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SINGAPORE'S property investment sales market has maintained its momentum since the end of last year despite a downturn in sentiment.

  Investment sales increased by half, year-on-year, in the first three months of this year, according to David Runciman, chairman, Richard Ellis International (Asia).

  Levels of investment in the upper end of the residential market and strata title office sectors were strong in the first half.

  'Market sentiment as a whole weakened considerably in the first quarter of 1995 largely as a result of a series of unexpected global events and financial market turmoil such as the peso and US currency crises, Sino-US trade war threats, the Kobe earthquake, Japanese economic setbacks and the collapse of Barings Bank,' Mr Runciman said.

  Moreover, the Singapore Government's economic forecast for this year was revised by half a percentage point to between 7.5 and 8.5 per cent GDP growth.

  Total major investment sales reached S$2.12 billion (HK$11.66 billion), up 48 per cent from the same period last year, when deals worth $1.43 billion were recorded.

  Proceeds from the Urban Redevelopment Authority's sale of sites programme amounted to $1.04 billion, or 49.2 per cent of the quarterly total.

  Of the $1.08 billion in private deals during the quarter, 70 per cent were generated by the strata title sales of 41 floors of office space at Suntec City Tower II.

   A total of 473,621 square feet of space was sold at prices ranging from $1,466 to $1,742 per sq ft net.

  'The continuing strong showings in the investment market clearly reflect investors' confidence in the prospects of the property market, particularly in the high-end residential and strata-title office sectors,' Mr Runciman said.

  He said office rents had climbed 12 per cent in the first quarter of this year, with the biggest increases in the prime locations. For example, rents at Raffles Place now exceeded $10 per sq ft.

  No new office projects were completed in the first three months of this year, but total office stock grew by 1.8 per cent or 861,000 sq ft to reach 49.3 million sq ft in the last quarter of last year.

  The biggest investment deal of the year so far has been the sale of 27 Claymore Road, one of two tower blocks at the Claymore condominium development.

   Wing Tai and Hong Leong/City Developments group bought the 26-storey Bougainvillaea tower for $273.2 million or $1,260 a sq ft.

  Located in the popular Orchard Road district, the Bougainvillaea has a number of facilities for residents, including a swimming pool with wet bar, tennis and squash courts, jogging track and playground.

  Richard Ellis Singapore office managing director Willy Shee said: 'The Claymore taps into a good niche market. Apart from Four Seasons Park and The Colonade, there are hardly any other condominiums in the area which offer luxury apartments over 2,500 sq ft.'   Large-scale private sector investment transactions completed in the first three months of this year, include the collective sale of Gohek Apartments to the Koh Brothers group in January for $31.23 million, the sale of a freehold industrial site at Kampong Ampat to Straits Steamship Land for $53.1 million in February, and the sale of freehold Tomlinson Mansion to Wing Tai for $62 million in the same month.

  A number of en bloc office sales were also made in the first quarter. These included the sale of the 16-storey Lippo Centre and 25 floors at the 28-storey Apex Tower.

  'The short-term outlook for the office sector remains optimistic. The strong pent-up demand for strata-titled offices, especially good quality Grade A space, is likely to push prices for such units to higher levels as reflected by the exceptionally good market response to the Suntec City strata-titled sale,' Mr Runciman said.

  'In the leasing market, growing demand, especially for office accommodation in Raffles Place, will continue to push rents up.

  'The steady rise in office rents in turn should further boost interest in investment sales within the central business district.

   'However, the rise in rentals will be moderated by new supply in 1995 and by tenants relocating to the Beach Road, City Hall, Marina Centre office submarket,' he said.



Investment sales indicate confidence in residential sector