The future of Singapore’s commercial property market — What’s driving growth in 2025?

Resilience, sustainability, and investor diversification are keeping the market steady despite global shifts

Singapore’s commercial property market remains resilient, underpinned by strong economic fundamentals, government incentives, and evolving investor preferences. Despite global economic challenges and shifting market dynamics, the city remains a top destination for investment 

“As a global financial hub with political stability and pro-business policies, the city continues to attract capital despite shifting market dynamics,” noted Kristin Thorsteins, co-founder and managing partner at Portman Investment Pte Ltd and chairperson for the PropertyGuru Asia Property Awards (Singapore) judging panel. 

Retail, offices, and alternative assets: Where investors are looking next 

One of the biggest drivers of continued investor confidence is the diversification of assets beyond traditional commercial properties. “Investors are diversifying into alternative asset classes such as data centers, life sciences, and logistics, capitalising on the rise of AI, e-commerce, and biomedical research,” Thorsteins shared.

According to The Independent Singapore, while demand for office space has slowed, it remains consistent in core business districts, particularly in sustainability-certified developments that offer energy-efficient and environmentally friendly features. 

“Despite higher interest rates and global economic uncertainty, limited supply and rising replacement costs have kept commercial property values stable,” she added.

The retail sector, on the other hand, is undergoing a gradual recovery. While tourism-related spending is improving, shifts in consumer behaviour, e-commerce competition, and fluctuating foot traffic mean that retail landlords must rethink strategies to attract and retain tenants. 

A report by JLL’s Asia Pacific stated that commercial real estate investments in the region hit USD131 billion in 2024, demonstrating continued investor interest in retail, office, and industrial assets. 

Sustainability is now a must-have for investors 

As investors focus more on long-term growth, sustainability and ESG compliance are playing a pivotal role in commercial property decisions. Green-certified buildings, net-zero initiatives, and urban renewal projects are now central to investment strategies, reported The Business Times. 

“Sustainability remains a major focus, with green-certified buildings and ESG-compliant assets attracting institutional interest,” Thorsteins stated. 

Singapore’s government has actively encouraged green real estate investments, offering incentives for environmentally friendly developments and ensuring that future urban planning aligns with climate-conscious initiatives. 

“The government’s push for sustainable urban development, coupled with incentives for environmentally friendly properties, has reinforced this trend,” she added. 

As noted by the World Economic Forum, Singapore’s “nature-first” master planning has helped create green-focused developments that align with global environmental goals, further solidifying its reputation as a forward-thinking real estate market. 

Singapore’s developers shine regionally 

Singapore’s dedication to sustainability, innovation, and world-class real estate development has not gone unnoticed. At the 19th PropertyGuru Asia Property Awards Grand Final 2024, Singaporean developers stood out among 15 markets across Asia, Australia, and the Middle East, taking home major regional awards in sustainability, hospitality, and lifestyle-focused real estate. 

• Best Sustainable Developer (Asia): UOL Group Limited
• Best Lifestyle Developer (Asia): TID Pte. Ltd. 
• Best Hospitality Developer (Asia): UOL Group Limited 
• Best Nature Integrated Development (Asia): Lentor Mansion by GuocoLand and Hong Leong Holdings Limited 
• Best Hospitality Interior Design (Asia): Pan Pacific Orchard by UOL Group Limited and Pan Pacific Hotels Group 

These awards highlight Singapore’s ability to balance luxury, functionality, and sustainability, reinforcing its status as a global leader in commercial and mixed-use development. 

“Looking ahead to 2025, investor caution may lead to more selective acquisitions, but core assets in prime locations will remain attractive,” Thorsteins noted. 

“Despite geopolitical uncertainties and continuing layoffs in the tech and finance sectors, Singapore’s commercial property market is expected to remain a key investment destination, driven by its strong fundamentals and long-term growth potential.” 

What’s next for Singapore’s commercial property market? 

While the commercial property market remains resilient, the road ahead will require strategic adaptation to evolving investor demands. Based on Colliers Singapore, three key factors will shape the market in 2025: 

1. Selective investments: While private capital, family offices, and institutional investors continue to be active, higher financing costs and global economic uncertainty mean that investment strategies will be more cautious and targeted.
2. Growth in alternative assets: With commercial properties exempt from the Additional Buyer Stamp Duty (ABSD) for foreign investors, capital that previously would have been directed toward residential real estate is now flowing into commercial assets. This is driving interest in data centres, logistics, and sustainable office developments.
3. Sustainability as a market standard: Moving forward, green-certified properties will be the standard, not the exception. Singapore’s commitment to urban sustainability and environmentally friendly incentives means that future developments must align with ESG principles to attract top-tier investors. 

With these trends shaping Singapore’s investment landscape, the commercial property sector is well-positioned to navigate global challenges and maintain its status as a premier investment hub. 

Know any award-worthy residential, commercial, or industrial projects in the country? Nominate them for the 15th annual PropertyGuru Asia Property Awards (Singapore) on or before 5 September 2025. To know more, visit AsiaPropertyAwards.com/Award/Singapore/.

Gynen Kyra Toriano, Digital Content Manager at PropertyGuru, wrote this article. For more information, email: [email protected].