Source: CBRE, 4Q 2023 PRIME ORCHARD ROAD AND PRIME SUBURBAN MONTHLY RENTAL VALUE Investment Transactions After an active year of transactions in 2022, total investment transactions slowed in 2023. Total investments in 2023 stood at approximately S$3.9 billion, representing 77% of 2022 total investment transaction. The overall activity decline was likely attributed to high interest rates and an uncertain global economic backdrop. Three notable transactions were reported in 1Q 2023. Link Asset Management acquired Jurong Point at S$1,988.9 million or S$2,762 per sq ft and 56% stake of Swing by @ThomsonPlaza at S$172.5million or S$1,568 per sq ft. Frasers Property Group (comprising Frasers Centrepoint Trust's 25.5%and Frasers Property's 24.5%) acquired a 50% stake in NEX at an agreed property value of S$2,077.8 million (100%) or S$3,274 per sq ft on NLA. As of January 2024, Fraser Centrepoint Trust has acquired an additional 24.5% effective interest in NEX for S$523.1 million from Frasers Property, raising Fraser Centrepoint Trust’s effective interest in NEX to 50% from 25.5%. In 2Q 2023, Lendlease Global Commercial REIT had taken an effective stake of property of 7.7%, based on an agreed market value of the Properties at $1,380.0 mil (100%). Despite lack of larger transactions, sales in strata retail market increased in 2Q 2023, reversing the three consecutive quarters of decline. In 3Q 2023, Far East Shopping Centre was sold to Bright Ruby Resources via a collective sale at a record price of S$908 million or S$3,350 per sq ft ppr based on the potential GFA of about 290,600 sq ft under the SDI scheme. Within the same quarter, Frasers Centrepoint Trust divested Changi City Point for S$338.0 million or S$1,621 per sq ft to Zhao Family. In 4Q 2023, there was only one significant retail transactionwhere Peter Koh purchased Jelita Shopping Centre for S$91.7 million or S$2,727 per sq ft from Jardine Matheson Group. Capital Values and Net Yields – Orchard Road With interest rates remaining elevated, investors and buyers are accounting for a higher required rate of return given higher funding costs. Therefore, Orchard Road capital values decreased marginally by 0.7%YoY to S$7,300 per sq ft in 4Q 2023. Net yields, however, had increased by 26 basis points (bps) to 5.04% in the same period. This is on the back of rental growth, which is having an upward trajectory driven by limited supply paired with the eventual return of tourists. 42 40 38 36 34 32 30 28 26 Rental Value (S$/sq ft/month) Prime Orchard Road Prime Suburban 38.64 35.60 34.20 34.55 36.30 29.65 29.50 30.10 30.80 31.75 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 3Q 2023 4Q 2023 98 CAPITALAND INTEGRATED COMMERCIAL TRUST INDEPENDENT MARKET REVIEW
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