Cap rates in Singapore are expected to stay stable, with changes tied to interest rates and economic shifts.

Singapore cap rates remained stable in Q3 2024, supported by resilient market fundamentals and sustained investor interest across key asset classes.

Data from the Asia Pacific Cap Rate Survey said that as of Q3 2024, cap rates for Grade A office properties in Singapore ranged between 3.35% and 4.00% in core locations, reflecting strong confidence in the prime office market.

For retail properties, including shopping malls, cap rates ranged from 4.40% to 5.05%, buoyed by recovery in consumer spending and stable foot traffic.

In the logistics sector, cap rates were reported between 5.95% and 7.50%, driven by the continued growth of e-commerce and demand for supply chain infrastructure.

Data centers, a standout sector in Singapore, showed cap rates ranging from 5.75% to 7.25%, highlighting strong investor demand for digital infrastructure assets.

Hotel properties saw cap rates ranging from 4.00% to 5.00%, supported by a rebound in tourism and high occupancy levels

Meanwhile, multifamily/build-to-rent properties had cap rates between 3.50% and 4.00%, reflecting rising demand for urban rental housing.

The report anticipates cap rates in Singapore will remain stable in the near term, with potential adjustments depending on broader interest rate movements and economic conditions.