HOTEL and property tycoon Kwek Leng Beng believes Singapore's real estate market is sustainable and further investment opportunities lie ahead.

'I am also waiting for the opportunity ... to go in and buy at the right time,' he said at a property conference yesterday.

The executive chairman of City Developments said growth in Macau's gaming industry had driven up residential property prices there sharply. And with two integrated resorts and big events such as the Youth Olympics in the next few years, Mr Kwek reckons the future is bright for Singapore real estate.

According to country head of Jones Lang LaSalle Singapore Christopher Fossick, the current slowdown in property demand is largely sentiment-driven, and many investors are probably waiting to purchase at better prices.

In terms of office space, Mr Kwek said: 'There has been a lot of talk that by 2010 and 2011 there will be a lot of oversupply. I do not believe so because in the first place, construction is a problem here.'

He cited rising construction costs as a reason for this view.

While office rents have been rising, Mr Fossick does not see this as a major business concern. Sharing feedback from multinational companies, he said wages are a much larger component of the cost of doing business, compared with rents.

Mr Kwek is also positive on the outlook for the hospitality real estate market. He believes the shortage of hotel rooms in Singapore and the rise in intra-regional travel will keep room rates on an uptrend.

Although Mr Kwek is generally upbeat on prospects for local real estate, he did express one concern. While investments from institutional funds have helped steady the market, 'funds have a duration of life and will get out', he said.

On the other hand, 'for the retail buyers, when they get out, they don't get out all at the same time'.

Mr Kwek asked in a panel discussion why the recent boom in Singapore's property market did not attract many individual investors from the West, while funds showed huge interest. The director of property at Henderson Global Investors Asia, Chris Reilly, said this could be due to the lack of familiarity with Asian real estate among retail buyers in the West.

This article was first published in The Business Times on May 16, 2008

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