Institutional Investors

Institutional Investors Spent S$1.3b On Singapore Office Assets YTD

SINGAPORE – Office space and industrial assets were the most popular non-residential property investments by institutional investors in Singapore year-to-date (YTD), according to an article written by Jones Lang LaSalle (JLL) Singapore that was published on The Business Times on Thursday morning (16 September, SGT).

In fact, institutional investors like funds and real estate investment trusts (REITs) have spent S$1.3 billion on Singapore office properties so far this year, while S$1.4 billion went to industrial assets.

“Office and industrial assets were institutional investors’ hot favourites, with the latter sector enjoying a slight lead,” wrote JLL Singapore’s Head of research & consultancy, Tay Huey Ying.

As for other real estate types, namely retail and mixed-use developments, these asset classes attracted approximately S$0.4 billion each.

While Singapore’s residential sector was the top performer with S$10.8 billion worth of investment sales so far this year, the most expensive acquisitions were all commercial properties, particularly those containing office space.

“These included Allianz Real Estate’s S$633.75 million purchase of a half stake in Grade A office asset OUE Bayfront, conserved building OUE Tower, and OUE Link, a link bridge with retail units,” she noted.

Another major transaction during the period was Ascendas REIT’s acquisition of the remaining 75 percent stake it doesn’t already own in Galaxis business park for roughly S$534 million. Lastly, Lendlease Global Commercial REIT acquired a 17 percent stake in office and retail project Jem for S$353 million, valuing the commercial property at around S$2.08 billion.

Tay said “office assets will remain high on the radar for institutional investors, with the turnaround in Singapore office rents potentially intensifying competition for asset acquisitions.”

Possible office deals to look out for in the next few months include Twenty Anson, PIL Building, 112 Robinson Road, and One George Street.

The S$2.7 billion collective-sale tender of International Plaza, a mixed-use development comprising strata shops, offices and apartments, in Tanjong Pagar is also an interesting one to watch. If concluded, it could become Singapore’s largest en-bloc deal in history, surpassing Farrer Court’s S$1.3 billion transaction in 2007,” she added.

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