Investment Market Update Q4 2023
Singapore stirrings of investment activity at year-end after a mostly quiet year
24 April 2024
Highlights
- Year 2023 was a tepid one for real estate investments in Singapore due to an inflationary environment where interest rates were constantly on the rise, the increase in Additional Buyer’s Stamp Duty (ABSD)
- Residential deals comprising mostly government land sales (GLS) amounted to S$10.3 billion, making up the majority of investment sales activity in 2023 at 47.7%. This translated to a decline of 13.3% from S$11.9 billion in the previous year, which can be partly attributed to elevated interest rates and cooling measures. In Q4 2023, total residential transactions declined 1.0% q-o-q to S$3.4 billion.
- Only seven collective sale deals amounting to S$2.1 billion were successful in 2023, a decline of 44.0% compared to the previous year when 16 collective sale deals translating to S$3.8 billion were done.
- Despite the muted market activity in Q4 2023, a few noteworthy deals included the purchase of a pair of Sydney school campuses for S$125.0 million in October by a fund of Keppel Corporation, and the acquisition of a 261-unit freehold private rented sector (PRS) project in Manchester by City Developments Ltd (CDL) for S$125.7 million.
- In 2024, more older developments might undergo value-adding works as investors mitigate risks and maintain revenue streams while the building is being improved. In addition, with the potential cut in interest rates, a pickup in the acquisition of core properties such as industrial assets may also increase. While redevelopment is susceptible to volatile variables such as construction costs and schedules, other investors could be more prepared to move up the risk curve and choose this route.
Read the full report here.
