Singapore: Real estate financing

Common ways of financing commercial real estate acquisitions

The main sources of financing property acquisitions are:

  • Borrowing from banks; and
  • Equity raising.

Typical security created

Typical security interests include:

  • Mortgage registered over the real property, or in cases where separate title to the property has not been issued, security is provided by way of assigning the rights under the sale contract to the lender and executing a mortgage in escrow;
  • Debenture incorporating a fixed and floating charge over all assets of the borrower or the company holding the legal title of the property. These include assignment of leases, sale contracts, rental and sale proceeds, a charge over the rental account and any reserve account, and an assignment of insurances; and
  • A charge over the shares of the borrower or the company holding the legal title to the property.

A charge must be filed with the ACRA within 30 days of its creation, failing which, the charge may be void against all creditors and any future liquidator.

Restrictions for foreign lenders

Subject to the terms and approval of the Head Lessor (if any) such as JTC Corporation, there are generally no restrictions on Singapore companies granting security over real estate to foreign lenders.

Costs relating to the granting and enforcement of security

In Singapore, stamp duty of 0.4% on the loan amount is payable where security over real estate or shares is granted to a lender, subject to a maximum amount of S$500.

A registration fee (currently S$68.30) for registration of the charge instrument at the land registry will also be payable.

While the law does not impose any time limit for the registration of an instrument, late registration may lead to a loss of registration priority.

Updated on 1 February 2019.

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