February 11, 2022
PropNex Property Frontrunners Series Featuring Norris Low, Director of Corporate Leasing.
By PropNex Research and Editorial
Chances are, most decisions around real estate are pretty big decisions, be it in leasing or buying a property. And having an experienced agent to guide and advise on these deals could help clients avoid potential pitfalls ahead.
In this special interview segment, PropNex Picks caught up with Norris Low, Director of Corporate Leasing at PropNex Realty to find out about his recommendations for tenants and landlords in navigating the leasing market as well as his views on rental outlook in the coming year.
In the beginning, it was the sales role that attracted me to embark on a career in real estate. Over time I learned that my real estate expertise helps people make one of the biggest decisions in their life. It’s a responsibility that I take seriously because a property is usually one of the largest investments that people commit to and it is a long-term commitment at that. In the course of my work, I got to meet a lot of people and some clients eventually became friends.
As the Director of Corporate Leasing, my remit is to manage our corporate clients’ real estate portfolios with a team of tenancy executives at PropNex, ensuring that we deliver services professionally and trying our best to achieve an optimal outcome for clients. Another key task for me is in business development - to grow our leasing business and capabilities.
It is certainly important for clients to engage an experienced leasing agent because the agent will be able to provide valuable advice and observations about market trends that could end up helping clients save time and money.
For the landlord, a seasoned agent can provide help in pricing the rent correctly, qualify tenants and most importantly, know how and where to reach out to the prospective tenants.
For the tenant, an experienced agent has a better understanding and knowledge of the apartments available; they can help the tenant to search for the right property in a more efficient and effective manner, by take them to apartments that match the tenant’s requirements. This shortlisting process saves time for the clients, not to mention cutting out the tedium that could come with viewing a long list of properties. A seasoned agent who is familiar with the rules and regulations will also ensure tenants are dealing with the rightful owner of the property - and not face a situation where he/she loses the deposit to someone acting to be the owner.
Generally, I would say it is always better to buy than rent, especially with the advantage of purchasing highly-subsidised HDB flats directly from the Housing and Development Board. A young newlywed can easily buy a new Build-to-Order HDB flat with all the grants from the government; and it will help them get started on their property ownership journey.
If someone is investment savvy, good at managing their funds and is confident that he/she can multiply the monies through investment - and consistently do so - then it may be better to use the down payment (otherwise used to purchase a home) to invest. However, most people are unable to achieve good investment returns, not to mention that the financial markets can be quite volatile.
That said, some people may opt to rent first before buying. For instance, a couple may choose to rent an apartment first before buying a larger unit later on when they have kids. It depends on the individual’s financial circumstances and lifestyle preference.
The strong residential leasing demand, coupled with the low supply of units available for rent have helped to prop up rental rates in 2021. We expect this trend could likely continue into 2022.
Tenants may have to set aside an additional budget for their rent as the landlord will likely request an increase in rental rate when their lease is due for renewal. If the tenant is just starting looking around, they have to be decisive once they find the property they are interested in. There might be keen competition for attractive units and being decisive will help the tenant to avoid the situation of losing the property to someone else.
For landlords, they need to look at the rental rate carefully; while the rent has gone up overall, it is also important not to overprice the property. They have to be mindful of transacted rentals and the leasing supply of properties nearby as well.
The pandemic had slowed down the office leasing demand in 2020. But in 2021, we saw some recovery in office leasing with several office towers taken off the market for redevelopment and tech companies taking up new leases in the central business district. With the reduction in supply from office towers withdrawn for redevelopment, such as AXA Tower, Shaw Tower, Keppel Towers, Fuji Xerox Tower, we may see office rentals increase this year.
For commercial leasing in retail and F&B spaces, we see good take-up rates with improved shopper traffic in malls and an increase in new F&B operators entering the retail scene. The rental relief grants by the government to qualified commercial properties tenants have provided some help to the tenants. However, with the continued restriction on social gatherings, dine-in restrictions, and border control measures, the retail and F&B sectors will likely remain weak and muted.
Contact Norris to find out more about PropNex’s corporate leasing services.
February 18, 2022