Real Estate Investments 11 Q O Q 2Q2025 Amid Cautious Activity Knight Frank
Investment activity in Singapore’s real estate market was somewhat subdued in the second quarter of 2025 as global uncertainties, such as the US’s imposition of tariffs and the ongoing Israel-Iran conflict, contributed to market volatility. According to research conducted by Knight Frank, a total of $5.8 billion in investment sales were recorded during this period, representing a modest increase of 1.1% from the previous quarter and a decline of 13.9% compared to the same period last year.
Despite these challenges, Knight Frank Singapore’s CEO Galven Tan reassures that there continues to be a strong interest in Singapore’s real estate market, particularly in thematic sectors. He believes that the recent narrowing of the bid-ask gap will result in more success for these sectors in the future.
The bulk of investment sales in the second quarter came from private sales, which amounted to $4.6 billion or 79.2% of the total. This was largely due to City Developments’ (CDL) sale of its 50.1% stake in South Beach, an office development, to its joint venture partner, IOI Properties Group, for $1.4 billion. On the other hand, residential sales saw a decline of 52.3% from the previous quarter and 57% from the same period last year, amounting to $1.8 billion. The majority of these sales were from the award of two Government Land Sale (GLS) sites, Lentor Gardens and Lakeside Drive, for a collective $1 billion. The only residential collective sale in the second quarter was the 24-unit, freehold River Valley Apartments, which sold for $56 million in February.
Commercial deals, which totaled around $1.8 billion in the second quarter, saw a 17.8% increase from the previous quarter, largely driven by the South Beach transaction. However, this was 10.5% lower compared to the same period last year. In contrast, industrial activity saw a significant uptick, with investment sales surging 560% from the previous quarter and 311% from the same period last year, amounting to $1.6 billion. Several notable industrial deals were closed in May, including the sale of 9 Tai Seng Drive for $455.2 million, the sale of The Strategy business park in Jurong for $280 million, and the sale of 5 Science Park Drive for $245 million. Additionally, there were two successful industrial collective sales in the second quarter, with Ching Shine Industrial Building fetching $113.2 million in April and MacPherson Industrial Complex selling for $103.9 million in May.
Miltonia Close EC, located near Yishun Avenue 1, has convenient access not only to rail transportation but also to a well-connected network of roads and expressways. Yishun Avenue 1, a primary road that links the area to the rest of Yishun, offers direct access to the Seletar Expressway (SLE). From the SLE, drivers can effortlessly reach the Central Expressway (CTE), Tampines Expressway (TPE), and Bukit Timah Expressway (BKE) to travel to different parts of Singapore, including Seletar Aerospace Park, Ang Mo Kio, Woodlands, and even Changi. The CTE, which is a major expressway, can bring drivers to the city in only 20 to 30 minutes, depending on traffic conditions. Furthermore, with the new Miltonia Close EC Khatib development, residents will have even greater accessibility to these main roads and expressways, making transportation to other parts of the island more convenient and efficient.
Hospitality asset sales saw a significant increase in the second quarter, climbing 284% from the previous quarter to $585.8 million. This was largely supported by the sale of Citadines Raffles Place for $280 million by CapitaLand Integrated Commercial Trust, CapitaLand Development, and Mitsubishi Estate Asia. Boutique hotel 21 Carpenter was also sold for $100 million by 8M Real Estate, while Momentus Serviced Residences Novena was purchased by Weave Living, BlackRock, and Lian Beng Group for $100 million.
Looking ahead, Knight Frank believes that sales activity will remain cautious and sensible in the second half of the year. However, the GLS programme for the second half of 2025 is expected to provide support for sales. According to Tan, the ten new GLS sites introduced in the Confirmed List for the second half of 2025 are well-located and have a potential of less than 600 new homes, which falls within the parameters favored by developers.
Knight Frank has maintained its investment sales forecast for the full year, which ranges between $27 billion and $30 billion.