Commercial units popular with wealthy foreign investors
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By Amanda Tan, The Straits Times, 11 May 2012
RICH foreign investors have been snapping up strata-titled commercial units here, in a sign that investor interest remains strong in the sector.
Ms Yvonne Siew, head of Asia real estate at Citi Private Bank, said that the commercial sector is being kept buoyant by clients, who are mostly looking at prime locations, such as the Central Business District.
‘Most office buildings are being held by Reits or listed companies, so there are not many options for high net worth individuals to acquire their own office space,’ she said.
She noted an ‘emerging group of clients’ buying these spaces and keeping them for the next generation. Others rent the units out.
Commercial units are popular with investors because they are a passive investment. Office tenants often take longer leases whereas residential leases are shorter and tenants transient.
Ms Siew was one of three speakers at a Citi Private Bank media briefing yesterday, which focused on the global property outlook.
Speakers Daniel O’Donnell and Tim Bowring touched on North American and European property markets.
Besides strata units, Ms Liew noted that ‘increasingly, our global investors are looking to acquire shophouses and keeping them for long-term investment’ because they get to own the land.
On the residential front, she said Citi is cautious and noted ‘policy risks’.
High net worth clients are ‘still looking to acquire’ properties, she said. Their focus is mainly on prime areas like districts 9, 10 and 11.
This is despite recent cooling measures which saw a 10 per cent additional buyers’ stamp duty levied on foreign buyers.
Foreign buyers, who typically come to Singapore for education or medical reasons, now look to keep their units for eight to 10 years, up from about five previously, she said. ‘High net worth buyers in today’s market are mostly owner-occupiers.’