Singapore’s landlords have jacked up rents by more than half over the past two years. They may be able to squeeze out a few more quarters of increases before enough new supply gives tenants a semblance of bargaining power. But this isn’t the end as high energy costs may be here to stay even after the city’s dwelling crunch has eased.
Investors’ love affair with landlords is waning after a bumper performance. For the first time since early 2020, private housing prices declined by 0.4 percent last quarter.
Between them, Sembcorp and Keppel account for roughly a fifth of the city’s 12 gigawatt power-generation capacity, of which 35 percent is over two decades old. DBS Group Holdings Ltd. expects a quarter of it to retire in the next five years, even as electricity demand grows by more than 4 percent annually. As a result, “Singapore’s power market will likely remain fairly tight until more capacity comes online from 2026,” DBS analyst Pei Hwa Ho, who has a buy rating on the two stocks, wrote in a June 20 note.
Starting from July 1, the island’s Energy Market Authority has imposed temporary caps on wholesale power prices to tamp down exceptional volatility. It will bring some relief to a market where 3,000 percent-plus intraday spikes have become common since 2021.
