Singapore Commercial Property Sales

Singapore Commercial Property Sales Plunged 86% In Q3

SINGAPORE – During the third quarter, commercial property deals in the city-state plummeted to US$405 million on an annual basis. This translates to a sharp fall of 86 percent, the highest contraction among all major markets in the Asia Pacific (APAC) region, reported Mingtiandi on Saturday (14 November, SGT).

Based on a recently released report by Real Capital Analytics, Singapore was the weakest-performing market in the region year-to-date (Q1 to Q3), with commercial property transactions plunging 74 percent to US$2.7 billion compared to the same period in 2019.

In comparison, Q3 commercial real estate sales in Hong Kong only edged down by 4 percent year-on-year to US$2.6 billion. However, the city’s quarterly figure was mainly propped up by Ping An’s US$1.5 billion acquisition of a 30 percent interest in a West Kowloon commercial project by Sun Hung Kai. For the first 3 quarters, commercial property deals declined significantly by 62 percent year-on-year to US$5.3 billion.

Across the APAC region, commercial real estate transactions dropped 38 percent on an annual basis to US$26 billion in Q3, noted Real Capital Analytics. The lacklustre market showing was mainly due to a drop in the property portfolio sales, which nosedived 78 percent year-on-year in Q3 to US$2.4 billion, a figure last witnessed during the 2008 Global Financial Crisis.

“The global pandemic continues to hamper deal-making for a swathe of cross-border investors, and the clouded economic outlook in many markets still presents uncertainty that puts many investors on hold,” said Real Capital Analytics’ Asia Pacific Managing Director, David Green-Morgan.

Real Capital Analytics noted international investors have been prevented from making acquisitions by COVID-19 travel bans and lockdowns, giving local institutional buyers the upper hand in picking up commercial properties in Asia Pacific. It also pointed out that the biggest commercial real estate markets were the most resilient to the effects of the virus outbreak.

“Domestic players seem to hold the advantage at the moment, and the major markets with robust domestic investor bases — such as South Korea, Japan and China — are holding up better in the current environment.”

As a matter of fact, while commercial property sales in Asia Pacific was lacklustre during the quarter, South Korea stood out for its strong market activity.

Among the notable commercial property deals there was the joint acquisition of The Pinnacle Gangnam office tower in Seoul, South Korea by Singapore-listed Mapletree North Asia Trust and its sponsor for S$528.4 million in September.

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