[SINGAPORE] Third-generation property leader Rachel Teo believes that any introduction of inheritance tax needs to be carefully thought through, “without stifling entrepreneurship or punishing intergeneration business succession”.
Speaking on a recent podcast episode of PropertyBT, she argued that business people may consider locating elsewhere, where there is no inheritance tax, should such a levy be introduced here.
She pointed out that small and medium-sized enterprises are an important part of the Singapore economy, and that founders are keen to pass on their businesses and assets to the next generation.
In Singapore, estate duty was removed for deaths on and after Feb 15, 2008. Estate duty is a tax on the total market value of a person’s assets at the date of their death.
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However, while she has reservations over any potential levying of an inheritance tax, she supports the need for property tax as part of a functioning economy.
She views the progressive nature of property tax as fair, but wonders whether tying property taxes to achievable market rents is fair, especially during periods of market volatility.
Teo is a director of her family’s business, Daniel Teo Group of Companies, and the co-founder of real estate platform Fraxtor.
The Daniel Teo Group is an investment holding company with diversified investment interests spanning Singapore and overseas real estate, aged-care facilities and active ageing. It is also a staunch supporter of the local arts scene.
Rachel Teo’s father Daniel Teo, who is in his eighties, is a past president of the Real Estate Developers’ Association of Singapore and the honorary chairman of the Securities Investors Association (Singapore) while her mother is Goh Soo Khim, a pioneer in the Republic’s ballet scene.
Her late grandfather Teo Thye Hong, together with her late granduncle Teo Thye Chor, migrated from China to Singapore in the 1940s and were involved in founding property group Tong Eng Group.
For Rachel Teo, despite giving up early ambitions to study architecture, joining the family business in property came naturally as she had started visiting sites when she was younger – first with her grandfather, as part of family outings, and then later with her father.
Fraxtor
After spending years working in the family business, Rachel Teo, together with Oliver Siah, co-founded Fraxtor in 2017. The platform aims to provide investors a chance to invest in real estate with a small amount of capital – akin to democratising property investment opportunities.
Through the digital platform, investors have been able to take up fractional interest in landed housing and boutique condo projects here, among others. Generally, an investor can access property opportunities on Fraxtor’s platform with a minimum sum of S$25,000.
Recently, its investors participated in a Kallang Way food factory project being built by CapitaLand Development.
In addition, investors on the platform have participated in real estate opportunities in Australia, Japan, Thailand and the UK.
Rachel Teo seeks to take the democratising of real estate opportunities further soon.
Currently, accredited investors – such as individuals with an annual income exceeding S$300,000 or net financial assets of more than S$1 million, among others – can participate in investment opportunities offered by Fraxtor.
She hopes that by this year or next year, subject to getting the necessary regulatory approvals, individuals who are not accredited inventors can access real estate opportunities offered on Fraxtor’s platform. She is confident Fraxtor has the compliance capabilities to handle retail investors.
Senior living
Amid Singapore’s fast-ageing population, Rachel Teo shares her father’s interest in providing solutions in the senior-living space.
She sees the potential for co-living spaces which cater to the elderly that come with various relevant ancillary services, and thinks the silver economy offers significant opportunities for property groups as well as a host of other sectors.
However, she noted that those pursuing real estate-linked opportunities in senior living here will need to overcome the obstacles of the high costs of land, construction and manpower.
Moreover, she sees a need for an entire ecosystem of players, such as policymakers, property developers, healthcare providers and even insurers, to collaborate in order to optimally address the needs of seniors.
Also, she pointed out that sites for housing residents requiring dementia care, for example, should be located in the city, where it will be convenient for family members to visit, instead of in the suburbs.
A health and medical-care site in Chai Chee that the charitable healthcare organisation Sata CommHealth has put up for sale at S$63 million is on her radar. According to marketing agent CBRE, an outline application has been submitted for the site’s redevelopment into a 12-storey assisted-living facility with a medical centre at a plot ratio of 2.5.
Giving back to the community
Alongside her business interests, Rachel Teo is passionate about giving back to the community, especially by supporting the local arts scene.
In 2010, Daniel Teo and Rachel Teo founded the non-profit The Private Museum, which is now located at the conserved Osborne House, atop Emily Hill.
Rachel Teo sees little contradiction between her family’s philanthropic pursuits and its interests in the hard-headed real estate world.
When asked if landlords in Singapore are greedy and hence hold back entrepreneurs by charging high rents, she firmly pushed back, saying not all landlords are greedy.
She pointed out that during the Covid-19 pandemic, her family, as a landlord, worked closely with retail tenants, giving them generous concessions to help them tide over the difficult times.
