What will become of Singapore’s commercial property market over the next 5 years?

With rents of high-tech office space seen to rise by 10%, will Singapore remain one of the busiest commercial hubs in Asia?

Shaun Di Gregorio, CEO of the iProperty Group which launched CommercialAsia recently, noted that there are initiatives introduced in 2011 that will support the vital investment drivers in the economy and therefore continue to secure Singapore’s position as a desired location for offices that act as a hub to the rest of Asia.

Over the next 5 years, some initiatives will have an impact on the commercial and industrial property sector. “These included a one-off 20% corporate tax rebate and an SME Cash Grant meant for small companies that may not benefit fully from the corporate tax rebate as they pay little tax,” he added.

According to Di Gregorio, these initiatives can help maintain Singapore’s position as a commercial hub in Asia and will help to build investors’ confidence about investing in Singapore’s industrial real estates. "Consequently, capital and land values rose by up to 10.7% during this time period. The continued expansion of Singapore’s economy should help to firm demand for industrial properties,” he added.

Di Gregorio further noted that rents for high-spec industrial space gained 11% during the last six-month review period and the continuing demand for high-specs space amid expectations of strong office rental growth is expected to drive up rents of high-specs space. “However, against a projected moderation in Singapore's GDP growth and global geo-political uncertainties, we can expect rents of high-specs space to rise by some 10% in the next 12 months,” he argued.