Foreign investors more keen on commercial units

by Cheryl Tay Strata-titled commercial units in Singapore are attracting more interest from affluent property investors, who are mostly keen on prime locations especially in the CBD.

"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," said Yvonne Siew, Head of Asia Real Estate at Citi Private Bank.

Some clients are buying these spaces as an investment for the next generation, while others are keen to rent them out, she added.

Commercial units have gained popularity among investors as they are a passive investment, considering that office tenants usually commit longer leases compared to residential tenants.

Apart from strata units, she also noted that "increasingly, our global investors are looking to acquire shophouses and keeping them for long-term investment" because they can own eventually the land.

Still, Citi remains cautious on the residential sector, noting "policy risks".

However, super-rich clients are "still looking to acquire" properties, focusing on prime areas such as districts 9, 10 and 11, despite the 10 percent additional buyers' stamp duty (ABSD) for foreign buyers.

"High net worth buyers in today's market are mostly owner-occupiers," she noted, adding that foreign buyers are now keeping their units for eight to 10 years, compared to only five years previously.

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