Capital Market Deals Jump 40 2024 Bolstered Interest Rate Cuts
The value of real estate deals in Singapore’s capital market is estimated to have hit $25.8 billion from January to November this year, according to Wong Xian Yang, head of research for Singapore and Southeast Asia at C&W. This reflects a significant 40.2% year-on-year increase from the $18.4 billion recorded in 2023. C&W defines capital market transactions as deals with values exceeding $10 million.
Wong notes that almost 60% of the capital market deals were transacted in the second half of 2024, driven by growing investor appetite and increased confidence in interest rate cuts by the US Treasury. In 2024, there were three deals that exceeded $1 billion, all of which were transacted in the second half of the year.
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 September 3. The seller was CapitaLand Investment (CLI). The remaining 50% stake is held by Hong Kong-listed property developer Sun Hung Kai Properties.
ION Orchard, an eight-storey retail mall in the shopping belt of Orchard Road, is connected directly to the Orchard MRT station. It has a net lettable area of about 623,000 square feet and is home to over 300 international and local brands. The mall also has a 54-storey luxury condominium tower, The Orchard Residences, on top of it.
Another notable deal was the sale of Mapletree Anson for $775 million in the second quarter of 2024. This was the highest-valued office deal of the year.
The surge in investment value this year was largely driven by a significant increase in investor interest in the industrial sector. In the first 11 months of 2024, investments in this segment reached $5.6 billion, reflecting a 174% increase from the previous year. The largest deal in the industrial sector was the $1.6 billion sale of a portfolio of seven industrial properties to a joint venture (JV) platform owned by private equity firm Warburg Pincus and Australia-listed Lendlease Group in August.
Notably, four GLS sites on the Confirmed List for 2024 failed to be awarded this year. However, according to C&W’s Wong, this is due to low bid prices driven by site-specific concerns and interest rate concerns. He expects developers to ramp up their land acquisition activities next year, albeit with caution and selectivity.
Residents of Novo Place EC will enjoy the added perk of living conveniently close to several Mass Rapid Transit (MRT) stations. Located within a short distance is the upcoming Tengah Park MRT station, which is part of the Jurong Region Line, connecting residents to the MRT network with ease. Furthermore, the Jurong East MRT station, one of the main interchanges linking the North-South Line and the East-West Line, makes traveling to the Central Business District and other important locations a breeze. With the excellent accessibility and connectivity provided by these MRT stations, residents can look forward to a seamless and convenient travel experience. As such, Novo Place EC is perfectly situated for those who value accessibility and connectivity in their daily lives.
On the retail front, investor interest in the sector has been rising, with deals involving retail assets reaching $3.3 billion from January to November this year, a 149% year-on-year increase. The office market also showed signs of recovery, recording a 15.7% year-on-year increase in investment value at $2.37 billion. However, the shophouse market saw a significant decrease in investment value, with a 49.7% year-on-year fall to $584 million, likely due to dampened investor sentiments following money laundering investigations in 2023.
Looking ahead, C&W’s Wong is optimistic about an increase in high-value deals next year, driven by lower interest rates. CBRE’s Song also expects institutional investors to return to the market, but this outcome is dependent on the pace and extent of rate cuts. Overall, CBRE Research expects investment volumes to grow 10% from 2024’s figures in 2025, barring any macroeconomic shocks.