Singapore Commercial Property Investments Up 27.4% In Q3

SINGAPORE – Commercial real estate transactions during the third quarter reached around S$1.5 billion, according to a report published by Knight Frank on Tuesday morning (10 October, SGT).

The tally for Q3 2023 represents a 27.4 percent increase from the preceding quarter and a growth of 23.3 percent compared to the same period last year.

“The higher transaction value mainly comprised the sale of Changi City Point by Frasers Centrepoint Trust, reportedly to the Zhao family from mainland China at S$338.0 million in August, and the collective sale of Far East Shopping Centre for S$908.0 million to Glory Property Developments at end-September,” Knight Frank noted.

In addition, the property consultancy shared that the Singapore government awarded its first land plot intended for a mixed-use development in Q3 2023 after six quarters since Q4 2021. This comes in the form of a Government Land Sales (GLS) site at Tampines Avenue 11 for S$1.2 billion for residential and commercial use.

Over the coming months, Knight Frank expects capital markets to be characterised by investors
searching for properties that they can add value to in a bid to generate higher returns to justify the higher borrowing costs.

“Due to the current high interest cost, buyers find themselves having to move up the risk curve by adding value to their investments to obtain higher sustainable returns… and this includes acquisitions for enhancement and redevelopment,” explained Daniel Ding, Head of Capital Market at Knight Frank Singapore.

Moreover, Singapore’s real estate market will likely face a continued slowdown for the remainder of the year, in light of the current challenges and the slower pace of property investment activity. As such, the Knight Frank slashed its forecasted investment sales for the whole of 2023 to between S$18 billion and S$20 billion from its prior projection of S$20 billion to S$22 billion.