Singapore Property News This Week #152

Residential

Residential investments dragged by cooling measures

Total real estate investments in Q1 amounted to $4.7 billion, a 24 per cent increase from the previous quarter. While 41 to 45 per cent of real estate investments in Q1 are from residential transactions, this is expected to fall. Also, total real estate investment volumes are likely to drop 13 to 20 per cent from last year’s $28.6 billion, as the introduction of cooling measures and the Total Debt Servicing Ration (TDSR) framework drags private residential sales. Restrictions in supply of residential sites in the first half of this year, and increased interest rates will further weaken residential investments.

(Source: Business Times)

Fewer private homes sold in March

According to the Urban Redevelopment Authority, private home sales fell from 2,793 units in March last year to 480 units in the same month this year. Total units sold in Q1 2014 fell to 1,791 from 2,568 in the previous quarter and 5,412 in Q1 last year. Launch volumes in Q1 this year is the lowest since the global financial crisis in 2008 and 2009. The Santorini and the Ascent@456 were the only two projects launched in March, as cooling measures weakened sales.

(Source: Business Times)

Lower bids at Prince Charles Crescent

Government’s cooling measures and the Total Debt Servicing Ratio (TDSR) framework severely impacted the tender of a 99-year leasehold residential site at Prince Charles Crescent (Parcel B). Bid price for the Parcel B site was at $820.65 psf ppr. However, its adjacent site at Parcel A was sold for $960.28 psf ppr two years ago. UOL Venture Investments and Kheng Leong were the highest bidders for the Parcel B site, and plan to develop it into 750 new units. The Crest, at the Parcel A site will be launched next quarter.

(Source: Business Times)

Fewer couples applying for larger PPHS flats

To encourage couples to take up larger flats, the government may allow couples to co-rent flats under the Parenthood Provisional Housing Scheme (PPHS). While 80 per cent of the 1,150 PPHS flats are occupied, applications have fallen from 409 in September last year to 81. Married and engaged couples who booked uncompleted Build-To-Order flats last year can apply under the PPHS.

(Source: Channel NewsAsia)

Developers increase marketing efforts to attract buyers

850 private residential homes will be launched in Queenstown next month, and close to 1,000 units will be launched near Tanglin Road and Tiong Bahru. While condominium supply has surged, developers are unlikely to lower prices. Instead to attract buyers, developers have stepped up marketing efforts. Prices are not expected to fall as interest rates remain low.

(Source: Channel NewsAsia)

Commercial

Sale of shophouses slows as demand shrinks

Commercial shophouse transaction volumes plunged from $921.7 million in H1 last year to $346.5 million in H2. According to CBRE, 26 shophouses sold for a total of $197.2 million in Q3 2013, but sales fell in the next quarter to $149.3 million, and further shrank to $118.4 million in Q1 this year. Tightened property loans, following the implementation of the Total Debt Servicing Ratio framework, and steep property prices have muted sales.

(Source: Business Times)

Non-residential investments likely to increase this year

Office investments are expected to soar this year, as rents improve and interests surge from H2 of 2013. Major office investments in Q1 2014 include the acquisition of the OUE Bayfront by OUE Commercial Reit; Low Keng Huat (Singapore) Ltd and Sun Venture Homes Pte Ltd’s $579.4 million purchase of CapitaLand’s Westgate Tower; and a $123.8 million acquisition of a 50 per cent stake in Finexis Building.

(Source: Business Times)

More shop and factory space available in next three years

Doubling the average annual demand for shop and factory spaces, an average of 500,000 sq m of multi-user factory space will be made available yearly for the subsequent three years. This move is expected to stabilise rental price, which account for about 3 to 7 per cent of business costs for small and medium-sized enterprises. While rental rates dropped during the global financial crisis in 2007, prices have since crawled into recovery in 2009.

(Source: Business Times)

Hotel on Sentosa managed by Accor undergoes renovation

The Sentosa, A Beaufort Hotel, currently known as the Singapore Resort & Spa Sentosa is undergoing a $20 million makeover. To be completed in Q3 2015 as Sofitel Singapore Sentosa Resort & Spa, the hotel was purchased for $210.85 million by Royal Group from HKR International. The hotel is currently managed by Accor, and continues to operate despite renovations.

(Source: Business Times)