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Tue, December 29, 2020 – 11:33 am
SINGLE OWNER parcels and older Central Business District (CBD) offices are now in the spotlight as residential property developers seek strong residential sales.
Cushman & Wakefield (C&W) expects more enthusiasm in residential investment activity in the first part of 2021 as residential sales continue to keep pace, it said in its 2021 market outlook series.
C&W Capital Markets Executive Director Shaun Poh said the recent sale of the Guillemard-Jalan Molek site for S $ 93 million has sparked a wave of interest from residential developers, particularly midsize ones, to look for sites that help them tap into the stream. cycle.
These include single owner parcels and older CBD offices that can take advantage of the CBD Incentive Scheme, which encourages owners of these buildings to remodel their properties for mixed-use projects, including residential.
Private residential prices posted a 0.8 percent gain in the third quarter of 2020, compared to the second quarter of 2020, pushing prices to their peak since the third quarter of 2013. For the full year, it is expected that sales reach about 20,000 units, C&W said.
Christine Li, C&W head of research for Singapore and Southeast Asia, said the residential crowdsale market is back in focus after a three-year hiatus.
“Signs point to a possible revival of collective sale tenders, but the long gestation period makes the sale of government land and private parcels a preferred option at this time,” he said.
C&W expects developers to sell around 9,800 to 10,000 residential units throughout 2020, which can potentially exceed the 9,912 units traded in 2019 despite the challenging economic situation.
Excluding related party transactions, including real estate investment trust mergers, residential sales made up the majority of investment sales activity for all of 2020 at 43%.
Office assets remained a favored asset class in 2020 and are poised for more transactions in 2021, Li said. He noted a growing interest in office properties from institutional players, opportunistic private equity investors, wealthy individuals and family offices.
Meanwhile, the fourth quarter of 2020 saw a strong rebound in sales of investment in commercial premises, with a total of S $ 252 million, almost six times more than the S $ 44 million registered in the third quarter of 2020.
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