Real estate investment sales totalled $7.44 billion in 4Q2024, bringing full-year sales to $26.61 billion (Samuel Isaac Chua/The Edge Singapore)
Real estate investment sales in Singapore totalled $7.44 billion in 4Q2024, marking a 10.1% q-o-q decline compared to the previous quarter, according to a January research report by Savills. This comes off the back of lower sales in both the public and private sectors.
Despite the slower quarter, investment deal volume for the whole of 2024 was up 35.4% y-o-y at $26.61 billion, an increase from $19.65 billion in 2023, according to Savills. The higher figure was driven by higher sales across all asset classes, with y-o-y growth ranging from 12.1% to 133.1%.
Savills attributes the performance to a rebound in private sector investment momentum backed by the availability of investible core assets for sale and better-than-expected economic growth.
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“This, together with higher proceeds from the sale of Government Land Sale (GLS) sites, has collectively contributed to the strong showing in 2024,” the report adds.
In the private sector, deals in 4Q2024 were bolstered by the $810 million collective sale of Thomson View Condominium to UOL Group and CapitaLand Development in November.
Top private investment sales in 4Q2024 (Source: Savills Research & Consultancy)
Residential investment sales saw a 24.3% q-o-q decline in 4Q2024 to $2.41 billion, due to a smaller number of pure residential GLS sites awarded during the quarter compared to 3Q2024, says the report.
The commercial sector fell by 62.7% q-o-q from the high base of $2.59 billion in 3Q2024, contributing $966.3 million in investment sales.
The industrial sector also saw a 14.7% q-o-q decline in 4Q2024, closing the final quarter with $2.13 billion worth of transactions.
In contrast, Savills notes that both the hospitality and mixed-use property sectors saw “remarkable” growth in 4Q2024, recovering from an absence of deals in the previous quarter.
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The hospitality sector was buoyed by CapitaLand Ascott Trust’s acquisition of Funan Singapore last October at an agreed property value of $263 million.
That same month, the mixed-use property sector saw the sale of a commercial and residential GLS site at Tampines Street 94 to a joint venture between Hoi Hup Realty and Sunway Developments for $668.3 million, or $1,004 psf per plot ratio (ppr).
Another notable mixed-use transaction was Hotel Properties’s acquisition of Concorde Hotel and Shopping Mall for $821 million ($1,804 psf ppr) last November. The latter marked the largest collective sale in 2024 and the fourth successful collective sale in the Orchard since 2022, according to Savills.
The sale of the Concorde Hotel and Shopping Mall for $821 million last November was the largest collective sale in 2024 (Picture: Samuel Isaac Chua/The Edge Singapore)
Lower sales expected in 2025
Looking ahead, despite the recent easing of global interest rates, Savills Research expects Singapore's investment sales value to moderate in 2025.
While interest rate movements are often used as an argument for higher or lower investment sales, research using Savills’ investment sales data from 2008 to 2024 indicates a tenuous link, says Alan Cheong, executive director of research and consultancy at Savills Singapore.
He believes that the weak correlation between interest rates and sales volume may boil down to several factors. These include the fact that Singapore does not have an interest rate-based monetary policy. As a wealth management hub, it also attracts capital from ultra-high-net-worth individuals whose objectives may be different from institutional players, thus diluting the overall impact of interest rate movements.
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In addition, Singapore has a dearth of good quality assets that are available for sale, which often leads to few and lumpy transactions, notes Cheong.
Consequently, he finds it “difficult” to predict investment sales values, though a repeat of last year’s significant growth is unlikely. “We view 2024’s numbers as being boosted by the sale of a retail mall along Orchard Road, two large industrial portfolio transactions, and two big collective sales,” he says.
For 2025, barring a “similar repeat of large ticket items transacted”, Cheong predicts total investment sales value may come in at about $23 billion.
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