Rise in offices sales here one of the fastest
Sales of offices in Singapore have been increasing at an even faster rate than those in London or New York, says a new report.
Singapore’s office property sector registered one of the world’s highest year-on-year increases in investments, and was one of the top-10 most active office markets in the world in 2006, according to the report by CB Richard Ellis.
Singapore’s $4.8 billion in office investment sales in 2006 was about 150 per cent more than the $1.9 billion in 2005. Madrid saw office investment sales increase 120 per cent from 1.9 billion euros ($3.8 billion) to 2.2 billion euros, while Paris saw investment sales increase 85.7 per cent from 9.1 billion euros to 16.9 billion euros.
In a list of 12 most active markets in 2006, London had the highest office investment sales of US$27.6 billion, followed by New York with US$23.3 billion.
Toronto was at the bottom of the list with US$1.4 billion in sales followed by Sydney with US$1.8 billion and Hong Kong with US$1.9 billion in sales.
On Singapore’s office property market, CBRE’s executive director (investment properties) Jeremy Lake said: ‘Singapore’s very conducive investor climate has attracted an expanding pool of foreign investors last year. We expect investor sentiment in the commercial sector to continue to be strong this year given the healthy leasing demand and limited supply in the medium term.’
Investment sales include Credit Suisse’s purchase of Lippo Centre for $348.5 million and CLSA Investment Bank’s purchase of SIA Building and HB Robinson for $343.9 million.
CBRE’s report also revealed that capitalisation rate was 4.9 per cent per by end-2009. It was highest in Beijing (8 per cent) and Shanghai (8 per cent) and lowest in London (3.75 per cent) and Paris (4 per cent).
The report noted that American investors were responsible for US$313 million of Shanghai’s investment sales while in Hong Kong, Australians were found to be the top investors, acquiring over US$643 million in assets.
Middle Easterners still favour the US, with over $5 billion spent there, exceeding the US$3.7 billion spent by Australians. Australians were previously the biggest spenders in the US, acquiring more than US$8.5 billion in 2005.
Gregory S Vorwaller, president of CBRE’s invest properties group, said: ‘The increasing volume of global office investment activity over the past five years reflects the abundant institutional and private investor capital that has been allocated to real estate and the migration of this capital across borders in pursuit of opportunity.’
Source: The Business Times, 06 February 2007
