Issue 243

Copyright 2011-2014 www.Propwise.sg. All Rights Reserved.

CONTENTS
p2

FROM THE

EDITOR

5 Benefits to Using a Company to Invest

Welcome to the 243th edition of the

Singapore Property Weekly.

in Property

Hope you like it!

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Singapore Property News This Week

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Resale Property Transactions

Mr. Propwise

(December 30 January 5)

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SINGAPORE PROPERTY WEEKLY Issue 243

5 Benefits to Using a Company to Invest in Property

By Tam Ging Wien (guest contributor)
Using an investment vehicle for your property
purchase is a topic I wished I knew about
earlier. So far, I have not used an investment
vehicle for my property purchase. But
knowing now the benefits of this method, I
may consider it for my next purchase.
I discovered this tip from my property agent
(who was just as clueless as myself!) who
casually asked me the question: I have been
servicing a loyal client for many years, and
every time he makes a property purchase he
will form a company and buy in the
companys name. Do you know why?

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SINGAPORE PROPERTY WEEKLY Issue 243

I set out to research this topic and to my
surprise, I discovered a wealth of advantages
in doing so! Here are the five benefits of using
a company to invest in property.
Benefit #1 Overcome Local Property
Ownership Laws
An experienced property investor friend
shared that in the Iskandar Region in
southern Malaysia, foreign property owners
must resell their properties to a local if the
value is below RM1million. Some savvy
investors therefore incorporated a local
company to purchase the property and later
sold the company (with the property as an
asset) to other investors. While I cant verify
the story, this might be an interesting point to
research when investing in foreign properties.

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Benefit #2
Reductions

Tax

Exemptions

and

To encourage small businesses, countries in

South East Asia have special tax laws where
new companies enjoy tax exemptions for the
initial years of incorporation. The income
generated from the property could therefore
be tax-free for the first few years.
In most countries, companies enjoy a much
wider variety of tax breaks or deductions. As
a property investment company, many of the
expenses incurred can be expensed in the
company books. Examples of expenses
include: utilities, repairs, agent fees,
maintenance fees, property taxes, furnishings
and renovations.

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SINGAPORE PROPERTY WEEKLY Issue 243

Benefit #3 Clean Way for Multiple
Investors to Invest

Benefit #4 Ability to Make Larger

Investments

Direct property investments require high

upfront capital. Therefore a group of investors
may pool resources together to share in a
property purchase and profit together. By
incorporating a company as an intermediary,
the shareholders can easily draft terms and
agreements into the companys shareholders
agreement. The share of the property can
also be easily apportioned by using company
shares. In the unlikely event of death,
bankruptcy or major illness of one
shareholder, the interest of the remaining
shareholders is still protected using company
law.

By incorporating a company to pool resources

together, a group of investors could
potentially negotiate for better prices with
developers by making bulk purchases.
Perhaps with a larger pool, the group of
investors may even acquire costlier properties
with higher yields such as shop houses or
even buildings.

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Benefit #5 Enjoy Company-Specific

Benefits
Many governments support small and
medium businesses by providing assistance
to support their businesses. This may take
the form of tax rebates, innovation credits or
something else.

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SINGAPORE PROPERTY WEEKLY Issue 243

A good example is Singapore where the
government has encouraged local businesses
to improve productivity through the PIC
scheme. The scheme provides up to 60%
grants to businesses that invest in innovative
ways to enhance their business productivity.
By guest contributor Tam Ging Wien, an avid
investor and blogger who spends his time
empowering the masses in financial
education.

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SINGAPORE PROPERTY WEEKLY Issue 243

Singapore Property This Week

Residential
Resale condo prices fall by 0.8% monthon-month in Dec 2015

Based on flash estimates by SRX Property,

resale prices of non-landed residential units
have fallen by 0.8% month-on-month in
December 2015. Year-on-year, the price
index fell by 2.1%. Resale prices of condos
fell the greatest in the Outside Central Region
as a 4.1% drop was recorded last year
compared to a 3.3% in 2014. In the Core
Central Region and the Rest of Central
Region, resale prices had increased by 2.2%
and 1.5% in 2015 after falling in 8% and 4.8%
2014 respectively. Last year, the resale
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transaction volume for condos rose by 28%

from 2014 to 6,346 units. Eugene Lim from
ERA Realty said that more buyers are
returning to the resale market particularly for
units with larger floor areas as developers
tend to launch smaller units.
(Source: Business TImes)
Condo rents fell by 5.4% while HDB flat
rents fell by 4% in 2015
Year-on-year, the condo rental price index
has fallen by 5.4% for non-landed private
homes in 2015. This was more than in 2014
when a 5.2% year-on-year drop was
recorded.

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SINGAPORE PROPERTY WEEKLY Issue 243

Eugene Lim from ERA Realty predicts that
there will be a 5 to 8% fall in rental prices of
non-landed private homes in 2016 due to tight
immigration policies and high supply of rental
units, particularly in the Outside Central
Region. In 2015, condo rents in that region
had fallen 6.4% while rents in the city fringe
fell by 7.6%. Condo rents in the Core Central
Region had fallen by just 0.9% last year.
Similarly, the rental index for HDB flats had
also gone down by 4% in 2015. Month-onmonth, the index had fallen by 0.6% in
December last year. Yet, the volume of HDB
flats had increased by 8% year-on-year in
2015. Lim believes that more expats are
renting HDB flats instead of private
apartments due to crimped relocation
packages, thus the surge in rental volumes
for HDB flats.
(Source: Business Times)
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Commercial
Mortgage auctions expected to increase

According to market experts, mortgagee

listings at auctions are expected to increase
this year. This month, the properties on
auction include an uncompleted factory in
Kranji, shop units along Cuscaden Road and
a two-storey detached house at Upper East
Coast Road. Market experts believe that
properties are auctioned off as a last resort.
Often, these properties are put up by foreign
investors who have defaulted on their loans,
said experts. While the number of properties
put up for auction has increased to 796 in
2015, only 33 units were sold because of a
mismatch between sellers and buyers
expectations, added Colliers Grace Ng.
Nevertheless, Sharon Lee from Knight Frank
said that sales rate at auctions may be low as
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SINGAPORE PROPERTY WEEKLY Issue 243

buyers tend to pick up a property after the
auction.

developments receive
occupation permits.

(Source: Business Times)

(Source: Business Times)

Rents for 1st floor retail space down by

1.2% in Q4 last year

Site at Lok Yang Road up for sale

According to DTZ, rents for first-storey retail

space have fallen by 1.2% quarter-on-quarter
in Q4 last year to about $30.50 psf. Year-onyear, rents have fallen by 5.9%. Market
experts believe that the fall in prices could
have been due to weaker consumer
sentiments. Rents of retail spaces at
Orchard/Scotts Road fell by 5% year-on-year,
compared to a 5.7% drop in retail space rents
in the suburban areas in the same period.
Lee Nai Jia from DTZ said that rents in the
Other City areas such as Chinatown and
Bugis are expected to recover when
residential
components
in
mixed-use
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their

temporary

An industrial site at Lok Yang Road is up for

sale by expression of interest. The indicative
price is set at $20 million. The 133,876 sq ft
site which comprises of 5 buildings, has a
total gross floor area of 107,130 sq ft and has
been zoned for Business 2 use with a
maximum approved plot ratio of 2.5. Grace
Ng from Colliers said that end-users in the
Business 2 industry such as those in
manufacturing may be particularly interested
in the site as industrial spaces of such size
are hardly available for sale.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 243

Tuas South Link 2 site tender awarded
JTC has awarded the tender for an industrial
site at Tuas South Link 2, at a tendered price
of $3 million. The 5,050 sq m site has a gross
plot ratio of 1.4 and a tenure of 20 years. The
site has been zoned for Business 2 use.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 243

Non-Landed Residential Resale Property Transactions for the Week of Dec 30 Jan 5

Postal
District
1
3
3
4
5
9
9
10
10
10
10
13
14
14
15
15
15
15
17
18
19

Project Name
MARINA BAY RESIDENCES
RIVER PLACE
QUEENS
REFLECTIONS AT KEPPEL BAY
THE INFINITI
SCOTTS SQUARE
ONE OXLEY RISE
GRANGE RESIDENCES
BOTANIC GARDENS MANSION
JERVOIS LODGE
THE MERASAGA
INTERO
WATERBANK AT DAKOTA
KEMBANGAN SUITES
SUITES @ EASTCOAST
ONE AMBER
COTE D'AZUR
TANJONG RIA CONDOMINIUM
FERRARIA PARK CONDOMINIUM
SEA ESTA
RIO VISTA

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Area Transacted Price

Tenure
(sqft) Price ($) ($ psf)
1,076 2,500,000 2,323
99
1,324 1,700,000 1,284
99
1,195 1,500,000 1,255
99
1,550 2,500,000 1,613
99
1,561 1,328,888 851
FH
1,249 3,500,000 2,803
FH
1,055 1,820,000 1,725
FH
2,583 5,600,000 2,168
FH
1,755 2,650,000 1,510
FH
1,238 1,740,000 1,406
FH
1,367 1,830,000 1,339
99
1,012 1,360,000 1,344
FH
883 1,300,000 1,473
99
538
750,000 1,394
FH
366
608,000 1,661
FH
1,389 2,058,000 1,482
FH
1,292 1,820,000 1,409
99
1,399 1,505,000 1,076
99
1,324 1,150,000 869
FH
517
588,000 1,138
99
1,249 900,000
721
99

Postal
District
21
21
22
23
23
23
26
27

Project Name
HUME PARK I
KISMIS COURT
THE MAYFAIR
HILLVIEW REGENCY
REGENT HEIGHTS
THE WARREN
THE CALROSE
CANBERRA RESIDENCES

Area Transacted Price

Tenure
(sqft) Price ($) ($ psf)
1,496 1,345,000 899
FH
1,948 1,150,000 590
99
1,227 1,060,000 864
99
904
800,000
885
99
1,023 840,000
821
99
1,206 950,000
788
99
1,238 1,388,888 1,122
FH
1,324 1,120,000 846
99

NOTE: This data only covers non-landed residential resale property

transactions with caveats lodged with the Singapore Land Authority.
Typically, caveats are lodged at least 2-3 weeks after a purchaser
signs an OTP, hence the lagged nature of the data.

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