Singapore Property News This Week #252

Residential

Healthy interest in Cairnhill Nine and The Wisteria

Of the 268 units at Cairnhill Nine, 200 were released for sale recently. Since its launch, 134 units have been sold. Located at Yishun, 116 of the 138 units at The Wisteria were sold since they were launched. Market experts believe that both developments appealed to investors because they were priced reasonably. At Cairnhill Nine, the units sold ranged from 591 sq ft to 3,864 sq ft and they were priced between $2,200 psf and $2,800 psf. Ranging between 732 sq ft and 969 sq ft, the one-bedroom with guest units were the most popular, with about 80% of the 90 units sold. Market experts believe that beyond its price, its strategic location at Orchard Road and a lack of major residential projects launched in that area in the last two years could have pumped up interest in the development. Donald Han from Chesterton Singapore added that based on an average price of $2,500 psf, investors of Cairnhill Nine could reap a yield of about 4%. At The Wisteria, the units were sold for average prices between $1,030 and $1,050 psf. Given strong demand for its one and two-bedroom units, market experts believe that there could be a higher percentage of buyers who are investors compared to a typical residential project in a suburban area. Comprising three 9-storey towers, The Wisteria is part of a mixed-use 99-year leasehold development.

(Source: Business Times)

6.8% month-on-month drop in private homes sold in Feb

According to the Business Times, 301 private homes (excluding ECs) were sold by developers in February this year, down from 323 units in January. This was a 6.8% fall month-on-month and a 22.8% fall year-on-year – the lowest since December 2014. Inclusive of ECs, 430 units were sold in February, down from the 479 units in the previous month and 455 units in February last year. Market experts said that this was not surprising as developers had held off launches last month due to the festivities and weak market sentiment. Nonetheless, property experts believe that private home sales should increase this month due to the launch of private homes like the Cairnhill Nine, The Wisteria and Wandervale. JLL’s Ong Teck Hui said that those projects are expected to do well due to their location and pricing. However, this does not indicate that the market is recovering. Wong Xian Yang from OrangeTee believes that developers will sell about 500 to 800 private homes in March. He also predicted that there will be a total of about 1,124 to 1,424 units sold in Q1 this year, which is comparable to the 1,311 units sold in Q1 2015. Nicholas Mak from SLP International estimates that about 7,000 private homes will be sold by the end of the year as developers have been selling more units than they have been releasing them. PropNex’s Ismail Gafoor and JLL’s Ong Teck Hui both said that developers will likely to adjust their pricing strategy so as to be able to move units, given the challenging market conditions.

(Source: Business Times)

MND: Cooling measures unlikely to be lifted

The Ministry of National Development (MND) has said that the government is unlikely to lift cooling measures now as doing so may result in a market rebound. The Real Estate Developer’s Association of Singapore (Redas) had been lobbying for a review of the cooling measures in recent years. Most recently, a Member of Parliament had asked if MND will consider removing the additional buyer’s stamp duty for Singaporeans but retain it for foreigners. Augustine Tan from Redas said that the association desires stability in the market and does not want a continued slowdown to have negative spillover effects on the broader economy. While experts believe that poor private sector construction demand may slow the economy in 2016, MAS believes that any impact of a property slowdown on the economy will be contained. MAS also added that the construction workforce is generally able to adjust flexibly to changes in demand without discernible impact on local employment, as the sector is made up of a transitory foreign workforce.

(Source: Business Times)

Tanjong Katong bungalow up for auction

Located at Tanjong Katong, a freehold bungalow has been put up for auction as a mortgagee sale. The indicative price of the property is about $16 million or $1,213 psf on the land area of 13,189 sq ft. The property may be redeveloped and the site has been zoned for residential use within a “two-storey bungalow landed housing” area. DTZ said that the plot may be subdivided to give a pair of bungalows or semi-detached houses, subjected to approval from authorities.

(Source: Business Times)

Commercial

Co-working space expected to gain popularity

Cushman & Wakefield said that co-working spaces can be a hedge for office landlords against a wave of new office completions. Undesirable or non-performing spaces may be carved out for tenants to rent on a needs basis. Developers may also consider bundling a portion of the vacant space with committed space, rather than engage in a price war, said market experts. Located at Keppel Towers, Workspace, is a new business venture by Keppel Land that offers both serviced offices and co-working spaces that cater to small startups. Cushman & Wakefield believes that co-working spaces will allow business to rescale their space requirements without having to deal with rigid terms in existing lease terms. These spaces also encourage cross-pollination of ideas and promotes a sense of community, as they tend to be large open areas, unlike serviced offices with private rooms. Given the stability of demand from co-working and its profitability, Christine Li from Cushman & Wakefield said that co-working operators should consider expanding so as to take advantage of the current supply of 3.6 million sq ft of Grade A office space, that is entering the market this year.

(Source: Business Times)