Singapore Commercial Property Deals

Singapore Commercial Property Deals Down 53.4% In Q1

SINGAPORE – Commercial real estate transactions here plunged by 53.4 percent quarter-on-quarter to S$1.3 billion during the first three months of the year, according to Colliers’ latest Quarterly Investment Report published on Wednesday (19 April, SGT).

Compared to the same period in 2022, commercial property sales in Singapore fell sharply by 73.7 percent.

Colliers said the significant fall in commercial real estate transactions here is partly due to the sale of several sizeable properties in the preceding quarter, like the Mercatus retail portfolio.

During the period under review, commercial deal volume was supported by the sale of Robinson Point and a 50 percent interest in Nex shopping mall, but momentum may continue to weaken because of the uncertain economic environment and higher borrowing costs, which makes it harder to fund the acquisition of bigger assets.

Looking ahead, the property consultancy expects average commercial real estate transaction sizes to become smaller, and the volume of deals could slow down as the price expectation gap between sellers and buyers widens.

“Although the current volatility will tighten liquidity amid the higher risk aversion, as more assets approach their refinancing and exit timelines, there are likely to be more motivated sellers and opportunities emerging,” noted Tang Wei Leng, Head of capital markets and investment services at Colliers.

Meanwhile, overall property investment sales in Singapore fell by 19.9 percent quarter-on-quarter to S$3.98 billion during the first three months of the year. But on a year-on-year basis, it plummeted by 63.6 percent.

By asset class, the residential segment accounted for the largest share investment sales in Q1 2023 at 39 percent. This is followed by the commercial property sector (32.8 percent), industrial (20.2 percent), and others (8 percent).

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