In a market dogged by supply concerns, falling yields and economic uncertainty, one thing is comforting - the deals are still coming.
The latest, the sale of Asia Square Tower 1 to Qatar Investment Authority (QIA) for $3.4 billion last week, caps a busy few weeks.
The deals included the $638 million sale of Shunfu Ville to Chinese developer Qingjian Realty, Indonesian tycoon Tahir buying Straits Trading Building for $560 million and Hong Kong-listed Shun Tak Holding snapping up a Cuscaden Road bungalow for $145 million.
Given the longer-term horizons of these players, the sales stand as a vote of confidence in Singapore's real estate fundamentals.
"While there are pressures in the current market, these are mainly cyclical," says Mr Desmond Sim, CBRE's head of research for Singapore and South-east Asia.
But why are we seeing more activity by foreign funds and individuals where local entities are apparently fearing to tread?
The answer lies largely in the arguably more forward-looking nature of these investors - as well as their redoubtable large scale.
LONG INVESTMENT HORIZON AMID FALLING YIELDS
Asset buyers may be divided into three layers, says Mr Alan Cheong, research head at Savills Singapore.
At the top are large global players like sovereign wealth funds, insurance companies, corporates and ultra-high-net-worth individuals who hold a long-term investment horizon, with emphasis on capital preservation.
The second layer comprises institutions with more demanding medium-term return objectives.
The third consists of individuals and traders who take a short-term view.
With interest rates coming off globally and yields in Singapore under pressure, it is difficult for institutions to make a case to buy or exit with a certain amount of return.
While rents are falling, capital values are not falling as fast. Average Grade A office rents here declined 15.7 per cent year on year in the first quarter while capital values fell 9.1 per cent, according to consultancy JLL.
This also means price expectations of buyer and seller do not match. A typical private equity fund thinking of exiting in five or seven years runs the risk of getting out at the wrong time.
While the weakening rental market has been deterring some investors, those with a longer investment mandate can afford to ride beyond one or two cycles, says CBRE's Mr Sim.
Asia Square's net yield is about 3.2 per cent based on the current occupancy of 83 per cent. There could be growth in net operating income if occupancy improves, which would in turn improve the yield.
But all this takes time and active asset management, which suits this top tier of investors who are looking seven to 10 years ahead or more.
Other than needing to ensure adequate returns over the cost of borrowing, or over the cost of their pension fund payout, sovereign wealth funds and pension funds need to invest in a place where they are assured of the security of their investment.
"Singapore is an open economy - you don't get sudden changes in rules and regulations. As there is relatively lower policy risk, funds don't get stuck here and there is easy entry and exit. So Singapore fits their bill," says Mr Cheong.
As for development sites, recent entrants from overseas may have different concerns than their Singapore counterparts.
The Cuscaden Road bungalow, a hotel development site, is the first Singapore property acquired by Shun Tak.
The purchase will allow the company founded by casino mogul Stanley Ho and run by daughter Pansy to play to Mr Ho's strengths in hospitality, all the more so as there are no hotel sites on the Government Land Sales slate.
It is also possible that these foreign players are not as influenced by historical data or institutional knowledge.
"We tend to look at the market with a rear-view mirror and say - last time, things were like that. Sometimes people come in and, looking forward, project something higher," says Mr Sim.
Just 11 years ago, for example, a consortium of Hongkong Land, Keppel Land and billionaire Li Ka-shing's Cheung Kong Holdings paid a higher-than-expected price for the first phase of the site that would host the Marina Bay Financial Centre. They outlaid nearly $1.8 billion, a sum criticised as not practical at the time and double the minimum acceptable price set by the Government.
Yet that $381 per sq ft per plot ratio (psf ppr) of potential gross floor area seems cheap today. The consortium went on to pay $435 psf ppr for the second phase in early 2007.
In a global context, though, the deals we are seeing today should not be surprising, given the build-up of investable funds seeking opportunities around the world.
Some of the new, very large investors that have been making waves include QIA, Norges Bank Investment Management - which had also been considering Asia Square - and China Investment Corporation.
Until a few years ago, these institutions either did not exist or were purely domestically focused, Dr Seek Ngee Huat, chairman of the Institute of Real Estate Studies at the National University of Singapore, notes in a recent book.
The purchases occurring in Singapore are just a fraction of larger capital flows into real estate.
Purchases of Singapore real estate by foreign capital over the past 12 months were US$5.2 billion (S$7 billion), compared with US$7.8 billion in Hong Kong, US$14.5 billion in Australia, US$25.7 billion in New York City and US$26.9 billion in Central London, according to a Savills analysis of Real Capital Analytics data.
There is potential for even more activity, especially from sovereign wealth funds as their assets under management grow, at the same time that they are still largely under-allocated in this asset class.
Real estate comprises an average of 7.9 per cent of the portfolios of sovereign wealth funds, well short of their average target allocation of 10.5 per cent, notes research firm Preqin. The Asia Square deal is the sixth large real-estate transaction for QIA this year, following its purchase of four office buildings in Los Angeles in February and a residential development site in London in April.
This is part of the fund's ongoing push to expand its real-estate portfolio into international commercial centres, says Mr Enrico Soddu, head of data and research at the Sovereign Wealth Centre.
QIA has been undergoing a strategy review since last year which has seen the fund professionalise and adopt formal asset allocation targets for geographies and sectors for the first time, he notes.
Singapore's prime real estate should continue to be sought after by global institutional investors looking for stable long-term returns in a diversified portfolio, Dr Seek tells The Straits Times. "It is a world-class metropolis with a highly developed, sophisticated real-estate market."
And while there could be concerns of foreigners crowding out the local players on their home turf, these deals are in line with the globalised nature of real estate.
Singapore may attract overseas capital, but Singapore firms also find opportunities elsewhere. Foreign direct investment into real-estate activities in Singapore was $35.5 billion in 2014 while Singapore's direct investment abroad in real- estate activities was $44.1 billion that year, according to the Singapore Department of Statistics.
If we believe Singapore's key success factor is her connectivity in trade and investment to other countries - compared with others that enact closed-door or protectionist policies - then it is obvious why we are seeing these transactions, says Savills' Mr Cheong. "As long as Singapore continues to maintain these conduits well and build even more, there will be more investments flowing here in the future - only that the tone and colours of future deals may kaleidoscopically change."