Singapore's Property Market Sees Low Risk And Stable Returns: Analysts

Source : Channel NewsAsia, 14 December 2007

Real estate investors can look to Singapore for low risk and stable rewards, according to LaSalle Investment Management.

With consumption on the increase, LaSalle said the retail market will provide good stable returns.

It expects that office rentals are expected to slow down in the coming year but said that residential properties will continue to grow as the number of expatriates increases.

Besides, with the city-state's well-diversified economy, it said that key sectors such as office, residential, hotel and retail will continue to grow.

David Edwards, Regional Director of LaSalle Investment Management, said: "Singapore’s retail market provides good solid stable returns (and) consumption is up. Confidence is strong and we believe those returns are sustainable."

The jump in office rentals though, is expected to moderate to 25 per cent in 2008, down from the 70 per cent jump this year.

Different sectors will naturally see different returns.

"If you're looking for core style then your requirements are very different. If you are more opportunistic, I think the range of opportunities is much broader. There's opportunity in the office market, in residential, in the hotel and hospitality area," said Edwards.

LaSalle noted that one trend going forward is the interest in buildings and properties equipped with green and sustainable technologies.

It added that landlords and investors can start factoring in efficient technologies in their long term plans as there will be a demand for these in five to 15 years.

There's also growing demand in the more immediate term for warehousing facilities, amid rising trade in the region.

"I think one of the things we will and we are tracking is the growth in demand for more modern warehousing facilities that enable more efficient handling of goods, more efficient supply chain management going forward. And that's a trend that is coming through in Asia-Pacific as a whole and we see that being one of the things in Singapore in the next three to five years," said Edwards.