INTEREST RATE TRAJECTORY TO BE CLOSELY WATCHED
Singapore recorded 5.9% yoyeconomic growth in Q2 2026, bringing H1 2026 growth to 6.1% yoygrowth. In mid-September, the U.S. Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75% to 4.00%, marking the first ratehike since 2023. The possibility of another increase later this year remains on the table. As of end-September 2026, Singapore 3M SORA has risen slightly to 1.23%, from 1.18% at the start of the year. Historically, Singapore's interest rate environment has generally moved in tandem with the U.S. However, interest rates in Singapore have remained relatively resilient in recent quarters
OFFICE INVESTMENT ACTIVITY COULD REBOUND IN Q4
Total investment volume fell by 41.1%qoqto $9.1billion (b) in Q3 2026, driven by the residential ($5.3b), followed by industrial ($1.7b) and mixed/others ($1.3b) sectors. That said, 2026 is shaping up to be a record year for investment sales with volumes reaching $44.3b for 2026 YTD (Q1-Q3 2026), or an86.6% yoy increase compared to the same period last year.
Residential investment volume rose slightlyby 0.9% qoqin Q3 2026, with activity largely driven by the public market which saw the award of 5 Government Land Sales (GLS) sites. Notably, the GLS site at Lorong Puntong/ Sin Ming Avenue was sold at $1,612 psfppr, surpassing expectations and setting a new recordprice for a residential-zoned site in the Rest of Central Region (RCR).
The mixed/others sector’s investment volume more than doubled (191.6% qoq increase) in Q3 2026, led by the sales of Wheelock Place ($1.1b) and Cuppage Terrace ($175m).
Commercial investment activity was dominated by the sales of several big-ticket retail assets, including Scotts Square ($310m) and Rivervale Mall ($276m). While office investment activity dipped in Q3 2026, office volumes could rebound in Q4 2026 if major assets currently on the market, including Marina One, Frasers Tower (50% stake), 30 Raffles Place, and Lazada One, materialize. In a higher-for-longer global interest rate environment, investors are increasingly focused on income-driven returns rather than cap rate compression. This has been reflected by investment sales in 2026 where well-located assets with visible recurring cash flows and/or potential rental upside have attracted strong investor interest.
