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According to Wong Xian Yang, head of research for Singapore & Southeast Asia at Cushman & Wakefield (C&W), the total value of capital market property deals in Singapore is estimated to have reached $25.8 billion between January and November this year. This marks a significant increase of 40.2% compared to the $18.4 billion recorded in 2023. The term “capital market transactions” refers to deals with values exceeding $10 million, as defined by C&W.
Wong attributes this surge in investment value to a growing investor appetite and increased confidence in interest rate cuts by the US Treasury, with almost 60% of the capital market deals transacted in 2H2024. Three deals exceeding $1 billion were made in 2024, all of which took place 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 Sept 3. The seller was CapitaLand Investment (CLI). The remaining 50% stake is held by Hong Kong-listed property developer Sun Hung Kai Properties.
The mall, located in the heart of the shopping belt and directly linked to Orchard MRT Station, has a net lettable area of about 623,000 sq ft and is home to over 300 international and local brands. It also features a luxury condo tower, The Orchard Residences, on top of the mall.
Another notable deal was the sale of Mapletree Anson, a high-value office property, for $775 million in 2Q2024.
The industrial sector saw a surge in investor interest, with investments reaching $5.6 billion in the first 11 months of 2024, a significant increase of 174% compared to the previous year. The largest deal in this sector was the $1.6 billion divestment of a portfolio of seven industrial properties from Soilbuild Business Space REIT to a joint venture (JV) platform owned by private equity firm Warburg Pincus and Australian-listed Lendlease Group. This portfolio includes 4.5 million sq ft of business parks and specialist facilities in various industries.
Despite the unsuccessful sale of several Government Land Sales (GLS) sites this year, residential development sites sold via GLS tenders made up 42% of total investment sales. Four GLS sites on the Confirmed List for 2024 failed to be awarded, with the main reason being low bid prices due to site-specific concerns and interest rate concerns. However, this trend is not expected to continue in 2025.
The retail sector also showed signs of recovery, with deals amounting to $3.3 billion, a 149% increase compared to the previous year. The office segment also saw a 15.7% y-o-y increase in investment value, while the shophouse market saw a 49.7% y-o-y fall in investment value.
Looking ahead to 2025, Wong remains optimistic about seeing an increase in high-value deals due to the expected interest rate cuts by the US Fed. He predicts that investment volumes will continue to rise as investors anticipate a rebound in capital values. CBRE Research also expects investment volumes to grow by 10% in 2025, barring any major economic shocks.