The Singapore real estate market has experienced a sharp increase in capital market property deals, with an estimated value of $25.8 billion between January and November of this year. According to Wong Xian Yang, head of research for Singapore & Southeast Asia at C&W, this marks a 40.2% year-over-year increase from the $18.4 billion recorded in 2023. C&W defines capital market transactions as deals with values exceeding $10 million.
Wong states that almost 60% of the capital market deals were transacted in the second half of 2024, driven by growing appetite from investors and increased confidence in interest rate cuts by the US Treasury. Three deals exceeding $1 billion were made in 2024, all of which occurred in the second half of the year.
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The largest transaction in terms of 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), and the remaining 50% stake is held by Hong Kong-listed property developer Sun Hung Kai Properties.
Located in the heart of the shopping belt and directly connected to the Orchard MRT Station, ION Orchard is an eight-storey retail mall with a net lettable area of approximately 623,000 sq ft. It is home to over 300 international and local brands and is also home to a 54-storey luxury condo tower, The Orchard Residences.
Another significant deal in the capital market was the sale of Mapletree Anson, an office property, for $775 million in the second quarter of 2024.
The industrial sector saw a surge in investments, with transactions reaching $5.6 billion in the first 11 months of 2024, reflecting a 174% increase from the previous year. The largest deal in this sector was the $1.6 billion sale of a portfolio of seven industrial properties to a joint venture platform owned by private equity firm Warburg Pincus and Australia-listed Lendlease Group in August.
This year also saw the sale of two data centres to Keppel DC REIT for $1.38 billion, making it the third-highest-valued transaction of the year. The two data centres, Keppel DC Singapore 7 and Keppel DC Singapore 8, are fully contracted to cloud services, internet enterprises, and telecommunications providers.
Despite the unsuccessful sale of several Government Land Sales (GLS) sites this year, residential development sites sold via GLS tenders continued to form the bulk (42%) of total investment sales for the year. Four GLS sites, including a 6.5ha master developer white site in the Jurong Lake District (JLD) and a 1.73ha white site at Marina Gardens Crescent, failed to be awarded. C&W’s Wong attributes the main reason for the unawarded sites to low bid prices and site-specific concerns.
On the other hand, the retail sector showed signs of recovery, with deals involving retail assets reaching $3.3 billion, a 149% year-on-year increase. The office sector also showed signs of recovery, recording $2.37 billion in investment value, a 15.7% increase year-on-year. The shophouse market, however, saw a dip in investment value, attributed to investor sentiments being dampened following money laundering investigations in August 2023.
Looking ahead, Wong remains optimistic about an increase in high-value deals in 2025, with the US Fed expected to make further interest rate cuts. CBRE Research also anticipates a 10% growth in investment volume from 2024 to 2025, barring any macroeconomic shocks.