Low rates, foreign capital lift Singapore property deals

Commercial property deals could reach a record in 2026.

Singapore’s commercial real estate market is on track for a record year in 2026, driven by strong overseas capital inflows, low domestic interest rates and abundant liquidity, according to UOB.

“An influx of safe-haven liquidity and low domestic interest rates have led to a record volume of transaction for commercial properties, encompassing office and retail properties,” the report said.

Commercial property transactions reached $13.03b (US$10.3b) in the first half of 2026, with another $7.59b (US$6b) of deals in the pipeline. Full-year transaction volume is expected to exceed the previous record of $16.57b (US$13.1b) set in 2019.

The transactions marked a return of large-scale deals involving high-quality office and retail assets, despite persistent inflation, currency volatility and geopolitical uncertainty, according to a separate report by JLL.

It noted that capital remained available, with investors targeting repriced prime assets that could benefit from tight supply and potential rental growth.

Singapore’s performance also supported a broader recovery in Asia-Pacific commercial real estate investment. Regional investment reached a record $118.4b (US$92.5b) in the first half, up 35% year on year.

Investment in the second quarter rose 38% to $58.2b (US$45.5b), driven by demand for offices, retail properties, data centres and logistics assets.

UOB added that international investors accounted for a significant share of market activity, with major deals including CICT’s $3.9b acquisition of Paragon and the sale of Asia Square Tower 2 supporting deal momentum.

"The resurgence reflects attractive rent growth and abundant liquidity, positioning Singapore as one of the strongest commercial property markets in the Asia Pacific region," the bank said.

The firm asset valuations and continued low cost of debt are also supporting the Singapore-listed real estate investment trust (S-REIT) sector.

Meanwhile, Singapore’s office investment market is expected to remain active in the second half of 2026, with several landmark properties being marketed for sale alongside the anticipated Marina One transaction.

Office transactions totalled $10.8b in the first half of 2026, already exceeding the full-year 2025 total.

Assets currently being marketed include Frasers Tower, where Frasers Property is seeking a buyer for its 50% stake valued at slightly above $1b. 30 Raffles Place has a guide price of at least $1.1b, whilst Lazada One is being offered at its $755m valuation.

Retail activity is also evolving, with CapitaLand Integrated Commercial Trust (CICT) reconfiguring Paragon to optimise its retail space and strengthen the mall’s tenant mix.

Areas currently occupied by Metro are among those being reviewed. Metro is expected to exit its traditional large-format department store model but has expressed interest in remaining at Paragon through a new retail concept store.

The changes form part of CICT’s strategy following its $3.9b acquisition of Paragon, with plans to introduce new retail concepts and experiences while reinforcing the mall’s positioning as a premium Orchard Road destination focused on luxury fashion, beauty, wellness, sports and family-oriented offerings.

CICT is also assessing improvements to connectivity with surrounding properties.

Meanwhile, KORE has secured a new 10-year lease covering 32,000 square feet at The Westpark Portfolio in Redmond, Washington, with a publicly traded global life sciences instrumentation company.

The lease will increase committed occupancy at the property from 73% to 77% and raise KORE’s overall committed portfolio occupancy from 85.3% to 86% on a pro forma basis.

The deal follows KORE’s record first-half leasing performance, during which it signed 550,522 square feet of leases, equivalent to 11.5% of its portfolio net lettable area.

Data centre REITs were among the top performers, with NTTDCR, DCREIT and MINT gaining 3.8%, 3.1% and 0.5%, respectively. KDCREIT declined 1.3%, whilest UIBREIT was unchanged in August.

Logistics REITs with overseas exposure were among the weakest performers. DHLT fell 17.5%, whils MLT and FLT each declined 5.6%.

Industrial REITs EREIT and AAREIT also dropped 12.6% and 6.9%, respectively.