Singapore’s real estate market experienced varied performance in the second quarter of 2025, according to the latest report by Realion Research. Investment sales activity softened, reaching S$5.5 billion, primarily due to a pricing mismatch and cautious investor sentiment. However, the market is projected to achieve total investment sales of between S$20 billion and S$25 billion for the full year, driven by potential interest rate cuts.
Office rents in the central region remained stable, with a slight 0.3% decrease in Q2 offset by a similar gain in Q1. The limited supply pipeline until 2027 is expected to favour CBD premium and Grade A office spaces, which are anticipated to see modest rental growth. Shadow space increased by 12.5% quarter-on-quarter to 420,000 square feet, indicating potential relocations or downsizing by tenants.
In the industrial sector, property prices rose by 1.4% quarter-on-quarter, led by multiple-user factories. Despite a slight dip in overall occupancy to 88.8% due to increased supply, the sector remains buoyant. The supply pipeline for industrial space is expected to reach approximately 3 million square feet for the rest of 2025, potentially exerting downward pressure on rental rates.
Retail rental rates showed steady growth, with prime first-storey rents on Orchard/Scotts Road increasing by 0.5% to S$41.60 per square foot. The islandwide retail occupancy rate stood at 92.9%, slightly down from 93.2% in Q1. Retail rents are expected to rise modestly, although rising business costs and tighter manpower regulations may keep leasing activity focused on relocations or downsizing.
Private home prices rose by 1% quarter-on-quarter, driven by landed homes and non-landed segments in the Core Central Region and Outside Central Region. However, transaction volumes fell by 29.4% due to fewer new project launches. Prices are expected to rise by 3-5% for the whole of 2025, with around 21,000 to 24,000 units being transacted.
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