Do commercial and industrial properties make better investments?

As I run a real estate research company, one of the questions I frequently get from my clients is whether commercial properties make better investments than residential properties.  Some of them believe that residential properties are currently too highly priced; hence do not make worthwhile investments.  They think that commercial and industrial properties have not appreciated as much as residential properties and could likely give better returns.  Moreover with higher rental, they could potentially get better rental yield.  

Do you share similar views and have you considered investing in a commercial or industrial property instead?  To give you an idea on the difference between the residential, commercial and industrial markets, let us look at the volume as well as the transacted amount for each category.

Comparison of transaction volume and gross transacted amount from Jan 09 to Sep 09

Category	Volume	Percentage Breakdown (Volume)
Residential	22, 954	95%
Commercial	511	2%
Industrial	596	3%
Total	24, 061	100%

Source URA and Ascendant Assets Pte Ltd

The table shows a compilation of all the property transactions that took place from Jan to Sep 09.  From the table, we can tell that residential properties have the highest amount of transaction activity with 22,954 transactions done.  This works out to 95% of the total property transactions done for the first 9 months within Singapore (excluding HDB transaction).  

From these figures, we can conclude that the private residential property market has the most buying and selling activity.  Based on the sheer volume, the likelihood of finding good deals for residential properties is higher as compared to non-residential properties.  While this does not mean that you should completely rule out buying a commercial/industrial property, residential properties may still be a safer bet if you are thinking of investing in a property for capital appreciation.