S’pore investment sales market strengthens in Q2: Colliers

Source : Channel NewsAsia – 21 Jul 2010

Property consultants Colliers International says Singapore’s investment sales market strengthened further in the quarter that ended in June turning in sales of S$7.11 billion.

That’s 24.3 per cent above the S$5.72 billion chalked up in the first quarter of this year.

Colliers released the information in its latest Knowledge Report Tuesday.

It found that the investment sales market was driven predominantly by developers’ aggressive land acquisition activity.

In all, developers picked up some $3.25 billion worth of development sites from both the public and private sectors in the quarter.

In fact, Colliers says the total investment sales value for the first half of this year stood at S$12.83 billion – already surpassing the S$10.54 billion accumulated for the whole of 2009.

Going forward, Colliers expects developers to continue acquiring land, particularly for residential sites located in outlying suburban areas.

However, developers will likely be more selective with the ample supply and wide selection of sites available from the second half Government Land Sales programme, and this should keep tender bids in check.

The report also found that the Singapore office property market surprised with a moderately strong rebound in the second quarter, despite concerns over large new supply.

The average monthly gross rents of Grade A office space posted gains of between five and seven per cent, with the Shenton Way – Tanjong Pagar micro-market leading the climb.

The uptick in rents came as occupancy rates tightened across all micro-markets, in spite of the addition of more than 1.5 million square feet of Grade A office space since the second half of last year.

On average, the occupancy rates of Grade A office space climbed three percentage points in the second quarter.

Going forward, Colliers says the positive economic outlook for 2010 is expected to further boost demand for office space.

While there are concerns over the possible hollowing out of the older office buildings in the central business district when companies move to the newly completed office buildings, Colliers notes that some of these spaces will be maintained by the expanding companies, or have secured new tenants.

The report also noted that the recovery of the industrial property market continued into the second quarter, with values outperforming rents.

Industrial strata sales volume continued to climb in the period, reaching a new high of 340 deals.

This brings the industrial strata sales volume for the first half of this year to an estimated 669, up 9.7 per cent on year.