Savills cuts 2025 sales forecast to $20b with market in flux

The downgrade follows a 47.3% QoQ drop in private sector investment sales.

Savills has slashed its full-year 2025 forecast for total investment sales to $20b, down from a previous estimate of $23b, citing the combined effects of US tariffs, geopolitical uncertainties, and a sharp decline in private sector activity in early 2025.

“The 90-day freeze on tariffs has brought some relief,” said Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore. “But it is still too early to determine at this point whether the medium to longer term impact of these tariffs would be deleterious, neutral or even positive to our real estate market.”

Cheong likened the evolving trade dynamics to a “game theoretic match play” amongst nations. He noted that the ultimate outcome for Singapore’s real estate sector will depend on how countries, including the US, adjust or remove tariffs.

“If enough countries were to remove them and the US reciprocates, then the benefits… would flow to those that did,” he added.

The downgrade follows a 47.3% QoQ drop in private sector investment sales, which fell from $5.71b in Q4 2024 to $3.01b in Q1 2025. This was partially offset by a 45.1% surge in public sector transactions, which rose to $2.79b.

Despite the downturn, the commercial sector saw a 54.2% QoQ increase, led by the $1.13b acquisition of Northpoint City South Wing by Frasers Centrepoint Trust. Other notable deals included the sale of the top three strata floors at 20 Collyer Quay for $91.8m and a retail space in Orchard Towers for $54.5m.

The hospitality sector also showed strength, with $332.8m in deals, up 26.5% from the previous quarter. Key transactions included Oakwood Studios Singapore ($152.8m), 21 Carpenter ($100m), and Duxton Reserve Singapore ($80m).

The industrial sector posted $211.2m in Q1 2025, led by high-value deals such as a single-use factory at 23 Lok Yang Way ($70.1m) and a freehold property at 21 New Industrial Road ($62m).