasers Logistics Trust and Frasers Commercial Trust,. In tital, they are accounted for about 41% of the total sales which is equivalent to $ 1.25 billion.


The $ 1.25 billion transaction includes the $ 648 million (commercial) China Plaza Central transaction and the Alexandra Technology Park (industrial) transaction $ 606 million. This resulted in industrial sales of $ 701.3 million in the second quarter, slightly higher than the $ 661.4 million in the first quarter.


Without Alexandra Technology Park, industrial revenue would drop to $ 95.3 million. In the second quarter, land sales by the government were not closed, meaning home sales fell 85% from $ 2.02 billion in the previous three months to $ 305.4 million. While buyers waited to see prices drop further, there was no deal in the hotel industry.


Kushman said that uncertainties about how long the Covid-19 crisis will last and when the tourism industry returns to pre-pandemic levels may have led to a large number of hoteliers looking to leave the field, concluding in the coming quarters can trigger some transactions.


The Executive Director of Capital Markets Mr. Shaun Poh, added: “In the ensuing power outage period and economic recession, some owners might have to sell their assets to free up liquidity”.




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