In 2014, companies accounted 70% in the purchases of strata-titled office market in Singapore. Also, there are lesser purchases for commercial properties under individual names compared to under companies in 2015. Individual investors will have to pay goods and services tax for all commercial properties purchase. This reason could be that investors are beginning to realize the advantages of setting up a company to buy commercial properties. Benefits include ease of ownership transfer, partial tax exemptions, goods and services tax exemption etc.
Due to the additional buyers’ stamp duty on residential properties; overseas investors are also changing their radar to commercial sectors. Buyers from China form the 2nd most buyers of strata-titled office buyers in 2012. Buyers from India of strata-titled office have also increased in 2012 with Malaysia and Indonesian buyers remaining the top 5 among foreign buyers in this market from 2012 to last year. The strength of Singapore currency against other Asian currencies could also be a factor contributing to foreign investors buying such properties.
In 1st quarter of 2015, office rents rose 0.6% quarter on quarter. Therefore, strata office market still have a tremendous growth potential, given Singapore’s status as a global financial hub. Moreover, the total office space per capita in Singapore is about 15 sq ft, less than that in major cities including Hong Kong at 17 sq ft and Tokyo at 19 sq ft.
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