Mar 15, 2013

Posted by in General

Are Commercial and Industrial Properties Still Good Investments in Singapore?

Are Commercial and Industrial Properties Still Good Investments in Singapore?

 

 

Dear Readers,

It is interesting to observe how the latest round of cooling measure is affecting the market. With the tightening affecting the residential market, we are seeing more people rushing to invest into commercial and industrial properties. Our WK investor network has already been actively investing in these sectors since 2009 and I would like to congratulate many of our investors whom have taken our advice in entering the market at that time.

The question now is whether commercial and industrial properties are still good investments in Singapore. My personal opinion is that many of the commercial and industrial property prices have already gone up considerably over the past 4 years. Yields are also diminishing to 4-5%. With the current low interest environment, it is possible to still get positive cash flow with these yields. However, investors have to bear in mind that interest rates may go up in time to come.

While there are still pockets of opportunities to find fair value commercial and industrial properties for investment, the growth potential is no longer as attractive as before. One needs to go in with a long term perspective and beware that rentals yields may not grow quickly in the next few years due to oncoming supply that will be completing from this year till 2016.

Wendy Kwek

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