SINGAPORE – Prospective buyers looking to snag a good class bungalow (GCB) in Singapore should be prepared to fork out at least $20 million, though some of these properties cost significantly more depending on their history, heritage, area and location.
Now, some investors have the option of including a piece of such real estate in their portfolios without the hefty cash outlay.
Alta, a digital securities exchange for alternative investments in Asia, has partnered Singapore Exchange-listed Straits Trading to offer accredited investors an opportunity to own a piece of such real estate for a minimum of $500,000.
Under a new scheme which makes investments in Singapore prime private property, accredited investors can gain access to otherwise unaffordable real estate at a fraction of the capital typically needed for a direct investment.
Alta has set up a fund to provide investors with easy access to the Fractionalised Investment Real Estate – Straits Trading (FIR-ST) scheme. The fund aims to “confer economic benefits akin to property ownership in Singapore without the hassle of upfront payments and paperwork”.
The FIR-ST scheme introduces a new way to participate in Singapore prime property through fractionalised investing, which allows investors to buy a fraction of an asset on a digital exchange rather than purchasing it outright.
Under the scheme, accredited investors can partake in the upside of property ownership without the burdens of landlord responsibilities, property acquisition, additional buyer’s stamp duty or cumbersome paperwork, as well as a market-adjusted dividend.
Operational costs will be managed by Straits Trading.
Mr Benjamin Twoon, chief commercial officer at Alta Alternative Investments, said real estate remains a steadfast choice for investors aiming to strengthen their portfolios, and believes this will be a game-changer for those seeking a flexible and innovative way to grow their portfolios.
Mr Eric Teng, group chief operating officer of Straits Trading, said FIR-ST will mimic the experience of buying a physical property with potentially stable returns and upside over time.
Straits Trading has been testing the waters for fractionalised investment options in recent years.
It was reported in 2023 that the company offered two properties – a condominium unit in Duchess Residences at 108 Duchess Avenue and a freehold GCB at 8A Cable Road – to registrants of the Straits Trading Shareholders’ Club.
The projected growth rate for Singapore’s real estate market in 2025 is estimated to be around 4.5 per cent, driven by strong demand in both residential and commercial sectors.
PropNex Research said sales activity in Singapore’s landed homes market remained resilient in the first half of 2024, with 681 transactions totalling $3.7 billion, outpacing the preceding six months.
Despite high interest rates and market uncertainties, buyers continue to show strong demand, driving prices upward. The GCB segment saw increased activity, with nine high-value deals totalling $219 million.
