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

Investment sales in Singapore dropped slightly in 2022, with a total value of $24.7 billion according to an investment report from Savills Singapore. Despite this drop of 1% year-on-year (y-o-y), for 4Q2022 the market was able to achieve $2.81 billion in investment sales. This marked the third consecutive quarter of decreasing values, a result of slowing market conditions.

Residential sales continued to be the major part of the value, making up 49.9% of the whole market’s value during the fourth quarter. However, this sector recorded a 50% drop to $1.4 billion in 4Q2022.

In contrast, the commercial segment saw a slight rebound in transactional activity. This sector was able to expand 28.4% quarter-on-quarter (q-o-q) to $1.02 billion in 4Q2022, after two consecutive quarters of decline. This rebound was mostly due to office investment sales, which increased 166.1% q-o-q from $251.4 million in 3Q2022 up to $668.9 million in 4Q2022.

While the retail and industrial investment sales both decreased in the last quarter of 2022, retail’s 34.9% q-o-q dip followed a much higher base in 3Q2022. Meanwhile, the industrial sector lowered 48.1% q-o-q.

Savills Singapore believes that the 2023 investment sales market will be bolstered by the increased number of Government Land Sales (GLS) sites on offer, the large purchase of Jurong Point, and the strata units of Thomson Plaza. Alan Cheong, executive head of Savills Research, said: “Despite the unfavourable economic and interest rate climate, total investment sales value should still stay afloat in 2023.”

Savills forecasts that total investment sales value will fall within the range of $24 – $25 billion for 2023, although activity in the market could take Tengah Plantation EC a hit from any economic or interest rate headwinds.