Commercial Property Investment
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HOT PROPERTY
Source: The Straits Times
Author: Esther Teo
28/1/2011
INVESTORS streamed back into the commercial property market last year on the back of the economic rebound and the improving rents it brought.
A new report said the number of transactions of strata-titled commercial real estate - shops, shophouses and offices - jumped 57 per cent to 1,219 last year over a muted 2009.
The total value of sales more than doubled to $2.5 billion.
But the robust figures are still well below the record 1,849 transactions totalling $8.7 billion that took place in the boom year of 2007.
Experts say investors favour strata-titled units because they are a relatively cheap way to enter the commercial market and are not affected by the Government's recent cooling measures. Estimated rental yields of between 4 per cent and 6 per cent - trumping the residential sector's 3 per cent - have spurred interest as well.
Offices were the star performer last year with transactions up 85 per cent over 2009 to 387 while their total value rocketed 165 per cent to $850 million.
Knight Frank's data showed that most transactions were between $1 million and $2 million.
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