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Top Four Best Commercial Property Investment Singapore

In Post-Covid Period

Updated September 2020

Property Investment

Many potential local and foreign buyers have approached us on which property investments are the best for this new norm of COVID Pandemic.  While there are many good residential properties for investment, many are keen to explore the commercial properties available for sale, directly from the developers.  Commercial properties are known for higher rental yield and all would want to avoid paying the Additional Buyer Stamp Duty (for residential only).

Below the listing are the top 10 reasons why you should consider commercial properties for investment in Singapore.

Without much ado, the four best current commercial property investments, as of September 2020, are as follows:

Location: Pandan Loop

Developer: Chui Teng (known for quality and detail planning)

  • Exquisite 10 storey Ramp Up Food Factory, ready for central kitchen, cold storage and food production

  • Designed with High Specifications for Food Factory such as the floor is 7.5 cm lower for easier washing and the exhaust is outside the unit

  • Located within Pandan Food Zone with many food suppliers

  • It has great connectivity to various expressways and the future Greater Southern Waterfront

  • The layout of the unit is highly functional with a high ceiling height

  • Under construction, estimated completion in September 2023

  • Attractively Priced

Location: Cecil Street

Seller: CapitaLand Fund Management

  • Located in the crème de la crème location at Downtown Singapore Business Financial District 1
  • Distinctively majestic like a titan of glass and steel
  • Individual air-conditioning units, great for companies which operate outside office hours
  • Impressive drop off area and lobby with stringent security
  • Around 26-steps from Raffles Place MRT Station
  • In the centre of Downtown Masterplan 2019 enhancements, bringing higher value
  • Only 56 Strata Office Spaces for Sale (some are vacant, some are tenanted)

Location: Serangon Road

Developer: Tong Eng Group

  • FREEHOLD (for all generations to come)
  • Located at City fringe within 1-minute walk to Farrer Park MRT and City Square Mall (outside ERP Zone)
  • Easy access to major transport networks and expressways
  • Mixed development with 143 Offices, 49 Retail Shops, and 39 Medical Suites
  • The ideal choice for business expansions, new setup, relocation, or investment
  • Units are column-free with 4.9m ceiling height

Novelty Techpoint

(Freehold Industrial B1 - Light & Clean Industries, Limited Units)

Location: New Industrial Road

Developer: Novelty Group (known for quality and exquisite furnishings)

  • FREEHOLD Industrial Building located off Upper Paya Lebar Road
  • Full condominium like facilities for business owners and staff
  • Novelty Techpoint is 8 minutes walk to Bartley MRT station
  • 1st in history with Dual key concept in Industrial building
  • Well-connected via Kallang Paya Lebar Expressway (KPE) and Pan Island Expressway (PIE)
  • Accessible to the various type of conveniences and a Short drive away to the upcoming Paya Lebar Commercial Hub
  • Property is completed, ready for immediate occupation

Top 5 Reasons to Consider Commercial Properties in Singapore

1.   Singapore is a great place for investment.

The world is in a constant state of conflict and there is much chaos in major economies.      In Singapore, the government has been tweaking the properties cooling measures to ensure there is no property bubble and the increase in property prices has been steady.  Investors have been enjoying a fairly good return on investment.

Some major factors to consider investment in Singapore properties include:

  • The Singapore Dollar is one of the only four currencies that appreciate against the US Dollar.
  • The country continually attracts many notable high net worth executives,
  • it has low political risks
  • Mortgage rates are attractively low
  • It is well known to be a safe haven for assets
  • The country has been handing the COVID pandemic very well and the government used close to S$100 billion from its reserve to fund Covid-19 support packages

2.  Avoidance of Some Property Taxes

Savvy investors know that one of the best investment is to get a Property.  One of the most notorious Cooling Measures is the implementation of Additional Seller Stamp Duty (ABSD) which applies to the following group of buyers for residential properties:

  • Singaporeans: second property at 12%; third and subsequent property purchases at 15%
  • Singapore Permanent Residents (PRs): The first purchase will be 5% while second and subsequent purchases will be 15%
  • For foreigners: a flat rate of 20% for any property purchase
  • For entities (companies or associations): 25% ABSD for every property

Thus to avoid ABSD, many investors are looking into commercial property investment which does not have ABSD.

3.  Future Tenure of Industrial Land

In 2012, The Ministry of Trade and Industry (MTI) in an effort to make the industrial property more affordable, announced that more sites with shorter tenure and smaller sites will be released.  As a result, the Industrial Government Land Sales (IGLS) is capping the maximum tenure to 30 years, instead of 60-year lease previously.

The five best investments mentioned above are above 30-year lease.  In fact, 2 of the recommended commercial properties are FREEHOLD, a tenure which is rarer.

4.  Rare Gems Among The Commercial Properties

The supply of some types of commercial properties available for sale to investors is indeed low.   There are 3 instances:

  • FREEHOLD TENURE.  Freehold land in Singapore very limited and it is getting scared.  In fact, freehold land open to foreigners’ purchase is indeed low on a global basis.  Two of the recommended properties which have freehold tenures are Centrium Square and Novelty Techpoint
  • GRADE A OFFICE UNITS.  While there are no international ratings for grading office building, many investors recognized certain buildings to be obviously Grade A.  Factors such as impressive secured lobby and foyer, the touch and feel and high-quality finishings are just some factors.  Getting a Grade A Office Space in the Downtown Financial Hub of Singapore is difficult.  Today, the opportunity is opened to investors at Plus at 20 Cecil Street
  • FOOD FACTORY.  There are many restrictions in massive food production in Singapore and food factories can only be found in Food Zones.  For those who understand or can relate to the food business, the CT FoodChain food factory would be an ideal choice.

5. Cost of Land and Labour Going Up.

Looking at the trend of land prices, the next high cost is always higher than the previous land cost.  With land scarce in Singapore, this cannot be avoided.  At the same time, the government has been tweaking the property cooling measure to ensure that there is no property bubble and has been slowing down the rate of increase.

With the COVID situation, the cost of materials and labor are threatening to go up rapidly.  In the near future, developers would have to increase the prices of properties in order to continue to be in the business.

There are some star buys in each of the recommended properties, do contact us to catch them.

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