28 & 29 Sep 2013


Colliers International: Office market recovery picks up pace

Source: Lianhe Zaobao, Saturday, Page 41

Property analysts pointed out that the recovery in Singapore’s office market has started to pick up pace with rents in most areas registering growth in the third quarter of 2013. This growth momentum is expected to continue in the fourth quarter of 2013.

IMG_7712According to Colliers International, rents of Grade A office space in all but two micro-markets registered quarter-on-quarter growth of between 0.3 per cent and 3.3 per cent in 3Q 2013. This contrasts from the situation in 2Q 2013, during which Premium Grade offices in the Raffles Place/New Downtown micro-market was the sole segment that experienced rental gains.

Mr Marcus Loo, Executive Director of Office Services at Colliers International, says, “The office market in 3Q 2013 saw leasing activity dominated by lease renewals, with landlords pricing their buildings competitively to ensure continued high occupancies. Following the improvements in market sentiments and landlords’ confidence, there was a slight growth in rents as compared to the last quarter. However, there is still pressure for companies to look at ways to cut cost. This has led to some firms reassessing the way they use their office space. Buildings with large and efficient floor plate will continue to attract tenants and we should see more examples of flight to quality going into the next quarter.”

Meanwhile, office occupancy rates fell in 3Q 2013 due largely to the completion of new office buildings. The average occupancy rate of Premium and Grade A office space in the CBD eased 1.7 percentage point to 93.5 per cent in 3Q 2013.

The fall was led by a 6.5-percentage point drop in occupancy rate in the Premium Grade office space in the Raffles Place/New Downtown micro-market to 87 per cent in 3Q 2013. Similarly, the average occupancy rate of Grade A office space in the City Fringe micro-market also fell 3.5 percentage point to a four-year low of 95.6 per cent during the quarter.

On the sales market front, strata sales activities moderated in 3Q 2013, as investors re-evaluated their purchase decisions or retreated to the sidelines due to the implementation of the total debt servicing ratio (TDSR) and the possible increase in interest rates. Noticeably, property owners were also not in a hurry to sell their properties due to their confidence in the long-term growth prospect of the office property market, as well as their strong holding power.

Going forward, on the back of brighter global and domestic economic prospects, Singapore’s office leasing market is expected to continue to improve in the last quarter of 2013 – supported by a broad base of demand drivers from commodity traders to law firms, to companies in the energy, finance and insurance, as well as information and communication sectors.

Ms Chia Siew Chuin, Director of Research & Advisory at Colliers International, expects office rents to continue to trend upwards in 4Q 2013 at a modest rate of about 1-3 per cent. This could bring the full-year rental growth for office space to between 1 per cent and 7 per cent for the different micro-markets, reversing the 4.6-15.6-per-cent contraction in 2012.

The recovery in office rents would also provide investors with better returns.  Ms Chia concludes, “The average capital values of overall Premium and Grade A office space islandwide have increased by 2.2 per cent in the first nine months, and are expected to stay relatively stable for the rest of the year. Hence, the full-year escalation which is projected at around 2.2 per cent will outpace 2012’s 1.2 per cent rise.”


Options galore for Bishan-Thomson buyers

Source: The Straits Times

Property buyers looking in the Bishan and Thomson vicinity are suddenly spoilt for choice.

Two new residential projects are up for sale this weekend. A week ago, brisk buying marked the first day of bookings at UOL Group’s 445-unit Thomson Three, with 160 units sold. About 15 minutes away by car, CapitaLand’s 694-unit Sky Vue opens for sale on September 28.

Both – on 99-year leases – are close to popular schools such as Raffles Institution, Catholic High and Ai Tong Primary School. The Sky Vue project in Bishan Street 14 is in the town centre – a stone’s throw from Bishan MRT station and Junction 8 mall. Thomson Three is in a quiet private housing estate, next to a cluster of landed homes. On transport, Sky Vue residents benefit from developed nodes as soon as they move in. Thomson Three’s nearest MRT station will be ready only in 2020.

At Sky Vue, one- and two-bedders – ranging from 484 to 926 sq ft – make up 74 per cent of the project, while such units make up 51 per cent of Thomson Three.

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Sales for Sky Vue condo in Bishan off to a flying start with more than 400 sold

Source: The Straits Times

Sales for CapitaLand’s Sky Vue condominium in Bishan got off to a rocking start with 410 of the 505 units released for sale on September 28 sold by 7pm. Two-bedders, with an average price of $933,000 per unit, proved the most popular among buyers, said the property developer in a statement.

Located along Bishan Street 15, the 99-year leasehold residential offering in Bishan Central by CapitaLand and Mitsubishi Estate Asia, has a total of 694 units.

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HDB says no immediate plans to develop Tampines Eco Green

Source: Channel NewsAsia

The Housing and Development Board (HDB) has said the Tampines Eco Green park at Tampines North will remain untouched for now. This is despite it being zoned as a residential area under the Urban Redevelopment Authority’s 2008 Masterplan.

Bound by Tampines Avenue 12 and Tampines North with an area of 36.5 hectares, the Eco Green park takes up 15 per cent of the land at Tampines North. The HDB said there are no immediate development plans for the area, adding that it intends to keep it as a park for as long as possible.

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IMG_7640Singapore’s property prices expected to hold steady in Q3

Source: Channel NewsAsia

Property prices in Singapore are expected to hold up firmly in the third quarter this year, despite sales transactions likely to come in lower in the same quarter – by almost half from the second quarter. This is the expectations of analysts ahead of the release of third-quarter property sector flash estimates by the Urban Redevelopment Authority (URA).

Save for a few launches like Tembusu in suburban Kovan, the third quarter of 2013 has been seasonally quiet – mainly due to the Hungry Ghost Festival Month.

But this year, the latest measures to curb housing loans have kept developers at the sidelines – hesitant to launch more projects. Introduced in June, the total debt servicing ratio (TDSR) framework limits how much property buyers can borrow to buy homes.

Analysts forecast transactions of new and resale private properties in the third quarter to be half of second quarter’s. But residential property prices, led by new projects, should continue to grow, albeit marginally.

Analysts also expect developers to sell more new private homes in the fourth quarter. New projects like Sky Vue and Thomson Three, launched only in the second half of September, will contribute to the actual price index, which will be released at the end of October.

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Plum Tai Seng plot among three sites launched for sale by JTC

Source: The Business Times

JTC Corporation is offering for tender a 1.18-hectare plot along Tai Seng Street (next to Tai Seng MRT Station), which when developed, will form “the epicentre of Paya Lebar iPark”, a pilot project by the statutory board aimed at attracting small and medium enterprises in the food and beverage (F&B), lifestyle, retail and light manufacturing sectors. Sakae Sushi, BreadTalk and Charles & Keith are among the well-known names that have set up operations in the park.

The statutory board launched the site, zoned for Business 2-White use, along with two smaller plots on Tuas South Streets 6 and 7, under the confirmed list of the second-half 2013 Industrial Government Land Sales Programme on September 27. Tenders close on November 22 for the Tai Seng Street site and on November 8 for the Tuas plots.

The proposed development on the Tai Seng site will house industries compatible with food manufacturing. The 30-year-leasehold site has a maximum gross plot ratio of 3.5, or maximum gross floor area (GFA) of 443,795.60 sq ft. Of this, at least 2.5 plot ratio (translating to 316,997 sq ft GFA) shall be built for Business 2 use and the remaining for white use. Of the white use, a minimum of 63,399 sq ft has been stipulated for retail use such as cafes, restaurants, food court and shops to support the working community in the Paya Lebar iPark. JTC said the site’s zoning allows for a “mixed-use business community offering retail, F&B and office uses”.

The 1.18-ha (126,799 sq ft) site is being sold with a 7,920-sq ft strip to provide vehicular access for pick-up and drop-off, and 2,336-sq-ft underground space for development into a pedestrian link to the Tai Seng MRT station. Strata subdivision of the new development is not allowed for the first 10 years after Temporary Occupation Permit (TOP) is issued. After that, strata division is allowed with minimum unit size of 150 sq m (1,614.59 sq ft) GFA.

Tan Boon Leong, executive director of industrial services at Colliers International, reckons that the new development will be leased to occupiers such as restaurant chains (for their central kitchen), culinary schools or those in the food packaging business. He acknowledges the site’s prime location but adds that the cost of constructing the underground pedestrian link could be an unknown factor in costing.

“I expect around six to eight bids, with the top bid around $280-300 per sq ft per plot ratio (psf ppr),” he said. This translates to an absolute lump-sum price of $124.3 million to $133.1 million in land cost alone.

The two Tuas South sites launched by JTC are zoned for Business 2 development, which allows for heavy industrial use. “These smaller plots with shorter tenure are targeted at industrialists who need to custom-build their own facilities,” said JTC. “This is also in line with the government’s efforts to make industrial property more affordable,” it added. Each plot is being offered on a tenure of 21 years and eight months. Strata subdivision is not allowed in the first five years after the projects receive TOP.

Colliers’ Mr Tan predicts eight to 10 bids for each of the Tuas plots with winning bids likely to be around $70-90 psf ppr.

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Combine & Conquer

Source: The Business Times

A growing pool of businesses have been banding together to jointly run extensions of their businesses. Hence, when furniture store Fred Lives Here from its current Emerald Hill shophouse to Orchard Central at the end of October, they intend to share the 2,000 square foot retail space with an art gallery, a nail salon and an artisan gift store, among several others.

The collective space will be an extension of Pact, which currently comprises restaurant-bar Kilo, menswear boutique Kin and hair salon, Pact + Lim.

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New Eateries

Source: The Business Times

The owners of two new eateries skip the well-trodden path of speciality coffee joints or trendy tapas bars to chart their respective culinary course.

Cera is located in the middle of a shophouse row of eateries in the far-flung end of Upper Thomson Road, offering vegetarian food, while Table 24 is a food-centric concept that is a restaurant first but which hosts small-scale concerts and events on its rest days. Table 24 is located in Temple Street at Chinatown and focuses on contemporary American cuisine, a melting pot style that works in Asian and Latin American flavours.

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HMV to close outlet in Somerset

Source: The Straits Times

Reeling from the sudden closure of Gramophone last week, Singapore’s music retail industry was dealt another blow with news that HMV will soon shut down its flagship store in Somerset. HMV Singapore’s general manager Michele Tan confirmed that November 4 will see the 313@Somerset outlet close for good.

The move will bring HMV down to a single, smaller outlet in Singapore at Marina Square. This comes just 10 months after HMV’s Hong Kong and Singapore business was bought over by Hong Kong equity firm Aid Partners Capital, a month after the British-based music giant went bankrupt in January.

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Assignment fees for hawker stalls on the slide

Source: Channel NewsAsia

A ruling that new hawker stallholders are not allowed to sublet or assign their stalls to another person has been in place for more than a year, and the Chinatown Complex Hawkers’ Association has observed that the assignment fees have shown signs of decreasing.

For example, for one of the non-subsidised stall in a hawker centre in Chinatown its assignment fee could have been as high as $30,000 a year ago. However this year, the new stallholder paid a fee of about $10,000.

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