Singapore Investment

Asian Cities

2H 2014

 

What drives Singapore’s investment real estate?
Investment in real estate is usually defined as taking a long term position in physical property for the purpose of reaping rental income during the holding period and capital gains at the end of that period. Although the investment decisions may appear rather intuitively straightforward for many, that is perhaps only for the individuals or those engage in crowd funding where the investment quantum is rather small and thus the decision making process need not jump through too many hoops. However, for institutional investors, their decision making is process driven. Not only must the financial returns meet their expectations, but due diligence on the physical building plays an important role as well. In this piece, we will look at investment decisions taken by institutions and the focus will be on office developments.

For the majority of institutional funds, their focus is usually on income generating properties. That means the real estate is completed. Most do not have the mandate or much latitude to invest in properties under development. This is because many of the funds are derived ultimately from pension bodies which adopt a lower risk profile and have the need to achieve an actuarial return target by certain dates.

 
 

Key contacts

Simon Smith

Simon Smith

Senior Director
Research & Consultancy

Two Exchange Square

+852 2842 4573

 

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