Property investment sales decline by 37% in the first quarter amidst Covid-19 crisis

  • There was a massive decline in property investment sales in Q1 as the coronavirus outbreak affected the investors’ sentiment, says a report released on Monday, 13th April 2020.
  • The total property investment sales went down by 37% in the first quarter when compared with Q4 2019 as the turnover received was $3.02 billion as per the Cushman & Wakefield report.
  • The buyers waited in the hope that the prices of the properties will go down due to the lockdowns came into effect which will trigger a global recession. On the other hand, sellers declined to reduce the prices as they hoped for the market recover rapidly as soon as the virus outbreak comes under control which eventually led to the decline in sales.
  • The residential sector with investment sales of $2.02 billion dominated the Q1 investment sales, with a total transaction sum of $10 million and above.
  • Q1 2020 Commercial property transactions sunk by 81% to $183, 4 million from Q4 2019, while the hospitality sector bagged no deals as ravel bans and lockdowns reduced the interest of the investors into the said sector. Sales in the industrial sector plunged by 22% to $606.8.
  • According to the reports there were several major strata deals that took place in the Q1 2020. Below are some noteworthy transactions:
    • Acquired from Sun Venture by a wealthy South Korean, the 11th floor of Samsung Hub was sold for a whopping price of $49.8 million.
    • Hong Realty’s divested the 10th floor in Suntee Tower One to the Rosa family at 26% profit for a price of $37.1 million.
    • Ascendas Reit bought a 25% stake in Galaxis for $102.9 million.

  • The silence in the property investment market is expected to continue in Q2 due to non-essential closure of non-essential services until May 4.
  • Cushman and Wakefield’s report also forecasts that the sales volume for the whole year can go down by more than 50% – from $32.87 billion dollars last year to $10 billion – $ 15 billion this year.
  • The report however also pointed out the market will recover very rapidly in 2021 due to the lowered interest rate and improved investor sentiments after the Covid-19 containment.
  • More bite-size investment deals will be most probably seen in the Q2 and into the second half 2020 noted, Mr. Shaun Poh, Cushman & Wakefield’s executive director and head of capital market, Singapore.
  • Mr. Poh also added that the developers will start launching their projects as soon as the lockdown ends and the investors get a better understanding of the market situation to better calculate their investment value.

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