Singapore property investment sales hit record S$15.4 billion in Q1, but Iran war could derail momentum: Knight Frank

[SINGAPORE] Real estate investment sales were up 166.5 per cent year on year to S$15.4 billion in Q1, from S$5.8 billion. This was the biggest first quarter figure on record, based on Knight Frank’s investment report released on Monday (Apr 6).

It also represented a 10 per cent quarter-on-quarter increase.

“The strong first quarter sales performance was supported by a low interest rate environment that reduced borrowing costs and narrowed price gaps, allowing transactions that were previously in limbo to materialise,” the report read.

“At the same time, investors were also actively repositioning their portfolios, undertaking selective divestments to recycle capital and create capacity for future acquisitions,” it added.

Geopolitical uncertainty

Yet, the sales momentum is facing immediate pressure from the military conflict in the Middle East that began in March, Knight Frank Singapore said.

While Singapore’s status as a safe haven is expected to sustain interest, Knight Frank Singapore warned that geopolitical uncertainty may push some investors back to the sidelines until further clarity prevails.

“Capital deployment is expected to be selective, shaped by individual preferences across asset classes and yield expectations rather than a broad influx of funds from conflict (affected) zones.”

Outbound investment from Singapore rose 7.8 per cent quarter on quarter to S$10.3 billion in Q1 2026 as entities sought stable markets and income resilience. The property advisory group noted that the pace of these cross-border deals might slow as global tensions rise.

Galven Tan, CEO of Knight Frank Singapore, said: “Amid finite capital and rapidly shifting global conditions, vendors who can offer assets with favourable attributes to the market in a timely manner, can potentially gain first mover advantage and tap into available funds that need to be deployed before these are committed elsewhere.”

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Despite the “fresh uncertainty” introduced by the conflict, Knight Frank has maintained its full-year 2026 investment sales forecast at about S$30 billion.

Commercial and industrial performance

The commercial sector was the most active, recording S$6.3 billion in transactions despite a 17.2 per cent quarterly decline.

The volume was heavily influenced by the injection of Asia Square Tower 1 into the Singapore Central Private Real Estate Fund, which amounted to about S$4.1 billion, based on Knight Frank’s report.

Other significant deals included the sale of 78 Shenton Way to Allgreen Properties and Kuok Singapore for between S$600 million and S$630 million, the S$428 million divestment of Bukit Panjang Plaza to Hines, and a portfolio sale of 11 retail assets by Mercatus for S$281 million.

Industrial investment volumes rose to S$3.1 billion, from S$1.8 billion in Q4 2025. Nearly half of this value came from the S$1.3 billion public listing of UI Boustead Reit, which includes 21 local industrial assets.

Residential and land sales

The residential sector posted S$4.4 billion in sales, a slight 1.8 per cent dip from the previous quarter. Activity remained concentrated in Government Land Sales, which accounted for S$3.2 billion.

Notable awards included a mixed-use site at Hougang Avenue 10/Hougang Central for S$1.5 billion, a residential site at Dover Drive for S$951 million, and a site at Tanjong Rhu Road for S$709.3 million.

The collective sales market remained subdued with only two non-residential transactions, including the rear plot of The Centrepoint sold for S$391.9 million and Kewalram House for S$120.5 million.