Friday, March 16, 2012

Big property deals now in cold storage

Business Times: Wed, Mar 14
(SINGAPORE) Investment sales of property so far this quarter have plunged to their lowest levels in two years - to about $3.4 billion as at March 12, although the final figure for Q1 could rise to around $3.8 billion, estimates Savills Singapore. The tally as at March 12 reflects declines of about 57 per cent from $7.7 billion for Q4 2011 and 60 per cent from Q1 2011's $8.4 billion.

Savills attributes the decline in the Q1 2012 investment sales to weaker market sentiment on the back of global economic uncertainty, compounded by the impact of recent government measures to stabilise the property market, such as the additional buyer's stamp duty (ABSD) and rules for industrial developments on Government Land Sales (GLS) sites sold from 2012.

Investment sales reflect the confidence of major property players in the sector's mid to long-term prospects. Savills defines investment sales as deals of at least $10 million but includes sales of GLS sites, acquisitions by real estate investment trusts (Reits) and residential collective sales below that amount.

Savills executive director (investment sales) Steven Ming expects the investment sales market to remain tepid in the near term as caution reigns amid macroeconomic volatility. Despite ample liquidity and demand in the market, there remains a mismatch between buyers' and sellers' expectations. However, he detects a slight improvement in investors' sentiment and predicts that once macro-concerns begin to fade, there could be a resurgence in transaction...

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