Booming Business for Rooftops

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As available real estate space in Singapore rapidly declines, businesses and event organizers are looking for alternatives via rooftop rentals. From highly coveted Orchard Road and the Central Business District to Chinatown, wide open rooftop spaces are available for the taking. More office and commercial buildings are converting drab rooftop spaces into restaurants, event venues, and urban gardens. Since last year, People’s Park Complex, an open-air carpark, was deemed one of the best nightlife spots in the city. Lepark, the manager of the 63,000 sq ft venue has been dedicated to consistently organizing outdoor events at the unexpected location, hosting concerts, craft markets, film screenings, and a yoga festival. .

The Getai Group has been equally dedicated to co-organizing public activities and events and joined forces with Lepark and TAJ back in May to produce the Getai Ethnica music festival as part of the Singapore Heritage Festival. The event attracted approximately 3,000 people over two days. Getai Ethnica mixed the world jazz sounds of Qilin Group with the acoustic songwriting of the HubbaBubbas followed by a performance from TAJ. TAJ is a Singapore based instrumental jazz hip-hop band comprised of Timmy D, JR, and Audrey 10k.

Open-air rooftop venues were particularly popular throughout the summer. In July, a concert featuring YouTube sensation Us The Duo performed at “A Rooftop Affair.” It allowed people to experience Singapore city from a very different perspective. According to Edmund Chye, executive director of Chye Lee & Sons, “In space-starved Serangoon Garden and Singapore in general, it’s difficult to find a space where the community can come together to bond.”

In addition to entertainment, rooftops give consumers access to urban farms. Bjorn Low, co-founder of the urban farming company, Edible Garden, has been on a mission to provide the city with numerous rooftop urban farms. Since last October, he and his team have been able to turn a 3,300 sq m garden on top of Wheelock Place into a vegetable patch.

Although there are various rooftop spaces available, this isn’t a quick fix for the lack of space available in the city. Moreover, because space is limited, many rooftop bars are tiny and can feel claustrophobic. What’s most important is that Singapore real estate investors now have more options – and the people love it.

Relief for Singapore Real Estate Market?

Singapore Housing

Relief is possibly on the way for the Singapore private property market. This year, the industry struggled due to falling prices and a general lack of enthusiasm. Ever since the government stepped in and enforced limits on financing, the Singapore market has rapidly begun to fall behind. And although buyer disinterest continues, developers are hopeful that 2016 will be more prosperous.

In the first six months of the year, real estate services JLL estimates only 3,496 private residential unit sold, a 21 percent decrease compared to last year. The lack of sales has nose-dived prices. Property prices are projected to reach a total decline of 6 percent by year’s end. Developers typically shy away from giving discounts any more than 15 percent of the initial asking price even in such a difficult situation. Fortunately, the upcoming general election has generated buzz around the potential end of government cooling measures in the near future.

Since 2009, the Singapore Government has placed restrictions on the housing market aimed at foreign demand in an attempt to stabilize market prices. Singaporeans currently have to pay an Additional Buyers Stamp Duty of 7 percent on their second home, and 10 percent on the third. Management companies are in hopes that the September or October general election will work in the favor of Singaporeans, rolling back additional fees.

In the current state of affairs, sellers aren’t the only ones feeling pressure. Renters currently face a dilemma due to a strong demand-supply imbalance. While 26,000 housing units are expected to be completed by year’s end, last year’s peak demand only hit just above 15,000. This year isn’t projected to be much different. This makes it difficult for renters to raise their tenants rent, hoping to keep up with the competition. A slow decline in the expatriate population further skews the issue.

With the continuos decline in rent, sellers and renters can only hope for a turn-around in this fall’s general election.

Square Yards Acquires Singapore Luxe Real Estate

Square-YardsA couple of weeks ago, Singapore-based real estate firm, Luxe Real Estate was acquired by Square Yards. Square Yards is the top pan-India organized real estate advisory group, toting a strong presence in 20 cities and 5 countries around the world. With over 600 employees and counting, the acquisition of Luxe Real Estate firmly places Square Yards in the top 30 Singapore-based agencies by number of agents. With direct access to prime Singapore Real Estate, Square Yards intends to hold a dominant position in the International real state market. Data from the International Project Marketing division in Dubai suggests high demand from influential counties like the United Kingdom and Malaysia. Square Yards hopes to reach the same level of presence in Asia.

Prior to the acquisitions, Luxe Real Estate offered investment, marketing, sales and rental services for private luxury and properties on its own. It will now operate in conjunction with Square, providing expertise in Australia, Hong Kong, Malaysia, Thailand, Indonesia, and China. The joining between Luxe and Square Yards appears to be favorable and both teams are looking forward to the merge. Each company provides and unique outlook and niche market, forming the ultimate package.

Luxe Real Estate was recently founded in 2014 by Calvin Chao, an individual with a particularly strong background in domestic and international luxury real estate. Square Yards was establish only a year before in 2013. The company will bring it’s 500 A grade developers to the Luxe team.

Over the next two quarters, Square Yards intends to expand it’s global reach into 20 additional markets.

Top Residential Locations of the World’s UHNW Population

According to the 2015 Global Luxury Residential Real Estate Report by Sotheby’s International Realty, the top cities for ultra high net worth residents are:

  1. New York, USA
  2. London, UK
  3. Hong Kong
  4. Los Angeles, USA
  5. San Francisco, USA
  6. Washington D.C., USA
  7. Singapore
  8. Dallas, USA
  9. Mumbai, India
  10. Paris, France

Ultra high net worth (UHNW) is defined by those with a net worth of US$30 million or more. There are approximately 211, 000 individuals worldwide who meet this requirement and each person averages 2.7 properties. The report also states that “United States is the most popular country for foreign UHNW individuals looking to buy secondary residences.” As you can see from the list, the United States holds the majority of UHNW residents worldwide. Also important, the world’s UHNW population grew 6% between 2013 and 2014, increasing the demand for luxury properties. Luxury real estate is deemed as any property valued at US$1,000,000 or more. Amazingly UHNW individuals tend to own at least 2 properties, and many have 3 or 4. These estates are purchased primarily for practical and business reasons, but emotional satisfaction plays a vital role as well.

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New York City Luxury Apartment

The report graciously breaks down the typical profile of luxury property owners by city. For example, the average UHNW New York resident is 60 years old, occupied in banking, investment, or finance, and has a median net worth of US$120 million. Sotheby’s CEO Kathryn Korte reported that a new record was set in Manhattan for the most expensive co-operative apartment ever sold at $70 million in 2014. It later broke the record again at $71.3 million. Interestingly, the report also claims that the emerging UHNW class from China and Russia are primarily younger, self-made individuals. China’s UHNW population has an average net worth of US$141 million and often elects to live in neighboring countries like Hong Kong and Singapore.

Definitely take a moment to read through the report for some interesting information regarding the world’s elite, where they chose to live, and how it affects the global real estate market.

African Real Estate Investment Eyes Long Term

What’s causing the sudden interest in African real-estate and motivating international investors to seek out new prospects on the continent? According to Knight Frank, the world’s leading real estate consultancy headquartered in England, investors are currently attracted to the growth potential within African markets which makes good real estate highly desirable by investors abroad as well as investors within the African continent.

Knight Frank’s Africa Report 2015 points to projections on population growth across the continent by the year 2100 as a leading factor in investor interest. By 2100, it is projected that Africa’s population will quadruple to 4 billion meaning that 40% of the world’s population will reside within Africa. In Nigeria, which happens to be Africa’s largest economy with a GDP of $593 billion, the population is set to top nearly 1 billion by 2100.

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View of Victoria Island, Lagos, at night. Nigeria has Africa’s highest GDP

Impressive, right? And the growth has already begun across the continent. One of the fastest growing economic regions in the world is Sub-Saharan Africa and within the next five years 13 of 20 fast-growing global economies are projected to be within Africa. Luanda, the capital city of Angola currently has one of the highest office rents in the world at $150 per square feet. This is driven by lack of availability in the face of high demand for office space from the oil and gas sector. Adding to this, the population of Luanda is expected to grow by 70% by the year 2025.

Population growth is often accompanied by a growing middle class, and urban regions across the entire continent are seeing such growth. Retailers in particular are rushing to snatch up excellent real estate deals. Chinese investors are already active within real estate development across Africa and the experts at Knight Frank are also paying attention to more investment activities come out of South Africa, with more capital flowing in from South Africa into the northern regions than ever before.

This century will prove to be exciting for the entire African continent and it is clear that investors of all types are playing the long game when it comes to investing within Africa. However, it is doubtful that we will need to wait until 2100 to see some amazing developments coming out of these economies with growth well underway.

Real Estate Investment and Diversification

Adding real estate to your portfolio is a common way to diversify your investments and add stability. Those two results, which obviously go hand-in-hand, are why real estate investment is often suggested to those looking to mature and grow their portfolio. Let’s examine some ways that real estate investment can accomplish those goals.

Diversification

Anthony S Casey

Why is real estate investment healthy for your portfolio?

The most common reason for interest in real estate investment is diversification, which in turn will maintain the purchasing power of capital. There are well documented studies indicating that there is a low correlation between the real estate industry and stock and bond investments. Take this to mean, empirically, that real estate investment is an effective method of portfolio diversification. Also, consider how many different sectors of real estate investment there are. Coupled with consistent introduction of new products, and buyers end up with many different options. This flexibility allows investors to further mitigate risk.

Safeguard Against Inflation

Real estate has a great method of guarding against inflation. This stems from the owner’s ability to raise rental rates based on inflation and market value. Dissimilar to manufacturing or service based investments, real estate does not need to battle demand elasticity to increase prices. Granted, prices are subjected to competing properties in the same marketplace, but it stands to reason that those shifts would be effected by inflation equally. The hedging effect of real estate investment also maintains the purchasing power of capital because it passes a portion of the inflationary volatility to the tenants.

Portfolio Organization

Keep in mind that home ownership is, for most investors, the biggest single slice of their portfolio-pie. If you are considering moving a portion of your portfolio in real estate, you should incorporate your own home into the overarching strategy. It can be odd to consider your personal home as an important part of your portfolio, but keeping your eye on your long term goals will help give investors perspective.


 

These are just a few of reasons why real estate investment is an important part of one’s portfolio. As always, it is important to discuss your financial goals with a professional, such as Anthony S Casey.

Ranking the World’s Best Real Estate Markets

A study recently published by the Association of Foreign Investors in Real Estate has ranked the most attractive real estate markets in the world for foreign investment. The yearly survey conducted by AFIRE is a polling of principles and senior executives at global real estate investment firms. Members of AFIRE have an estimated $2 trillion in real estate assets.

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The United States is an attractive destination for international real estate investment (photo: Getty Images)

The results for 2014 indicate the broad appeal of properties in the United States. Three of the top six cities ranked were in the United States. New York City is once again number one, having been beaten by London in 2013. San Francisco and Houston are the other US cities on the list.

The United States was ranked the number one country with opportunity for capital appreciation, beating out Spain and the UK in the second and third position, respectively.

Granted, this organization focuses primarily on United States investment. In fact, inbound investment in the US is the common bond between all of it’s members, so take these results with a grain of salt. However, the results of this latest survey do indicate that the economy of the United States is continuing to rebound and offers stable investment opportunities. With the strength of the USD at an 11 year high, many foreign investors are taking notice.