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Issue 97

Copyright 2011-2012 All Rights Reserved.

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How to Build a Global Property Portfolio with Little Capital Property Renting Tip #1: Are You



Welcome to the 97th edition of the Singapore Property Weekly.

Hope you like it!

Mr. Propwise

Landlord Material?
Singapore Property News This Week Resale Property Transactions (March 13 March 19) Contribute
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How to Build a Global Property Portfolio with Little Capital

With the skyrocketing property prices in Singapore, many investors are looking overseas to find attractive investment opportunities. In this article we interview Dr. Rohan Weerasinghe, one of the United Kingdoms most recognized wealth creation experts and a speaker at the National Achievers Congress 2013, on both his failures and successes in building his property portfolio, and how investors can build a global property portfolio with little capital. Dr. Rohan Weerasinghe

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SINGAPORE PROPERTY WEEKLY Issue 97 Could you share your story of how you began your property investing journey and achieved the success that you have today? I started my journey in 2001 when my business partner and I purchased our first property using money we had saved up. Over the next 10 months we viewed properties and read books and magazines on property but found we had a limited understanding of how to grow our property portfolio. Because of my PhD and experience in Engineering I was a little cautious and almost overly analytical, which I believe held us back for a short period. I believed we could do it on our own. But we werent growing as fast as we wanted. Finally in 2002 my business partner literally dragged me to a two hour presentation which
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changed the direction of our attitude towards property. From there we took a three-day property training course with Tigrent Learning UK and it was like somebody had put a rocket engine on our backs. We then took a variety of classes and worked with a professional property Mentor who kept us focussed. We discovered creative ways to finance property deals, how to negotiate with sellers and to buy multiple properties at the same time. We realised that we were not limited by how much we had available in our bank account and that there were many strategies we could apply as the market conditions changed. With these new tools, over the next year or so we purchased and traded around 40 properties and my business partner was able to set up a property sourcing business
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SINGAPORE PROPERTY WEEKLY Issue 97 which allowed him to buy almost 100 properties in 14 months. What does your property portfolio look like today? What steps did you take to build up that portfolio? Our success was based on a team effort, with the two of us working together to develop a portfolio with our mentors and support from Tigrent. We bought, sourced and traded over 150 properties, which allowed the development of both passive income and cash generation, which I will teach at the NAC when I speak. properties, buying land for development and also buying properties that can be rented to multiple tenants to produce a higher income. Today this last strategy is one that I am particularly focussed on. People looking to generate wealth from the markets are faced with a wide range of options that include trading and investing in property, stocks, options, futures and foreign exchange. Which of them do you think would be more suitable for a beginner looking to build his or her wealth? Over the past 12 years I have not only invested in property, but have also built businesses and traded the stock market. As I travel the world I see people attempt to juggle multiple businesses and strategies at the same time.
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We started with a strategy to acquire buy-tolet property producing a positive income. We started with smaller properties that were cheaper to purchase and which we could refinance and pull our money back out. Over time we expanded into renovating
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SINGAPORE PROPERTY WEEKLY Issue 97 It is my belief that property underpins all other wealth vehicles simply because it has the ability to produce a passive income from tenants who live in your properties. Even if the market is flat and not increasing in value, your property will still produce income for you whether you are fit and healthy or unable to work or to run your business. What property types (e.g. residential, commercial etc) do you recommend investing in and why? This is a great question and it must be addressed when understanding the investors primary needs. For example international investors buying in the UK have opportunities to create yields at

Another great benefit to property is that

during a recession many people are unable to purchase properties so they must rent which increases the possibility of renting. As an international investor you have the ability to purchase properties in countries where there are high yields, generate an income and still bring the income back into your home country that you can then live off.

10%, 15% and in excess of 20% on

residential properties. A good place to start would be income generating residential properties where the access to financing is simpler and interest rates enable the property

to produce a high positive cash flow.

Property can be purchased below the market value and then refinanced 6 to 12 months later enabling investors to withdraw the initial

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SINGAPORE PROPERTY WEEKLY Issue 97 investment capital and start buying another property. This can be repeated to build a multi-million pound portfolio. Most importantly do not focus on just one area. For example, some countries or cities do not produce the correct yield and you cannot make the properties work. Therefore as an investor you must be prepared to diversify and move out of your location in order to create the income that youre seeking, and this may involve investing in other countries. Which global property markets do you think have the greatest profit potential for an investor and why? Which markets do you think investors should avoid? I have been privileged to teach investors in nine different countries and I personally believe that there is no market currently that
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matches the United Kingdom. The USA does have some strong strategies, but one must be exceptionally careful in view of their economy and you must be very specific on the location of where you have your investments. The UK has the benefit of financing available to overseas investors, interest only mortgages, a growing population with not enough properties available and therefore high demand for rental properties. The yields in the United Kingdom at present vary from 5% at the low end to over 20%. There is also the ability to purchase properties below market value from distressed sellers and then later refinance the property without having to sell other properties that you own. Be careful about developers and countries where there are a lot of new developments,
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SINGAPORE PROPERTY WEEKLY Issue 97 apartments and large blocks of properties being developed over a five year period or so. These properties are often incorrectly valued and rents are overinflated for a short period under guarantee and then drop away, causing the investor a lot of problems further down the line. What pitfalls should a global property investor be wary of? There are several indicators you can look at when it comes to buying properties in different countries. It is important to buy properties in marketplaces where there is a high demand for rental if your long-term strategy is to produce passive income. Be careful of properties where the market has overinflated prices and where you do not have an exit strategy. For example, if you are for whatever reason
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finding it difficult to sell a property because you havent done your research properly, then you should at least have the ability to rent the property out and produce income. I believe the greatest pitfall is ignorance. The lack of education, lack of knowledge and the belief that you can try and do this on your own.that is one of the greatest pitfalls Ive seen for investors that have lost money. How much capital do you need to have to build a property portfolio and what sort of rental yield and capital gains can you get? Could you share with us some of your best and worst property investments? This question really needs to be answered in conjunction with a question about the investors strategy. I teach people that you do not have to own a property to make money from it, which means you dont have to put
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SINGAPORE PROPERTY WEEKLY Issue 97 any money down at all. However, if you're typically looking at a property for rental income then you might initially want to put aside 20 to 25 percent of the purchase price to buy into the deal. If financed correctly with the right discount on entry you have the ability to pull this capital back out six months or 12 months later, which means ultimately it can become what is known as a no money down deal. Where this becomes very creative is when you start to work with other peoples money to buy properties which means that you can invest into deals using external funding and then pull that money back out which means you never had to use any money at all. One of my worst deals was when we purchased a property without doing the correct due diligence and research. We did
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not plan our exit strategy properly and therefore it took a lot longer to sell the property than expected. This was many years ago and that one experience taught me to always be clear on having several strategies to exit the deal whether you are holding it or selling it. The best deals that we have done always revolve around purchasing the property at a sufficiently low price to enable you to create a great income even after you have refinanced the property and released the equity back out. What are the most important lessons youve learnt about living a happy, successful and meaningful life? My father died when I was 13 years of age and he was just 46 years of age. From an early age I learned how important it was to value every minute and to get the most out of
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SINGAPORE PROPERTY WEEKLY Issue 97 life and the experiences that you have. I have also learned that success is not about chasing money it is about doing what you love and being passionate about what you do. For example, property for many people may simply be a vehicle. But if you can be passionate about building a vehicle that creates freedom then you can truly live your purpose and go and do the things you enjoy most. I also believe in living a healthy life, which creates more vitality to enjoy the special and magical moments that occur every day. Dr. Rohan Weerasinghe will be going in depth on the strategies he has used to build a global property portfolio with little capital at the National Achievers Congress 2013.

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Property Renting Tip #1: Are You Landlord Material?

Do you have what it takes to be a Landlord?

The responsibilities of a Landlord are considerable. Its not just about providing a space for your Tenants.There are rents to collect, repairs to attend to and maintenances to deal with. You also have to handle unsatisfactory Tenantsand consider the relevant laws.
As a Landlord you have to recognize that your Tenants are your Customers and they are the ones paying or covering part of the mortgage loan for you.So do treat your Tenants nicely and provide a clean, safe and functional house for them to enjoy their stay. It is a good practice to stay engaged with your Tenant regularly to be aware of the condition of the house they are staying in. Regardless of how well-built the house is, there is bound to
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be wear-and-tear and it may need repair and rectification from time to time. Bad weather tends to lead to more wear-and-tear and may even cause some structural problems to your house. Address the problems early and rectify it as soon as possible.Spending some money upfront will help to avoid expenses on big ticket items in the future. We are not saying you have to check on your Tenant on a monthly basis once a quarter is more than sufficient. It is necessary to keep a safe distance with your Tenants.Being too close may give your Tenants a chance to delay or avoid paying rent! By Eileen Tan and Ui Wei Teck, property investors and authors of Enjoying Mid-Life Without Crisis. This tip and dozens more are from their book.
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Singapore Property This Week

Freehold Kismis Lodge sold for $84m Kismis Lodge located near Toh Tuck Road has been sold collectively at $84.18 million, or $1,198 psf based on its 70,283 sq ft land area. Zoned for a three-storey mixed landed development, it has can potentially be redeveloped into 43 terrace houses or 32 semi-detached houses, subject to approval. There are currently 64 units in the two blocks of walk-up apartments. (Source: Business Times) PRs share of private property purchases fall in February Following the latest increase in ABSD rates, PRs share of private home purchases (both primary and secondary markets) have fallen by a 5.7 percentage point to a 12.7% share of 789 caveats lodged for private home transactions in February from 18.4% of the total 2,876 caveats in January. Singaporeans share of purchases, however, saw a 5.5 percentage point increase to 76.6% in February from 71.1% in January while nonPR foreigners share remained similar at 10.1% in February, a mere 0.1 percentage point increase from 10% in January.

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SINGAPORE PROPERTY WEEKLY Issue 97 The number of caveats lodged by PRs, nonPR foreigners and Singaporeans fell by 81.1%, from 530 in January to 100 in February, 72.3% from 289 to 80 and 70.5% from 2,046 to 604, respectively. Nevertheless, PRs share of purchases is expected to recover for those buying for occupation. (Source: Business Times) Prices of February completed condos fall in

Freehold Meyer Rd bungalow up for sale

The freehold bungalow sits on a 25,525 sq ft regular-shaped site located at Meyer Road near East Coast Park is asking for $35 million or $1,371 psf ppr. Zoned for "residential - twostorey bungalow" use, it can be potentially redeveloped into conventional or strata bungalows. The tender will close on April 23. (Source: Business Times)

According to NUSs SRPI, prices of completed non-landed private homes excluding ECs fell by 1.4% in February from January. Specifically, the sub-index for Central Region (excluding small units) fell by 3.7% while the sub-index for Non-Central Region (excluding small units) increased by 0.5%. This may a result of some investors shifting their interest from the Central to NonCentral Region. Meanwhile, the sub-index for prices of completed small apartments and condo units (up to 506 sq ft) islandwide fell by 0.1% in February. While both the primary and secondary market was affected by the cooling measures and Chinese New Year season in February,

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SINGAPORE PROPERTY WEEKLY Issue 97 the primary market is recovering faster than the secondary market since developers are offering attractive incentives and buyers do not have to make an upfront payment unlike in the secondary market. Further, owners in the secondary market are less willing to settle for a lower price since they may be affected by the ABSD or lower LTV limit if they were to purchase a replacement property. Resale transactions excluding ECs fell from 879 in January to 248 in February. (Source: Business Times) Three 99-year leasehold residential sites released THREE 99-year leasehold sites with a potential 845 private homes and ECs have been released for sale, this include a site at Coronation Road and a site at Woodlands Avenue 5 under the reserve list and a site at
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Jalan Bunga Rampai under the Reserve List. The 403,000 sq ft site at Coronation Road in a private landed estate near Nanyang Primary School and Hwa Chong Institution can yield 140 landed homes and is expected draw 5-17 bidders with bids around $1,400 psf ppr given its location and the scarcity of such sites. The Woodlands Ave 5 EC plot, however, can yield 590 units with its 633,000 sq ft maximum GFA, and is expected to draw 4-8 bids of $300-340 psf ppr. While any project on the site can only be launched 15 months from the award of the sites or after foundation works are completed, whichever is earlier, it is likely to benefit from being part of the future North Coast Innovation Corridor, an area of economic growth in the recent Land Use Plan.
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SINGAPORE PROPERTY WEEKLY Issue 97 The Jalan Bunga Rampai site with a maximum GFA of about 105,000 sq ft can yield around 115 units and is expected to draw 5-12 bids of $520-575 psf ppr. awards, and response to the latest cooling measures. Investment sales in the residential sector fell by 31% to $2.3 billion with transactions falling from 50 deals ($835 million) in Q4 to 27 deals ($456 million) in Q1. Three collective sales have also been transacted at a total of $247.8 million. The commercial sector saw a 46% fall to $1.6 billion in Q1 while the industrial sector aw an 8% increase to $608 million in Q1. (Source: Business Times) 7th and 8th floor of One Sims Lane up for sale The seventh and eighth floors of eight-storey One Sims Lane, a freehold Business 1 zoned development located along Lorong 23 Geylang has been put up for sale by expressions of interest. Each offers a 22,500 sq ft strata floor area, with a combined strata area of 48,739 sq ft.
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The tenders for the Coronation Road and Woodlands Ave 5 sites will close on June 20 and May 9, respectively.
(Source: Business Times)

Q1 sees 42% fall in property investment sales The investment sale of properties has fallen by 42% from $8.88 billion in Q4 2012 to $5.13 billion in Q1 2013 so far. Nevertheless, the year-end total is expected to be at the same level as 2012s or even higher, with $31.39 billion or more. The fall in this quarter can be attributed to the traditional slower Chinese New Year season, fall in state land tender
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SINGAPORE PROPERTY WEEKLY Issue 97 The building offers parking on the first two levels, three passenger lifts, two goods lifts and two loading bays. It is located near Aljunied MRT station, and fairly accessible from the CBD and the airport, making it also fairly accessible. It can also potentially be strata-subdivided in the future. The two floors are currently fully leased $3 psf. The expressions of interest exercise will close at 4pm on April 26. (Source: Business Times) Minimum average size of retail units set at 50 sq m at two to 2.4 m for single loaded corridors, and 2.4 to three m for double-loaded corridors. These measures were not meant to cool the strata retail market but to ensure a good shopping environment since small shops may be targeted at investors rather than most retailers that need a bigger space. A narrow corridor may also not be able to handle pedestrian traffic at busy times. The new guidelines are welcomed since the small units may not be a sustainable investment. The latest guidelines are likely to result in a fall in rental rates and rental returns, since smaller units usually fetch a higher psf rent. Land bids for mixed-use developments may also fall as a result. (Source: Business Times) All 93 Pavilion Square retail units sold All 93 retail units in Pavilion Square, a mixed
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To prevent the rise of small units that may not serve their intended purpose and cause disamenities, URA has set the minimum average size for retail units at 50 sq m (538 sq ft). In addition, the minimum corridor widths for retail developments were also set
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SINGAPORE PROPERTY WEEKLY Issue 97 development in Geylang Road has been sold at a range of prices from $2,000-2,400 psf for third-floor units with open terraces and "flat roof" space above to $10,879 psf for a 118 sq ft street-fronting F&B unit on the first level. Six other F&B units at the same level were sold at above $10,000 psf, with other units at the same level sold at above $8,000 psf. Unit sizes range from 86 to 926 sq ft with most at 108-129 sq ft. Its apartments, however, has not one as well, with only 15 of the 42 apartments sold at prices ranging from $1,400 to $1,600 psf. Sizes start from 398 sq ft for a one-bedroom unit, with the biggest unit being an 818 sq ft two bedroom-plusstudy unit. (Source: Business Times) Office demand supported by lower rents in Q1 Supported by lower rents, vacancy rates for offices fell by 0.7 percentage points to 5.1%
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in Q1 from 5.8% from the last quarter, with net absorption increasing from 272,000 sq ft in Q4 2012 to 375,000 sq ft in q1 2013. Grade A offices saw a 0.3 percentage point fall to $9.55 psf per month in Q1 while vacancy rates inmproved to 7.1% from 8.8%. For Grade B offices, rents also fell by 0.3 percentage points to $7.09 psf per month while vacancy rates improved to 5.4% from 5.9%. In the pipeline for 2013 are around 2.5 million sq ft of office space supply from Metropolis and Nexus@ one-north, JEM in Jurong East and Asia Square Tower 2 in the CBD among others. As projects such as Metropolis and JEM have pre-commitment levels of 70% and 100% respectively, rents are expected to remain steady in decentralised areas while rents in the CBD are likely to fall in 2013, given the much lower pre-commitment levels of 12% at Asia Square Tower 2. (Source: Business Times)
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SINGAPORE PROPERTY WEEKLY Issue 97 Restored three-storey Chinatown Lian plot Beng unit Wealth Development

shophouse up for sale The three-storey restored shophouse sits on

bought Changi Road freehold commercial

a 999-year 1,316 sq ft site at 81 South Bridge

Road, near the junction with North Canal Road. Zoned for commercial use with the first storey for activity-generating uses, it has a 5,656 sq ft GFA. It features include a


of Lian






purchased a freehold commercial plot at Changi Road for $68 million and is intending to redevelop the property with two partners

mezzanine floor and an open roof terrace,

and a column-free design and en-suite bathrooms on every floor after restoration. The currently vacant property is asking for $13.8 million. It is expected to see strong

Kim Seng Heng Realty and Development 16 wholly owned subsidiaries of KSH Holdings Ltd and Tee International, respectively. The developer is said to be developing the 17,974 sq ft site with a GPR of 3 into a mixed-use

demand given its location and the scarcity of

such property. The expression of interest will close at 3pm on April 25. (Source: Business Times)

development that will have both office and

retail space. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 97 30-year Loyang Way industrial site up for sale The 222,092 sq ft industrial site located at Loyang Way for sale by public tender. Zoned for Business 2 development, it has a 2.5 GPR and can be strata-subdivided. It is expected to see much interest given the scarcity of such sites in the area and assuming no restrictions on the strata title. Some expect top bids of $100 psf to over $130 psf ppr while others predict a top bid of $50-70 psf ppr, citing its irregular L-shape and narrow length. The tender will close on May 9 at 11am. total of eight properties, more than the fullyear figure of $62.44 million in 2012. At least $150 million worth of transactions is expected to be completed by this year. The strong performance was despite the latest round of cooling measures in the secondary market, since there were four high-value sales accounting for a total sales value of $70.1 million or 92.1% of total sales value in Q1. These include two shophouses which usually offers yield of 2-4% per annum, and a GCB plot at Chee Hoon Avenue near Botanic Gardens MRT station which was sold for $22.9 million. More high-value properties are expected to be put up for auction since it reaches out to more buyers with generated publicity though transactions are likely to be mainly from the industrial and commercial segment given the cooling measures in the residential segment.

(Source: Business Times)

Property auctions market picks up The total sales value of the property auctions market excluding those sold by statutory boards in Q1 2013 was $76.08 million from a
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(Source: Business Times)

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Non-Landed Residential Resale Property Transactions for the Week of Mar 13 Mar 19
Postal District 2 3 3 4 5 5 5 5 5 5 8 8 8 9 9 9 9 9 10 11 11 12 13 14 Area (sqft) 506 775 2,906 2,390 1,410 689 1,195 1,270 2,669 2,196 861 732 1,410 1,733 549 1,324 872 1,701 1,259 1,625 2,336 484 1,378 861 Transacted Price ($) 1,087,900 1,168,000 3,640,000 7,050,500 1,688,000 738,000 1,280,000 1,300,000 2,450,000 1,932,480 1,495,000 1,100,000 1,750,000 3,800,000 1,200,000 2,250,800 1,480,000 2,551,500 2,000,000 2,100,000 2,400,000 700,000 1,600,000 850,000 Price Tenure ($ psf) 2,150 99 1,507 99 1,252 99 2,950 99 1,197 99 1,071 99 1,071 FH 1,023 102 918 99 880 FH 1,736 FH 1,503 FH 1,241 99 2,193 FH 2,186 FH 1,700 999 1,697 103 1,500 999 1,588 FH 1,292 FH 1,027 FH 1,445 FH 1,161 FH 987 FH Postal District 14 15 15 15 15 15 15 15 15 15 15 15 16 16 16 16 16 17 17 17 18 19 19 19 Area (sqft) 1,249 388 495 1,475 893 1,776 1,163 1,948 1,012 1,001 1,572 1,044 1,658 980 1,001 1,227 1,001 1,163 1,195 1,507 1,130 366 710 753 Transacted Price ($) 1,230,000 570,000 718,000 2,050,000 1,160,000 2,268,000 1,480,000 2,337,600 1,200,000 1,100,000 1,660,000 1,045,000 1,805,600 980,000 988,000 1,150,000 910,000 1,280,000 1,255,000 1,350,000 900,000 590,000 830,000 810,000 Price Tenure ($ psf) 985 99 1,471 FH 1,450 FH 1,390 FH 1,298 FH 1,277 99 1,273 FH 1,200 FH 1,186 99 1,099 FH 1,056 99 1,001 FH 1,089 FH 1,000 99 987 FH 937 99 909 99 1,101 999 1,050 FH 896 999 796 99 1,612 99 1,168 99 1,075 99



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Postal District 19 19 19 20 21 21 21 21 21 23 23 23 23 25 25 26 27 Area (sqft) 818 1,270 1,851 1,615 1,442 1,227 1,335 1,270 1,539 700 1,281 1,119 1,033 1,184 1,173 1,302 1,206 Transacted Price ($) 860,000 1,290,000 1,680,000 1,408,000 2,100,000 1,330,000 1,368,375 1,270,000 1,258,000 795,000 1,115,000 920,000 800,000 1,026,888 995,000 960,000 860,000 Price Tenure ($ psf) 1,051 FH 1,016 999 907 99 872 99 1,456 FH 1,084 FH 1,025 999 1,000 FH 817 99 1,136 FH 870 99 822 99 774 99 867 99 848 99 737 FH 713 99


NOTE: This data only covers non-landed residential resale property transactions with caveats lodged with the Singapore Land Authority. Typically, caveats are lodged at least 2-3 weeks after a purchaser signs an OTP, hence the lagged nature of the data.

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