CONCEPT OF STRATA-TITLED SERVICED APARTMENTS

Abstract

In Singapore, serviced apartments ownership is cunrently under the en block ownership structure, which is one of the development guidelines imposed on serviced apartments. However, in other countries such as New Zealand and Australia, such developments are individually owned i.e. strata-titled ownership but managed and maintained by one single company. This dissertation examines the possibility of adopting this idea of strata-titled ownership for the serviced apartments in Singapore. The major roadblock to realize this possibility lies in the development guideline, which limits serviced apartments to only en bloc ownership. This was done to protect the amenity of the established residential areas. From a survey, 95% of those interviewed are willing to invest in this industry if this idea becomes a possibility. They warmly welcome the concept of strata-titled serviced apartment coupled with the minimum guaranteed return benefit. Furthermore, the majority of those interested to invest are backed by the ability to do so. A pricing scheme is suggested to provide a better understanding of where the strata-titled serviced apartment would stand should it be implemented. A comparison of the serviced apartments and condominium units was also done to convince potential investors of its worth for investment. It was found that the prices of serviced apartments obtained by using the Income Method of valuation are 011 the high end and are veiy comparable to the prestigious condominium units in districts 9, 10 and 11 since most serviced apartments are located in those districts too.