Asset Management Report: Singapore Property Investment Strategies

This report provides a comprehensive analysis of asset management in Singapore, focusing on commercial property investment. It begins with an executive summary highlighting Singapore's favorable business environment and the potential of the real estate sector, particularly in the Central Business District (CBD). The report then delves into asset management strategies, emphasizing the importance of aligning practices with business objectives, prioritizing assets, and defining clear responsibilities. Marketing strategies, including print and social media campaigns, are discussed to attract potential tenants, with consideration given to external factors influencing the market. The report also explores asset enhancement initiatives such as additional floors and the adoption of renewable energy sources. Risk management and business continuity plans are examined, followed by an indicative property income statement and disposal strategies. The report recommends acquiring property within the CBD, specifically Alexandra Technopark, with a holding period of 10 to 15 years, and advises the client to establish a private limited company in Singapore. The report concludes with a summary of findings and recommendations, offering valuable insights into the Singapore property market.

Running Head: Asset Management
Asset Management in Singapore
Student Name
Institution Affiliation
Instructor’s Name
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Table of Contents
1 Executive Summary………………………………………………………… 3
2 Report Introduction…………………………………………………………. 4
3 Asset Management Strategy…………………………………………....... 5
4 Marketing and Management Strategy……………………………………. 7
5 Asset Enhancement Initiatives……………………………………………... 9
6 Risk Management Business Continuity ………………………….................... 9
7 Indicative Property Income Statement…………………………............... 12
8 Disposal Strategy……………………………………………………….. …….. 14
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Summary and Recommendation………………………………………..... 15
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References…………………………………………………………………... 16
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Executive Summary
Singapore has in recent years developed into a free market economy with a favorable
environment for business people or investors to do business in the country. Singapore has been
hailed for been least corrupt, favorable government policies and low tax levies. These, among
other incentives, make Singapore a business destination for investors all over the world. In this
case, various sectors including real estate, hospitality, manufacturing, banking and retail in the
economy have shown promising returns even in the coming years.
In this report, however, we will explore the real estate sector with a focus on the laid down
procedure of acquiring property, the marketability aspects, risks associated with it as well as the
future outlook of this multi-billion industry. The government, which owns about 80% of the total
land, exercises public leasehold systems which not only enable the government to reserve land
for public utility but also manage the ever-growing urban population. The government levies
taxes on property leaseholders which are guided by four main principles; easily understood,
equitable, efficient and it should have neutral effects on the economy. The demand for housing
as well as hospitality services is expected to surge in the coming years. The favorable
government policies that favor the external investors make the business opportunity lucrative.
Based on the above factors, asset acquisition within the CBD is recommended for any investor
after great returns. Having weighed in available options in the CBD, we recommend Alexandra
Technopark to our investor. The acquisition target is proposed with a holding time of 10 to 15
years and the customer is encouraged to shape a private constrained organization in Singapore.
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Alexandra Technopark is a cutting edge business space advancement situated inside the
noticeable Alexandra business hallway.
Introduction
The recommended real estate property venture is Alexandra Technopark. The property is situated
along the Alexandra business hallway. It has a holding time of 10-15 years. This property can be
easily be enhanced through asset enhancement initiatives. Below is a view of the Technopark
Centre.
The Real estate business is a lucrative venture in Singapore. The government has made even the
process of acquisition much easier by using the public leasehold systems so as to manage public
utilities as well as emerging real estate needs. The leases can be held by an individual,
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partnership or company. The company option is usually advised due to its limited liability while
maintaining control. In Singapore for instance, the acquisition leases for commercial property
usage are mainly divided according to the use of the property e.g. retail lease, industrial lease.
Singapore city, being a business hub, is a lucrative location to set up a commercial property. The
market trends indicate promising returns in the coming days. It is, therefore, the best bet for any
investor to sink his her teeth into. The favorable existing business environment is ideal for this
venture to thrive. We shall, therefore, in this report give an overview of the current market trends
as well as various approaches for acquisition and disposal available to the investor. We shall
provide professional guidance to the client and advise him on key procedures required to set
acquire this property in Singapore city.
Asset Management Strategies for Marketing and Maintaining the Asset
Asset management is a very important practice after asset acquisition. At this stage, the asset is
put into its commercial production. It is an ideal practice that the leaseholder develops an asset
maintenance policy that will provide due guidance on how the asset is to be maintained while it
is being put to production. The development of the asset management policy must take into
consideration the current and future market and business environmental conditions, the business
needs as well as the expectations of all the stakeholders. It involves a healthy balance of
operational costs, opportunities as well as the risks the business assumes in order to achieve the
objectives of the business. Therefore in the case of the property to be acquired in Singapore, I
will outline various asset management principles the investor will take into consideration while
developing the asset management strategy.
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Among the asset management principles is aligning the asset management practices with the
overall business objectives. There is a need to implement this principle especially in a booming
business hub like Singapore. This is because this principle emphasizes more on business
planning, which is key in evaluating all the potential suitable methods of enhancing efficient
service delivery. More often, service delivery is hindered by uncertainties such as unexpected
market surge. Therefore, with proper mechanisms of planning, these uncertainties will be greatly
mitigated so as to enhance efficiency in service delivery. The planning process should also be
aligned to the government policy as well as budgetary frameworks so as to steer in achieving the
agency objectives.
The asset should also be prioritized based on how critical the service it provides is. This will
enhance the efficiency of the assets by ensuring that only critical services are given priority.
There should be a clear framework for the allocation of asset management responsibilities.
Responsibility and accountability should be clearly defined, documented and communicated to
the staff. Staff charged with these responsibilities should be allocated with enough resources in
order to carry out their responsibilities accordingly. The company should also ensure that asset
management functions are well communicated and understood by the staff. The staff should be
well trained on how to carry out those duties. This will ensure that asset management
responsibilities especially the complexity are exercised with due care and as per the prescribed
principles. The management should drive the implementation as well as the compliance of the
asset management strategy in the organization. The management should at all times promote the
culture of continuous improvement in asset management policy, for, without leadership support
from those in management, the whole process will lapse.
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By enforcing the asset management practices, the organization will realize numerous benefits
that are not limited to the reliability and maintainability of the asset. These practices also
enhance the lifetime of an asset by assuring that asset lasts longer as. The organization will also
realize optimal cost management in its long-term and short-term operations. The continuous
asset improvement strategies will lead to better practices in the future and the organization
should align itself to this culture so as to align its operations to those deemed best practices in the
coming days. These practices will enhance the maintainability of the asset while it is being put
underuse.
Marketing Strategies.
Marketing strategies are core in any asset management strategies. Our client needs to run a
sound and appealing promotion campaign on this property. This will aid in tapping potential
interests for tenancy and interested tenants will consider Alexandra Technopack as their favorite
building choice. These may be in the form of print media, social media or even employ the
services of advertising agencies in Singapore city. This will shape the product development of
the asset and brand it well to suit the current prevailing trends because it is worthwhile for any
organization to incorporate current and future trends that are likely to impact the marketability of
the asset.
Marketing aspects are at times influenced by the factors beyond the organization’s control, the
external factors. Singapore has had a stable economy which has been aided by a favorable
business environment. However, we cannot rule out any external factors that may influence the
business in the future even though the future looks promising. Any organization in business
should, therefore, put measures to curb any negative impacts that may arise in the future.
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In this report, I will explain various marketing strategies as well as the environment and
influence trends impacting asset management in Singapore so that the client takes note of them.
One crucial factor in society. For any business to thrive, it must auger well with the set values in
the society. The aspects of asset management should be in control all the time and must align
itself to values that are generally accepted by the wider society. Some aspects especially in
service delivery and price settings have deemed a violation of integrity and therefore violating
these societal values will negatively impact the marketability of the business. Another important
aspect is the environment. This factor has a great impact on the survival of the business. For
instance, if the business is located in a location that anticipates a shortage of skilled manpower or
competency may be due to demographic factors is likely to hinder its service delivery. Singapore
is a growing country both in terms of population as well as the literacy level. This challenge is
unlikely to occur based on the current demographic statistics.
A value chain is also an important aspect that has a strong impact on asset management. The
strategy should be well designed to suit the ever-changing needs of value chain management.
The technological aspect is also critical. The asset management strategy should be aligned to suit
the most appropriate technology. It should also create a flexible environment to suit the changing
aspects of the technological environment as well as serve the changing needs in the
organization's needs in the coming days.
The market trends in Singapore show promising returns in the real estate sector. Among the key
drivers are the growing commercial activities in the city. There is, therefore, no doubt that with
the asset management systems in place, this property will experience steady growth over-time.
The demand is huge and is forecasted to grow in the coming days. Unlike England and Wales,
the incentives are quite favorable. The taxes levied are lower especially in the case of external
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investors. The economy is stable and political influences have little impact as compared to
England and Wales. This, therefore, makes Singapore a business hub.
Possible Asset Enhancement Initiatives
Asset enhancement initiatives are a key component in real estate circles. It refers to mechanisms
put in place to enhance the productivity of an asset. In this case, technology, efficiency, and
marketability are key is enhancing the life and productivity of an asset. Technology, for instance,
is key in that the best techniques in the market are aligned in the management of an asset. This
involves incorporating the best technologies that will have increased productivity and boost
efficiency. In the case of Alexandra Technopark Centre, additional floors are recommended as a
way of scaling productivity.
Energy consumption a key aspect that contributes quite a higher percentage of the total costs
incurred. In this regard, we advise our clients to employ current technologies of renewable
energy. These options are available in Singapore and if employed, energy costs will significantly
be reduced.
Diversification is also a key component to enhance asset property. The government has of late
encouraged property developers to diversify into residential properties to address growing
housing demands in the city. With this policy, our client can diversify the commercial aspect of
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the property to residential. This way, margins will increase significantly and risks will be
mitigated.
Our client can also reduce operation costs by applying the Green Mark scheme, which is
advocated by the Building Construction Authority (BCA). This scheme suggested various
measures an organization can employ to reduce their operation costs. Among these measures
include replacement of Chilled Water Chillers with Variable Refrigerant Flow (VRF), adoption
of renewable energy sources, and replacement of fixed glass panels with low emission coated
glass to possibly increase the energy efficiency. Therefore by implementing these laid down
measures, our client will save on operation costs by quite a large percentage. Various resource
improvement methodologies should also be adopted by the client. This includes the allocation of
enough resources to staff who are tasked with the accountability and implementation of asset
management strategies. This will eventually lead to better results later on and the association
ought to adjust itself to this culture in order to adjust its tasks to those regarded accepted
procedures in the coming days. These practices will upgrade the practicality of the benefit while
it is being put under the use.
Therefore a healthy mix of technological advancement, as well as efficient use of the asset, is
key in enhancing the lifetime of an asset. The organization should also consider hiring competent
staff who would take up the responsibility of safeguarding the asset. Adequate resources are also
key to optimizing asset productivity. The organization should do thorough marketing to promote
the asset. In Singapore, the cost of product promotion is quite low as compared to England and
Wales. This will, therefore, ensure that the services to be provided by the asset is reach out to the
untapped market in Singapore.
Risk Management and Business Continuity Management Approaches
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Risk management is a very important component of any business. It ensures that the business
continues with its operations despite the uncertainties. In the case of property management, the
strategic plan should clearly outline the mitigation measures on risks that may arise. Among the
risks that are common in property management is a business risk, property risk, and market risk.
Business risks arise where an organization is unable to meet its short-term financial obligations.
This scenario often occurs where the business is mismanaged in its entirety. For instance, if
business costs are not well mitigated, the business can easily plunge into financial crisis such as
insolvency. To mitigate this risk, the organization should hire competent staff who would make
sound business decisions that will enhance the value of the property. Singapore has a large pool
of professionals who can always advise on future trends as well as various operation control that
an organization can put in place. We highly advise our client to seek professional advice on
matters to do with operation control.
Another key risk is robbery. Even though the cases of robbery and theft have been minimal in
Singapore city, it cannot be entirely ruled out. The organization should put measures in place to
protect their property from theft. Among the key measures in securing the property by
contracting security companies to provide security. The organization should also take an
insurance cover on theft so that if the risks occur, losses suffered can be recovered. The
government has beefed up security in the city. This explains the minimal cases of theft and
robbery. This clearly indicates that Singapore is a safe and secure place to do business in.
Another key risk is loss of market. The market is key in the continuity and survival of any
business. A firm is likely to lose her market share if it cannot withstand the competition being
posed by other players in the industry. This normally occurs if the firm does not undertake due
diligence in her product development groundwork or offer poor services to the consumers. The
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firm can mitigate this risk by fashioning itself as an efficient quality service provider in the
market and charge fair prices. This way, the consumers will develop taste and preference for the
firm’s products. In Singapore city, for instance, competition is quite high, especially in the real
estate sector. Even with the huge demand in this sector, any firm willing to invest in this sector
should study the market niche and chip in to provide the service. The niche currently is creativity
and innovativeness in service delivery due to the dynamic nature of the real estate sector. The
organization should do due diligence in product development so that the product serves its
uniqueness in the market. This way, the firm will tap a huge market share and withstand future
competitiveness.
Indicative Income Statement in the beginning and at the end of the investment period
The investment income in Singapore is quite promising given the favorable environment created
by the government. An investment in this sector is likely to yield 16% net returns. Below is an
income statement at the beginning of the year and the end of the year. This has been obtained
from a similar business set up in Singapore.
Below is an estimated capital value of Alexandra Technopark based on a similar business set up
in Singapore city.
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The statement clearly shows the proposed acquisition amount would be S$112 million with a
premium of 5 to 10% resulting in a range between S$117 to S$123 million.
The income statement at the beginning is as follows
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The income statement at the end of the investment period is as follows
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Having used a similar model as Alexandra Technopark, the property would be able to gain an
estimated amount of S$800 million valuations.
Disposal Strategy
Various options exist for property disposal. Among them is tendering, auctioning as well as open
market negotiations. Tendering is when the seller invites interested parties to bid and quote their
prices. The highest bidder is sold the property. Open market negotiation is where the property is
set and placed in the open market for offers from interested parties. Auctioneering is when
auctioneers are engaged to undertake the bidding process and sell off the property. We advise the
client to choose the most suitable option when the time comes to dispose the property.
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Summary and Recommendations
Having done due diligence on the business environment in Singapore, it is no doubt that it has
favorable terms and ease of doing business. The market share is quite huge and is expected to
grow in the future. The cost of setting up a leasing property is also quite low. Unlike other
European countries such as England and Wales, Singapore has favorable terms for external
investors willing to set up businesses in the country.
In our analysis also, we recommend Alexandra Technopark as the best investment venture for
our client. The property is a 15-minute drive from the CBD along the Alexandra hallway. It is,
therefore, the best bet for our client to sink his her teeth into. The favorable existing business
environment is ideal for this venture to thrive. I, therefore, recommend the investor to move with
speed and set up the business in the city.
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References
Singapore Report Construction Market Quarterly Update. (2017, September). Retrieved from
http://assets.rlb.com/production/2017/12/11025024/RLB-Construction-Market-Update-
Singapore-Q3-2017.pdf
(2011). Retrieved from
https://www.lta.gov.sg/content/dam/ltaweb/corp/Industry/files/VPCOP2011.pdf
Ng, J. (2015). Building refurbishment: How commercial building owners increase their real
estate value: special case studies of Singapore Marina Bay Area and Orchard Road
Code of Practice for Vehicle Parking Provision in Developments. (2011). Retrieved from LTA
website: https://www.lta.gov.sg/content/dam/ltaweb/corp/Industry/files/VPCOP2011.pdf
Conversion of surplus car parking in commercial, mixed-use and hotel developments within the
central area (URA/PB/2016/06-DCG). (2016). Retrieved from
https://corenet.gov.sg/media/1849893/conversion-of-surplus-car-parking-in-commercial-
mixed-use-and-hotel-dev.pdfhttps://corenet.gov.sg/media/1849893/conversion-of-
surplus-car-parking-in-commercial-mixed-use-and-hotel-dev.pdf
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