Singapore’s property market saw a significant increase in capital market property deals, reaching a total estimated value of $25.8 billion between January and November this year. This is according to Wong Xian Yang, head of research for Singapore & Southeast Asia at C&W. This marks a 40.2% year-on-year increase from the $18.4 billion recorded in 2023. C&W defines capital market transactions as deals with values exceeding $10 million.
According to Wong, the second half of 2024 saw a surge in investor appetite, fueled by increased confidence in interest rate cuts by the US Treasury. As a result, almost 60% of the capital market deals were transacted in the second half of the year. Three deals exceeding $1 billion were made in 2024, all of which were transacted in the second half of the year.
The highest-value transaction by absolute price was the sale of a 50% stake in ION Orchard mall for $1.85 billion to CapitaLand Integrated Commercial Trust (CICT) on September 3. The seller was CapitaLand Investment (CLI). The remaining 50% stake is held by Hong Kong-listed property developer Sun Hung Kai Properties.
ION Orchard is an eight-storey retail mall in the heart of the shopping belt, directly linked to the Orchard MRT Station. It boasts a net lettable area of approximately 623,000 sq ft and is home to over 300 international and local brands. On top of the mall is a luxury condo tower with 175 units called The Orchard Residences.
Another noteworthy deal was the sale of Mapletree Anson, the highest-valued office deal of the year, which was sold for $775 million in the second quarter of 2024.
The surge in investment value was largely driven by a surge of investor interest in the industrial sector. In the first 11 months of 2024, investments in this segment amounted to $5.6 billion, representing a 174% increase from the previous year. The biggest deal in the industrial sector was the $1.6 billion sale of a portfolio of seven industrial properties in Soilbuild Business Space REIT to a joint venture platform owned by private equity firm Warburg Pincus and Australia-listed Lendlease Group in August. The portfolio consisted of 4.5 million sq ft of business parks and specialist facilities across life sciences, technology, advanced manufacturing, and logistics.
Despite the unsuccessful sale of several Government Land Sales (GLS) sites this year, residential development sites sold via GLS tenders remained the largest contributor, accounting for 42% of total investment sales. This year, four GLS sites on the Confirmed List for 2024 failed to be awarded. However, C&W’s Wong attributes this to low bid prices, driven by site-specific concerns such as large land quantum or untested markets, as well as interest rate concerns and development risks. CBRE’s Song also believes that this trend is unlikely to continue in 2025 as the new sites on the Confirmed List are well distributed and cater to diverse demands and needs.
Investor interest in the retail sector has been rising, with a notable y-o-y growth of 149%. Similarly, the office segment has shown signs of recovery with a 15.7% increase in investment value, thanks to the normalization of return-to-office trends. However, the shophouse market saw a 49.7% y-o-y fall in investment value, which CBRE’s Song believes is due to dampened investor sentiment following the money laundering investigations in August 2023.
C&W’s Wong remains optimistic about seeing an increase in high-value deals next year, given the expected interest rate cuts by the US Fed. CBRE Research predicts a 10% growth in investment volumes from 2024 to 2025, barring any major macroeconomic shocks.