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Is Singapore driving away property investors?

Roslan Rahman | AFP | Getty Images

Property plays are near and dear to Singapore's heart, but at least one manager doesn't think the city-state is particularly friendly to real-estate investors.

"For Singapore, which is one of the most business friendly countries in the world, it's possibly one of the least real estate investor friendly countries because of constant policy changes," said Andrew Jackson, head of real estate funds at Standard Life Investments, which has around $318 billion under management.

Read More Should yield chasers worry about Singapore REITs?

While the policy changes are designed to keep Singapore competitive by lowering property prices, which is a key factor in economic production, that also puts a lot of real estate investors off, Jackson said. His Select Property Fund is underweight the Singapore property market, with just 0.1 percent of its assets invested there.

Explicit property plays make up 20 percent of the constituents of the benchmark Straits Times Index, while some of the other index members, such as Singapore Press Holdings, also have significant earnings from their property holdings.

Of the Singapore stock exchange's around $845 billion market capitalization, around $166 billion is classified as related to property,according to data from SGX.

Read More Slump in Singapore prime property worst globally

Others also see some drawbacks to investing in Singapore's property market.

"It's not that it's not friendly, but there's very little space available," said Peter Churchouse, publisher of the Asia Hard Assets Report. "It's all very tightly held by the big property companies and the REITs."

But Churchouse doesn't believe Singapore's policies have been particularly anti-investment, noting that governments across Asia put measures in place to deflate potential bubbles as developed market central banks flooded markets with liquidity.

Residential property prices in Singapore have surged over 60 percent since 2009, propelled by rock-bottom global interest rates and quantitative easing in developed economies, even as the city-state's government enacted a series of cooling measures.

Read More Analysts slash forecasts for Singapore 2014 growth

"Many would argue that those policies are very sensible. Mr. [Alan] Greenspan [the former U.S. Federal Reserve chief] refused and it led to a disaster," Churchouse said.

To be sure, Standard Life's Jackson sees a number of dampeners for investing in Singapore property, beyond just a fickle policy framework.

"We're also aware of a pretty large pipeline in commercial space -- both and retail and office space. There's a lot being constructed," he said. "That will put downward pressure on rents and returns for real estate investors."

He's also concerned about the government's recent curbs on immigration.

Read More Singapore economy outpaces growth expectations

"Population growth is expected to be fairly anemic over the next few years. That is not good for real estate," Jackson said.

But Churchouse also noted that despite all the seeming headwinds, Singapore's property market performance over the long term has been one of massive appreciation.

"It's been a way better price appreciation than you've seen in America or most parts of Europe, the U.K., Australia and New Zealand," Churchouse said. "The markets [Hong Kong and Singapore] have been way more volatile, but if you pick your points, you've done very well. The shares of Singapore property companies reflect that reality."

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.