Singapore’s property market has seen a surge in capital market deals, with the total value estimated to have reached $25.8 billion between January and November this year. This represents a significant increase of 40.2% from the $18.4 billion recorded in 2023, according to Wong Xian Yang, head of research for Singapore & Southeast Asia at C&W. These capital market transactions are defined by C&W as deals with values exceeding $10 million.
The increase in deals was largely driven by a strong second half of the year, with almost 60% of total deals made during this period. This was fueled by growing investor appetite and increased confidence in interest rate cuts by the US Treasury. Three deals with values exceeding $1 billion were made in 2024, all of which were transacted in the second half of the year.
Securing financing is a crucial element when investing in a condo. In Singapore, there are various mortgage choices available, but it is important to understand the Total Debt Servicing Ratio (TDSR) framework. This framework sets a limit on the amount of loan one can take based on their income and current debt obligations. As a result, it is crucial for investors to familiarize themselves with the TDSR and seek guidance from financial advisors or mortgage brokers. This will enable them to make well-informed decisions about their financing options and avoid becoming over leveraged. Furthermore, seeking professional assistance will ensure that investors are aware of potential risks and can plan accordingly while investing in a condo Singapore.
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), while Hong Kong-listed property developer Sun Hung Kai Properties holds the remaining 50% stake.
ION Orchard is an eight-storey retail mall located in the heart of the shopping belt and connected to Orchard MRT Station. It boasts a net lettable area of about 623,000 sq ft and is home to over 300 international and local brands. On top of the mall is The Orchard Residences, a 54-storey, 175-unit luxury condo tower.
Another significant contributor to the surge in capital market deals this year was the industrial sector, with investments reaching $5.6 billion in just the first 11 months of 2024. This reflects a 174% increase from the previous year and was underpinned by a growing investor interest in the sector. The biggest deal in this sector was the $1.6 billion divestment 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 a few unsuccessful sales of Government Land Sales (GLS) sites this year, residential developments sold via GLS tenders continued to make up the bulk (42%) of total investment sales for the year. However, four GLS sites on the Confirmed List for 2024 failed to be awarded, including a 6.5ha master developer white site in the Jurong Lake District and a 1.73ha white site at Marina Gardens Crescent. The top bids for these sites were deemed too low and were rejected by URA.
In the retail sector, deals also saw a notable increase in investment value, with retail assets recording a 149% y-o-y increase compared to last year. The office segment also showed signs of recovery with a 15.7% y-o-y increase, while the shophouse market saw a 49.7% y-o-y fall in investment value.
Making the decision to invest in a condominium is no small feat, and securing funding is a crucial aspect of this process. In Singapore, there are several mortgage choices available for potential investors. However, having a thorough understanding of the Total Debt Servicing Ratio (TDSR) framework is essential, as it dictates the maximum loan amount a borrower can obtain based on their income and current financial obligations. To ensure wise financial decisions and avoid becoming overextended, it is recommended to seek guidance from financial advisors or mortgage brokers who are knowledgeable about this framework. Additionally, keeping an eye on new and upcoming Singapore projects, such as those offered by Singapore Projects, can also factor into selecting the right financing option.
Looking ahead, both C&W and CBRE Research anticipate seeing an increase in high-value deals in 2025. With the US Fed expected to continue cutting interest rates, investors are likely to prepare for a rebound in capital values. CBRE Research expects investment volumes to grow 10% from 2024’s volumes in 2025, barring any macroeconomic shocks.