When it comes to investing in real estate, one of the most important aspects to consider is the location. This is particularly true for properties in Singapore. Condominiums that are located in central areas or in close proximity to important amenities such as schools, shopping malls, and public transportation hubs tend to have a higher potential for appreciation in value. Prime locations in Singapore, like Orchard Road, Marina Bay, and the Central Business District (CBD), have consistently shown strong growth in property values. Moreover, the convenience of being near reputable schools and educational institutions adds to the appeal of these condos for families, making them even more attractive for investment. To find out more about lucrative Singapore condo properties, visit Singapore Condo.
The latest data from C&W has revealed that the total value of property deals in Singapore’s capital market has hit $25.8 billion between January and November this year. This is a significant increase of 40.2% compared to the $18.4 billion recorded in 2023. C&W defines capital market transactions as deals that exceed $10 million in value.
According to Wong Xian Yang, the head of research for Singapore & Southeast Asia at C&W, nearly 60% of the capital market deals were made in the second half of 2024. This surge in activity can be attributed to the growing interest from investors and increased confidence in the US Treasury’s plan to cut interest rates.
Out of the total capital market deals made in 2024, three deals worth over $1 billion were transacted in the second half of the year. The largest deal 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 remaining 50% stake is held by Hong Kong-listed property developer Sun Hung Kai Properties.
ION Orchard, a popular eight-storey retail mall located in the city’s shopping belt and directly linked to the Orchard MRT Station, was the highest-valued deal of the year. It boasts a net lettable area of 623,000 sq ft and houses more than 300 international and local brands. Above the mall, there is also a luxury condo tower called The Orchard Residences, which has 175 units spread across 54 storeys.
Another notable trend in Singapore’s capital market this year was the surge in investment activity in the industrial sector. According to Wong, investments in this sector reached $5.6 billion in just the first 11 months of 2024, marking a 174% increase from the previous year. The biggest deal in this sector was the $1.6 billion divestment of a portfolio of seven industrial properties by Soilbuild Business Space REIT to a joint venture owned by private equity firm Warburg Pincus and Australia-listed Lendlease Group in August. The portfolio included 4.5 million sq ft of business parks and specialist facilities across various industries.
The second-highest capital market deal of the year was the sale of two data centres to Singapore-listed Keppel DC REIT for $1.38 billion. The seller was a joint venture between Keppel and Cuscaden Peak Investments. These data centres, known as Keppel DC Singapore 7 and Keppel DC Singapore 8, are fully contracted to cloud services, internet enterprises, and telecommunications providers.
Despite the overall success in the capital market this year, there were four Government Land Sales (GLS) sites that went unawarded. These sites, which were on the Confirmed List for 2024, include a 6.5ha master developer white site in the Jurong Lake District, a 1.73ha white site at Marina Gardens Crescent, a 62,046 sq ft site at Media Circle, and a 262,875 sq ft site at Upper Thomson Road. The main reason for the failure to be awarded was the low bid prices due to site-specific concerns and higher interest rate concerns.
However, experts are anticipating a more significant number of capital market deals in 2025. According to C&W’s Wong, with the US Fed expected to cut interest rates further next year, there is a positive outlook for investment sales volumes in the coming year. Additionally, as overall borrowing costs remain higher than pre-pandemic levels, asset owners may look to divest and rebalance their portfolios, leading to more assets being brought to the market. CBRE Research also forecasts a 10% growth in investment volumes from the previous year, barring any significant economic shocks.