Commercial Property Investment In Singapore Up

Commercial Property Investment In Singapore Up 19% In Q1

SINGAPORE – Commercial real estate (CRE) investment in the city-state increased about 19 percent quarter-on-quarter to $2.6 billion during the first quarter of the year, according to a recent report published by Cushman & Wakefield (C&W) last week.

“This could be attributed to the conclusion of several large commercial deals in Q1 2022,” said the property consultancy’s Executive Director of capital markets, Shaun Poh.

These include the collective sale of Tanglin Shopping Centre for $868 million, making it the largest commercial property deal during the quarter under review. The quarter’s 2nd biggest commercial investment is the disposal of the Cross Street Exchange by Frasers Logistics and Commercial Trust for $810.8m to PAG. The selling price translates to a 28.3 percent premium to the commercial property’s book value of $632m as of 30 September 2021.

Another major commercial real estate deal in Q1 2021 is the $287 million divestment of 55 Market Street by AEM to a subsidiary of Kajima.

“These transactions have indicated investors’ strong confidence and preference for quality assets in Singapore’s CBD amid the expected strong growth for the office market this year,” noted Shaun.

He expects Singapore’s commercial property investment sales momentum to stay solid in 2022, amid stable economic growth and the gradual resumption of various economic activities. In fact, C&W thinks that sales volumes could significantly increase in the upcoming quarter as various mega-deals are anticipated to be concluded by then.

One of the largest transactions is Lendlease Global Commercial REIT’s (LREIT) acquisition of the remaining stake it doesn’t hold in Jem Mall that values the commercial property at $2.08 billion. At present, LREIT indirectly holds a 31.8 percent stake in the shopping centre that comes with office space.

Another large commercial deal expected to be completed in Q2 2022 is the acquisition of 79 Robinson Road, a Grade A office building by CapitaLand Integrated Commercial Trust (CICT) and CapitaLand Open End Real Estate Fund for nearly $1.3 billion.

Other upcoming transactions include the merger between ARA LOGOS Logistics Trust and ESR-REIT, in addition to the potential disposal of the Golden Mile Complex via en bloc sale. Notably, Far East Organization and Perennial Holdings have made a $700 million offer for the iconic development, which was launched for collective sale last year with a reserve price of $800 million.

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