Issue 337

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 CONTENTS FROM THE

p2 REITs or Physical Properties Which

EDITOR
Welcome to the 337th edition of the
Singapore Property Weekly.
One Makes a Better Investment?
Hope you like it!
p7 Resale Property Transactions
Mr. Propwise
(October 28 November 3)

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 SINGAPORE PROPERTY WEEKLY Issue 337

REITs or Physical Properties Which One Makes a

Better Investment?
REITs or Physical Properties Which One
Makes a Better Investment?

By Mr. Propwise

Are physical properties or REITs better

investments? I have over a decade of
experience investing in the stock market, and
also have experience buying and selling
multiple properties (in addition to writing a
property blog), so in this post I will share my
opinion with you.

The Key Difference between Buying

Physical Properties and REITs

First, lets look at the differences between

buying physical properties and REITs.

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 SINGAPORE PROPERTY WEEKLY Issue 337
When you buy a property, you lock in your
purchase price when you sign on the dotted
line. And due to the size of the typical
property purchase, most of us will only be
able to buy just one at a time, i.e. we only
have one bullet.
For REITs, you can spread your purchase
over a period of time using Dollar Cost
Averaging. I liken this to the difference
between using a shotgun and a machine gun.
With a shotgun you only have one shot, but
you can do more damage with that shot. You
can spray lots of bullets with a machine gun,
but you might not achieve the same effect as
the shotgun. Which one is better? Well,
depends on whether you hit the target!
Is Diversification a Good Thing?
Some financial advisors tout the benefits of
diversification when investing in REITs, which
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you cant do when investing in properties
(unless you invest via property sharing
agreements with other investors). Via a single
REIT, you can invest in multiple properties in
a single sector (e.g. 100+ industrial properties
through Ascendas REIT), or in properties
across many sectors through diversified
REITs. You can also invest in a portfolio of
REITs or in a REIT index to get even greater
diversification across sectors and
geographies.
Is diversification a good thing? Ask Warren
Buffett, who said: Diversification is a
protection against ignorance. It makes very
little sense for those who know what they are
doing. I particularly like how he described his
US$26 billion investment in Burlington
Northern (a railroad company) as an all in
bet on the U.S. economy.
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 SINGAPORE PROPERTY WEEKLY Issue 337

If it wasnt Warren Buffett saying that, you How much? How about several YEARS worth
would think you were in the Marina Bay of your employment income with a holding
Sands casino! period from 3 months to 3 years? I have seen
this happen to people I know quite often with
Is diversification a good thing? Depends on
property, but rarely with REITs or stocks.
whether you know what youre doing.
Properties Do Have Some Glaring
The Biggest Advantage of Investing in
Disadvantages versus REITs
Physical Properties
One disadvantage is that it is troublesome to
The biggest advantage of property is that you
take care of. It takes a lot of legwork to find a
can get a LOT of leverage for a LARGE
good property, the buying process can be
absolute sum of money at an incredibly LOW
complicated, then you have to maintain the
interest rate (versus any other loan you can
property, look for tenants etc.
take). If the property price goes up, your
return on capital is multiplied. Buying stocks just involves clicking some
buttons or calling your broker. BUT to really
Leverage, like a knife, cuts both ways. But as
understand a company takes a lot of work it
long as you do not overstretch yourself and
takes years of experience to be able to
have holding power, buying a property will
properly analyze a companys financial
usually not be a fatal mistake. And when you
statements and develop good judgment,
get it right, you can make a LOT of money.

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 SINGAPORE PROPERTY WEEKLY Issue 337
and research all the different properties the
REIT owns, but if you know what youre
doing, then yes its a lot easier to deploy your
capital into REITs.
Also, properties are illiquid. If you dont mind
hitting the bid, you can take a loss and sell
your shares. Selling a property in a down
market could take months. Sometimes the
illiquidity is not a bad thing, as it forces you to
have a longer time horizon when investing.
For REITs its too easy to sell early to take
profit and then miss out on a lot of the
upside.
REITs or Physical Properties Which Are
Better For Building Wealth?
I think the question that matters is whether
properties or REITs are better at building
wealth for the vast majority of people. Sure,
Warren Buffett became the richest man in the
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world by investing in stocks, but how many
Warren Buffetts are there? And are you as
good and as dedicated as Warren Buffett? I
highly recommend reading his biography, The
Snowball. If you read it you will realize that he
is not an ordinary guy. He has an obsessive
personality that helped him become
enormously successful in asset allocation and
investing, but at a great cost to his personal
life.
Closer to home, if you look at the Forbes 40
richest people in Singapore, you can compare
the number of people who got rich via real
estate versus stock investing. For the latter
category, I can think only of Peter Lim, who
made a bet on Wilmar that made most of his
fortune. You will see many more real estate
investors and developers on that list. Or just
look around you I would bet that for the
average Singaporeans,
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 SINGAPORE PROPERTY WEEKLY Issue 337

the appreciation of their HDB flat has added Ones not always better than the other it just
more to their net worth than investing in depends on what your objectives are.
stocks.
Happy Investing!
The title of this article is a bit of a trick
This article is a sample chapter from the
question, because you dont have to choose
newly published REITS to RICHES
to invest exclusively in one or the other. You
Everything You Need to Know About Investing
can invest in BOTH physical properties and
Profitably in REITs by Tam Ging Wien.
REITs. Both types of investments have their
place. In fact, I do both. It all depends on your
judgment of the property and stock markets.

For sheer wealth creation for the average

person, however, my vote will be for property.
If youre looking for capital preservation and a
hassle-free way to generate income from a
diversified portfolio of properties, then REITs
would be the preferred vehicle.

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 SINGAPORE PROPERTY WEEKLY Issue 337

Non-Landed Residential Resale Property Transactions for the Week of Oct 28 Nov 3
Postal Area Transacted Price Postal Area Transacted Price
Project Name Tenure Project Name Tenure
District (sqft) Price ($) ($ psf) District (sqft) Price ($) ($ psf)
1 ONE SHENTON 1,119 1,780,000 1,590 99 9 LEONIE HILL RESIDENCES 1,389 2,800,000 2,016 FH
2 ICON 657 1,158,000 1,764 99 9 ROBERTSON BLUE 1,668 3,340,000 2,002 FH
3 THE CREST 883 1,713,000 1,941 99 9 8 RODYK 721 1,438,000 1,994 FH
3 ALEXIS 398 700,000 1,758 FH 9 ST THOMAS SUITES 2,013 3,900,000 1,938 FH
3 TWIN REGENCY 980 1,670,000 1,705 FH 9 ROBERTSON 100 936 1,700,000 1,815 FH
3 TIONG BAHRU ESTATE 1,001 1,375,000 1,374 FH 9 LA CRYSTAL 904 1,598,000 1,767 FH
3 THE ANCHORAGE 1,830 2,250,000 1,230 FH 9 PARC EMILY 581 1,020,000 1,755 FH
3 TANGLIN VIEW 1,141 1,370,000 1,201 99 9 LUMA 743 1,300,000 1,750 FH
3 QUEENSWAY TOWER 1,432 1,295,000 905 FH 9 LUMA 1,173 1,930,000 1,645 FH
4 REFLECTIONS AT KEPPEL BAY 1,851 3,066,140 1,656 99 9 THE MORNINGSIDE 2,411 3,680,000 1,526 FH
4 REFLECTIONS AT KEPPEL BAY 1,830 3,016,090 1,648 99 9 SUITES AT ORCHARD 2,002 2,980,000 1,488 99
4 REFLECTIONS AT KEPPEL BAY 1,055 1,737,890 1,647 99 9 OLEANAS RESIDENCE 1,636 2,430,000 1,485 FH
4 REFLECTIONS AT KEPPEL BAY 1,313 1,865,000 1,420 99 10 ARDMORE PARK 2,885 10,200,000 3,536 FH
4 THE PEARL @ MOUNT FABER 1,389 1,600,000 1,152 99 10 ARDMORE PARK 2,885 9,600,000 3,328 FH
5 THE PEAK@BALMEG 1,507 2,238,000 1,485 FH 10 TOMLINSON HEIGHTS 2,551 7,780,550 3,050 FH
5 THE ROCHESTER 1,862 2,620,000 1,407 99 10 GOODWOOD RESIDENCE 2,551 7,500,000 2,940 FH
5 SEAHILL 861 1,125,905 1,307 99 10 GRAMERCY PARK 2,196 6,177,600 2,813 FH
5 ONE-NORTH RESIDENCES 1,012 1,260,000 1,245 99 10 LEEDON RESIDENCE 1,044 2,630,000 2,519 FH
5 VENTANA 2,185 2,410,000 1,103 FH 10 MON JERVOIS 1,475 3,269,900 2,217 99
8 CITY SQUARE RESIDENCES 1,238 1,760,000 1,422 FH 10 GARDENVILLE 1,776 3,450,000 1,943 FH
8 OXFORD SUITES 1,033 1,288,000 1,246 FH 10 BELMOND GREEN 1,066 2,000,000 1,877 FH
8 CITIGATE RESIDENCE 614 730,000 1,190 FH 10 PARVIS 1,701 3,160,000 1,858 FH
8 KENTISH LODGE 1,184 1,150,000 971 99 10 REGENCY PARK 2,260 4,150,000 1,836 FH
8 N.A. 1,216 980,000 806 FH 10 GOODWOOD GARDENS 1,076 1,940,000 1,802 FH
9 VIDA 517 1,140,000 2,206 FH 10 FIFTY-TWO STEVENS 527 920,000 1,744 FH

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 SINGAPORE PROPERTY WEEKLY Issue 337

Postal Area Transacted Price Postal Area Transacted Price

Project Name Tenure Project Name Tenure
District (sqft) Price ($) ($ psf) District (sqft) Price ($) ($ psf)
10 WING ON LIFE GARDEN 3,240 5,150,000 1,590 FH 15 MARINE BLUE 3,025 4,179,800 1,382 FH
10 THE FORD @ HOLLAND 1,152 1,801,000 1,564 FH 15 PEBBLE BAY 2,088 2,870,000 1,374 99
10 D'LEEDON 1,012 1,580,000 1,562 99 15 VERTIS 1,206 1,600,000 1,327 FH
10 VALLEY PARK 797 1,200,000 1,507 999 15 PARC BLEU 527 660,000 1,251 FH
10 SPANISH VILLAGE 1,163 1,718,000 1,478 FH 15 COSTA RHU 2,056 2,350,000 1,143 99
10 HOLLAND TOWER 1,873 2,238,000 1,195 FH 15 ENVIO 1,033 1,060,000 1,026 FH
10 VIZ AT HOLLAND 1,227 1,350,000 1,100 FH 15 MANDARIN GARDENS 1,001 960,000 959 99
10 ONE TREE HILL MANSIONS 1,625 1,500,000 923 99 15 VILLA MARINA 2,013 1,720,000 855 99
11 26 NEWTON 560 1,582,854 2,828 FH 16 THE SUMMIT 1,668 1,990,000 1,193 FH
11 EVELYN MANSIONS 840 1,400,000 1,667 FH 16 COUNTRY PARK CONDOMINIUM 1,087 1,265,000 1,164 FH
11 CUBE 8 904 1,400,000 1,548 FH 16 CASA MERAH 947 1,072,500 1,132 99
11 SHELFORD SUITES 1,227 1,870,000 1,524 FH 16 ARCHIPELAGO 1,539 1,655,000 1,075 99
11 MANDALE HEIGHTS 1,776 2,250,000 1,267 FH 16 WATERFRONT KEY 1,216 1,240,000 1,019 99
11 IRIDIUM 2,691 3,380,000 1,256 FH 16 WATERFRONT WAVES 1,636 1,585,000 969 99
12 PRESTIGE HEIGHTS 344 547,500 1,589 FH 16 CASA MERAH 1,550 1,480,000 955 99
12 TREVISTA 1,119 1,520,000 1,358 99 16 SUNHAVEN 1,281 1,115,000 870 FH
12 BEACON HEIGHTS 667 780,888 1,170 999 16 BAYSHORE PARK 1,292 1,098,000 850 99
12 OLEANDER TOWERS 1,152 1,300,000 1,129 99 16 STRATFORD COURT 1,399 1,150,000 822 99
12 OLEANDER TOWERS 1,141 1,270,000 1,113 99 16 CASAFINA 1,485 1,180,000 794 99
13 SUITES@BRADDELL 883 970,000 1,099 FH 16 CASAFINA 1,206 938,000 778 99
14 REZI 26 452 603,888 1,336 FH 16 STRATFORD COURT 1,238 950,000 767 99
14 THE TRUMPS 700 865,000 1,236 99 17 AVILA GARDENS 1,302 960,000 737 FH
15 SILVERSEA 1,647 3,180,000 1,931 99 17 LOYANG VALLEY 1,528 910,000 595 99
15 MARINE BLUE 732 1,375,830 1,880 FH 17 LOYANG VALLEY 1,485 840,000 565 99
15 THE SEAWIND 700 1,082,080 1,547 FH 18 SEASTRAND 883 878,000 995 99
15 ONE FORT 1,249 1,790,880 1,434 FH 18 EASTPOINT GREEN 958 720,000 752 99
15 LAVERNE'S LOFT 398 554,000 1,391 FH 19 THE YARDLEY 1,270 1,450,000 1,142 FH

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 SINGAPORE PROPERTY WEEKLY Issue 337

Postal Area Transacted Price Postal Area Transacted Price

Project Name Tenure Project Name Tenure
District (sqft) Price ($) ($ psf) District (sqft) Price ($) ($ psf)
19 A TREASURE TROVE 775 815,000 1,052 99 21 HIGH OAK CONDOMINIUM 1,216 1,018,000 837 99
19 RIVERSAILS 850 855,000 1,005 99 21 HIGH OAK CONDOMINIUM 1,249 989,888 793 99
19 RIVERSAILS 850 850,000 1,000 99 22 THE CENTRIS 1,582 1,500,000 948 99
19 THE SPRINGBLOOM 1,119 1,100,000 983 99 22 PARC VISTA 1,249 1,010,000 809 99
19 THE QUARTZ 1,206 1,110,000 921 99 23 HILLSTA 764 840,000 1,099 99
19 THE LUXURIE 1,109 1,000,000 902 99 23 HILLVIEW HEIGHTS 1,432 1,560,000 1,090 FH
19 REGENTVILLE 980 763,000 779 99 23 HILLVIEW PARK 883 960,000 1,088 FH
19 REGENTVILLE 980 745,000 761 99 23 TREE HOUSE 1,249 1,275,000 1,021 99
20 SKY VUE 495 830,000 1,676 99 23 THE PETALS 1,044 975,000 934 FH
20 SKY VUE 807 1,290,000 1,598 99 23 HILLVIEW REGENCY 904 770,000 852 99
20 SKY VUE 797 1,255,000 1,576 99 23 THE LINEAR 1,798 1,380,000 768 999
20 FLAME TREE PARK 1,862 2,530,000 1,359 FH 26 THE CALROSE 1,152 1,270,000 1,103 FH
20 SKY HABITAT 1,399 1,870,455 1,337 99 27 EIGHT COURTYARDS 1,066 1,020,000 957 99
20 RAFFLESIA CONDOMINIUM 1,442 1,480,000 1,026 99 27 CANBERRA RESIDENCES 958 810,000 846 99
21 THE CASCADIA 1,496 2,470,000 1,651 FH 28 SELETAR PARK RESIDENCE 1,378 1,630,000 1,183 99
21 THE BLOSSOMVALE 904 1,350,000 1,493 999
21 MAPLE WOODS 1,787 2,440,000 1,366 FH NOTE: This data only covers non-landed residential resale property
21 MAPLE WOODS 1,378 1,855,000 1,346 FH transactions with caveats lodged with the Singapore Land Authority.
21 SYMPHONY HEIGHTS 958 1,080,000 1,127 FH Typically, caveats are lodged at least 2-3 weeks after a purchaser
21 GOODLUCK GARDEN 1,270 1,360,000 1,071 FH signs an OTP, hence the lagged nature of the data.
21 CAVENDISH PARK 1,227 1,300,000 1,059 99
21 HUME PARK I 1,270 1,330,000 1,047 FH
21 PARC PALAIS 1,378 1,415,000 1,027 FH
21 MEADOWLODGE 1,345 1,340,000 996 99
21 THE HILLSIDE 1,528 1,460,000 955 FH
21 CLEMENTI PARK 1,625 1,552,000 955 FH
21 HUME PARK II 1,238 1,180,000 953 FH

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