Investing In Real Estate
As Singapore property looks set to remain as a preferred long-term investment asset with opportunities for growth, it is good to understand the different types of real estate investment options available.
Property ownership is the first option that comes to mind. However, owning and managing additional properties directly can be rather time-consuming and effort-intensive. Other ways to invest in property without owning one include:
- Real Estate Investment Trusts (REITs)
- Property stocks
- Property crowd-funding
- Real estate private equity e.g. development funds
REITs allow investors to pool their money for property investment and earn from price increase in the properties held, as well as from the distribution of rental income. Buying property stocks such as CapitaLand or City Developments is another alternative. These two options allow for property investment at a lower cost with potentially solid returns, as compared to buying your own property as investment.
Boutique developers who lack financial strength can fund their own projects through property crowdfunding. Such developments are usually based overseas and are more loosely legislated as this industry is relatively nascent. There is also the possibility of losing your capital, should the developers fail to follow through with the project. Do note that many real estate listings on crowdfunding platforms actually get investors to buy the end unit at a discount, essentially making them into a retail property buyer.
Development funds allows investors to invest in a property development without the hassle of facilitating project management, while benefitting from the gains that the developer makes. Traditionally, such private equity real estate opportunities have only been available to institutions. When developers work with joint venture partners who also possess fund management capabilities, investors are able to access these development funds and potentially make high margins typically attributed to developers.
To be able to offer such funds, fund management companies must be a Registered Fund Management Company (RFMC) or hold a Capital Market Services Licence, as issued by the Monetary Authority of Singapore. Do choose firms that provide transparency on their charges, their prior track records, the projected investment performances and exit strategies.
ZACD has a proven track record of successful partnerships with reputable developers for joint-venture projects, while making 106 percent averaged realised return of investment throughout market cycles. The ZACD fund management team is just as vested as the developer in seeing through the development, with the primary objective to sell out all units and generate revenue for investors.
For Your Business Space Needs
If you are seeking out an industrial or commercial space for your business as a business owner, do pay attention to the following:
For industrial properties:
- Strata VS Usable area
Business owners should know the difference between the following terms:
- Void area: refers to the empty space above the floor in a strata unit, and still included in the total saleable floor area – usually applicable to properties with very high ceilings. This information is available in the Sale and Purchase Agreement.
- Strata area: refers to the area of a strata unit. This information is available in the Sale and Purchase Agreement.
- Usable area: refers to actual floor space that can be used
- Non-usable area: refers to area that cannot be used, e.g. air con ledge, void area
- Buying the correct zoning for your trade
Check with your property consultant on the correct zoning for your trade.
- Clearance of usage from authorities
Industry-specific licenses and permits are required for different trades, so do ensure clearance from the relevant authorities e.g. URA for change of use of business space, SCDF for fire safety compliance, etc.
For commercial properties, you may wish to consider:
- Age of property
- Location and amenities
- Standard of maintenance
- Length of lease
- Accessibility to major highways/public transport
For the latest trends and statistics on property pricing, you can check out the tools on www.squarefoot.com.sg to better understand the market.
Of course, it is also important to have a good agent to help you navigate the property market’s ups and downs, while avoiding any possible pitfalls. Before engaging any agent, you should look up the CEA register: https://www.cea.gov.sg/public-register to check if the prospective agent is a licensed estate agent and a registered sales person, whether he or she has won any awards or been disciplined by the Council in the past three years.
Three aspects to look for in a good agent:
- Resourcefulness, in terms of business network with partners, bankers, lawyers, etc,
- Value-added services, not just processing the paperwork and
- Knowledgeable in providing advice or insights
Business FastForward 2019
A conference to discuss key challenges faced by local businesses in a continually evolving marketplace, the 2nd edition of Business FastForward is expected to be attended by about 200 delegates.
Speakers from renowned corporations such as A*Star SIMTech (Singapore Institute of Manufacturing Technology), Aviva Ltd., and many others, will share key insights on the current business climate.
Delegates will also gain knowledge in helping Small and Medium Enterprises (SMEs) innovate, scale up businesses and transform capabilities.
Date: 1 March 2019 (Friday)
Time: 1pm to 5.30pm
Venue: Fort Caning Lodge, 6 Fort Caning Road,
Level 2 Ballroom, Singapore 179494
The conference is organised by ZACD Group Ltd and SLP International Property Consultants Pte Ltd, supported by Enterprise Singapore and SME Centre @ Singapore Manufacturing Federation.
Delegates who are keen to attend, may register via email [email protected].
About ZACD Group Ltd., SLP International Property Consultants Pte. Ltd.
Headquartered in Singapore, ZACD is an integrated asset manager listed in Hong Kong, offering integrated solutions across the real estate value chain in the Asia-Pacific region. Known for our pioneering spirit and acute business strategies, ZACD has a reputation for identifying and seizing market opportunities before others, to capture first-mover advantages ahead of economic cycles.
One of ZACD’s conglomerate of affiliated companies, SLP International is a leading home-grown property consultancy firm, reputed for its highest number of industrial properties marketed since 2001. SLP is more than just your go-to real estate consultancy firm. Our track record is not just built on properties, but on relationships. SLP is constantly seeking new ways to help SMEs grow and innovate their business and we want to revolutionise the real estate landscape to be the Agency of the Future.