The property market in Singapore suffered a slowdown and correction following a period of economic uncertainty that the Republic suffered during the early part of this century.
Now that Singapore’s economic fortunes are changing for the better, the property market is also recovering with the residential market sector recovery period expected to last at least for the medium term and strong investment potential appearing in the retail and commercial property sectors as well.
The current potential for property investors interested in Singapore has just been boosted by the Singaporean government which has launched a series of incentives to reignite the retail, commercial and residential real estate market sectors and it is directly as a result of these incentives that Singapore is likely to prove a positive prospect for the medium to long term.
Singapore is already a hugely popular destination with tourists, those seeking a regional base and of course the expatriate and local professional population employed in Singapore. All demand quality accommodation for sale and to let and because this market interest is not abating an investor has a strong core and strong foundation on which he can build any residential based property investment.
Local developers are confident in the fact that this base of core demand will grow and as a result they are now acquiring land at record rates in Singapore to build more freehold quality properties. A number of new developments on Sentosa are proving particularly attractive for overseas property investors who are buying at preconstruction prices and then finding strong demand for the resale of the properties or the rental of the properties when they are completed.
There is also immediate appeal in the Singapore retail real estate market because the Singaporean government recently announced that the Orchard Road shopping belt is to receive SGD 40 million over the next three years for rejuvenation and infrastructure improvement and that this will help boost tourism numbers in Singapore by 7%. Furthermore the increase in attraction of this part of Singapore will create more visitor walk-through activity and push up profits for the retailers operating in the area.
To this end the government has also announced the expansion of the Orchard Road area with development expected to take place on two sites to increase retail space by up to 1.7 million square feet and certain spaces on Orchard Road that are currently used by non-retail outlets will be rejuvenated and transformed into more retail space. Investors are hungry for these properties right now because if the expected increase in tourism numbers comes to pass and the massive investment in this area of Singapore boosts walk through traffic rates, the profits the retail outlets will enjoy will mean that lease and unit rental rates can be increased resulting in greater yields and bigger profits for the investor.
Commercial properties in Singapore are also attractive to the property investor right now because there is not only continuous demand for quality space to let, but a lot of REITs are competing to purchase space as well. The Singaporean government has recently made changes to the REITs rules that may see more REITs being established which may result in more demand for commercial property to buy and an investor who buys ahead of this predicted surge in REIT interest will be able to potentially resell on with strong profit margins.
All in all Singapore is in a good position right now and the government is committed to managing and maintaining Singapore’s fortunes. To this end they are careful to promote sustainable investor activity and a property investor examining the potential in the Singapore property market should draw confidence from these facts.
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