Singapore’s capital market property deals hit a total value of $25.8 billion between January and November this year, according to Wong Xian Yang, head of research for Singapore & Southeast Asia at Cushman & Wakefield (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.
Wong notes that almost 60% of the capital market deals were transacted in the second half of 2024, fueled by growing investor appetite and increased confidence in interest rate cuts by the US Treasury. Three deals exceeding $1 billion were made in 2024, all of which were transacted in the second half of the year.
The largest 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 a prominent eight-storey retail mall in the heart of the shopping district, directly linked to the Orchard MRT Station. It boasts a net lettable area of over 623,000 sq ft and is home to more than 300 international and local brands. The mall is topped by a 54-storey, 175-unit luxury condo tower, The Orchard Residences.
(Mapletree Anson was the highest-valued office deal of the year, selling for $775 million in second quarter 2024) (Photo: EdgeProp Singapore)
Investment in industrial assets saw a significant surge this year, with transactions reaching $5.6 billion in the first 11 months of 2024, a 174% increase from last year, according to Wong. 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 (JV) platform owned by private equity firm Warburg Pincus and Australia-listed Lendlease Group in August. The portfolio consists of 4.5 million sq ft of business parks and specialist facilities across life sciences, technology, advanced manufacturing and logistics.
(Credit: CBRE Research, Cushman & Wakefield)
Soilbuild Business Space REIT is controlled by global asset manager Blackstone and Lim Chap Huat, executive chairman of Soilbuild Group.
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The second-largest capital market deal in 2024 was the divestment of two data centres to Singapore-listed Keppel DC REIT for $1.38 billion. The seller was a 60:40 JV between Keppel and Cuscaden Peak Investments. These data centres – Keppel DC Singapore 7 and Keppel DC Singapore 8 – cater to large-scale data processing and are fully contracted to cloud services, internet enterprises, and telecommunications providers.
(Credit: Keppel)
Wong expects transaction volumes in the sector to reach a five-year high, reflecting high liquidity and investor preference for new economy assets such as prime logistics and life science assets. However, Tricia Song, CBRE head of research for Singapore and Southeast Asia, predicts that industrial rent growth may slow down in 2025, potentially affecting yields.
Despite the unsuccessful sale of several Government Land Sales (GLS) sites this year, residential development sites auctioned via GLS tenders continued to make up the bulk (42%) of total investment sales for the year.
This year, four GLS sites on the Confirmed List for 2024 failed to be awarded: a 6.5ha master developer white site in Jurong Lake District, a 1.73ha white site at Marina Gardens Crescent, a 62,046 sq ft site at Media Circle fully zoned for long-stay serviced apartments, and a 262,875 sq ft site at Upper Thomson Road (Parcel A) that included an SA2 component.
The highest bids for three of these sites – Jurong Lake District ($640 psf per plot ratio (ppr)), Marina Gardens Crescent ($984 psf ppr), and Media Circle ($461 psf ppr) – were rejected by URA for being too low. The Upper Thomson Road site closed in June without any bids.
(Credit: EdgeProp Singapore)
Wong identifies low bid prices driven by specific site concerns and untested markets, as well as interest rate concerns and development risk as main reasons for the unawarded sites.
CBRE’s Song believes this trend may not continue in 2025, as the new sites on the Confirmed List are well distributed across Singapore and close to MRT stations and amenities, catering to a variety of demand and needs.
Wong expects developers to increase their land acquisition activities, but with caution and selectivity. In November, a 50:50 JV between UOL Group and CapitaLand Development agreed to purchase the 255-unit Thomson View condo for $810 million, translating to $1,178 psf ppr. The acquisition price included the land betterment charges and lease upgrading premium for a fresh 99 years. The developer plans to build a 1,240-unit residential project on the 5ha site.
The office segment showed signs of recovery, recording $2.37 billion in investment value, a 15.7% year-on-year increase, according to CBRE’s Song. The market also saw a narrowing price gap between buyers and sellers, supporting the recovery of office deals. Song explains that the market is seeing an increased number of investors targeting attractively priced assets.
(Credit: EdgeProp Singapore)
On the other hand, the shophouse market saw a 49.7% year-on-year decrease in investment value to $584 million. Song attributes the slump to dampened investor sentiment after money laundering investigations in August 2023.
Barring major economic shocks, CBRE Research expects investment volumes to grow by 10% from 2024’s volumes in 2025. CBRE’s Song believes that institutional investors, who had been observing from the sidelines, will return to the market next year. However, she warns that slower and lower-than-expected interest rate cuts may slow down the recovery of capital markets.