A. POOR RETAILING FUNDAMENTALS VS INVESTING IN NON-RESIDENTIAL PROPERTY.

Owing to many new supplies of shopping spaces coming out of the market, shopper traffic has been dispersed or scattered into more or new shopping areas thereby thining down the shopper flow and retail takings of retailers. Thus, rental and capital value of shops should adjust downwards in response to the demand and supply equilibrium.

Regionally, Singapore has a high cost in rental, manpower, operating expenses, the Goods and Services Tax (G.S.T.) and the appreciating Sing dollar exchange rates, making retail prices much higher compared with other Asian countries.

Many tourists felt that Singapore is only good for shopping and buying genuine branded and luxurious goods which are still much cheaper, having no import tariffs and more variety to choose from.

Retailing is much tougher as the dosmestic market is small. Many locals now have lesser disposable income as they have to contribute to mandatory savings like the Central Provident Fund, (C.P.F), housing and car loans, credit card roller-over debt servicing, and the present inflation-induced increase in food and fuel prices, utilities bills and general price increase in services.

But the price of non-residential property did not adjust downwards according to the economic fundamentals especially for shops. Due to the recent changes by the Government to control the residential property prices before the bubble gets bigger, eventually hurting the unwitting purchasers or speculators, such residential property purchases have become unattractive, bothersome or even punitive.

The Goverment's restriction has unintentionally created temporary market exuberance as many investors choose to buy non-residential leading to price increase but the market fundamentals and yield are not supportive of the short term gain.

The buyers will need to survey, research or consult those who are familar with the field and who can forecast a reasonable and realistic yield affordable by the tenants.

For those considering to sell the shops, this is a good time as some buyers are still prepare to make attractive offers. Once, when everybody wishes to sell think that a market crash is imminent or price correction has set in, the price will surely fall.

With cash in hand, there will be many more opportunities to realise your plans or leverage for faster and higher profits.

We have observed time and again that there is a tendency for the rent to remain low or depressed when the landlords handle the tenancy and lease renewal matters directly with the tenants. This is even more apparent when the tenants have been with the landlords for many years. Oftentimes, friendship and fellowship built up through time and tenants often will paint a negative or struggling image of their businesses. Those lucky landlords who have bought the properties at a low price would have enjoyed multiple folds in rental yield and capital appreciation. Some felt contented and liked things to remain status quo. Thus, they could be generous with the small rent adjustment. However, if they wish to sell at a good market price, the yield must be attractive as buyers need to factor in the cost of borrowing, the opportunity cost of using their own money and the prospective loss if the market were to drop or crash.

Owning real estate should be an enriching experience with the pride of ownership, a sense of accomplishment and a psychological and emotional well-being. Perhaps, landlords should set up a necessary budget to engage a 3rd party like us to handle all tenancy and lease renewal matters and still get to keep their privacy and tranquility and at the same time have stable rental income and future sale profit.

Such services including negotiating with the existing tenants for lease renewal before sourcing for new tenants, rental rates forecast, insisting on certain terms and the collection of rent as well replacing tenants who often delay or default rent payments.

 C. IMPROVING CUSTOMERS' INTIMACY AND LOYALTY.

In 2011, there have been many new rules set up by the Council For Estate Agencies (C.E.A.) to control the conduct of the agents. This is to ensure a level playing field and maintain a high level of professionalism. We cannot publish or send out public flyers showing all the property for rent and sale or circulate freely the sale price of properties sold.

Thus, market transparency and speed of information delivery is curtailed. Many prospective buyers and sellers, tenants and landlords will have lesser and slower real-time data to make a vital decision.

We plan to overcome this setback by enhancing our services in the area of customer intimacy and loyalty. We have updated our record on our valuation opinion for sale and rent and could update you on which property are for sale or rent and upon your personal request can reveal those property sold and the price to date. Keen buyers considering to invest, should register with our Buyers' Library to get the latest property for sale.

We are only a call away at HP 96736477. Please do visit our office at Far East Plaza #05-134B to have a confidential discussion on your requirements