2025 Singapore Real Estate Outlook: Navigating Opportunities & Challenges

As 2025 gets underway, Singapore's economy is poised to thrive, with a forecasted growth rate of 1-3%. While global challenges such as protectionist policies, geopolitical tensions etc exist, Singapore is well-positioned to capitalize on emerging opportunities in the real estate sector.

The country ranks among the top 3 investment destinations in APAC in 2025. Transaction volumes are expected to recover amid expected rate cuts, although downside risks remain due to economic and geopolitical uncertainty. Investors are likely to be selective, allocating capital into specific sectors or strategies with a more favourable outlook.

The office market showed improvement in Q4 2024, with increased take-up and occupancy rates. While there are concerns about upcoming lease expiries and low pre-commitment levels for new offices, we expect Core CBD (Grade A) rents to grow modestly in 2025, driven by tentative demand, limited medium-term supply, and the ongoing flight to quality.

The industrial and logistics sector experienced subdued demand in 2024 due to cost pressures and supply chain disruptions. However, with the JS-SEZ initiative, Singapore continues to attract investments from manufacturers, reinforcing its position as an advanced manufacturing hub. We expect uneven growth across different manufacturing clusters in 2025.

Despite ongoing challenges, retailers' expansionary appetite is expected to remain strong in 2025. With expectations of a full tourism recovery and below-historical-average future supply, we anticipate retail rents to be supported.

In the residential market, buying sentiment and appetite have improved amid lower mortgage rates, and developers are likely to launch more projects in 2025. While rents may remain under pressure in the near term, the market is showing signs of stabilisation.

In conclusion, while there are challenges ahead, Singapore's real estate market is expected to remain resilient in 2025. The anticipated return of institutional investors, driven by falling interest rates and expectations of additional Fed rate cuts, which should further stimulate demand. With a focus on innovation, sustainability, and adaptability, we are confident that Singapore will continue to be a hub for business, investment, and talent.