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Investment MarketBeat Report

Xian Yang Wong • 13/10/2021

Healthy economic rebound

Singapore’s economy grew at a record pace of 14.7% on a yoy basis in Q2 2021 extending the 1.5% growth in the preceding quarter. The strong growth was largely due to the low base in the second quarter of last year, when Gross Domestic Product (GDP) plunged by 13.3 % due to the Circuit Breaker (CB) measures implemented from 7 April to 1 June 2020. Performance across sectors remained uneven, continuingly led by Manufacturing sector that expanded by 17.7% yoy in Q2 2021. Overall unemployment rate has also improved, coming down from 3% for the whole of 2020 to 2.9% in Q1 2021 and 2.7% in Q2 2021. Amidst a strong global economic recovery and accelerated vaccination programmes in key advanced economies, the Ministry of Trade and Industry on 11 August 2021 lifted its GDP growth forecast range for 2021 to 6.7%. The new prediction compares with the previous full year forecast of 4%-6%, first announced in November 2020.


Residential investment sales continues to outperform

Singapore real estate market has attracted around $18.8 billion (b) in investments during the first nine months of this year, compromising almost 80% of the total investment volumes registered in 2020. The Q3 2021 investment volume amounted to nearly $8.0 b, clocking a 22% qoq increase over Q2 2021 The increase was mainly led by growth in residential transaction values as well as the sales of two mixed used sites for more than one billion each.

Total residential investment volume continued to inch up by 28% to around $3.8b as compared to $3.0b registered in the previous quarter, driven by the surge in both public and private residential sales market. There were four residential Government Land Sale (GLS) sites sold during the quarter, including Lentor Central with top bid of $784 million (m) or $1,204 per sq ft per plot ratio (psf ppr), Slim Barrack Parcel A ($320m or $1,246 psf ppr), Slim Barrack Parcel B ($162m or $1,210 psf ppr) and Tampines Street 62 executive condominium (EC) site ($422m or $659 psf ppr). All these sites were keenly contested with numbers of bidders ranging between 9 and 10 participants Healthy bids also reflected developers’ hunger for land amid an upbeat market when prices are rising, and unsold inventory are fast depleting.

Private residential investment sales clocked in $2.2b during Q3 2021 up from $1.8b seen in the preceding quarter due to strong sales activities in the high end apartments, landed market as well as an uptick in en bloc sales Hong Kong listed Far East Consortium International announced on 17 September 2021 that it has sold the freehold 34-unit 21 Anderson for $213 million to Kheng Leong Group The $213 million purchase price translates to $2,490 psf, based on the gross floor area (GFA) of 85,552 sf for the building Also transacted in the same month, freehold development Flynn Park in Pasir Panjang was sold en bloc to a joint venture between Hoi Hup Realty and Sunway Developments The sale price works out to $371m or $1,355 psf ppr which exceeds the $365m reserve price, making it the largest collective sale site sold so far this year.


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