Singapore strata industrial: the leveraged buy-pledge-buy loop, costed
Composite-board score: 4.8 · Where it is strong: Net cash flow, Stability & rule of law · methodology
This is one of this site's "do the arithmetic" entries: it takes a widely circulated playbook apart — incorporate a Singapore company, buy a floor of strata industrial space, let it, pledge it for a loan to buy the next floor, and repeat. In Singapore the structure is real: non-residential property carries no ABSD, banks face no MAS loan-to-value cap for company buyers, genuinely operating companies are assessed on DSCR rather than TDSR, leverage of 70–80% is available, and appreciated equity can be refinanced out. But it is not arbitrage — it is a leveraged carry-plus-appreciation bet, and the positive carry is a gift of 2026's collapsed SORA: the unlevered full-cost net rent is only 3.0–4.5%, and the numbers clear only because strata industrial loans price at 2.3–3.0%. Four structural traps are taken apart below: tenure decay stalls the refinancing engine, spreads reset in year 3, round-trip friction runs 8–15%, and the exit buyer pool is thinned by JTC rules. Verdict: doable on conditions — 60-year or freehold tenure only, underwritten to survive a 5% rate world, and treated as an operating business rather than passive rent.
In short: four lines first
From S$570,000 (worked example: a 1,000 sq ft 60-year unit; equity of roughly 20–30% plus costs)
3–4.5%（Strata industrial net rental yield (full-cost)）
High burden (multi-tenant management, re-letting and refinancing all need watching; industrial tenants turn over fast)
Tenure decay stalls the engine: banks cut both leverage and loan tenure as the remaining lease shortens — the cheapest 30-year units are precisely the ones that will not borrow. Savills 1Q 2026 puts 30-year strata at S$353 psf, down 0.6% quarter on quarter, falling alone in a year when overall industrial prices rose 4.2%. Loop with those and there is no second floor.
The numbers that matter
- Strata industrial loan pricing (all-in, floating)：2.3–3%（ Broker claim ，Data as of: 2026-11-08）
Why we think it makes money
First, why the structure stands at all: non-residential buyers pay no ABSD (per IRAS), company buyers have no MAS LTV cap, bank practice runs to 70–80%, and companies with real operations are assessed on DSCR (rent cover over interest) outside the personal TDSR frame. That is the entire institutional basis — and it exists only on the commercial/industrial side, where residential leverage is doubly walled off by ABSD and TDSR.
The numbers clear today for exactly one reason: money got cheap. 3M SORA has fallen to about 1.0–1.3% and strata industrial all-in floating pricing sits around 2.3–3.0%, while JTC puts multi-user factory occupancy at 90.3% for 3Q 2026. On a 60-year unit at S$570 psf renting at S$2.0 psf/month: gross yield about 4.2%, full-cost net about 3.2–3.8%, and DSCR of roughly 1.5–1.9× at 70% leverage. The positive carry is real — and every point of the cushion comes from the rate spread, not from the asset being cheap.
Yields are compressing as you loop: JTC rents rose 1.6% year on year against prices up 5.3%. Each successive purchase is struck at a lower yield than the last. What the loop actually earns is the time gap between low rates and slow price growth — not rent.
How to actually get in
- Incorporate the holding/operating company and open accounts. Note that shell-company buyers are pulled back into the MAS Notice 645 frame (individuals and shell/investment-holding borrowers are tested under TDSR at 55% with a 5% stress rate); only companies with genuine operating substance are DSCR-assessed. Directors' personal guarantees are standard for holding companies.
- Select units: 60-year or freehold tenure only (30-year units are falling in price even in a rising market — see the risks); check JTC use and the 60:40 rule plus subletting and assignment restrictions; price against the Savills strata bands (60-year about S$569–571 psf, freehold S$876–890 psf).
- Finance against full-cycle terms, not the first-year rate: compare 2–3 banks on the year-3 spread reset (SORA+3.0 structures are in broker tables), lock-ins and refinancing fees; 70–80% leverage, keeping DSCR headroom above 1.5× on conservative rents.
- Let and hold: industrial tenants are mostly SMEs on short leases with fast turnover — management intensity is far above residential. Rental income is taxed (interest is deductible); GST on rent follows the treatment in the tax lines.
- The loop itself (refinancing equity out): after appreciation or amortisation, apply for a top-up or refinance into the next floor — every cycle re-runs bank valuation and DSCR, and the next unit's tenure and rate terms are whatever the market then offers. No step is automatic.
What it costs, what it earns
Entry amount: From S$570,000 (worked example: a 1,000 sq ft 60-year unit; equity of roughly 20–30% plus costs)
How much work for you: High burden (multi-tenant management, re-letting and refinancing all need watching; industrial tenants turn over fast)
- Entry friction: BSD on non-residential property tops out at 5%; GST of 9% applies when buying from a GST-registered seller (input recovery depends on the buyer's GST status); legal and agent fees about 2%.
- Holding costs: property tax at 10% of annual value; MCST maintenance charges; vacancy and re-letting agent fees; repairs. Together they compress a 4–5% gross to the 3.0–4.5% net.
- Exit friction: industrial SSD — 15% if sold within 1 year, 10% within 2, 5% within 3 (other commercial property has no SSD); plus selling agent and legal fees. Full round-trip friction of about 8–15% is the short-cycle loop's silent killer.
- Financing costs: valuation, legal and prepayment/refinancing penalties per bank terms; when spreads reset from teaser to SORA+3.0, annual interest cost can jump from about 2.4% to above 6.5% (see the loan-pricing metric card).
Basis: this site uses full-cost net returns only — income minus vacancy, management, maintenance, taxes and insurance, then financing interest, with entry costs in the denominator. See the methodology。
Identity & tax
Status (residency / citizenship)
This asset does not count toward the channel This asset leads to no status
Threshold: S$10,000,000 起（新设/扩充本地企业）；基金路线 S$25,000,000
买分层工业单位不给任何身份：新加坡没有被动投资者居留，真正的投资移民只有 GIP（S$1,000 万投入本地企业、直接给 PR）。以公司持有工业物业是税务与融资结构，不是身份通道。
Source: 新加坡经济发展局（EDB）《GIP 说明书》；ICA
Tax (investor level)
租金收入应税、利息可抵扣；非住宅房产税为年值 10%；GST 是工业交易区别于住宅的隐藏摩擦。
- 租金收入：公司按 17% 企业所得税、个人按累进税率（非居民个人净租金 24%）；贷款利息、房产税与维修费可抵扣。
- 房产税：非住宅物业按年值（AV）的 10% 征收，不论自用或出租。
- GST 9%：向 GST 注册卖家购买商业物业须付 GST；买方公司若注册 GST 可抵扣进项税，但出租时须向租户收 GST——多数小型工业租户自身不能抵扣，等于变相压低可收租金。
- 印花税：买方印花税（BSD）非住宅五档、最高 5%（2023-02-15 起）；工业物业另有卖方印花税（SSD）：持有 1/2/3 年内出售分别 15%/10%/5%——其他商业物业没有这一项。
Double-tax treaties: 新加坡有 90 多个全面税收协定，与中国、印度均已生效；与美国没有全面所得税协定（美国来源股息对新加坡居民仍是 30% 预提）。新加坡是 CRS 参与方。
Source: 新加坡税务局（IRAS）
This section is general information only — not immigration or tax advice. Program rules change frequently; before acting, rely on the official texts and a licensed adviser.
Risks: what could go wrong
What we have not verified yet
The following key figures have not yet been verified; the reason is noted for each item.
- Any specific transaction's leverage and spread: these vary bank by bank and case by case; this page carries broker comparison pricing only (see the loan metric card), and the bank's formal letter of offer governs before signing.
- JTC consent practice for subletting and assignment on specific units: the rules are written, but consent speed and conditions case by case have no published statistics, so this page gives no timeline figures.
FAQ
- Why not run this loop with residential property?
- Residential is walled off twice: ABSD reaches 60%/65% for foreigners and entities, and individuals and shell companies sit under the 55% TDSR. Non-residential property has no ABSD and no MAS LTV cap for companies — the institutional space exists only on the commercial and industrial side.
- Does buying through a company automatically escape TDSR?
- No. MAS Notice 645 pulls individuals and shell/investment-holding borrowers into TDSR (55%, 5% stress rate); only genuinely operating companies are DSCR-assessed. The common shell-company-plus-personal-guarantee structure is often assessed on both bases.
- What does this model fear most?
- Rate normalisation. The entire positive carry comes from 2026's low SORA; a spread reset or SORA back above 3% turns the worked example's carry negative while the exit market stays thin — the fear is not losing rent, it is being forced to sell at a bad point. Run the numbers at 5% first; if they still clear, then talk about entering.
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