Singapore’s commercial real estate market is abuzz with billion-dollar deals and shifting investor priorities as institutional giants like Warburg Pincus, CapitaLand, and Keppel intensify their focus on high-growth sectors. Leading the way are data centres and industrial assets, which are poised to dominate local and regional investment activity in 2025.
Big Deals Take Centre Stage
This year, institutional investors drove 75% of all activity in Singapore’s commercial property market, according to an MSCI Asia Pacific report.
Among the standout transactions:
- CapitaLand Integrated Commercial Trust acquired a 50% stake in Ion Orchard for S$1.85 billion, marking the largest retail deal of the year.
- Lendlease and private equity powerhouse Warburg Pincus closed a S$1.6 billion deal for a portfolio of industrial and business park assets located near the up-and-coming Tuas Port—set to be the world’s largest automated port.
The industrial sector has become a top investor magnet, offering higher yields and strong long-term growth prospects.
Data Centres: A Generational Opportunity
Data centres are emerging as the star asset class of 2025, propelled by skyrocketing demand for digital infrastructure.
- Peter Hayes, Global Head of Investment Research at PGIM Real Estate, predicts a 22% annual growth rate in data centre demand over the next five years, citing constrained supply due to power shortages and planning hurdles.
- Keppel is leading the charge, planning to expand its portfolio to 1.2 gigawatts through its S$10 billion Keppel Data Centre Fund III and co-investments. Keppel’s focus aligns with the rising demand for AI-driven infrastructure that is larger, faster, and energy-efficient.
Christina Tan, Keppel’s Chief Investment Officer, noted: “AI and generative AI are redefining global infrastructure needs, creating unprecedented opportunities for growth.”
Investors Eye Overseas Markets for Growth
Singapore’s big players are not limiting themselves to the domestic market. CapitaLand Investment (CLI), for example, is tapping into global opportunities:
- CLI is expanding its India portfolio, projecting a growth from 7% to up to 15% of total funds under management (FUM) by 2028.
- Japan remains a key focus, with CLI’s acquisition of SC Capital Partners set to triple FUM in Japan to S$11 billion. CLI is actively targeting self-storage and data centres in Japan’s major cities.
Meanwhile, Mapletree Investments is doubling down on logistics, student housing, and office assets, particularly in Vietnam and India. These markets offer favourable rental prospects and are less impacted by remote work trends.
Industrial Assets: The Rising Star
The industrial sector’s high yields and positive carry make it a favourite among investors. According to CBRE’s Tricia Song, there’s a surge in demand for specialised facilities, such as dangerous-goods warehouses and multi-temperature storage, further driving investor interest.
Singapore-based EZA Hill, backed by Hillhouse Investments, is focusing on logistics as its core growth area. Frank Ng, EZA Hill’s CIO, explained: “We aim to leverage operational expertise to meet Singapore’s growing demand for specialised logistics facilities.”
The Outlook: Bright Prospects in a Shifting Market
With interest rates stabilising and investor confidence returning, Singapore’s commercial property market is on a recovery path. Analysts predict robust activity across industrial assets, data centres, and retail properties, driven by a mix of local and overseas capital.
As global trends evolve, Singapore’s largest investors are strategically positioning themselves to capitalise on the booming data economy, logistics infrastructure, and industrial innovation—sectors that will shape the future of commercial real estate in 2025.
From billion-dollar retail takeovers to AI-fuelled data centre investments, the stage is set for Singapore’s commercial property sector to soar into the new year.
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