Singapore Office Investment Sales Surges By 166% In Q4

SINGAPORE – Data from Savills showed that office investment transactions in the city-state jumped by more than two-fold to S$668.9 million in Q4 2022 compared to S$251.4 million in the preceding quarter, reported The Edge on Monday afternoon (30 January, SGT).

Mainly thanks to the sharp increase in Singapore office investment sales, total commercial property deals (including retail and industrial) here climbed by 28.4 percent quarter-on-quarter to S$1.02 billion following two consecutive quarters of downtrend.

However, overall property investment transactions in the city-state across all asset types dipped by 1 percent to S$24.7 billion for the whole of 2022 compared to the previous year. On a quarterly basis, transaction volume plunged by 36.1 percent to S$2.81 billion in Q4 2022.

This marks the 3rd straight quarter of decline amidst slowing market conditions, stated Savills.

For 2023, the real estate consultancy expects the baseline average investment sales volume would significantly be pushed up by the sale of a 6.8ha White Site in Jurong Lake District (JLD), which could fetch around S$2.16 billion. Another factor is the disposal of strata units at Thomson Plaza.

“Despite unfavourable economic and interest rate climate, given the openness of the economy and a positive perception of Singapore, total investment sales value should still be afloat in 2023,” noted Savills Research’s Executive Head Alan Cheong.

“While higher borrowing costs may hamstring institutions, there still exists the possibility of a big-ticket deal or a series of medium-sized transactions through this year,” he added.

For the entirety of the year, Savills expects total real estate investment deals in Singapore across all property types to range between S$24 billion and S$25 billion. However, transaction volume will likely be impacted by economic headwinds, such as the rapid interest rate hikes.