Singapore Property News This Week #99

Residential

BTO flats construction not delayed by tighter foreign workers policies so far

To ensure that the construction of BTO flats will not delayed by the tighter foreign worker policies, HDB may replace contractors unable to cope. However, the impact of the tighter policies on HDB is likely to be small since 60% to 70% of the super-structure of HDB projects is constructed with precast parts. Another possible impact of the tighter policies is an increase in construction costs. However, the government will increase the subsidy and absorb the additional subsidy if the costs increased.

(Source: Business Times)

Freehold Nassim Road GCB up for sale by tender

The bungalow which sits on an 84,839 sq ft freehold site at No 33 Nassim Road with a nearly 100-metre road frontage is asking for $250-300 million or $2,947-3,536 psf. The seller is also willing to sell it in two parcels of 31,647 sq ft and 53,192 sq ft, the first of which can be subdivided into two GCB plots and the second three. It is expected to see much interest given the size of the plot, its rectangular shape, location, and the scarcity of freehold sites over 80,000 sq ft. The tender will close on May 16.

(Source: Business Times)

99-year Twin Fountains EC at Woodlands launched

99-year leasehold Twin Fountains, an EC development located at the junction of Woodlands Avenue 6 and Woodlands Drive 16 has been launched at a price of $660-790 psf. It consists of 418 units housed in eight 14-storey blocks, of which 53% or 221 units are three bed-room units, with the rest being two-bedroom and four-bedroom units, and two penthouses. Prices start from $580,000 for an 828 sq ft two-bedroom unit to $1.26 million for a 1,593 sq ft four-bedroom unit. It is expected to be popular, with draws such as its affordable pricing, proximity to the Woodlands and Admiralty MRT stations and the upcoming Woodlands South MRT station as well as the Seletar and Tampines expressways and the future North South Expressway. Another draw would be the authorities’ plan to develop the town into a regional hub.

(Source: Business Times)

Resale prices of non-landed private residential properties rose in Q1

According to the SRX, resale prices of units in the CCR, RCR and OCR increased from $1,816 psf to $1,837 psf, $1,208 psf to $1,259 psf and $958 psf to $1,010 psf respectively, despite the fall in transactions from 3,271 to 1,982 units. This is a result of the low interest rates, and as well as buyers’ confidence in high returns from property investment. The fall in transactions can be attributed to the lack of supply as a result of the cooling measures which deter owners from selling.

(Source: Business Times)

99-year Sengkang West Way private residential site attracts $262.1m top bid

The above site attracted a total of eight bids, with the top bid of $262.1 million or $488.84 psf ppr from UOL Group unit Secure Development. The 179,900 sq ft site has a 3.0 GPR and a 536,000 sq ft GFA. The popularity of the site is attributed to the popularity of sites with water views amongst developers and home owners and the need for developers to replenish their land banks. It also reflects confidence of demand for mass-market homes despite recent cooling measures. A 20-storey development with 600 units in planned for the site near Sungei Punggol, Sengkang Sports and Recreation Centre and Sengkang Riverside Park. The expected breakeven price and average selling price are $900 psf and $1,000-1,100 psf respectively.

(Source: Business Times)

Commercial

Park Hotel Group said to be selling Grand Park Orchard Hotel

After the sale of 336-room Park Hotel Clarke Quay for $300 million or $893,000 per room, it is said that the Park Hotel Group is intending to sell its two remaining Singapore hotels – Grand Park City Hall in Coleman Street and Grand Park Orchard (along with its retail podium Knightsbridge). It is said to be asking for $1 million per room for the Grand Park City Hall which sits on a site with a remaining lease of about 79 years and over $1 billion or a per-room price in the high-$1 million range for the freehold 308-room Grand Park Orchard. The latter also includes about 74,000 sq ft NLA of retail space.

(Source: Business Times)

Q1 sees fall in sales of industrial property

The sales volume of industrial property fell by 62.3% from847 lodged in Q4 2012 to 319 caveats in Q1 2013, as a result of the cooling measures. Specifically, new sale and sub-sale transactions slid by 71.3% from 480 to 138 transactions in Q1 while resale transactions of strata-titled factory units fell by 50.7% from 356 to 181 transactions. The fall in prices is not as great, as seen in the 4.2% fall in prices of 30-year leasehold new strata factory units to $345 psf, the 4% fall in prices of units with a 60-year lease to $425 psf, and the 1.6% fall to $876 psf for 99-year leases, and 3.5% to $956 psf for freehold units. For resales, however, prices of strata-titled factory units with 30-year leases saw a 10.7% to $219 psf, and prices of units of 99-year leases fell by 0.6% to $551 psf while prices of units with 60-year leases and freehold units increased by 3.8% to $390 and 3.3% to $634 psf respectively. Islandwide industrial gross rents also saw a 5% increase to $2.13 psf in Q1, though this is unlikely to rise by much in 2013 given the upcoming supply of 24.12 million sq ft of new factory spaces.

Looking ahead, demand is expected to slow in the near term as a result of the cooling measures and the slowing manufacturing activity. As a result of this, prices are also unlikely slow.

(Source: Business Times)

Flight to quality trend in business parks

As more tenants shift to new buildings with quality specifications and in better locations with competitive rents, there had been a positive net absorption in Q1 2013, with a fall in vacancy rate from 7.2% in Q4 2012 to 6.4%. Average rents have also stabilised at $3.80 psf per month. Such a trend will also lead to the creation of 800,000 sq ft of secondary space in Q2 and Q3 2013. This, coupled with the upcoming supply of 750,000 sq ft space which are not pre-committed, the expected supply of 1.55 million sq ft and competitive rents in the Grade B office market and light industrial markets, are likely to prevent sharp rental increases. It may even lead to a fall in rents in business parks and force older parks to undergo asset enhancement or redevelopment to compete with newer ones.

(Source: Business Times)

Sub-letting rule for third-party facility providers relaxed

Previously, lessees of JTC property intending to sub-let their GFA must sub-let at least 50% of the building’s GFA to one or more JTC-approved anchor tenants, with a minimum GFA 3,000 sq m each. The figure has now been reduced to 1,500 sq m. This is a welcomed move since it would make it easier for landlords in floor planning. Nevertheless, the impact is likely to be small outside of Reits and only felt when there are lease renewals since it is easier to find replacement tenants for smaller spaces. The change would also mean that spaces can also possibly be leased to SMEs, and rents may also rise since smaller anchor tenants have less bargaining power.

(Source: Business Times)

30-year Tuas Bay Close industrial plot attracts $37.1m top bid

The 30-year leasehold 2.5 ha site located at Tuas Bay Close has attracted four bids, with a top bid of $37.1 million or $81.19 from a joint bid by ZACD Investments and Bohai Investments (Sengkang). Zoned for Business 2 development, it has a plot ratio of 1.7. The lack of active participation in the tender is attributed to the narrow shape of the plot and the requirement that the at least 12 factory units, with 10 contiguous 1,000 sq m units, and two 3,000 sq m factory units be build. Units in any development on the site are expected to be sold at $350-400 psf for ground floor units and $250-300 psf for units on the upper floors.

(Source: Business Times)