From East to West – What’s prompting Singaporean investors to invest in UK properties?

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Investment trends in 2015 have made for compelling analysis.

Uncertainty in global equities markets and political instability are just some of the reasons that have prompted many of the world’s investor community to reconsider their investment strategies this year.

Yet amid all of this change and upheaval has remained one asset that continues to generate global investment interest – UK property.

A weakening rand, for example, has triggered high numbers of investors in South Africa to get their money out of the country and diversify their portfolio with a British real estate acquisition.

And another region in which the UK market has seen significant levels of sentiment is Singapore. This year many investors have decided to hold off entering one of Asia’s most popular property markets, and instead invested in one of the highest performing in Europe. Such significant activity has prompted Select Property Group, the UK’s leading property investment company, to open an office in downtown Singapore, where they will be holding an exclusive grand opening on 25th November.

But why are investors in the region rushing to secure assets in a market 7,000 miles away?

Singapore – a 13-year slump with no end in sight

For many investors, patience has finally worn thin. Singapore’s property market has now been sliding for eight consecutive quarters, overwhelmed by the government cooling measures put in place in recent years to control what has become the continent’s second most expensive real estate market. With yields being swallowed and an outlook that predicts little market improvement, an alternative investment strategy is urgently sought.

What about the Singapore equities market?

Although it offers an alternative investment option, Singapore shares are also on the wane. The Straits Times Index has plummeted 18.6% since its peak in the middle of April this year.

Besides, it’s real estate that investors in Singapore have familiarised themselves with, thanks to historic capital growth of 83.7% in the last 10 years. But now house prices are experiencing slow residual declines and they cannot be offset by yields.

Property is still the answer, just not in Singapore.

So why has the UK now become the place investors want to own real estate?

High returns and a long track record of growth for international investors make British property an attractive proposition. In three decades UK residential real estate has driven better returns than gilts, equities and commercial property.

Instead of weathering the storm of the Singapore market, investors can take advantage of the security the UK offers, with its political and economic stability and returns in a strong currency.

Which UK markets are currently offering the highest growth?

Traditionally a nation of homeowners, Britain is currently undergoing a rental revolution. A preference for flexibility, as well as changing generational attitudes, means that by 2025, it’s estimated that over 50% of 20 to 39-year-olds in the UK will be renting their property.

As such, private rented sector (PRS) property is one of the must-have property assets in the UK right now. Cities such as Manchester have seen yield growth 13 times faster than London, as the demand for property in key regional markets is being met with low levels of supply.

Additionally, student property has been established as the UK’s number one asset in recent years. A product that experienced growth throughout each year of the global economic downturn, huge undersupplies of purpose-built student accommodation (PBSA) across the UK has created huge investment opportunities in a country with an international appeal for higher education.

Select Property Group will hold the exclusive grand opening of its new Singapore office on Thursday November 25th – and it wants you be part of it. Hear about the latest UK investment opportunities and find out why Select Property Group are the trusted UK property investment experts of investors in over 117 countries. To register and secure your place, follow this link.

Park First Airport Car Parking

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The UK’s airport parking companies have seen the highest growth and highest yielding returns within the commercial car-parking industry over the last three decades.

Park First is proud to offer the first affordable UK airport parking property investment opportunity. We believe this investment is low risk and highly profitable, you will receive guaranteed returns from a 6 year lease already in place upon completion.

You will receive full title dees in your name on completion. Airport parking is a solid asset backed commercial property and creates diversification across any investor’s future portfolio.

A Proven Investment Opportunity

The proposition is for an investor to purchase an individual long stay airport parking space that is leased back and managed on your behalf by a well-established airport parking company with over 20 years experience.

A unique feature of the investment is the on-line booking software and number plate recognition systems which allows for a very hands-off approach to benefit end users and investors alike.

Airport Car Parking provides higher yields than other traditional ‘buy-to-let’ investments. The scale of popularity and the rise of interest in car park investments are exemplified by the global market size, which is estimated by Colliers to be worth $12.6 billion.

Investors worldwide understand the need for airport car parking and with many car parks operating at almost full capacity on a daily basis this investment is proving very popular as well as lucrative.

Facts & Figures

  • Almost 8 million passengers travel through Glasgow International Airport each year, that’s nearly 22,000 passengers per day
  • 17,900 parking spaces are required by the Airport before the year 2020
  • Official figures show Glasgow Airport has only 2,700 long stay parking spaces (2011), therefore demand for extra airport parking is huge
  • 92% was the average occupancy of Park First’s 4,500 airport parking spaces throughout 2014
  • Park First has now released 4,500 airport parking spaces for sale to investors worldwide

For more information, sign up for Park First’s seminar on Saturday, 23rd May 2015 to find out more.

 

Better Business Inspired Investment – Parking Spaces, An Emerging Asset Class

Date: 23 Mar 2015 (Sat)

Time: 10am – 2pm

Venue: Red Velvet Ballroom, Level 5, Village Hotel

*registration starts at 10AM.

To RSVP call 83338403 (Issa) or 98466686 (Yahya)

 

Lions, Alligators, Elephants & Locusts – Investment lessons from the wild

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Here is my take on the Asia Pacific real estate market and why Malaysia is still the place to invest.

Before I go into the details of the market, I want to identify the segment of the market which I believe holds the key to any major real estate boom; the middle and upper middle class. For this article. I will specifically look at the middle classes of Asia Pacific.

According to a report by Ernst and Young released on 25 April 2013 in London

“By 2030, two-thirds of the global middle class will be residents of the Asia-Pacific region, while Europe’s share of this population will have dropped by 14%” – Ernst & Young

From studying the different markets of the world that went from sleepy to scintillating and boring to boom, we can see a certain pattern emerging. It always starts with strong government initiatives for economic transformation and growth that motivate and trigger an influx of savvy investors both big and small to develop various fundamental industries like construction, transportation, utilities, education, health care, corporate services, logistics, recreation etc. which are crucial to building a successful city or region.

Real estate will also have to be developed to anticipate the population growth created by such transformation. As such It baffles me to hear people saying constantly that supply is greater than demand during the transformation period. Doesn’t it make sense to build homes and offices first and than fill them up as you go along? Any government worth its salt will ensure there are homes first before bringing the people in! That means there will always be more homes and offices than people during this phase and the disparity is greatest at the beginning.  Imagine doing the opposite? Where would the people live or the businessmen do their businesses? I can imagine these people would leave as soon as they come to such cities as there are not enough housing or places to run their businesses effectively. My point is if a country is going to grow successfully, there must always be more homes and offices first. Yet In some strange ways, you will hear people saying that there is an oversupply or saying that the place is a ghost town and there are still nothing there and no one is living there! Excuse me, but it is still a construction zone and there are no bars and restaurants and anything else at the moment and supply will always exceed demand at this stage.

It is good to note that most of the savvy investors and institutional investors would have gone in early. They are the lions and alligators and elephants but like lions, alligators and elephants, the big players’ who have gone in will not cause a frenzy. The lions, alligators, and elephants eat and have their fill and will then sleep. No impact on the forest or jungle (real estate market). Eventually,  the market will go into a little slumber. This slumber will persists until visible signs of change appear and more stories of people making money surfaces. This is where the middle class, the locusts (who are, at the moment, still grasshoppers) will come in and devour all in its sight.

China, Hong Kong, Singapore is not palatable for most middle and upper middle class as prices are too high and/or restrictions aplenty.

India is for Indians or NRI and has its restrictions and may not be

Emerging markets like Myanmar, Cambodia, Philipines, Thailand, Vietnam, Jakarta are emerging markets and are not for bulk of the middle & upper middle classes as they are more risk adversed and these markets do not have a mature secondary (resale) market.

Australia & New Zealand, Taiwan are slower markets and may not generate the right rate of returns for those who wants faster returns

One country, Malaysia, where many people speak English, Chinese, Indian etc and where food from India, Hong Kong, China, Singapore, Korea, Japan etc can me found. Where it’s relatively cosmopolitan and many MNC’s are moving to. Where Price WaterhouseCoopers and Ernst and Young report to be the place to set up businesses to penetrate the lucrative South East Asia market. One major reason, Profitability.

Where there are quality workforce, adequate facilities and has all the logistic support equivalent to developed cities but much lower operating costs. PWC and E&Y

The World bank reported it to have better investor protection than Australia, UK and the U.S.

It is strategically located right in the middle of Asia Pacific and a short distance to all the countries mentioned above

Yet prices of its properties are still one of the cheapest in the region.

Fact is the middle & upper middle class will finally realize that there is only a place that suits their profile. Just that they will only move when all the Economic Transformation Program are in place, the people and industries are in place and then the middle class who waited will see all these happening and then it will boom.

It is like Singapore in 2005 period where we were in the transformation transition. The middle class stayed away from District 1,2 and 4 in Singapore and avoided properties like The Sail & Icon until they finally saw the Marina Bay Area truly transformed with the Casino, MBS, Flyer, Esplanade, F1 happening and heard people started making money. By then, the properties which could have turned many middle class into multi-millionaires became out of reach of them. Pity.

In Malaysia, All the Savvy investor and institutional investors have gone in. They are the lions and tigers and elephants but like them, the big players’ who have gone in will not cause a frenzy. The lions, tigers, and elephants eat and have their fill and will then sleep. No impact on the forest or jungle (real estate market). It is the middle class, the locusts (who are now still grasshoppers) that will come in and devour all in its sight.

In short, the middle class will consider these:

  • Proximity
  • Culture
  • Investor protection
  • Resale
  • Increase in population thru transformation
  • A mature local real estate market
  • Lower price and entry level

Singapore had all of these but the one country most similar to Singapore in Culture, language, and social and economic make up. Which country in Asia Pacific is most similar to Singapore in these aspects?

Remember, Singapore boomed and attracted the expatriates and grew our population because of adding one element to work and live, play. Which country is working on the same industries and ingredients that transformed Singapore in the last 20 years?

Your guess is as good as mine. We are just waiting for the grasshoppers from China, Korea, India, Hong Kong, Indonesia, Singapore and even Malaysians themselves to become locusts.

 

By Colin TanColinTan Training & Consultancy

ColinTan Training & Consultancy

The Land of the Kiwi, the Land of Opportunity

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Recent figures released by Land Information New Zealand of approved investments have shown two key buyers of New Zealand land in the past five years, the Americans and the Chinese. Though the Americans have the edge over the Chinese across the period, the Chinese stands head and shoulders above the competition when it comes to owning land in the land of the Kiwi.

Chinese buyers headed the list with 10,989 hectares of land bought in 2014 alone, while two Auckland islands linked to the mainland were purchased by China’s Rainbow Holdings NZ in a $41.5 million deal, with plans to develop a $130.6 million six-star luxury resort and native reserve.

With the Chinese investors, it seems that we might just be looking at the start of the property cycle in New Zealand and now seems as good a time as any to hop on aboard the New Zealand property investment ride.

So Why New Zealand?

No stamp duty, no capital gains tax, and no resale restriction comes first to mind. Not to mention that it has regularly been ranked top in investor protection, with a stark lack of corruption in the system. Apart from the confidence afforded to investors, New Zealand stands out for being one of the top countries for doing business, which further encourages foreign investment and drives employment in the country.

Apart from the strong GDP driven by the ideal business conditions and foreign investments, the migration from nearby Australia and Asia are also key in driving the population growth, and as a result, there is an increasing demand for housing in New Zealand, and none more so than in Auckland.

Auckland alone accounts for over 33% of the entire population in the land of the Kiwi, and the latest statistics point at a severe housing shortage in the city due to the following factors, including the abovementioned reason of population growth, the lack of new residential apartment developments in the CBD area, as well as the regulatory reasons of having limited freehold land and new building regulations in recent years.

With demand comes increasing property prices and rental yields, with many analysts pointing out that Auckland property is well poised to see the 2nd highest global capital growth in 2015, while the strong rental market yield is set to further appreciate on the current rate of 6%-8%. With the current low supply of new rental property, especially in the CBD area where the vacancy rate stands at 0.8%, there’s no better time to own a property in New Zealand.

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None more so than the Victoria Residences by the Conrad Group, which will be the pinnacle vertical sky village to embrace the Auckland CBD and become the premier address for residential living in Auckland CBD, visit http://newlaunch.iproperty.com.sg/Victoria-Residence/4941 today!

Brisbane is the city to watch for 2015

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Brisbane is the capital of Australia’s Sunshine State and the city’s property market is expected to take on a similarly bright sheen over the next few years.

Sydney and Melbourne have often been the star performers in the Australian market –Sydney grew 17.15 percent in the year to November 2014 and Melbourne’s property market increased 9.38 percent – but big questions are being asked about whether growth might slow.

Attention is now being directed towards Brisbane, which historically is about one or two years behind their Australian city cousins. Many economists are even saying it’s now roughly three years behind where Sydney is now and that Brisbane is set to play catch up.

After a period of moderate growth in the property market over the last five years, there are many reasons to suggest this might change. The population has spiked and there has also been little residential construction in the same period, which will put pressure on the market.

Demand for residential housing in Brisbane is forecast to exceed supply. By 2031, an additional 156,000 dwellings will be required, with 132,000 of these classified as apartments and townhouses.
Average annual returns have already been 11.9 percent over the past 10 years and the current rental yield of 5.33 percent is ahead of both Melbourne (4.42 percent) and Sydney (4.69 percent).

ANZ Bank’s chief economist Warren Hogan has said Australia is expecting another property price increase (15%-20%) in the next two years and Brisbane is tipped to be a property market leader this year.

It’s a view shared by All Property Solutions Singapore director Lyndon Fairbairn.
“Brisbane’s property market, out of all the property markets in Australia, is going to be the one to shine in the next two to three years and it is where the smart investors are buying right now,” he said.

“The population is ever-increasing, which is putting pressure on the housing market and rental prices, so buying now for the future will see good capital growth and high rental returns.”

One of the highlights of Brisbane’s changing property face is the Brisbane Skytower, a 274m-high, $1 billion skyscraper with 88 levels of residences. Located in Brisbane’s CBD, and overlooking the botanical gardens and a section of the Brisbane River, it’s expected to rival iconic structures like Singapore’s MBS, Melbourne’s Eureka tower or Sydney’s Sydney by Crown.

It will be the tallest building in Brisbane and reach the city’s height limit of 274m. It will feature Australia’s highest infinity pool at the tower’s crown as well as incredible recreation decks and luxury health club and spa.

A limited allocation of these apartments will be sold in Singapore, with APSS holding the exclusive rights in south-east Asia. The first batch will be available in Singapore on January 31, and it’s possible to pre-register with APSS now.

Brisbane recently hosted the G20 summit and Queensland is set to host the next Commonwealth Games in 2018. Brisbane last year adopted a new slogan – Give me Brisbane every day. It’s what savvy investors are saying, too.

 

This article has been contributed by APSS and for more information, visit http://www.apss.com.sg

iProperty H2 2014 Survey: Sellers Up, Buyers Down

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Owners keen to sell while buyers expect price declines; HDB confidence rises.

The latest iProperty Asia Property Market Sentiment Report H2 2014, Asia’s largest consumer property sentiment survey, shows a significant shift in Singapore sentiment, with more wanting to sell (from one per cent to 16 per cent) and fewer wanting to buy now (from 22 per cent to ten per cent) as prices head lower. More respondents also expect new and resale private condominium prices will continue to decline (up from 34 per cent to 53 per cent), but are more confident about HDB values.

“The H2 2014 report shows that both property sellers and buyers are nervous a year after the start of the Total Debt Servicing Ratio (TDSR). In the H2 2013 APMSR report, just after the TDSR was announced, 59 per cent of owners were confident their property would retain its value; now only 38 per cent think so, a decline of 21 per cent.  Another 25 per cent are unsure if the value will be retained,” commented Mr. Sean Tan, iProperty.com Singapore General Manager.

“Buyers are biding their time, with affordability and financing as top concerns. While the number of respondents who intend to purchase within the next 24 months remains the same at 51 per cent, buyers may wait for new and resale private condo prices to fall,” said Mr. Tan.

Developers are already responding to the more cautious market, delaying new project launches and lowering launch prices, among other strategies. According to the Urban Redevelopment Authority (URA), developer launches decreased from 441 to 351 private homes last month. Median prices between Q1 2013 and Q2 2014 declined three per cent for completed projects, while declining eight per cent for uncompleted projects.

Singaporeans do however continue to view property as a good investment, stating rental income (34 per cent) and long-term investment (29 per cent) as the top reasons. Home ownership was at 23 per cent. Private condominiums (57 per cent) continue to be the top choice, with terrace houses at 25 per cent and HDBs at 23 per cent. Survey respondents chose price, location and potential ROI as the top three factors when purchasing properties.

“Singaporeans are confident about property and have the money. 17 per cent of respondents have identified budgets above $1 million; 61 per cent have budgeted between $500,000 and $1 million; and 18 per cent have less than a $500,000 budget. The market is now correcting after the rapid rise over the last few years ago, and demand is there at the right price point,” concluded Mr Tan.

Mr. Getty Goh, Director at real estate research and consultancy firm Ascendant Assets, noted that buyers are jumping in to purchase properties when prices are within expectation, or if they are in a good location. “Examples include the 91 per cent surge in sales in District 9 and 10 reported by Barclays, and more recently the good sales figures at Highline Residences,” said Mr. Goh.

The Highline Residences in Tiong Bahru, District 3, launched in September, saw a strong sales with 80 per cent of its 160 units launched, following a “special preview discount” that took prices from $2,000 per sq. ft. (psf) to an average of $1,900 psf. District 3 was selected as one of the top three preferred locations in the iProperty H2 2014 survey.

A large number of respondents (45 per cent) indicated lower price per square foot was more important than other incentives, such as furniture vouchers. The next most important criteria (40 per cent) were smaller unit sizes. CIMB has reported that median sizes of homes have fallen from 1,200 sq. ft. to 800 sq. ft., because “most buyers compromised on smaller units in order to keep the investment amount more affordable”.

52 per cent say HDB resale prices are not affordable, down from 53 per cent in the previous survey, and from 61 per cent before that. Only 15 per cent say HDB resale prices will continue to fall, down from 37 per cent in the previous survey. This shows pricing levels are becoming more comfortable for buyers.

Overseas Properties Popular For Investment Purposes; Malaysia #1 followed by Australia and the UK

Overseas property continues to appeal for investment, with private condominiums and serviced apartments as the preferred property type. In May 2014, the Monetary Authority of Singapore (MAS) reported that the value of overseas property investments handled by local real estate agencies increased by 43 per cent from S$1.4 billion in 2012 to S$2 billion in 2013. Malaysia accounted for slightly more than half of investments, followed by the United Kingdom and Australia.

Malaysia remains Singaporean’s top investment destination at 31 per cent. Most respondents (40 per cent) are willing to pay less than S$500,000 for overseas properties and the attractive exchange rate of the Malaysian currency against the Singapore dollar continues to draw Singaporeans. Iskandar Malaysia remains a stronghold for investors, with 58 per cent stating investment as a reason for purchase, while citing affordability (54 per cent) and proximity to Singapore (69 per cent) as positives.

Australia sees continued interest (18 per cent, down from 22 per cent) along with the United Kingdom (UK) (12 per cent up from 9 per cent). Australia appeals for its proximity, quality education and lifestyle. The UK draws interest for capital growth, yields and as a place for buyers’ children to live while they study. Recent exchange rate shifts have made investing in both locations more attractive.

Respondents also indicated a preference for seminars and exhibitions when purchasing overseas properties, with 53 per cent having purchased their overseas properties through developer shows/seminars/exhibitions in Singapore.

The APMSR is Asia’s largest consumer sentiment survey, with close to 13,000 respondents from four countries, including 2,805 in Singapore. The survey was conducted by iProperty Group from June to July 2014. For the full report, please refer to http://www.iproperty.com.sg/asia-property-sentiment-survey/download/.

Why Invest in France?

France along with Germany have recently posted decent GDP growth in the last (2nd quarter) of 2013 of 0.5% and 0.7% respectively comfortably beating both the USA and UK economic growth. Due to these results people are now much more confident about the way things are going in Europe and are particularly interested in investing in these two European economies which are the powerhouses of European area.

Property being one of the main asset classes for investment is understandably being targeted with high transaction volumes expected particularly in the commercial sector. France has not traditionally been a property market where people from Singapore have invested as they have gone for the more traditional markets closer to home such as Malaysia, Thailand or Australia however with property markets looking like they might be overheating in Australia or still a bit too immature like the Philippines, France represents an attractive place to invest right now.

Its main advantages over other countries for property investment include its very secure legal system, its large economy (5th largest in the world) and political stability however that is just the tip of the iceberg. France has a temperate climate, a rich history & culture, excellent food and wine but also excellent transport links and this attracts an enormous number of tourists each year with 83 million visitors in 2012.

This puts it head and shoulders above any other country including the USA & China making it the no.1 tourist destination in the world. These kinds of figures are prompting property investors into popular tourist destinations in France especially into property where they can take advantage of these huge tourist numbers and earn a solid rental income from their property.

Seeing the appetite for secure and attractive overseas property investments amongst Singaporeans the French developer Avecoeur is about to launch its luxury resort near Bordeaux here in Singapore called “La Foret d’Armotte”.

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La Forêt d’Armotte is a luxury, eco-friendly residence in a highly sought after seaside destination in south west France that caters for discerning international clientele. Here people can invest in landed property and apartments generating very healthy rental returns for their owners and somewhere they can come and enjoy on holidays with their families and friends, giving them the best of both worlds. la6

Key Highlights

·         The lowest interest rates in over 60 years with mortgages from 2.3%
·         50% finance for Singaporeans available
·         Attractive tax incentives: no income tax to pay
·         19.6% cash-back from the tax administration
·         NET guaranteed rental income of 6% backed by notaire administered HSBC account
·         Fully-managed with no running costs for the property owner
·         Initial investment from just 220,000 SGD
·         Projected value of almost 1.2m SGD with a fully paid-off mortgage
·         Cash-flow positive from the first day

Interested to find out more about La Foret d’Armotte? Join us for a property launch preview with free seminar to find out more about investing in France here! 

No better time to Invest in Overseas Property

Simply because if the time is right for you, it is the right time. There are risks, which comes with all types of investment of course, but you can certainly make wise, calculated decisions by attending property seminars, speaking with experienced industry experts and doing your own research.

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With information of overseas property becoming more accessible and detailed, and with online sources available 24-7, information is at your fingertips, literally. Why purchase a property in Asia? It is nearer to home, and also makes a good holiday home option. Depending on the rules and regulations in the country of purchase, properties are cheaper and have more space for growth. And rental yields can be substantial, if you invest in the right property in the right location. Compared to Singapore properties, where home loans and buying curbs are increasingly being implemented, the real estate landscape overseas could be more fertile for short-term investment.

Horizon Hills in Nusajaya, Johor, Malaysia.

Horizon Hills in Nusajaya, Johor, Malaysia.

Malaysian properties are increasingly popular, especially with strong and steady developments at the Iskandar region. Horizon Hills in Nusajaya, Johor,is part of the Iskandar Malaysia development. Movenpick WHite Sands PattayaNear enough to Singapore with properties half the price or less of the same here, with the luxury of the space of your own, landed homes here are easily accessible via the North-South Expressway, Malaysia-Singapore Second Link, Skudai Expressway and the Perling Expressway. Cluster housing within a spacious buy cosy 1,200 acres, it encourages family and community living.

Looking further north into Thailand, beachfront living in the heart of Asia is offered by Apex Development. Situated in Pattaya, the Movenpick White Sands Beach Condotel development provides investors the opportunity to take part in a hotel development by purchasing hotel rooms which they can in turn earn rent on. This development is nearing completion, is targeted to be ready by end 2013.

But if it an urban lifestyle you fancy, Ayala Land, part of the Ayala Corporation in the Philippines is offering up that possibility at your doorstep. A variety of properties under the Ayala Land umbrella will put you in the centre of Makati city, Manila, with conveniences, shopping and much more in the vicnity.

Garden Towers and Escalada Scelod condominiums in the Philippines. Photo by Ayala Land.

Garden Towers and Escala Salcedo condominiums in the Philippines. Photo by Ayala Land.

Still undecided about which to go for, or perhaps you might even be considering a few, the iProperty International Property expo is where you will find all these developers and more, under one roof, presenting collections and properties at the same time. It might just be the best way to do your research, consult with experts, gather various information and compare pros and cons across the board before signing on the dotted line. The exhibition runs from 26 to 28 July at the Marina Bay Sands Expo & Convention Centre and you can pre-register here.