Implications of Singapore's Record-High Residential Sales on Asia-Pacific REITs and Real Estate Investments

Based on collected data and analysis, I provide you with an in-depth report on the implications of Singapore’s record-high residential sales on Asia-Pacific REITs and real estate investments.

According to data released by the Urban Redevelopment Authority (URA) of Singapore on January 15, 2026, sales of new private residential properties in Singapore exceeded 10,700 units in 2025, hitting an annual high since 2021 [1][2]. Although only 197 units were sold in December, a traditional off-season for home purchases, the full-year sales far exceeded the 6,469 units sold in 2024, representing a staggering year-on-year growth of 65.5%. This data reflects the strong resilience of demand in Singapore’s real estate market.

Singapore’s real estate investment market showed a significant recovery in 2025. According to CBRE data, total investment transaction volume excluding public investment deals rose by approximately 32% quarter-on-quarter in Q3 2025; private investment transaction volume in the first 9 months of 2025 increased by 15.9% year-on-year [3]. The full-year total investment sales reached SGD 33.68 billion, up 16.8% from SGD 28.84 billion in 2024 [4].

There were 5 mega-deals with transaction values exceeding SGD 1 billion throughout the year, and a surge in transaction activity at the end of the year was the core driver of the total value growth. Major large transactions include:

• CapitaLand REIT
  : Acquired a one-third stake in Marina Bay Financial Centre (MBFC) Phase 3 for SGD 1.453 billion, the largest transaction of the year
• Frasers Centrepoint Trust
  : Acquired Northpoint City South Wing for SGD 1.13 billion
• CapitaMall Trust
  : Acquired a 55% stake in CapitaSpring for approximately SGD 1.05 billion

As of December 18, 2025, the iEdge Singapore REIT Index posted a price return of 9.0%, and the total return including dividend distributions reached as high as 14.4% [5]. As of December 5, the total return hit 14.7%, which is expected to be the best annual performance since 2019 (when the total return was 27.5%).

Looking at sub-sectors, the performance of S-REITs across different sectors showed clear divergence in 2025:

Despite the strong performance of S-REITs in 2025, Morningstar analysts pointed out that S-REITs are still trading at a discount of approximately 17% to book value, with the office sector offering the ‘steepest discount’ [6]. This valuation level provides potential upside for long-term investors.

• Retail Investors Net Inflow: SGD 961 million (continuous net buying since 2019)
• Institutional Investors Net Outflow: SGD 1.3 billion
• Top S-REITs Attracting Retail Capital: Mapletree Industrial Trust, Mapletree Logistics Trust, NTT Data Centre REIT, Ascendas Real Estate Investment Trust, etc.

The strong growth in Singapore’s residential sales reflects the resilience of the country’s macroeconomy. The economy performed better than expected in the first half of 2025, coupled with continuous easing of domestic short-term interest rates (the 3-month SORA fell from 3.02% at the beginning of the year to 1.25% at the end of the year), providing a favorable financing environment for the real estate market [3].

• Singapore’s 10-year government bond yield fell from approximately 2.8% at the beginning of the year to 1.8% in Q3, rebounding to 2.2% at the end of the year
• The US Federal Reserve cut interest rates three times in 2025 (totaling 75 bps), and the market expects two to three more rate cuts in 2026
• Falling interest rates directly reduce the debt financing costs of REITs, enhancing their yield attractiveness

Singapore’s real estate investment in 2025 exhibited the following structural characteristics:

1. Residential and Government Land Sales (GLS) Dominant
   : The residential sector accounted for approximately 47% of the total annual investment transaction value, driven mainly by GLS. Developers actively replenished land banks due to strong new home sales and lower borrowing costs.

2. Data Centres as a Core Growth Driver
   : Demand is supported by hyperscalers, general enterprises, and AI-driven enterprises, with a vacancy rate of less than 5%. Government data centre tenders are expected to release approximately 200MW of new capacity [4].

3. Office Market Recovery
   : After domestic interest rates fell by approximately 180 bps, office investment returned to positive interest rate spreads, and market interest rebounded. Newly developed projects such as IOI Central Boulevard Towers achieved an occupancy rate of over 95%, while Paya Lebar Green was fully leased.

4. Hotel Sector Strong Rebound
   : Total investment in the hotel sector increased by 137% year-on-year, with boutique hotels accounting for approximately 51% of Singapore’s total hotel supply.

Asia-Pacific regional REITs markets show differentiated development trends:

1. Bond-like Attribute
   : The stable dividend yield of REITs becomes more attractive in a low-interest-rate environment
2. Equity-like Attribute
   : Lower financing costs enhance the acquisition capacity and earnings growth potential of REITs

Historical data shows that interest rate downcycles often drive REITs to achieve significant excess returns. Currently, Asia-Pacific REITs are trading at historically low valuations, and as central banks around the world gradually advance easing cycles, the valuation gap is expected to narrow gradually [7].

1. AI Infrastructure
   : The rapid expansion of AI has become an important catalyst for tech-oriented real estate, and data centre REITs have long-term growth potential

2. Population Aging
   : The housing demand of the elderly population continues to rise, and healthcare REITs benefit from this long-term trend

3. Supply Chain Diversification
   : Demand for high-spec industrial and logistics space remains strong, and industrial REITs are expected to continue to benefit from the normalization of goods inventory

4. Tourism Recovery
   : Tourist numbers have recovered to pre-pandemic levels, supporting rental income growth of retail and hotel REITs

Despite the strong performance of Singapore’s real estate market and REITs, investors need to pay attention to the following risks:

1. Macroeconomic Uncertainty
   : Changes in US trade policies and geopolitical risks may affect the economic outlook of the Asia-Pacific region
2. Interest Rate Volatility
   : Although currently in a downcycle, a rebound in inflation may lead to a reversal of interest rate trends
3. Residential Market Regulations
   : The residential property tightening policies introduced by Singapore in July 2025 (higher seller’s stamp duty, extended holding period) may dampen investment enthusiasm
4. Valuation Discount Risk
   : Although S-REITs trade at a large discount, persistent discounts may reflect market concerns about fundamentals

Based on the strong performance in 2025 and the market environment, analysts are generally optimistic about the prospects of S-REITs and Asia-Pacific REITs in 2026:

1. Interest Rate Environment
   : The market expects the US Federal Reserve to cut interest rates twice in 2026, and Singapore’s SORA is expected to decline further
2. Valuation Reversion
   : The 17% discount to book value provides upside potential for long-term investors
3. M&A Activity
   : Attractive valuations combined with improved fundamentals may stimulate private equity interest and listed company consolidation
4. Robust Fundamentals
   : Occupancy rates and rental adjustment rates in retail, industrial, and office sectors maintain positive trends

The record-high sales of new private residential properties in Singapore in 2025 (a new high since 2021) have the following core implications for Asia-Pacific REITs and real estate investments:

1. Economic Confidence Indicator
   : The strong residential market is a positive signal of enhanced economic confidence, supporting the valuation reversion of REITs

2. Interest Rate Sensitivity
   : The interest rate downcycle simultaneously benefits the bond-like and equity-like attributes of REITs, and the improvement of Singapore’s interest rate environment directly drove the outstanding performance of S-REITs

3. Regional Advantage Highlighted
   : Asia-Pacific REITs outperformed US REITs overall, with Singapore leading the region with a stable investment environment

4. Sector Rotation Opportunities
   : Diversified, industrial, healthcare, and data centre REITs performed prominently, and investors should focus on structural growth themes

5. Retail-Dominated Capital Structure
   : Continuous net inflow from retail investors (since 2019) reflects individual investors’ recognition of REITs as income-generating assets

6. Long-Term Allocation Value
   : For investors seeking assets with both defensive yield and capital appreciation potential, Asia-Pacific REITs may be a choice with ‘resilience and opportunities coexisting’ in 2026

[1] 36Kr - Singapore’s Residential Sales Hit Multi-Year High (https://www.36kr.com/newsflashes/3640217025629319)

[2] Lianhe Zaobao - Private Home Sales Fell 39% Month-on-Month to 197 Units in December Last Year (https://www.zaobao.com.sg/finance/singapore/story20260115-8104786)

[3] HSBC Asset Management - Q1 Real Estate APAC Quarterly Spotlight (https://www.assetmanagement.hsbc.com.hk/en/intermediary/news-and-insights/real-estate-apac-quarterly-spotlight-december-2025)

[4] Yahoo Finance Singapore - Singapore investment deals hit $33.68 bil in 2025 (https://sg.news.yahoo.com/singapore-investment-deals-hit-33-233000141.html)

[5] SGX Group - S-REITs Total Return YTD Reaches 14.7% in 2025 (https://www.laohu8.com/U/3551063330533637)

[6] LinkedIn - Analysis Report by Shikhar Gupta (https://www.linkedin.com/posts/shikhargpt_steepest-discount-analysts-bullish-on-activity-7415211069415006209-gkdO)

[7] East Money - Global Real Estate Investment Trusts to Embark on a Steady Recovery Path (https://finance.eastmoney.com/a/202601083612766941.html)

Chart 1 shows an analysis of Singapore’s real estate and REITs performance in 2025, including annual investment value trends, S-REITs total return, performance comparison across REIT sectors, and the correlation between residential sales and REITs performance.

Chart 2 presents a comparison of Asia-Pacific REITs market performance, including total returns of REITs in various regions, distribution of Singapore’s real estate investment types, yield comparison across asset classes, and the dynamic relationship between interest rate environment and REITs performance.

Chart 3 summarizes the core implications of Singapore’s record-high residential sales on REITs investments, covering sales trends, sector performance, capital flows, and investment recommendations.

Report Generation Time: January 15, 2026