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Cushman & Wakefield expects property investors to shift their attention to commercial and industrial segments after the Singapore government introduced a new round of property cooling measures in the residential market last week, reported the Straits Times.
On Friday (6 July), the authorities increased the Additional Buyer’s Stamp Duty (ABSD) for those not buying their first home, while the Loan-to-Value (LTV) limits were slashed for all, including first-time buyers.
According to the property consultancy’s senior research director Christine Li, retail investors with ample capital could divert their gaze to strata-titled offices and heritage shophouses intended for commercial purposes.
Those familiar with the industrial property sector could also consider this market, as rents are stabilising following a long-lasting downturn.
“Although we do not expect residential developers to rush into acquiring commercial and industrial sites as many are not traditional commercial and industrial asset owners, over the medium term, some liquidity will still find its way back to these segments should Singapore continue to remain a compelling choice for businesses.”
In particular, she noted that the office market is appealing as Grade A office rents across the city-state rebounded 15 percent after bottoming out in Q4 2017 and is now seven percent shy of the recent peak in Q1 2015.
Rental growth of Grade A offices in the Central Business District (CBD) also gained momentum in Q2 2018. It rose 3.9 percent on a quarterly basis and marked the fifth straight quarter-on-quarter gain since the trough in Q1 2017.
The improving rent is attributed to the falling supply of Grade A office space in places like Raffles Place and Marina Bay, added Cushman & Wakefield.
Senior Content Producer, Christopher Chitty, edited this story.
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