Real Estate in Singapore

Residential, industrial and office properties are options that individuals and companies can choose from. It is important to have a basic idea about the nature of each type of real estate property that you could purchase in Singapore given the fact that real estate is a serious long term investment.

Residential

Residential properties are largely differentiated by the housing type – landed or non-landed properties. Non-landed flats consist of HDB flats, apartments or condominiums. Landed housing consists of bungalows, semi-detached, terrace and strata landed housing.

Singapore had optimised space efficiently through proper urban planning. Almost 82% of the current population is living in public housing managed by the Housing and Development Board. These are housing options located in areas with a hospital, school, supermarket, and even sports and recreational centres.

According to reports, there will be 1.4 million flats in Singapore by 2018. If these numbers are correct, that is an 11% jump from the current number of flats.

A quick guide on the 3 Types of Public Housing in Singapore.

Industrial

As a business centre in Asia, Singapore needs to cater to enterprises of all sizes. Singapore has a healthy market for leasing industrial real estate properties. Renewals and commitments of companies aiming for expansion all contributed to growth in the industrial real estate sector.

Industrial properties are mainly used for manufacturing, warehouses, storage, workshops and business parks. Most industrial property comes have 30-60 year lease. Rare, but there are some that has a 99-year lease or are freehold.

Industrial land are categorised into:
Business use
Intended for industry, warehouse, utilities and telecommunication uses

(a) Business 1 (B1)
Nuisance buffer lesser than 50m.

(b) Business 2 (B2)
Nuisance buffer more than 50m and within health and safety buffers.
Special industries such as manufacture of industrial machinery, shipbuilding and repairing is approved on a case-by-case basis by the relevant authority.

(c) Business Park
Non-pollutive businesses that engage in high-technology, research and development (R&D), high value-added and knowledge-intensive activities. Examples: Business parks and science parks.

Commercial

Office real estate is promising in Singapore, due to the myriad of businesses attracted to Singapore.  A main differentiating factor between a commercial and industrial properties is that commercial property do not cause disturbance to the surrounding environment. This includes: air pollution, loud noises and safety hazards.

Some examples of commercial developments: office blocks, shopping centre, shophouses, development buildings that has shops on the first storey and mixed commercial and residential buildings.

Locations are labeled as Grade A or Grade B.  Occupancy rate is mostly above 80% in different parts of Singapore regardless if it is a premium, a Grade A or a Grade B location.

Office real estate yield experienced a 6.1% jump on its yield from third quarter of 2014 to its 2014’s 4th quarter, springing momentum for the first quarter of 2015.

As of 4th quarter of 2014, the highest average rent in Singapore’s office space for Grade A location is at $11.9 per square foot monthly in New Downtown area. The cheapest average rent in a Grade B location, is a suburban area at $4.38 per square foot monthly.

Find out where we are in the Singapore Housing Cycle.

Recommend0 recommendationsPublished in Property
SHARE
Previous article3 Reasons You Should Invest In Real Estate
Next article3 Types of Public Housing in Singapore
C.E.O @ The New Savvy
Anna Haotanto is passionate about finance, education, women empowerment and children’s issues. Anna has been featured in CNBC, Forbes, The Straits Times, Business Insider, INC and The Peak Singapore. She was nominated and selected for FORTUNE Most Powerful Women conference in 2016 (Asia) and 2015 (San Francisco, Next Gen). Anna has 10 years of experience in the financial sector and is currently a Director in Tera Capital. Her previous work experience includes positions at Citigroup, United Overseas Bank, a regional role in Business Monitor and a boutique private equity firm based in Shanghai. She graduated from Singapore Management University (Finance and Quantitative Finance).