SG Morning Highlights | SingPost Announces Sale of Australian Operations for S$870 Million

Advancers / Decliners is 92 / 23, with 58.42M securities worth S$84.29M changing hands.

In Q3 2024, Singapore's cap rates held steady across various asset classes, buoyed by robust market fundamentals and consistent investor interest, according to the Asia Pacific Cap Rate Survey. Prime Grade A office spaces saw cap rates ranging from 3.35% to 4.00%, indicating strong market confidence. Retail properties, including shopping malls, maintained cap rates between 4.40% and 5.05%, supported by a recovery in consumer spending. The logistics sector recorded cap rates from 5.95% to 7.50%, driven by the booming e-commerce sector and increased demand for supply chain infrastructure. Data centers showcased cap rates between 5.75% and 7.25%, reflecting high investor interest in digital infrastructure. Hotels experienced cap rates of 4.00% to 5.00%, encouraged by a tourism rebound and high occupancy, while multifamily and build-to-rent sectors had cap rates of 3.50% to 4.00%, due to growing urban housing demand. The outlook suggests that these rates are likely to remain stable, though they could adjust based on shifts in interest rates and economic conditions.

In the first nine months of 2024, the food and beverage (F&B) sector in Singapore experienced its slowest rate of new business formations in eight years, with only 11% of new entities being established, a decline from 14% in the previous year. Despite this slowdown and a high cessation rate of 9%, the industry continues to attract new entrants, attributed to its low barriers to entry. Data from the Accounting and Corporate Regulatory Authority (Acra) shows that there were 2,937 new F&B businesses, marking the second-highest number in eight years. However, 2,465 businesses closed during the same period, the highest since 2017. Factors such as increasing operating costs, market saturation in certain segments, and stricter lending criteria are contributing to the cautious approach seen in the industry. Nonetheless, experts like Dr. Samer Elhajjar from the National University of Singapore Business School suggest that the sector's fundamental attractiveness remains intact, despite these challenges.