Investment sales level in the Singapore property market in the first quarter of 2008 was similar to that in the fourth quarter of 2007 despite deepening concerns regarding the US economy.
Singapore Power BuildingA report by DTZ Debenham Tie Leung said a total of S$8.4 billion worth of transactions was concluded, a slight increase of one per cent quarter-on-quarter.
The office sector was the best performer with S$3.4 billion in sales, up 134 per cent against the previous quarter.
The office sector was supported by en bloc transactions which saw several major buildings, like One George Street, Hitachi Tower, Singapore Power Building and One Philip Street, being transacted.
The industrial sector also saw increasing interest. Investments in industrial properties rose 31 per cent quarter-on-quarter to S$690.5 million, mainly in en bloc deals purchased by REITs.
However, residential sales fell to S$2.2 billion, down 45 per cent from the last quarter.
DTZ said sales activity in the private residential market slowed significantly in the first quarter due to weakened market sentiments. It added that developers and buyers were taking a wait-and-see attitude.
Preliminary figures showed there were only about 2,000 private residential transactions recorded through caveats in the first two months of 2008.
According to DTZ, there were only 795 developer sales in the first quarter of this year, reflecting a 46 per cent quarter-on-quarter decline. This was the second lowest quarter of developer sales since the SARS-stricken period, which was the first quarter of 2003.
DTZ added that rents have increased marginally due to tight supply. Monthly rents of prime condominiums increased 2.1 per cent quarter-on-quarter to average S$4.90 per square foot.
For non-prime districts, monthly rents of condominiums increased by an average of 2.5 per cent quarter-on-quarter to S$2.10 per square foot.
DTZ said rental increases of private residential properties are likely to moderate due to budget constraints and the slower influx of expatriates. - CNA/vm
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