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[SINGAPORE] The real estate investment market gathered momentum in the third quarter of 2025, supported by robust participation in government land sales (GLS) tenders and increased real estate investment trust (Reit) activity, even as global economic uncertainty persisted.

Q3 figures compiled by Knight Frank Singapore showed that total investment sales jumped 23.8 per cent to S$10.5 billion, from S$8.5 billion in the year-ago period. On a quarterly basis, total investment sales increased 7.5 per cent.

Private sales chalked up S$6.3 billion in sales value and accounted for the bulk of real estate deals, said the consultancy on Monday (Oct 6).

Activity in the private sales segment was led by the purchase of a 55 per cent stake sale in CapitaSpring by CapitaLand Integrated Commercial Trust (CICT) for S$1.05 billion from CapitaLand Development and Mitsubishi Estate.

Developers’ continued interest in GLS sites also underpinned the quarter’s investment momentum.

Residential sales chalked up S$4.2 billion in sales value, of which S$4 billion was attributable to the award of four private residential GLS sites – one-mixed use commercial and residential site, and three executive condominium sites.

“Compared to just two private residential GLS sites awarded in the previous quarter, the firm and continued appetite by developers was also due to sites with attractive attributes that were made available,” said Knight Frank.

The largest GLS deal in Q3 was the sale of the Chencharu Close mixed-use site to a consortium comprising the entities of Evia Real Estate, Gamuda and Ho Lee Group for S$1.01 billion.

Their bid was some 20 per cent above the second-highest bid of S$845 million from a tie-up among Frasers Property , Mitsubishi Estate and Lum Chang Building Contractors.

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The 317,000 square feet (sq ft) site can be developed into a maximum gross floor area of 1.03 million sq ft, of which at least 801,986 sq ft will be set aside for residential use. The development will be integrated with a bus interchange and hawker centre.

Investors’ appetite for industrial properties increased as transaction value rose 46.1 per cent quarter on quarter to S$2.5 billion.

Centurion Accommodation Reit’s purchase of five purpose-built worker’s accommodation assets for S$1.3 billion accounted for the bulk of industrial investment sales in Q3.

Other prominent deals included CapitaLand Ascendas Reit’s divestment of five industrial and logistics properties for S$329 million, as well as the sale of a data centre at 51 Serangoon North Avenue 4 for S$354 million.

“These deals underscore sustained investor appetite across a wide and diverse spectrum of industrial property types,” said the consultancy.

Galven Tan, Knight Frank Singapore’s chief executive, said: “Aside from Singapore Reit activity and developers participating in residential GLS tenders, investment sales generally remain limited to ticket sizes of under S$200 million.

“Even so, investor demand is proving resilient, with capital continuing to target living and industrial sector themes.”

 En bloc, hospitality sectors lag

While investment activity in the hospitality sector fell 72.7 per cent quarter on quarter to S$160 million in Q3 – with only the sale of Hotel Miramar Singapore in July – investor interest in the broader living and hospitality segments remained firm, said Knight Frank.

On the collective sales front, activity remained subdued in Q3, with only one deal concluded.

Freehold Chiku Mansions was sold en bloc in September to Macly Group for more than S$22 million, or S$1,180 per square foot per plot ratio. Located in Joo Chiat, the 13,453 sq ft site is expected to be redeveloped into a new boutique residential project. The four-storey walk-up block was built in 1983.

Knight Frank noted: “The case of Chiku Mansions demonstrated that when pricing expectations are realistic, older ageing projects can still be successfully sold through a collective sales exercise. Developers will show interest in such sites should owners’ price expectations be rational, notwithstanding the wider market challenges.”

GLS tenders and Reit deals are expected to remain the key drivers of investment sales through early 2026. Smaller to mid-tier transactions below S$200 million – particularly in accommodation and industrial assets – are also expected to feature, said Knight Frank.

It expects the investment market will close the year near the upper end of the earlier S$27 billion to S$29 billion forecast.

Despite ongoing activity, Knight Frank pointed out that a clear gap persists in the availability of greenfield office sites in the Central Business District, with new supply limited until 2028.

It added that making a commercial site available through the GLS programme sooner could help prevent a future undersupply, as observed in 2006-2007, when a spike in demand led to sky-high rents and the introduction of transitional office sites with 15-year tenures as a stopgap.