Friday, December 14, 2012

Strata office demand 'likely to continue'


Dec 13, 2012
By Esther Teo, Property reporter

Demand for strata office space is expected to remain healthy next year, Citibank said at a press briefing yesterday.

This is one of the property segments likely to continue enjoying growth next year, it added.

The scarcity of supply is one key reason supporting the segment.

"Most of the (office) buildings here are owned by either real estate investment trusts or developer company types. So strata office space for ownership and preservation of wealth to some extent, if you have use for it, makes sense," said Ms Yvonne Siew, head of Asia real estate at Citi Private Bank.

She was speaking at the launch of Citibank's real estate wealth solutions - a service which provides customers with a net worth of at least $1 million with property market updates and real estate investment opportunities.

Mr Shrikant Bhat, Citibank Singapore's head of wealth management, estimates that about a third of the wealth of this customer segment is placed in real estate.

Citi's market share of this segment in Singapore is roughly in "the teens", he said.

Barring any major crisis, property prices are not expected to correct over the next few years as low interest rates and ample liquidity keep the market going despite the huge supply in the pipeline.

One possible strong residential performer is the high-end sector, which could see a resurgence next year as the price gap between suburban and high-end homes narrows. The segment could have been quiet owing to a lack of exciting launches, said MsSiew.

"New launches have to be competitively priced for the excitement to come back into the market... The threshold seems to be less than $3,000 per sq ft, based on our observation," she added.


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