Singapore 1Q 2025

Approaching cross-currents

Performance

Singapore’s investment sales hit S$5.8 billion in 1Q 2025, with landmark deals signalling strong market appetite. With Government Land Sales momentum and a S$20-24 billion forecast, investors are poised to seize prime opportunities in a thriving market.
Six Government Land Sales (GLS) sites were awarded during the quarter, significantly contributing S$3.6 billion to total investment sales. Developers have regained confidence in the market, buoyed by strong take-up rates at recent new launches. However, they remain measured in their land acquisition strategies, mindful of rising development costs and lingering economic uncertainties.

Outlook

Total investment sales in Singapore’s real estate market is projected to reach S$20-24 billion in 2025, driven by sustained demand and strategic opportunities. However, elevated global interest rates and stabilised, yet high borrowing costs in Singapore will continue to influence market dynamics. Rising construction and labour costs are expected to further pressure developers’ margins, reinforcing their cautious approach to land acquisitions.
Government Land Sales will remain a pivotal driver, with upcoming tenders for well-located residential and mixed-use sites anticipated to attract competitive bids, bolstering market activity.

Performance

Singapore’s office rents edged up 0.3% QoQ, marking a reversal from two consecutive quarters of decline. Islandwide office occupancy rates dipped 0.3 percentage points to 94.5% in 1Q 2025.
In the CBD, net absorption reached a healthy 214,000 sq ft, on the back of the 192,000 sq ft of office space from Keppel South Central, as occupiers continued to show a clear preference for premium and Grade A office spaces. In the non-CBD markets, net absorption also strengthened, rising by 146,000 sq ft, led by strong take-up in the City Hall/Bugis area and Bras Basah, which recorded 90,000 sq ft and 41,000 sq ft, respectively.
Shadow space saw its first decline after four quarters of consecutive increase. The decrease in shadow space is attributed to the take up of CBD area office spaces, underscoring a preference for corporate offices in central locations.

Outlook

In 2025, rental growth for CBD premium and Grade A office spaces is expected to see a modest increase, supported by a limited new supply pipeline — with only Shaw Tower and Newport Tower anticipated to achieve TOP by late 2025.

Performance

Singapore’s industrial property prices rose 1.5% QoQ in 1Q 2025, driven by a 1.9% increase in multiple-user factory prices. Occupancy held steady at 89.0% island-wide.
Rental rates for the warehouse/logistics segment rose 0.3% to S$1.88 per sq ft, while the multiple-user factories and central region Business Parks and Hi-tech industrial spaces remain unchanged.

Outlook

About 6.4 million sq ft of new industrial space is expected over the next three quarters, with warehouses, multiple-user factories, and business parks making up 32%, 29% and 10% of the supply respectively.

Performance

Singapore’s retail sector kicked off 2025 steadily, with tourist arrivals holding firm at 4.3 million—signalling a strong return to pre-pandemic levels. Despite the slight dip in occupancies, resilient suburban demand and rising prime rents reflect a market bracing for growth.
Singapore’s island-wide retail occupancy rate fell to 93.2% from 93.8% in 4Q 2024, with central area retail spaces seeing the most significant declines, as leasing demand turned more selective amid shifting consumer preference within the Food and Beverage sector.

Outlook

While the retail sector continues to grapple with inflation-driven rises in construction, labour, and operating costs—factors that may lead to upward pressure on rents and challenge cost-sensitive retailers—the outlook remains promising.
A robust line-up of MICE events and concerts is set to fuel the tourism rebound, which is expected to drive stronger footfall and bolster demand for prime retail spaces.

Performance

Singapore’s residential property prices rose 0.8% QoQ in 1Q 2025, led by a 1.0% increase in non-landed home prices, with the non-landed RCR posting the strongest growth at 1.7%.
In the rental market, prices edged up 0.4%, supported by stable demand and rising transaction volumes.
Transaction volume was recorded at 7,261 units in 1Q 2025, a 1.3% QoQ decrease from the 7,433 units in 4Q 2024.

Outlook

With the residential market largely driven by domestic purchasers, buyer sentiment is expected to remain favourable in 2025. The residential property price index is anticipated to moderate, as overall housing supply rises with the ramp-up of Government Land Sales — a trend that should help support market stability and sustain healthy transaction activity.