“Singapore’s Strata Commercial Spaces: An Ideal Investment Opportunity, Experts Say”

“Property Type Unaffected by ABSD Hike: Offering Significant Returns”

Foreign investors who may have hesitated to invest in prime residential properties in Singapore following the recent increase in Additional Buyer’s Stamp Duty (ABSD) rates are being advised to consider strata commercial spaces instead.

Tang Wei Leng, managing director and head of Capital Markets & Investment Services at Colliers Singapore, suggests that strata commercial spaces, especially those situated in the Central Business District, present an “ideal investment choice.”

“The control over future approvals for new strata subdivision ensures that the supply of such commercial spaces remains limited, potentially leading to higher rental yields and capital appreciation,” Tang explained to the Singapore Business Review.

She further emphasized that foreign investors can take advantage of Singapore’s pro-business environment and favorable attitude towards foreign investment.

Tang highlighted the stable political climate and robust legal framework that instills confidence, providing a secure and transparent environment for international investors.

While stressing the attractiveness of strata commercial spaces for foreigners, Tang also noted that these investments hold promise for local investors.

“Investing in strata CBD commercial space in Singapore provides local investors with the chance to leverage their understanding of the domestic market and benefit from the ongoing growth of Singapore’s business landscape,” Tang stated. “Moreover, such investments enable them to actively engage in Singapore’s thriving business environment and contribute to the country’s economic expansion.”

Nicholas Keong, head of Residential and Private Office at Knight Frank Singapore, echoed Tang’s sentiment, suggesting that both locals and foreigners explore investment opportunities in commercial shophouses and strata office segments, as they remain unaffected by recent increases in ABSD rates.

“These assets are scarce in the island state of Singapore, consistently delivering significant returns over time for investors adopting a longer-term investment horizon,” Keong remarked.

“Commercial shophouses and quality strata office space in Singapore, whether in the CBD or suburban locations, typically offer capital preservation and appreciation for buyers.”

In addition to strata commercial spaces, Keong highlighted private landed homes as an investment option for local Singaporeans.

“These are also in limited supply, constituting just 5% of all housing stock on the island.

As long as there is continued increasing affluence in Singapore, demand for landed homes will remain supported given the limited inventory that is unlikely to increase significantly in the future,” Keong explained.

“Singapore’s Investor Appeal Endures: Strategies and Opportunities”

Despite the steep rise in real estate prices, Leonard Tay, head of Research at Knight Frank Singapore, remains optimistic about Singapore’s allure to investors.

He sees it as a “flight-to-safety and flight-to-quality destination for investment and expansion,” particularly appealing during times of global economic uncertainty.

“Institutional investment and private wealth seek stability amid uncertainty and are willing to pay a premium for security,” Tay remarked, underlining Singapore’s appeal.

Tang Wei Leng from Colliers Singapore shares this sentiment, suggesting that despite high prices, Singapore can still draw foreign investors through three key strategies.

Firstly, she highlights the offering of long-term investment opportunities.

Tang points to Singapore’s commitment to ambitious projects like the Jurong Lake District (JLD), showcasing sustainable growth prospects for investors.

“The JLD exemplifies Singapore’s dedication to sustainable growth, attracting foreign capital seeking stable returns. Moreover, continuous land releases through the Government Land Sales (GLS) program offer ample investment opportunities,” Tang explained.

She emphasizes the importance of the government addressing supply-demand imbalances in the property market by implementing flexible policies responsive to economic shifts, sustaining Singapore’s appeal amidst rising prices.

The recent hike in Additional Buyer’s Stamp Duty (ABSD) rates is expected to impact collective sales in Singapore, according to Tang and Tay.

Tay notes that foreign sellers may be discouraged from participating in en bloc initiatives due to increased replacement costs, potentially slowing collective sales launches.

Tang suggests mitigating the cooling measures’ impact on collective sales through incentives and initiatives, fostering a healthy property market.

“Introducing incentives to rejuvenate older developments through collective sales can attract both local and foreign investors to engage in redevelopment opportunities,” she stated.

In conclusion, Tang emphasizes Singapore’s commitment to economic growth, stability, and innovation as crucial factors in retaining its appeal as an investment destination for both local and foreign investors.

Greg Swanson
Greg Swanson
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