Office space likely to draw investor interest: Report

Office space is likely to attract interest from investors in an uncertain year for property here, a new report said.

The overall outlook is cautious given the uncertain global economy and last week's tough new property cooling measures.

It said investors may look to office space given the "compelling low interest rate environment" and high policy risks in the residential sector.

The sound financial structure, business-friendly policies and Singapore's status as a financial hub are also likely to spur investor demand for office space here, it added.

On the industrial front, the market is expected to take a step back to assess the impact of the new seller's stamp duty imposed by the Government on industrial properties sold within three years of purchase.

The duty, ranging from 5per cent to 15 per cent, was introduced last week to rein in industrial property prices and discourage short-term speculation.

Sales in the retail space market are expected to be uncertain, as a tighter labour force and weaker discretionary spending by locals amid the bearish economic outlook would put a lid on retailers' expansion - softening demand for retail space.

Rents of prime retail space in the shopping district of Orchard Road are also expected to decline by 3 per cent to 5 per cent this year, as 340,000 sq ft is set to be added to the supply of retail space there.

The report added that investment activity would be led by the sale of government land sites, as 54 land parcels were earmarked for the first half of the year under the Government Land Sales programme.

Source: The Straits Times –17 January 2013