According to DTZ Research, real estate investment rose 48 per cent quarter-on-quarter to S$6.9 billion in the second quarter, lifted by an increase in both domestic and cross border investments.
Whilst government land sales (GLS) contributed to 43 per cent of overall investment value, cross border investment accounted for 16 per cent of real estate investment activity in the second quarter.
Cross border investment of S$1.1 billion in the second quarter was about 43 per cent higher compared to S$767 million in the first quarter, boosted by regional funds, which accounted for 57 per cent of cross border investment.
These include US-based Blackstone Group's purchase of 60-year leasehold industrial building Starhub Green and Prudential's Asia Property Fund's purchase of Compass Point in a joint venture with Frasers Centrepoint. The bidding for GLS residential sites by regional developers from Japan and China contributed to the rest of cross border investment in Q2.
Looking ahead, DTZ Research said investment activity in the second half of the year is expected to come from mainly purchases of government land sales sites and REIT activity.
Investment activity in 2012 is likely to be less than that in 2011, given that foreign investors are looking to invest in other countries and other deals are taking longer to complete.
As for the residential segment, DTZ Research said new benchmark prices have driven buyers to the secondary market in search for better value. As a result, resale volume of private homes rose in the second quarter. Resale prices of private homes gained pace across most segments.
While purchase demand for private homes is expected to remain healthy, DTZ Research pointed out that the strong pipeline of developments will intensify competition for purchases and tenants and limit price increases, particularly in the face of slower economic growth.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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