A version of this article was published in e27 by Ohmyhome co-founder and CPO Race Wong with the headline, Why Singapore becoming a tech hub is a great boost for the proptech sector.
As Singapore housing prices and transaction volumes continue to rise, one-stop-shop property service provider Ohmyhome looks to the technology sector as one of the key reasons why the upward trend in the property market may continue.
The rise in global innovators flocking to Singapore
The APAC region is home to some of the largest (and highly competitive) digital platforms globally, constantly bumping against each other to win digital consumers. To find their foothold in the market, these tech giants are moving and expanding their regional headquarters to a central location.
Enter Singapore.
As green lanes reopened for international business last year, several up and coming tech giants announced their relocation plans to set up their regional offices and data centres in the Lion City. Among them are Chinese tech behemoths Tencent and ByteDance (the parent company of Tik Tok) and Zoom, Rakuten, Amazon, Twitter, Kajima, Johnson Controls, and DB Schenker.
Eighty per cent of the world’s top 100 tech firms already have a regional headquarter in the country, according to the Economic Development Board (EDB) of Singapore. A notable few include industry giants such as Google, Alibaba, Grab, SEA, and PayPal.
As more global tech players flow into Singapore’s shores, a digital platform surge may be on the horizon. This makes us wonder:
Can Singapore be the next tech mecca that is Silicon Valley?
The fact that global tech players are moving to Singapore in the middle of a pandemic to establish their businesses is a signal that the little red dot comprises one of the key ingredients of a Silicon Valley in the making, which is that it’s the destination of choice for establishing tech businesses and start-ups.
Year after year, Singapore is recognised as one of the best countries for business across the globe. This is due to a plethora of reasons, the most obvious one being its strategic geographical location.
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It is only a six-hour flight time radius from any other country in APAC, positioning it at the nexus of connectivity to Eastern and Western markets. A JLL study cited in Forbes found that China’s cities were most connected to Singapore, which means the tech giants mentioned above have access to a talented resource pool of software engineers and growth employees.
And because software engineering talents are mobile and fluid, the best and brightest will be eager to move wherever they feel will provide job satisfaction and greater access to cutting-edge research or tech.
They can easily find it in Singapore, specifically one-north: A tech-oriented, research and development precinct in District 5 that houses prestigious tenants, such as Google, Grab, Shopee, and Unilever.
Punggol is soon to follow, slated to be developed as a tech hub in the North-East area, a digital district projected to create 28,000 tech jobs and make room for the next mini-Silicon Valley.
Singapore has an entrepreneurial environment that fosters innovation
With unicorns — or billion-dollar startups — peppered across the nation, Singapore has also proven itself to be a top entrepreneurial ecosystem with a flourishing marketplace characterised by innovation, collaboration, and research.
For example, one-north is a hotbed for key growth sectors, mainly info-communications technology and startups found in the Biopolis, Fusionopolis, and Mediapolis developments.
Besides the wide array of possibilities for businesses in Singapore, we cannot disregard the local government’s effective COVID-19 response, which also plays a crucial part in attracting foreign talents and investors.
With more than half of the population expected to be vaccinated by the third or fourth quarter of the year, it is no question why Singapore is an ideal destination for many, especially tech companies.
A deeper look into the key tech players moving to Singapore
Establishing your regional headquarters to an entirely different country also means taking your teams with you and hiring more talents—both locally and internationally. Considering the influence that the aforementioned tech players have on Singapore’s economic growth, employment rates, and even rental rates, those in the technology sector will have a much easier time hiring than other industries—especially with the new Tech.Pass scheme.
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In January 2021, Singapore EDB and Enterprise Singapore announced the launch of the Tech.Pass scheme, which aims to grow the country’s technology ecosystem and global presence by allowing “established tech entrepreneurs, leaders, or technical experts from around the world to come to Singapore to perform frontier and disruptive innovations”.
Through the scheme, global tech giants can seamlessly establish their headquarters in Singapore and hire foreign talent with ease despite the ongoing travel restrictions.
Speaking of which, TikTok’s parent company, ByteDance has more than 200 job openings listed on their site while Chinese tech giant Tencent Holdings will kickstart their operations with over 100 open job positions. Cloud-based video conferencing service Zoom is also actively hiring local talents for their software and data engineering, data science, and product departments.
Even local startup Grab announced their plan to hire about 350 more employees at the start of the year, with skills in artificial intelligence (AI), cybersecurity, data science, software engineering, and product management and design.
In the immediate term, the evolution of supporting technology and 5G in Singapore makes it an ideal breeding ground for innovations across industries. These capabilities and increased bandwidth for data-intensive content will pave the way to galvanising organisations to set up their businesses in the country, and lay the groundwork for the future.
What does this mean for Singapore’s property market?
The wealth expansion of those in the technology sector—even healthcare, fintech, logistics and software—will bode well for the real estate market, which has been well established as a hot favourite among well-heeled investors and wealthy foreign buyers.
As such, they may continue to grow their investment portfolios in tandem with their income through real estate, primarily residential properties that could give more stable returns in the long run.
Also Read: Proptech is changing the face of real estate in Asia Pacific
And so the cycle runs: As more tech firms move to and expand in Singapore, there will be more employment opportunities, attracting high-income employees to move into the towns in which they’ve set up their offices, which can raise the rental demand in the area.
With a larger pool of tenants, investors will most likely snap up properties to lease in selected areas, which may raise property sales transactions and prices.
This is where proptech comes in.
The role of proptech
Companies with the combined power of technology and real estate expertise will have an increased responsibility to point buyers and investors in the right direction as it faces a competitive seller’s market where cash over valuation (COV) is back in play. (COV refers to the amount of money that buyers have to pay in cash if the sale price exceeds HDB’s home valuation.)
A great example of a proptech company with the capabilities to successfully assist such buyers, tenants, and investors is Ohmyhome. As a one-stop-shop for all property needs, they streamline the housing process by reducing paperwork, speeding up housing transactions through artificial intelligence, and providing end-to-end services at every stage of a customer’s property journey.
This means a buyer or investor can rely on their Ohmyhome Super Agent to take charge of the home search, selection, documentation, and even the financial planning, legal conveyancing, home staging — all the way to handover.
Published: 22 April 2021 in e27
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