According to Wong Xian Yang, head of research for Singapore & Southeast Asia at C&W, the total value of capital market property deals in Singapore has reached an estimated $25.8 billion between January and November this year. This marks a significant 40.2% year-on-year increase from the $18.4 billion recorded in 2023. C&W defines capital market transactions as deals that exceed $10 million in value.
Wong also notes that nearly 60% of the capital market deals were made in the second half of 2024, driven by a growing investor appetite and increased confidence in interest rate cuts by the US Treasury. Three deals worth over $1 billion were made in 2024, all of which occurred in the second half of the year.
One of the largest deals of the year 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), while Hong Kong-listed property developer Sun Hung Kai Properties holds the remaining 50% stake in the mall.
Situated in the prime shopping district of Orchard Road and directly linked to the Orchard MRT station, ION Orchard is an eight-storey retail mall spanning 623,000 square feet and houses over 300 international and local brands. It also features a luxury condominium tower, The Orchard Residences, on top of the mall.
Another notable deal was the sale of Mapletree Anson, a high-value office property that was sold for $775 million in the second quarter of 2024. This surge in investment value was largely driven by a strong interest in the industrial sector, which saw an impressive 174% increase in transaction value from the previous year. The biggest 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.
Despite some unsuccessful government land sales (GLS) sites this year, residential development sites sold through GLS tenders still made up 42% of the total investment sales for the year. Four GLS sites on the confirmed list for 2024 failed to be awarded due to low bid prices and site-specific concerns.
In terms of the retail sector, there was a notable year-on-year growth in investment value, with deals reaching $3.3 billion, a 149% increase from the previous year. The office segment also showed signs of recovery, recording $2.37 billion in investment value, a 15.7% increase from last year. However, the shophouse market saw a 49.7% decrease in investment value due to investor sentiment being dampened by money laundering investigations.
Wong believes that high-value deals will continue to increase next year, especially as the US Federal Reserve is expected to cut interest rates further. He also anticipates a return of institutional investors to the market, although the pace of recovery may depend on the rate of interest cuts and any potential macroeconomic shocks. Overall, CBRE Research expects investment volumes to grow 10% in 2025 from the levels seen in 2024.