Singapore’s property investment market is shifting towards office and retail assets, driven by tight supply and falling borrowing costs. According to Cushman & Wakefield Plc, these assets accounted for 33% and 18% of first-half investment sales, respectively.
Wong Xian Yang, head of research for Singapore and Southeast Asia at Cushman & Wakefield Plc, said this shift reflects growing investor confidence in offices and retail, which offer strong income visibility.
Office and retail yield spreads over the government’s 10-year bond have widened beyond pre-pandemic levels, improving their appeal for investors seeking income and potential capital appreciation, said Wong.
Prime office and retail assets are trading at net yields of about 3.5% to 4.5%, with capital values remaining stable, according to Catherine He, head of research at Colliers International.
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Singapore’s investment market has exceeded expectations this year, with transaction volumes reaching $35.2b in the first half, exceeding the $33b recorded for all of 2025, said Cushman & Wakefield.
Falling borrowing costs have supported the increase, with the three-month Singapore overnight rate average falling to about 1.08% at end-June from about 1.18% at the start of the year, said Wong.
The market is also benefiting from a constrained supply pipeline, expectations of rental growth, and Singapore’s appeal as a safe haven amid war and macroeconomic uncertainty, said Wong.
Demand for private commercial real estate is supported by limited supply of Grade A offices in the central business district and relatively attractive retail yields, said Alan Cheong, executive director for research and consultancy at Savills Singapore.
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Investment restrictions affecting private residential property and JTC Corporation-managed industrial properties have also directed capital towards commercial assets, said Cheong.
Chua Yang Liang, head of research and advisory for Southeast Asia at Jones Lang LaSalle, cited Hongkong Land Holdings Ltd’s Singapore Central Private Real Estate Fund as a standout transaction, with the fund backed by $8.2b in assets.
Singapore’s property market is expected to continue growing, with Savills expecting 2026 investment sales of $55b to $60b.
They offer strong income visibility.
