Real estate investment volume surges 73% QoQ to $6.07b

The residential sector saw the highest investment growth.

Singapore's real estate investment volume grew 73% to $6.07b quarter over quarter (QoQ), CBRE revealed. Year-on-year, however, the Q1 figure is 40.9% lower.

Mercatus' large-ticket asset divestments mainly drove the surge in investment volume. Excluding the divestments in Jurong Point and Thomson Plaza units and NEX, investment volume would have been down 18.3% QoQ.

Despite the increase, CBRE said "investor sentiment remained cautious amidst sustained rate hikes and the deteriorating global macroeconomic backdrop," resulting in a QoQ drop in most sectors' investment volumes in Q1.

By sectors, investment volume grew for residential real estate. In Q1, residential real estate's investment volume rose 14.5% QoQ due to the sale of three freehold properties totalling $583.8m.

On the flip side, the investment volume in office real estate declined 20.1% QoQ due to a lack of big-ticket deals.

Apart from the sale of Robinson Point for $399m, most transactions in the sector were smaller strata office units purchased by non-real estate companies or private individuals.

The investment volume for industrial properties also shrank, dropping 58.6% QoQ due to less significant portfolio deals.
CBRE Research said transaction volumes might remain low in the near term as investors adopt a wait-and-see approach; however, volumes are likely to pick up in the second half of 2023 and full-year volumes will be comparable with 2022's.

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