Investment Sales To Hit $50b in '07: CBRE

Source : The Business Times, September 18, 2007

Target up from $35b set 3 months ago, with some $12.7b deals done since July

PROPERTY investment sales could hit $50 billion by the end of 2007, CB Richard Ellis (CBRE) predicted yesterday - increasing its full-year target from the figure of $35 billion it set just three months ago.

If CBRE's target of $45-50 billion is met, it will be a substantial increase from the $30.6 billion worth of investment properties transacted in 2006.

The property firm arrived at the new target after total investment sales for the year to date came to some $37.9 billion - exceeding the previous prediction of $35 billion for the whole of 2007.

CBRE's bullish prediction came on the back of news that some $12.7 billion worth of investment transactions have been recorded since the start of July, placing Singapore in a good position to end the year on a strong footing. 'At this current pace, CBRE expects sales to peak at an all-time high of $50 billion by the end of 2007,' the firm said in a report.

CBRE's investment sales tally includes land deals, collective sales, transactions of entire office and other buildings as well as sales of strata-titled units including good class bungalows and condominiums worth more than $5 million apiece.

Investment sales in the private sector accounted for 84 per cent or $31.7 billion of total investment sales so far this year. The public sector contributed the remaining $6.2 billion.

So far this year, the residential sector has recorded $23.8 billion in transacted value - or 63 per cent of the year's total investment sales, CBRE said. In particular, the collective sales market was fairly active in the third quarter of 2007, with a total of 16 sites generating some $1.7 billion of investment sales.

This was followed by sales of office properties. 'On the back of the upbeat Singapore office market, investment activity in the office investment market remains robust,' said CBRE. 'Prime office properties continue to be highly sought after by investors, with some notable acquisitions made by real estate investment trusts and foreign funds.'Total office investment sales accounted for 24 per cent - or $9.2 billion - of the year's investment sales.