This week showcased encouraging developments in Singapore’s economic landscape, particularly within the property market. A collection of positive reports has led economists to significantly upgrade the country’s GDP growth outlook for 2025, while two notable real estate transactions signify a bullish response from the market.
Economists have raised Singapore’s GDP growth forecast for 2025 to 4.1%, a marked increase from the previous estimate of 2.4% reported in September. This revision comes on the heels of a robust third-quarter performance that recorded a growth of 4.2% year-on-year. The revised outlook indicates improvements across vital sectors, with manufacturing growth expectations surging from 0.8% to 5.4%. Upward adjustments were also made for finance and insurance, wholesale and retail trade, and construction.
Looking ahead, the forecast for fourth-quarter growth is set at 3.6%, with expectations for growth to normalize at 2.3% in 2026. Inflation remains stable, with headline and core inflation forecasts steady at 0.9% and 0.7% respectively for 2025. Nevertheless, inflation figures are expected to see modest increases in 2026, reaching 1.5% and 1.3%. A consensus among economists suggests no changes to monetary policy during the reviews scheduled for January and April 2026, with only 11% anticipating possible tightening by July 2026, demonstrating confidence in subdued inflationary pressures.
In a significant development within the real estate investment trust (REIT) sector, Keppel DC REIT has announced its acquisition of the remaining interests in two data centres located in Singapore. The deal, valued at approximately S$50.5 million, involves the purchase of a 10% stake in Keppel DC Singapore 3 and a 1% stake in Keppel DC Singapore 4 from its sponsor, Keppel Ltd. Upon completion, Keppel DC REIT will have full ownership of both properties, valued at S$434 million and S$586 million respectively. The total acquisition cost of about S$53.9 million includes purchase consideration, acquisition fees, and ancillary expenses. Expected to be slightly accretive to Distribution Per Unit (DPU), the acquisition will enhance the REIT’s assets under management, which will increase by 3.5% to S$5.9 billion. With this acquisition, the proportion of Singapore assets in the portfolio will rise from 57.8% to 58.8%.
Furthermore, a consortium featuring CapitaLand Development, CapitaLand Integrated Commercial Trust (CICT), and UOL Group emerged as the leading bidder for a mixed-use land sale in Hougang Central, offering S$1.5 billion. The site, which spans 504,820 square feet with a gross floor area of 1.27 million square feet, will be jointly developed for residential purposes, while CICT will manage the commercial segment. The development is projected to feature around 830 residential units along with a retail space of 300,000 square feet, positioning it as the largest mall in Hougang. Strategically located above Hougang MRT station, the site is poised to connect to the Cross Island Line by 2030.
As market conditions improve and liquidity rises, there is optimism regarding yield-focused assets. Investors are encouraged to remain vigilant as opportunities arise in the landscape, reflecting a strong rebound in Singapore’s stock market.
