Monday, April 1, 2013

Chart reveals current market leader in property auction deals

Singapore Business Review
RESIDENTIAL PROPERTY | Staff Reporter, Singapore
29 March 13

Jones Lang LaSalle dominates the first quarter.

In a release, Jones Lang LaSalle said it has held its position as the market leader by capturing some 56% of the auction market share in 1Q 2013, or an equivalent of $32.96m.

It also noted that non-residential assets dominated the auction market in the same period, concluding with a whopping $56.84m worth of deals or equivalent to 96% of the total auction sales value.

Jones Lang LaSalle said that in this quarter, the industrial sector has managed to turn in a healthy 47.3% of the deals amounting to $27.88m despite the latest cooling measures aimed at this sector. On January 11, the government announced that Seller’s Stamp Duty (SSD) will be imposed on Industrial properties sold within 3 years after the purchase or acquisition on and after Jan 12, 2013.

The retail sector which took up 37% of the total auction sales value was largely driven by two shophouse transactions. Residential sector on the other hand, had the lowest contribution in over 10 years at just 3.6%, worth only some $2.1m.

Interest in the Industrial sector was driven by the harsher measures targeted at the residential sector, said Jones Lang LaSalle, where investors face more stringent Loan-to Value limits as well as ABSD on their 2nd residential purchase. This has resulted in lowering the affordability and increasing the effective prices of residential purchases.

The Industrial sector has a ready pool of end-users who are competing with investors for industrial assets. In 1Q13, 2 out of 3 industrial properties auctioned were on a vacant basis, suggesting that the buyers could be owner-occupiers (for their business use).

In the largest transaction conducted in 1Q13 worth $25.6m, brokered by the Jones Lang LaSalle auction team, an industrial property at 39 Benoi Road was sold with vacant possession to an end-user who for their business use.

Ms Mok Sze Sze Head of Auctions at Jones Lang LaSalle says “We are seeing an increasing proportion of enquiries for industrial properties coming from occupiers looking to own their premises. Given the huge capital investment required to fit-out the premises, and ever-increasing rents, these occupiers prefer to own rather than lease to ensure greater business stability. Despite the implementation of the SSD on Industrial properties, the resilience of demand in this sector has been supported by a fundamental need for space from industrialists. Interest in the auction market for non-residential properties is anticipated to increase in the short term given this limited new supply in the market.”

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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