The volume of small firms venturing out of their main business to yield huge bets on real estate development is another burning sign for residential housing market.
Aztech, an electronics maker, is the most recent company to venture into boutique property development. It joins the likes of jewellers Aspial; Popular Holdings, a bookstore chain; and Heeton Holdings.
With the projected increase in population, Aztech is confident that for its new business, there ‘will be long-term sustainable demand’.
In a statement made last Thursday, the firm said, "The residential property sector in Singapore has seen tremendous growth in terms of the number of new projects launched as well as the amount of interest in these projects among investors and buyers.”
The move of the company follows that of Heeton Holdings, which was previously in the wet market business but lately sold off to Sheng Siong its five markets in order to concentrate on boutique property development.
The Lumos, an exclusive condominium situated in Leonie Hill, was developed by the company.
One Robin, its 14-unit maiden project was launched in June 2009. Two months after it was commenced, it was sold out.
Yet-to-be-launched 8 Raja and 18 Shelford in Shelford Road are other developments under its belt. The plummet in these two developments’ fair value caused Aztech to report $17.6 million net loss for the year ended April 30, rather than a $13.6 million profit.
During the 2000 real estate boom, the property bandwagon had few passengers. Among them were Nobel, an interior design and finishings firm; BBR Holdings, a specialist contractor; Noel, which markets hampers; and Leeden, an equipment supplier previously known as ACE Dynamics.
According to market experts, the enthusiasm sweeping through the residential sector is likely to tempt the firms nowadays.
With the two integrated resorts’ impending launch, further growth and lower costs in construction in the property market can possibly yield larger margins for developers.
“Land prices for high-end residential development are still at a substantial discount (compared with) the recent peak in 2007/08,” said Ms. Tay Huey Ying, director of research and advisory of Colliers International.