Pursuing value

SEVERAL rounds of property cooling measures have taken some wind out of the market's sail. Notably, Singapore's private residential property transactions have fallen to levels last seen during the global financial crisis. It is hardly surprising then that discussions at recent industry conferences have centred on when the government will lift at least some cooling measures.

While government policy remains a wild card, several property experts and economists have pointed out that the long-term fundamentals remain sound. Among them was Song Seng Wun, executive director and regional economist at CIMB Research, who posits that rising wages, a full employment situation and a growing resident population bode well for the property market.

Recent studies still show that real estate remains a favoured asset class among common investors, high net worth individuals (HNWIs) and corporates.

The widely cited Wealth Report 2014 by Knight Frank shows that Asian HNWIs prefer holding real estate as a form of investment, with the UK being the most favoured location to purchase a second home, followed by Singapore, the US and Australia.

For non-residential properties, investment activity continues to hold up, with a recent study by CBRE showing that Asian outbound investments surged 40 per cent year on year to US$16.2 billion in the first half of this year, with the majority of Asian dollars going into office assets.

Singapore topped the list of Asian sources of capital, nudging behemoth China to second place, as compressed yields in the domestic market pushed Singapore developers to seek greener pastures overseas. No wonder it is quieter back home. Many investors seem to be adopting a wait-and-see attitude in anticipation of further price declines in Singapore.

But with market cycles getting shorter than before, potential buyers may want to start early in their search for good buys. In this period of low transaction volumes, they are able to wield higher bargaining power than before.

There is hence a silver lining behind this market correction. Of course, with the prevailing uncertainties, it is ever more crucial that potential investors undertake adequate research before taking the plunge.

At the same time, property companies will find the going tougher; nonetheless, there are yield-accretive deals that could be found with some skill and luck.

In this supplement, we turn the spotlight on key residential hot spots in Singapore that could enjoy a lift from the government's masterplan and key popular overseas markets.

One consultant will make his case on why a policy review is due for executive condos, while another will expound on the newish fad of mixed developments.

In the commercial property segment, you will read more about why rents in the Central Business District are holding up despite greater competition from new commercial clusters, trends and challenges in the retail and industrial sectors, and what's keeping the luxury hotels segment buoyant amid slower visitor growth and an influx of rooms in the last few years.

All in, this supplement could offer some insights as you combine due diligence and astuteness in real estate investing. Enjoy!