Non-residential units: Foreign interest flat

FOREIGNERS here are not turning in large numbers to invest in commercial and industrial property in the wake of tough measures affecting residential property. 

Recent figures show only a slight rise in these investments by foreigners since the hefty 10 per cent additional buyer's stamp duty (ABSD) on residential property was imposed last December. 

A report found foreigners, including permanent residents, bought 11 strata shops in the final quarter of last year, rising to just 13 in the first quarter. 

The proportion bought by foreigners is still small, with Singaporeans and companies still making up bulk of the purchasers. 

One exception was strata offices. From January to last month, foreigners picked up about 43 units - or 16 per cent - of a total of 266 that were bought. In the fourth quarter of last year, they bought 12 units, which rose to 30 units in the first quarter. 

Many foreigners know little of the technical aspects of non-residential sectors. 

Unlike private residential properties which foreigners buy in the hope of long-term capital appreciation, investment, or as a holiday home. As commercial and industrial properties don't offer the possibility of owner-occupation, it remains unpopular with foreigners. 

Still, among the non-residential property choices, strata offices saw the most obvious increase in interest from foreign buyers on the back of several key launches, such as Eon Shenton. 

Strata offices are perceived to have higher investment potential through Singapore's tested commercial viability. (They) also match the price range of deep-pocketed foreign property investors. 

He pointed out that some buyers may have bought the units in the hope of expanding their business operations to Singapore. 

Source: The Straits Times – 7 June 2012