Investors still bullish on office, hotel assets
Industrial properties attracted "bona-fide industrialists" rather than investors in Q4 2013, enabling demand for office and hotel properties from both local and overseas investors is expected to remain strong in the current quarter, according Knight Frank.
In particular, rents for Grade A office space is forecasted to rise further due to the rosy global market outlook and the limited new supply in Singapore's central region.
Major office property transactions in Q1 2014 include the sale of Westgate Tower to Sun Venture Home and Low Keng Hua for S$579.4 million, and the purchase of a 50 percent stake in Finexis Building by Sin Capital Partners for S$123.8 million.
"Another notable transaction was the acquisition of 700 Beach by Master Contract Services and Fine Grain in a deal worth S$120 million. The buyers are planning to redevelop the eight-storey boutique office into a 15-storey hotel with approximately 300 rooms," Knight Frank said. In recent reports, it is said that Master Contract is also looking for potential buyers for the hotel project, which is expected to be completed by 2016.
In the hotel segment, Master Contract Services and Keong Hong Construction gave an unexpected high bid of S$352.8 million or S$1,326 psf ppr for a hotel site in Katong. This is the highest offer for a hotel site under the Government Land Sales (GLS) programme for Q1 2014.
"With a record-high tourist arrivals of 15.5 million in 2013 and expected positive externalities from the opening of Singapore Sports Hub, investors see upside potential in the hospitality industry. As such, demand for hotel sites in both public and private sectors is likely to remain firm for this year," Knight Frank concluded.
Nikki De Guzman, Junior Journalist at PropertyGuru, edited this story. To contact her about this and other stories, email nikki@propertyguru.com.sg.
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