Singapore’s property market is on an upward trend, with the total value of capital market deals estimated to have reached $25.8 billion in the first 11 months of 2024. This marks a 40.2% increase from the $18.4 billion recorded in 2023, according to Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield (C&W). The firm defines capital market transactions as deals exceeding $10 million.
The surge in investment value can be attributed to a boost in investor appetite, fueled by growing confidence in the US Treasury’s potential interest rate cuts. In fact, almost 60% of the capital market deals were made in the second half of 2024. Three deals worth over $1 billion were transacted during this period.
The highest-valued 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), while Hong Kong-listed property developer Sun Hung Kai Properties holds the remaining 50% stake.
ION Orchard is an eight-storey retail mall located in the heart of Singapore’s shopping belt, directly linked to the Orchard MRT Station. It boasts a net lettable area of over 623,000 square feet and is home to more than 300 international and local brands. On top of the mall is a 54-storey luxury condo tower, The Orchard Residences.
Another significant contributor to the increase in investment value is the surge of interest in industrial assets. In the first 11 months of 2024, investments in this sector reached $5.6 billion, a staggering 174% increase from the previous year. The largest deal in this sector was the $1.6 billion divestment 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.
Despite the unsuccessful sale of several Government Land Sales (GLS) sites this year, residential development sites sold through GLS tenders still made up 42% of total investment sales. However, four GLS sites on the Confirmed List for 2024 failed to be awarded: the 6.5-hectare master developer white site in the Jurong Lake District, the 1.73-hectare white site at Marina Gardens Crescent, the 62,046-square-foot site at Media Circle, and a 262,875-square-foot site at Upper Thomson Road (Parcel A).
The top bids for three of these sites were rejected by the Urban Redevelopment Authority (URA) as they were deemed too low. The only successful sale was a 50:50 joint venture between UOL Group and CapitaLand Development, which agreed to purchase the 255-unit Thomson View condominium for $810 million.
The retail and office sectors also showed signs of recovery, with a notable increase in investment value. On the other hand, the shophouse market saw a decline in investment value, which can be attributed to dampened investor sentiment following money laundering investigations in August 2023.
Looking forward, C&W’s Wong remains optimistic about an increase in high-value deals in 2025. He expects investors to prepare for a rebound in capital values driven by lower interest rates. CBRE also predicts a 10% growth in investment volumes from 2024 to 2025, barring any major economic shocks.