Savills: Real estate investment volume totals $24.7 bil in 2022, down 1% y-o-y

Investment sales value in Singapore came in at $24.7 billion in 2022, a drop of 1% year-on-year, according to a report by Savills Singapore. The fourth quarter of the year saw a 36.1% quarter-on-quarter decrease in investment sales to $2.81 billion, marking the third consecutive quarter of decline due to softer market conditions.

Residential sales remained the most significant segment, comprising 49.9% of the total. This segment saw a 50% decrease in sales to $1.4 billion in the fourth quarter, making it two consecutive quarters of decline.

Commercial sales saw an increase of 28.4% quarter-on-quarter to $1.02 billion, attributed mainly to a 166.1% q-o-q growth in office investment sales from $251.4 million in 3Q2022 to $668.9 million in 4Q2022.

Retail and industrial investment sales both declined in 4Q2022 – 34.9% and 48.1% quarter-on-quarter respectively. This was due to lower transaction values of shophouses and Senja Close EC a drop off from a relatively high base for retail strata sales in the third quarter.

In 2023, Savills expects more Government Land Sales (GLS) sites on offer, as well as the $2.16 billion sale of Jurong Point, and the sale of strata units at Thomson Plaza to lift the baseline of average investment sales.

Despite the current economic and interest rate climate, Alan Cheong, executive head of Savills Research, expects to see total investment sales staying afloat this year. “It’s possible that we may see a big-ticket deal or a series of medium-sized transactions through this year,” he said.

Savills predicts total investment sales value for 2023 to be between $24 billion and $25 billion, with activity somewhat constrained by economic and interest rate headwinds.