Not too late to cash in on office boom

The Sunday Times reports that the Singapore real estate market for office space is still healthy despite faltering residential properties and property-related stocks. There is a strong demand for office space due to expanding business and limited options and, despite a rise in prices of 32.6 per cent last year, analysts are saying that demand is likely to stay strong through the end of the year or longer. Though office prices have started to stabilize, rents are expected to continue rising until at least 2010, making office real estate a strong investment choice.

There are downsides to the current market, however, including greater risk and difficult in obtaining financing. Banks generally only lend 60 to 70 per cent of office sale price versus 80 to 90 percent of sale price of homes. Buyers cannot use their Central Provident Savings to fund the purchase of office space either.

Overall, it still looks like the commercial real estate market for office space will remain strong for some time.