Total 2022 investment sales fell by 1% year-on-year to S$24.7 billion

Savills Research reports that the investment sales value for 2022 was S$24.7 billion, just 1% down from the S$24.9 billion recorded in 2021.

Notably, investment sales in the office sector increased by 45.8% year-on-year (YoY) to $7.52 billion in 2022, from $5.16 billion in 2021. (Please see Table 1) On a quarter-to-quarter (QoQ) basis, the commercial sector rebounded 28.4% QoQ to S$1.02 billion after two straight quarters of decline. This was largely attributed to the 166.1% growth in office investment sales from S$251.4 million in Q3 to S$668.9 million in Q4.

Across all segments, residential investment sales held its place as the largest contributor value-wise for the third consecutive quarter, constituting 49.9% of total investment sales value. This is despite a sharp decline of 64.4% QoQ to S$1.40 billion. (Please see Graph 1)

There was also a decline in proportion of industrial investment sales, from 16.8% in Q3 to 13.6% in Q4. On the other hand, the share of investment sale in the commercial sector grew from 18.1% in Q3 to 36.5% in the quarter. (Please see Graph 1)

Overall, the total investment sales volume dropped to S$2.81 billion in Q4 from S$4.40 billion in Q3/2022. This was the third consecutive quarter of decrease and was the lowest since Q2/2020 when investment sales value amounted to S$2.14 billion.

Savills Research projects that 2023 will end the year with a total investment value of $24 billion to $25 billion, the same as what transpired in 2022.

For 2023, the greater number of Government Land Sales sites on offer and the registration of the S$2.16 billion sale by NTUC Enterprise Co-operative of Jurong Point, as well as the sale of strata units at Thomson Plaza to Link REIT in Q1/2023 is likely to uplift the baseline average.

Market observers have been opining that the opening up of China to outbound travel would bring about increased real estate acquisitions to Singapore. However, the ultimate effect may not be that great because strict capital controls may cloud the outcome.

Nevertheless, because of the openness of the economy and the positive perception that high-net-worth individuals have towards Singapore, continued expression of interest is expected in 2023. While institutions may be hamstrung by higher borrowing costs, there still exist the possibility of a big ticket or a series of medium sized transactions still going through this year.

Alan Cheong, Executive Head of Savills Research, adds, “Despite unfavourable economic and interest rate climate, given the openness of the economy and a positive perception of Singapore, total investment sales value should still be afloat in 2023.”

Savills Research provides in-depth analysis of property market trends, forecasts from our professional research team and market commentary to help you make the right property decisions.

Download the full Sales and Investment Briefing for Q4 2022 here.