Savills Singapore reports that real estate investment sales reached S$47.52 billion in the first nine months of 2026, surpassing all previous full-year totals since market tracking began in 2008. However, transaction momentum moderated in the third quarter amid global economic uncertainty, the protracted conflict in the Middle East and uncertainty surrounding the interest rate outlook, which reinforced a cautious approach to investment decisions.

Total investment sales fell 21.2% quarter-on-quarter (QoQ) to S$12.06 billion, following two quarters of strong performance. Nevertheless, transaction value remained 6.0% above the S$11.38 billion recorded in Q3/2025, suggesting that investment activity continued to hold up despite the pullback from the elevated levels seen in the first half of the year.

Private-sector investment sales contracted sharply by 42.5% QoQ to S$6.81 billion, compared with S$11.84 billion in the preceding quarter, weighed down by the absence of major big-ticket transactions. The decline was concentrated in the commercial and hospitality sectors.

In contrast, public-sector investment sales rose 51.5% QoQ to S$5.26 billion, largely underpinned by the awards of the commercial and residential Government Land Sales (GLS) site at Bayshore Drive (S$2.13 billion) and the private residential GLS site at New Upper Changi Road (S$1.43 billion). Together, these accounted for 67.6% of public-sector investment sales during the quarter.

Residential assets overtook the commercial sector to become the largest contributor to investment sales in Q3/2026, accounting for 40.7% of total transaction value. Despite its leading share, residential investment sales declined 9.9% QoQ to S$4.91 billion, largely due to fewer residential GLS site awards and slower home sales activity during the Hungry Ghost Month.

Three private residential GLS sites were awarded during the quarter, with tender participation varying considerably. Berlayar Drive attracted a sole bid, compared with four bids for New Upper Changi Road and seven for Lorong Puntong / Sin Ming Avenue.

Despite uneven bidding interest, land rates reached new highs across all three sites. Berlayar Drive set a new benchmark for purely residential GLS sites in the Rest of Central Region (RCR) at S$1,515 per sq ft per plot ratio (psf ppr), before being surpassed by Lorong Puntong / Sin Ming Avenue at S$1,612 psf ppr. New Upper Changi Road similarly set a new high in the Outside Central Region (OCR) at S$1,537 psf ppr, underscoring developers' continued confidence in Singapore's private residential market.

Developers also turned to the private sector to replenish their landbanks, with four transactions recorded in Q3. Notably, the two largest involved sites currently zoned for non-residential uses: the S$950 million collective sale of Tan Boon Liat Building, likely the largest collective sale transaction in Singapore in eight years, and the S$578 million acquisition of 8 Thomson Lane. These transactions suggest the potential for sizeable residential redevelopment opportunities through the conversion of existing properties.

Commercial investment sales fell sharply from S$8.04 billion in Q2 to S$2.02 billion in Q3, weighed down by the absence of big-ticket transactions, particularly in the office segment. The sector accounted for 16.7% of total investment sales, down from 52.5% in the preceding quarter.

Among the most significant transactions were the disposals of Wheelock Place and the retail podium of Scotts Square by Wharf Real Estate Investment Company for S$1.1 billion and S$310 million respectively, as well as the S$276 million sale of Rivervale Mall by SC Capital Partners.

Jeremy Lake, Managing Director, Investment Sales & Capital Markets, Savills Singapore, says: "Within the commercial sector, investor appetite for retail assets remains very strong, driven partly by the sector’s superior yields of 4% to 5% relative to office yields of 3.5% to 4%. The spread over the cost of borrowing is also very attractive for retail despite the recent uptick in the all-in cost of financing."

Looking ahead, expectations of further US Federal Reserve tightening could compress yield spreads for income-producing assets in Singapore, weighing on investor appetite. Nevertheless, retail and industrial properties remain relatively resilient to moderate increases in borrowing costs. Retail assets on 99-year tenures typically offer net yields of 4.0% to 5.0%, while industrial properties with 20 to 25 years remaining lease tenures can generate yields of 6.0% to 6.5%.

However, the limited availability of such investment-grade assets, coupled with uncertainty surrounding the closure of major transactions, is likely to constrain private-sector investment activity. Savills Singapore has therefore revised its full-year investment sales forecast from the previous range of S$55 billion to S$60 billion, to a ceiling of approximately S$55 billion.

Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore, comments: "While investment sales have reached record levels this year, the divergence between public- and private-sector activity has become more apparent. Government land sales continue to support transaction volumes, but the absence of major private-sector deals suggests that investment momentum is becoming increasingly uneven. With the completion of major transactions remaining uncertain, we expect a calmer fourth quarter."

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