I believe many will agree with me that residential properties in Singapore have become quite pricey.

With residential property prices at an all-time high, many investors have started to look at non-residential properties (i.e. commercial and industrial) as investment alternatives. Apart from having fewer regulations, some investors are of the opinion that commercial and industrial properties allow them to diversify their property portfolio. In other words, if there was a price correction in the residential market, they believe that the commercial and industrial sector would not be as badly affected.

My company Ascendant Assets Pte Ltd recently did a study to see how correlated the different property sectors were. Our findings are shown in the chart below (see Figure 1). From the table, we can tell that all the different sectors have high correlation with each other. In other words, if the residential sector dropped (or increased), the office, ...