Here’s our summary of the important residential, commercial and industrial news this week. We hope this helps you to save time catching up on the news!
Residential News
Prices for non-landed luxury houses remain stable
Property firm Savills Singapore mentioned that the prices for non-landed luxury houses remain stable. The difference in the average price of non-landed high-end private houses in Q1 2011 and Q4 2010 remains small; there was only a 0.5% increase from $2,258 psf in Q4 2010 to $2,269 psf Q1 2011. The current prices, which stand just 5.9% and 7.2% below the peak points for high-end and super luxury properties respectively, come close to those during the peak in Q4 2007. Similarly, the growth in the average monthly rent of non-landed luxury houses remained slow at a mere 0.7% quarter-on-quarter.
Developers’ land banks expected to grow thanks to GLS
Developers have been accumulating unsold residential units in their land banks through government land sales (GLS) sites. Sim Lian, which topped the chart, has 1,441 private houses, 660 executive condo units and 680 HDB flats in its collection. Developers are expected to accumulate even more in the second half of this year when the government sells land under its GLS program, which happens twice a year. Knight Frank predicted that some developers might choose to sell off what they have before taking in new supply. Knight Frank also mentioned that developers can sell off their land banks over time if the demand remains stable.
Price recovery for 99-year suburban condo leads to increase in demand for EC units
More people are opting for executive condominium (EC) units as the price gap between ECs and 99-year suburban condos widened because of a recovery in the latter’s price. The price for an EC and a 99-year suburban unit at a similar location is around $650-700 psf and $900-950 psf respectively. The increase in demand for ECs, which ranges from $600,000 to $700,000 per unit, is evident in the sale results of the Belysa project, where 147 out of 315 units launched were sold on the first day of launch at a price of $670 psf.
Increase in non-Singaporean buyers for private houses: DTZ analysis
While the number of Singaporeans purchasing houses that cost below $500,000 increased from 72% to 80% from Q4 2010 to Q1 2011, the number of foreigners purchasing private houses in Singapore increased to 16% from January to March 2011. The analysis by DTZ, which takes into consideration new and secondary sales, showed that foreigners purchasing houses that cost at least $1.5 million increased from 17% in Q4 2010 to 21% Q1 2011. Knight Frank saw an increase from around 20% in previous quarters to 31% in Q1 2011 in non-Singaporean buyers purchasing their marketed units in new launches.
KSH Holdings awarded $78.7 million contract for project in Ardmore Park
The residential development project Ardmore Three in Ardmore Park, which is expected to commence work next month and be completed by August 2013, will be carried out by KSH Holdings. The contract for the residential development that involves the 84 units in Ardmore Park was awarded to KSH Holdings by Wheelock Properties’ subsidiary Bontanic. KSH’s construction business’ current order book is said to be around $245 million with the award of this $78.7 million contract.
New residential and industrial launches in Pasir Ris and Hougang
NTUC Choice Homes and Chip Eng Seng Corporation unit CEL Development will launch their 315-unit Executive Condominium (EC) Belysa at Pasir Ris Drive 1/ Elias Road. The average price of $670 psf will only be available for buyers who choose the normal progressive payment scheme. The EC will cost from $574,000 for units starting at 829 sf and $882,000 onwards for units beginning at 1,335 sf. In Hougang Avenue 2/ Yio Chu Kang Road, MCL will launch its 414-unit Terrasse Condo at an average price estimated at around $950 psf. At Yishun Industrial Street 1, Soilbuild Group will also launch its 454-unit North Spring BizHub with an average of $311 psf for its unit with sizes from 1,507 sf to 36,511 sf.
Commercial/Industrial News
ING Fund Buys Anson House for $148m
Anson House, 96% occupied with a remaining lease of around 85 years and net lettable area (NLA) of approximately 77,244 sf, has been sold to a property fund under ING Real Estate. In 2009, Anson House was purchased for $85 million but right now, it has been sold for $148 million. Other office deals this year include: i) Finlayson Green, a freehold office block with NLA of approximately 89,950 sf, which was sold for $227 million or $2,524 psf of NLA ii) Ergo Insurance Group also sold Capital Square to Alpha Investment Partners’ Macro Trends Fund and NTUC Income for $889 million or $2,300 psf (the biggest office transaction this year) iii) Singapore Technologies Building that has NLA of about 98,906 sf was sold for $146 million or $1,476 psf of NLA to Genting Singapore subsidiary Resorts World Properties.
Tanglin Shopping Center up for sale yet again
Tanglin Shopping Center, which is around 68,512 sf, is put up for sale again after its previous failed attempt to get a buyer. The sale will be handled by ERA Real Estate this time round. As ERA remains mum about the reserve price, speculation was made based on the previous reserve price of $1.25 billion, or around $3,300 per square foot for the existing 380,000 sf strata area. The bid for Tanglin Shopping Center will end on 16 June, 2011.
CMA, CMT and CapitaLand made top bid of $969 million for site at Boon Lay Way
Among the 5 bidders, Capitamalls Asia (CMA), CapitaMall Trust (CMT) and CapitaLand have collaborated to make a top bid of $969 million, which equals to $1,012 psf ppr, for a white site at Boon Lay Way. The site, which has a maximum permissible gross floor area (GFA) of 957,772 sf, will be split 50:30:20, with CMA holding the largest stake and CapitaLand having the smallest stake. Executive director of CBRE Research predicted that the site might be used for retail purposes and is likely to generate an average rental of $15 psf and $6 psf for retail and office space respectively every month.
Ascendas Group, MIT and Soilbuild Group said to be in the final round of bidding for JTC’s two tranches of properties
Market watchers speculated that the shortlisted bidders for two tranches of JTC Corporation’s flatted factories and amenity centers are: a unit of Ascendas group, Mapletree Industrial Trust (MIT) and Soilbuild Group. The 3 groups will be participating in the final 2 rounds of bidding for the JTC properties that consist of 21 blocks of flatted factories and amenity centers locating in places such as Bedok and Tai Seng. These properties, which total an area of more than 300,000 square meters, are said to be worth $600 to $650 million. The bid price will likely be the driving factor behind JTC Corporation’s decision in awarding the properties.
Office rental values growing moderately: CBRE
According to CB Richard Ellis, there is a rise in office rentals and demand for office space in countries like Singapore in Q1 2011. For example, the monthly rental value for an average Grade A office in Q1 2011 is $10.30 per square foot (psf); this is a rise of 4% quarter-on-quarter. CBRE director Moray Armstrong predicts a slower growth for rental value for 2011 with only an increase of 16.2% to $11.50 psf as compared to 22.2% in 2010; this is because supply for office space will likely increase in 18 months time when new and second-hand office space is made available.
Good sales results for residential and industrial launches
In Hougang, MCL Land sold 150 out of 200 units launched at its 414-unit Terrasse condo at $950 psf on average. The cheapest unit costs $580,000. Also, MCL sold 2 out of 4 launched five-bedroom penthouses (about 2,217 sqaure feet) at $1.85 million. In Pasir Ris Drive 1, NTUC Choice Homes and CEL Development launched its 315-unit Belysa EC priced at $670 psf on average, which received 520 e-applications. Marketed by Colliers International, 151 out of 454 units launched at North Spring Bizhub were sold at $311 psf for a 1,539 sf unit. The smaller units (about 1,500 to 1,600 sf) cost around $311 while the larger units (about 11,000 to 36,000 sf) cost about $210 psf.
A-Reit won the bid for Fusionopolis site with a bid of $110 million
Ascendas Real Estate Investment Trust (A-Reit) had the highest bid for a site at Fusionopolis The $110 million bid offered by A-Reit equals to $4,397.89 psm ppr for the 6,253 square meters site. A-Reit, who plans for a gross floor area of 25,000 square meters for the site, will allocate 60% of the site for the development of a business park. The remaining 40% will be used as office space. A-Reit plans to cater the site for the IT and media industry, and R&D in physical science and engineering.
Large Orchard commercial properties sales coming up
Marketed by CB Richard Ellis and Jones Lang LaSalle, TripleOne Somerset is up for sale for around $1.2 billion or $2,132 psf on net lettable area (NLA) by Pacific Star’s Asia Real Estate Income Fund (AREIF). Analysts believe that the building, with a remaining lease of around 63 years and NLA of about 563,000 sf, will have an asking price of $1.2 billion. Also, there have been speculations that Lend Lease might put 313@Somerset up for sale or sell about a quarter stake of the mall. Judging from its NLA (294,000 sf), 313@Somerset might fetch near to $1.18 billion according to analysts.
Office block at 70 Shenton Way and Elizabeth Tower up for sale
A five-member consortium is selling the office block at 70 Shenton Way at approximately $270 million, or $1,583 psf per plot ratio (psf ppr). Over at Elizabeth Tower, which is located in Mount Elizabeth, majority owners are putting up their freehold units up for collective sale at a price of $630 million, which is $2,496 psf ppr. However, Credo Real Estate sees the possibility of the price being lowered to $2,323 psf ppr, which will lead to a development cost of approximately $15 million.
Increase in rents in countries like Singapore: JLL
According to a report by Jones Lang LaSalle’s (JLL), one can expect to see a rise in rents across most Asia-Pacific markets such as Singapore. The increase in rents for conventional and high-tech industrial space in the industrial sectors is greatest in Singapore. Commercial real estate investment volumes in Singapore also increased by 60% in Q1 2011 as compared to Q4 2010. The rise in rents is driven by the increase in investment activities, mentions JLL.