If you are a first-time investor in commercial property in Singapore, there are many aspects to take into account before, you embark on your first purchase.
One of the commercial properties biggest advantage is that, its not affected by higher taxes or speculative taxes as the residential sector has. Unlike the residential sector, where investors can be drawn into the look and feel of the estate with double swimming pools , jacuzzi, gyms and so on. Investment into the commercial sector is based more on the economic outlook, Job growth, rental yield. As such, the investors who invest in such properties go by their numbers, not the look or feel and are likely to keep their properties for 5 years or longer
Commercial properties so far have been untouched by cooling measures. Unlike, the residential market .The commercial property market has never overheated unlike residential properties, this is because most commercial properties are priced reasonably and are priced based mainly on yields.
Commercial properties are priced on a per square foot (psf) . Investors will typically gauge the attractive of a purchase by asking , the price of a certain office unit in a particular building by its per square foot pricing .
However , unlike residential properties, those looking to invest in commercial property, will most likely ( depending if seller is gst registered too ) have to pay 7% GST in addition to paying the valuation price for the property and a 3 % property tax . So the total tax payable could be 10 % . If you own a company and are purchasing the property through your company, then you can consider being GST- registered to claim back the GST amount. Its generally a better option to purchase commercial properties through the creation of a company as that will allow you to claim back the 7% gst. For advice on this, I will be more than happy to let an accountant explain to you, how , that is done
Commercial properties like offices, Shophouses, , Retail ( except industrial ) are not subjected to Additional Buyers Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD). This means you don’t get taxed with ABSD when you buy and there’s also no SSD when you sell, making it much easier to invest when you want to.
Generally most investors first time investors like to invest in offices. Investing in such offices is quite straight forward , as tenants are business. Most business, unlike tenants prefer to remain in 1 location. That gives an investor , not only stability but a steady yield, on which the investment can be judged .
Just like different residential properties have their own tiers (ie: mass-market, mid-end and high-end), Office spaces are also classified among Grade A, B and C
Investors still prefer investing in “downtown cbd” , which is located There used to be only 1 main cbd ,Right now, Through government efforts, the development of 2 other office clusters are also taking shape. However, CBD still remains very popular as CBD is the benchmark. Not only that, With the development of the southern water front, CBD is back in focus .
1 point of contention among investors is that, there are not as many properties available for investment compared to the residential sector. One could confidently claims, that , there are less then a dozen grade A units that are available for sale and not all of them can be purchased in small units. Some can only be purchased by floor plates .
Most Available Grade “A” type, that can be invested are listed in the next page .
If you prefer something with perhaps a bit more character or history , Investing in shop houses is also one of the option . If you have gone shopping along Chinatown, eating at little India or having a drink or two at Duxton hill. You most likely had your meal or drink in 1 of such shop house .Those shophouses would be a familiar sight despite their rarity.
These buildings, which are highly sought after by investors, are of historical architecture, rich in heritage and have a rustic charm compared to the modern building usually surrounding it.
These shophouses can be used for both business and living. also form the bulk of the gazetted conservation buildings.
These shophouses are like that rare car, that collectors have. There are strict rules to follow, to maintain its heritage status and for some shophouses, the flexibility of use, would not be possible. However, if you have the investment and would like one , then , its requires a little patience, as such units are not always on the market and the prices tend to be above market .
Post Covid, Singapore’s Examplarary and quick response to Covid has made , this niche property worth seriously looking at . With a target population projection of 6.9 million by 2030, as set out in the population white paper 2013, our population is set to grow and age steadily in the coming years to come. These mean a greater demand for healthcare needs. Furthermore, growing affluence from our neighbouring nations also heightens the demand for top quality medical services that Singapore has become synonymous for.
To cater to this need and growth for medical services, the master plan for Health City Novena was introduced in August 2013. Health City Novena will anchor the Regional Health System (RHS) for the central region and becoming a key component under MOH’s capacity building strategy to develop medical excellence and provide more accessible and quality care to Singaporeans.
First-mover advantage is important when it comes to property investing. As a region starts developing, early investors would tend to see a greater appreciation on their initial investments, and would naturally be able to reap the best gains, even as other similar developments start coming into the market. This applies to commercial property as well.
As with all types of investments, there would always be a risk-return tradeoff. Since the area will be new, and possibly, not well tested for the type of development it is building, investors would need ensure that they have the financial muscle to hold on to their asset for a long enough period of time to reap the full gains of their investment.
Therefore, making a careful assesment, whats suitable for you, depends not only on your own budget but also time frame. Another factor to consider , would be setup procedures. For my Commercial property investors, I highly reccomend investing such proeprties through a company set up. Therefore the advice of such specialist like accountants and lawyers become necessary . I provide a one stop service , where, you can have your most proeprty questions answered. Drop me an e mail or whats app . +6585768864
For More information ,visit this link
https://www.ura.gov.sg/Corporate/Planning/Master-Plan/Regional-Highlights/Central-Area/Downtown
Here Are Some Of The Top Rated Condominums Popular With Investors. The Close proximity to CBD, makes them a good investment choice
If i were to ask
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