Singapore Property News This Week #190

Residential

December 2014 HDB resale prices lowest in the past 41 months

The HDB resale prices in December 2014 are the lowest in 41 months. HDB resale prices had fallen 0.4 percent in December from the previous month while resale volume also fell by 4.1 percent to 1,295 units. Market experts believe that stricter mortgage servicing ratio limits had affected demand for resale HDB flats. According to the Business Times, four-room and five-room flats had led the fall in HDB resale prices, falling by 0.7 percent and 0.3 percent respectively. Ong Kah Seng from R’ST Research believes that supply for HDB resale flats increased as more owners had wanted to upgrade to private homes or executive condos. Nicholas Mak from SLP International added that an increase in build-to-order flats had also affected demand for HDB resale flats. Nonetheless, HDB resale volumes in December increased by 28 percent year-on-year.

(Source: Business Times)

$20 million allocated to upgrading projects in 9 private estates

The Ministry of National Development (MND) will be allocating $20 million to upgrade 9 private estates. Under the Estate Upgrading Programme (EUP), upgrading works will be made to improve the living environment of older estates. Clover Estate, Lentor Estate, Thomson Faber Island Gardens, Toh Tuck Estate, Meng Suan/ Springleaf Estate, Happy Gardens, Sea Breeze Garden, Toh Estate and Jalan Merbok, Jalan Layang-Layang, Jalan Kakatua, Jalan Selating, Jalan Rajawali and Shamah Terrace Estate are among the 9 private estates that would undergo upgrading. More than 4,800 households will be impacted by this cycle of EUP and the EUP project is expected to be completed in three to four years.

(Source: Business Times)

Singapore imposes one of the highest property taxes on foreign investors

According to a report by Knight Frank, Singapore imposes one of the highest property taxes on foreign investors. Market experts believe that investors may be attracted to countries such as South Korea, Thailand, Malaysia and Cambodia, as they have more relaxed tax regimes. Nicholas Holt from Knight Frank said that taxes have been imposed to cap growth in the property market. Particularly in Singapore, cooling measures were implemented to keep prices in check. These measures include the imposition of higher taxes for foreigners. For example, foreign investors are subjected to an additional 15 percent buyer’s stamp duty. According to the Business Times, property prices had fallen by 4 percent in 2014, following the implementation of the cooling measures.

(Source: Business Times)

Duxton flat changed hands for $918,000

A five-room unit at the Pinnacle@Duxton has changed hands for $918,000. The 106 sqm flat is located on the fifth floor of the housing development. This is the second Duxton unit that was sold, following the end of a 5-year occupation period for home owners at the Duxton. According to the Straits Times, a four-room flat on a higher level had previously fetched a price of $900,000.

(Source: Business Times)

Commercial

Industrial building at Geylang on sale

A light industrial building that is located at Lorong 23 Geylang has been put up for sale. According to Colliers International, the 60-year-leasehold building has an indicative price of $115 million and it will receive its temporary occupation permit (TOP) by the end of Q1 this year. However, the building is not permitted to be strata-subdivided for sale in the first 10 years upon receiving its TOP. The 67,944 sq ft site consists of seven stories and its total provisional strata floor area is about 237,000 sq ft. Tan Boon Leong from Collier International believes that the building will appeal to institutional investors because it has a longer tenure as compared to most sites offered under the government land sales programme. Furthermore, the site is expected to appeal to tenants who are ineligible for JTC sites as it is not under the purview of JTC, said Tan.

(Source: Business Times)

Colliers: Retail rents expected to stabilise in 2015

Colliers International predicts that rental growth will remain flat this year. According to Colliers, rental growth for prime ground floor retail space in Orchard Road will fluctuate between -1 percent and 1 percent in 2015. Similarly, retail rents in other areas such as in the suburban regions, are expected to fluctuate by just 2 percent. Nonetheless, Colliers predicts that there will be a moderate increase in rents of retail spaces located in niche and diverse areas such as in the heartlands. According to the Business Times, the average monthly gross rent of prime retail space in Orchard Road had fallen by 0.8 percent to $36.17 psf in Q4 last year. Yet, the average monthly gross rent of prime retail space in regional centres had increased by 1.1 percent to $33.83 psf in Q4 last year. Market experts believe that labour shortages and higher operating costs have weighed on tenants’ abilities to afford a higher rent. Due to a reduction in retail activities in Orchard Road, the rental premium that prime retail space in Orchard Road had commanded over similar spaces in the regional centres have fallen from 9 percent to 6.9 percent, said Colliers.

(Source: Business Times)

Q3 2014 occupancy costs increases by 14.6% year-on-year

According to CBRE, the rate of growth in prime office occupancy costs in Q3 2014 had increased to US$112.91 psf per year in Singapore. This was a 14.6 percent year-on-year increase in occupancy cost. CBRE added that this increase in cost is likely to be due to higher monthly rents in prime locations. Moray Armstrong from CBRE said that as new supply for office spaces is expected to shrink by H2 of 2016, office rental growth is expected to surge. Globally, prime office occupancy costs had also increased by 2.5 percent year-on-year in Q3 2014. The Asia-Pacific region saw a 2.8 percent increase in occupancy costs while America experienced a 4.1 percent increase in costs. Richard Barkham from CBRE predicts that this trend will persist this year.

(Source: Business Times)

6 shophouses at Peck Seah Street sold for $42.8 million

A row of six shophouses at Peck Seah Street have sold for $42.8 million or $2,155 psf. The total gross floor area of the six shophouses is $19,860 sq ft and the shophouses have lease tenures of about 78 years left. Under the Chinatown (Tanjong Pagar) Conservation Area, in URA’s Master Plan 2014, the site had been zoned for commercial use. According to Sammi Lim from CBRE, the site was sold for a price that was in line with the market value. However, other market experts have said that the site had been priced highly, because they believe that such a site should have commanded a price below $2,000 psf.

(Source: Business Times)