Commercial Property Sales Soar 509% YOY In Q4 2020
SINGAPORE – Commercial property investment sales during the 4th quarter of 2020 soared by more than three-fold on a quarterly basis and over six-fold on an annual basis, according to the quarterly report from Colliers International that was published on Tuesday (26 January, SGT).
“Commercial investment sales in Q4 surged 228 percent quarter-on-quarter (QOQ) and 509 percent year-on-year (YOY) to S$8.69 billion,” said the property consultancy in its latest report.
The massive growth is primarily attributed to 2020’s biggest transaction: the merger of equals between CapitaLand Commercial Trust (CCT) and CapitaLand Mall Trust (CMT), wherein the latter purchased the former’s 6 offices and 2 mixed-use projects for a total of S$10.8 billion.
“Excluding the merger, we have seen increased institutional acquisition of prime office buildings,
leveraging on more tech giants setting up bases in Singapore and the Urban Redevelopment Authority’s (URA) Incentive Scheme.”
For the whole of 2020, commercial property investment sales increased by 8.8 percent to S$12.8 billion, while that in the mixed-use segment surged by four-fold to S$3.83 billion, including Alibaba’s acquisition of a half-stake in AXA Tower that valued the property at S$1.7 billion.
Looking ahead, Colliers International expects commercial property investment sales to grow by 10 percent on a yearly basis to S$14.1 billion for the whole of 2021. Between 2020 and 2025, it projects that investment sales will increase by 10 percent per annum to reach S$17.2 billion by then.
However, Singapore’s overall property investment sales – including residential, industrial, hospitality, and shophouses – declined by 16.7 percent year-on-year to S$24.72 billion for the whole of 2020.
Still, the real estate consultancy foresees a strong recovery in 2021. “We expect (overall) investment sales to grow 20 percent (year-on-year) in 2021 to S$29.7 billion,” it said.
“Catalysts in 2021 include more tech companies setting up hubs and a global economic recovery. We recommend investors focus on assets with long-term growth drivers, such as CBD office buildings with income or redevelopment potential, high-specs business space, logistics assets and
Shophouses,” added Colliers International.