Singapore Real Estate Market Outlook to 2028

In 2023, the Singapore Real Estate Market was valued at USD 46 billion, fueled by sustained demand across the residential, commercial, and industrial sectors. The markets growth is driven by Singapores status as a global financial hub, attracting significant foreign investment and the strategic development of infrastructure projects.

The Singapore Real Estate Market is dominated by key players such as CapitaLand, City Developments Limited (CDL), Frasers Property, UOL Group, and Mapletree Investments. These companies have established strong market positions through their extensive portfolios across residential, commercial, and industrial properties.

On February 7, 2024, CapitaLand Investment (CLI) announced the acquisition of three properties in Southeast Asia, including two industrial sites in Singapore through Extra Space Asia and a 20-hectare freehold site in Bangkok, Thailand. The total investment for these acquisitions is approximately SGD 700 million, which will increase CLI's funds under management in the region to SGD 1.2 billion.

The real estate market in Singapore is predominantly dominated by the Central Region, especially areas like Marina Bay, Orchard Road, and Sentosa Cove. These locations are highly coveted due to their strategic proximity to business districts, luxury amenities, and top-tier educational institutions.

Singapore Real Estate Market Segmentation:

By Property Type: The Singapore Real Estate Market is segmented by property type into residential, commercial, and industrial properties. In 2023, the residential segment held a dominant market share due to the strong demand for luxury housing. The rise in expatriate populations, coupled with the limited land availability in prime locations, has led to high demand and prices in this segment. Key areas like Orchard Road and Sentosa Cove are popular for high-end residential developments, contributing significantly to the residential sector's dominance.

By End-User: The Singapore Real Estate Market is segmented by end-user into individuals, corporations, and government bodies. In 2023, corporations held the largest market share, driven by the high demand for commercial office spaces in prime areas. Singapores reputation as a global business hub attracts multinational corporations, particularly in the finance and technology sectors, leading to increased demand for Grade A office spaces. The growing e-commerce and tech industries also contribute to this segment's dominance.

By Region: The Singapore Real Estate Market is segmented by region into North, South, East, and West. In 2023, the South region, particularly the Central Business District (CBD) and Marina Bay, dominated the market share. The South regions dominance is driven by its status as the core of Singapore's business and financial activities. With a concentration of high-end commercial and residential properties, this region remains the most sought-after for real estate investments. The South regions strategic location, coupled with its advanced infrastructure, makes it the leading market in Singapore.

Singapore Real Estate Market Competitive Landscape:

• CapitaLand
• City Developments Limited
• Frasers Property
• UOL Group
• Mapletree Investments

CapitaLand: In FY2023, Frasers Property made a strategic acquisition by purchasing a significant stake in NEX, one of Singapores largest suburban shopping malls. This acquisition played a pivotal role in enhancing Frasers Propertys financial performance for the year. The company reported a 5.1% year-on-year growth in Profit Before Interest and Tax (PBIT), driven largely by the increased income generated from its expanded retail assets.

City Developments Limited (CDL): In 2024, CDL's subsidiary Cityview Place Holdings marketed 58 unsold units at The Residences at W Singapore Sentosa Cove, a luxury development completed in 2011. Prices were discounted by around 40% compared to the 2010 launch, starting from SGD 1,648 per square foot. The move aimed to capitalize on increased interest in Sentosa Cove properties.

Singapore Real Estate Market Analysis:

Growth Drivers:

Sustainability Initiatives: The Singapore Real Estate Market is significantly driven by the governments focus on sustainability. The Green Mark certification and the Green Plan 2030 are pushing developers towards creating energy-efficient, sustainable buildings. In 2023, the government mandated that all new developments must meet higher Green Mark standards, driving demand for green technologies and sustainable building materials.

Enhancing Foreign Investment: Singapores status as a global financial hub continues to attract significant foreign investment. In 2023, foreign investors accounted for approximately SGD 120 billion in real estate investments, particularly in the luxury residential and commercial segments. This influx of capital is expected to continue, driven by Singapores stable economy and transparent legal framework.

Increasing Infrastructure Development: The governments ongoing infrastructure projects, such as the expansion of the MRT network and the development of new business districts, are key growth drivers. These projects enhance connectivity and accessibility, making new regions attractive for real estate development. The URA Master Plan 2024 outlines significant infrastructure investments that are expected to boost real estate demand in newly developed areas.

Challenges:

Land Scarcity: One of the significant challenges in the Singapore Real Estate Market is the limited availability of land. As a small city-state, Singapore faces constraints in land supply, leading to high property prices. Developers are increasingly looking at innovative solutions such as underground and vertical developments to overcome this challenge.

Economic Uncertainty: Global economic uncertainties, including fluctuating interest rates and geopolitical tensions, pose a risk to the Singapore Real Estate Market. While Singapore remains a safe haven for investors, these external factors can impact investment flows and market stability.

Government Initiatives:

Green Mark Incentives: The Green Mark Incentive Scheme (GMIS) is a program initiated by the Building and Construction Authority (BCA) of Singapore to promote energy efficiency and sustainable building practices. The latest iteration, GMIS-EB 2.0, offers SGD 63 million in grants to building owners for retrofitting existing buildings to achieve higher energy performance standards, such as Super Low Energy or Zero Energy.

Affordable Housing Projects: In response to rising property prices, the government has launched several affordable housing projects under the Housing and Development Board (HDB). In 2023, HDB completed about 21,400 flats across 23 housing projects, which is the highest number of projects and flats completed annually in the last few years.

Singapore Real Estate Market Future Outlook:

The Singapore real estate market is poised for substantial growth, driven by sustainability initiatives, foreign investment, and infrastructure development.

Future Trends:

Rise in Sustainable Developments: By 2028, sustainable developments are expected to dominate the market as developers increasingly adopt green building practices. The governments focus on the Green Plan 2030 will push for higher standards in sustainability, making green buildings a norm in Singapores real estate market. Developers who fail to adopt these practices may find it challenging to remain competitive.

Expansion of Business Districts: The expansion of existing business districts and the development of new ones, such as the Jurong Lake District, are expected to drive demand for commercial real estate. These districts are being developed with a focus on connectivity and sustainability, making them attractive to multinational corporations and investors.