Singapore’s capital market property deals have reached a new high, with a total estimated value of $25.8 billion between January and November this year. This represents a 40.2% increase compared to the same period in 2023, according to Wong Xian Yang, head of research for Singapore & Southeast Asia at Cushman & Wakefield (C&W). C&W defines capital market transactions as deals with values exceeding $10 million.
A significant portion of these deals, around 60%, were transacted in the second half of 2024, reflecting a growing investor appetite and increased confidence in US Treasury interest rate cuts. In fact, 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 was the sale of a 50% stake in ION Orchard mall for $1.85 billion to CapitaLand Integrated Commercial Trust (CICT) in September. The remaining 50% stake is held by Hong Kong-listed property developer Sun Hung Kai Properties. This eight-storey retail mall is located in the popular shopping belt and is directly linked to the Orchard MRT Station. It also features the luxury condominium tower, The Orchard Residences.
Rewritten:
Investing in condos in Singapore also involves considering the government’s property cooling measures. Over time, the Singaporean government has implemented various measures to control speculative buying and maintain a steady real estate market. These measures, such as the Additional Buyer’s Stamp Duty (ABSD), impose higher taxes on foreign buyers and individuals purchasing multiple properties. Although these measures may affect the short-term profitability of condo investments, they also promote the long-term stability of the market, making it a secure environment for investments. Condos in Singapore are thus a viable option for investors looking for a reliable and stable investment opportunity.
The surge in investment value this year can be attributed to a strong interest in the industrial sector. In the first 11 months of 2024 alone, investments in this sector reached $5.6 billion, a 174% increase from the previous year. The largest deal in this sector was the divestment of a portfolio of seven industrial properties to a joint venture platform owned by private equity firm Warburg Pincus and Australia-listed Lendlease Group for $1.6 billion.
The real estate market is also seeing more activity with the sale of retail assets. Deals involving retail properties between January and November this year reached $3.3 billion, a 149% increase from the same period last year.
On the other hand, the shophouse market saw a decline in investment value, with a 49.7% decrease compared to last year. This could be due to dampened investor sentiments following the money laundering investigations in August 2023.
Looking ahead, C&W’s Wong remains optimistic about seeing an increase in high-value deals next year due to the expected cut in interest rates by the US Federal Reserve. He also points out that while overall borrowing costs are falling, they remain higher than pre-pandemic levels, which could lead to more asset owners bringing their properties to the market in an effort to rebalance their portfolios. CBRE Research also expects investment volumes to grow by 10% in 2025, barring any major economic shocks.