Singapore Property Sector: Retail and Industrial Growth
Singapore’s property market is showing mixed trends across various segments, with retail and industrial properties experiencing notable growth, while the residential sector faces challenges. As the city-state’s manufacturing and tourism sectors recover, investor interest has surged, particularly in industrial estates and high-street retail spaces.
The industrial sector, buoyed by a manufacturing revival, has become a prime target for investors. According to Colliers, industrial property deals rose by 6.1% in the second quarter of 2024, reaching $320 million. Full-year volumes are projected to grow by 10%, bringing the total to $2.7 billion. One notable transaction would be BDx’s acquisition of OneTen Paya Lebar for $140 million. Another notable one is Ho Bee Land’s sale of a 49% stake in Elementum for $134 million. Logistics properties remain the most sought-after, driven by businesses reconfiguring supply chains amidst the US-China trade war. Companies are also increasingly turning to sale and leaseback deals to free up capital, adding momentum to the sector.
Retail properties are also seeing a resurgence, particularly in suburban retail malls. Retail property deals in the first half of 2024 surpassed last year’s full-year total, reaching $1.4 billion. Suburban malls, supported by strong fundamentals like low vacancy rates and rising rents, are providing positive returns. Rents in this segment grew by 1% year on year. Furthermore, some malls experienced double-digit rental reversions as leases signed during the pandemic come up for renewal. One of the most significant retail deals this year was the sale of The Seletar Mall for $550 million in March.
While retail and industrial properties thrive, Singapore’s residential market has struggled. New home sales in August fell by 47.2% year on year. Currently, fewer than 2,700 units sold in the first eight months of 2024. Cooling measures and high interest rates have contributed to the slowdown. These factors have forced agencies like CBRE and JLL to revise their forecasts.
Despite challenges in the residential market, Singapore’s property landscape remains attractive to investors, particularly in the industrial and retail sectors, which are benefiting from the city’s economic recovery.
