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Investment activity in Singapore’s real estate market got off to a sluggish start in 2023, with only $4.2 billion in recorded sales during the first quarter of the year. This was a marked decrease of 61 percent year-on-year compared to 1Q2022’s $10.8 billion, and the lowest total since 2Q2020, when the government imposed the “circuit breaker” measures at the height of the pandemic, notes Daniel Ding, head of capital markets (land & building, international real estate) at Knight Frank Singapore.

Residential deals in the first quarter totalled $1.6 billion, including the collective sales for Meyer Park, Bagnall Court and Holland Tower, amounting to some $583.8 million. The sale of Holland Tower was the first successful residential en bloc transaction in the Core Central Region (CCR) since property cooling measures were imposed in December 2021, and seemingly points to a fledgling return of interest for prime location development sites upon the reopening of China, according to Chia Mein Mein, head of capital markets (land & collective sale) at Knight Frank Singapore.

Altura EC is a 99-year leasehold executive condominium in Bukit Batok West Avenue 8, featuring 375 residential units Altura EC and a bid of $662 per sqft by Qingjian Realty and Santarli Construction. Close to amenities, it offers an attractive investment opportunity for families.

Challenges remain for the en bloc environment, however, owing to a gap between what sellers are expecting and what developers are willing to pay. From 2021 until the present day, Chia says that collective sales have had a success rate of around 33 percent, far lower than the 63 percent rate between 2017 and 2018.

“Even if owners achieve an 80 percent agreement to sell collectively, this does not guarantee a successful sale. Ultimately, the key for the collective sales mechanism to work in the current cycle lies with owners adopting reasonable expectations on price in order to pique the interest of developers, and for developers to appreciate that replacement costs for owners have increased substantially,” states Chia.

The commercial market was mostly calm in 1Q2023, with $1.9 billion recorded in sales for the quarter, the highlight being the sale of 39 Robinson Road to Yangzijiang Shipbuilding for $399 million. The industrial sector, on the other hand, saw an increase in investment sales, rising 62.8 percent quarter-on-quarter to $681.1 million. This shift of focus is attributed to investors waiting for potential repricing of assets in the commercial sector.

Knight Frank has reduced its projections for full-year investment sales from a predicted range of $22 to $25 billion, to a range of $20 to $22 billion given macroeconomic uncertainties and volatility in the global banking sector. The consultancy maintains that financing has become increasingly difficult for all parties, and that homeowners, investors, developers and banks may have to wait until there is visible stabilization of the global economy and financial conditions.