Brexit might have done S'pore property a favour

FOR all the damage that it is doing to a fragile global economy, "Brexit" might have some unintended positive consequences. Among them, perhaps, a soft landing for Singapore's wobbly property market.

With hindsight, the seemingly excessive S$3.4 billion that Qatar Investment Authority (QIA) paid BlackRock this month to buy an office tower amid a glut of commercial space could turn out to be a decent diversification, if not an altogether shrewd investment.

This might seem like an odd time to make a case for Singapore property. Office prices on the island peaked more than a year ago, after almost doubling over about a decade. Rents in business districts have fallen 10 per cent in the past year. Roughly 700,000 sq m of office space was vacant at the end of March, and another 825,000 sq m of capacity is under construction. The worsening oversupply could easily push vacancy rates, currently at 9.2 per cent, a lot higher. Yet Brexit does change the calculations on a relative basis.