There is still a chance for a large transaction or several medium-sized ones during this year

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Tembusu Grand remaining units

The value of investment sales in Singapore reached $24.7 billion in 2022. This is a decrease of 1% in a year-over-year basis, according to an investment report from Savills Singapore. In the 4Q2022 the market saw $2.81 billion of investment revenue, falling 36.1% q-o-q — the third consecutive quarter in which sales have declined due to slower market conditions, according to the report.

Tembusu Grand remaining units is expected to house 640 exquisite residential units, a midsized project for the giant property company CDL.

Residential sales accounted for the highest revenue, accounting for 49.9% of total investment revenue during the quarter. However, sales for the residential segment decreased by a quarter by $1.4 billion in the 4Q2022 period. The fourth quarter was second in a row of decline that this segment suffered last year.

The commercial segment experienced an increase in transactions which grew by 28.4% q-o-q to $1.02 billion in 4Q2022 despite two consecutive quarters of declining. The increase is mostly due to an 166.1% q-o-q growth in office investment sales, which increased from $251.4 million for 3Q2022 up to $668.9 millions in the 4Q2022, according to Savills.

However, industrial investment sales and retail sales both fell by 34.9% and 48.1% in the q-o-q. Retail sales were from a fairly high base in the 3Q2022 period and the final period of this year witnessed an increase in retail strata sales as well as less transaction value for shophouses.

The 2023 year is when Savills believes that 2023 will see the larger number of Government Land Sales (GLS) sites to be offered and including the $2.16 billion purchase of Jurong Point along with the purchase of strata unit units from Thomson Plaza will uplift the base average of investment sales.

“Despite an unfavorable interest rate conditions, given the economic openness and the positive image of Singapore overall investment sales will remain in the 2023 range,” says Alan Cheong who is the executive director of Savills Research. “While rising borrowing costs could hinder institutions, there is the chance of a major deal or series of small-sized transactions in next year.”

Savills anticipates that the value of investment sales total in 2023 to be between the range of $24-$25 billion and the pace of activity to be slowed by the effects of interest rates and economic headwinds.