Developers optimistic about EC market

Provisional results on 31 May 2013’s tender for an EC site in Sengkang showed developers’ confidence about prospects for this market segment, despite measures introduced in January. More recently, there have been strong hints from the government that it will change its housing subsidy of up to $30,000 for first-time buyers who pick up an EC unit from a developer. At the tender closing on 31 May, a 99-year EC site in Anchorvale Crescent drew a top bid of $330.65 psf ppr from Qingjian Realty (South Pacific) Group. Colliers International noted that the healthy participation rate as well as the robust competition among the top bidders signified developers’ optimism towards the EC market. Jones Lang LaSalle noted that the $331 psf ppr top bid surpassed the $296.48 psf ppr for the Sengkang West Way site last November by 11.5%, suggesting that EC land prices in this part of Sengkang are on the increase due to stronger demand by developers. The site tendered is near Farmway LRT Station and Sengkang Riverside Park. Qingjian Realty (South Pacific) Group forecasted the average selling price for the project to be in the $730-780 psf range.

(Source: Business Times)

8,000 SBF, BTOs for sale

HDB has put 8,000 flats up for sale in a joint BTO and SBF exercise. 4,900 BTO units are on offer across five non-mature estates: Choa Chu Kang, Hougang, Jurong West, Sembawang and Woodlands. The remaining 3,100 are balance flats spread across 26 mature and non-mature estates. For the BTO projects, 682 three-room to five-room flats in Choa Chu Kang are offered at $140,000 to $308,000. 292 studio apartments in Hougang are priced from $76,000 while 314 three-room and four-room units on average cost $171,000 and $268,000 respectively. There are 478 two-room to four-room flats offered in Jurong with prices starting at $94,000 for the two-room units and $260,000 for the four-room flats. Three projects were launched in Sembawang situated between Sembawang Road and Sungei Simpang Kiri. A total of 2,116 two-room to five-room units are up for sale, with prices starting at $82,000 for two-room flats, and $314,000 for the five-room units. The final project is in Woodlands, with 1,018 three-room to five-room flats for sale, whose prices range from $133,000 to $276,000. Under the SBF exercise, flats vary in sizes and are spread out across the island, ranging from a $145,000 two-room flat in Pasir Ris to a $760,000 executive flat in Queenstown.

For this latest launch by HDB, there are three new housing measures. First, the Parenthood Priority Scheme will enable married couples who are expecting their first child and are buying their first flat to benefit from a quota of 30% of BTO flats and 50% of SBF units. Second, two- and three-room flats in non-mature estates set aside for second-time buyers who wish to downsize have been doubled from 15% to 30%, 5% of which will be reserved for divorcees or widows with children below 16 years old. Under the third new scheme, HDB will set aside 50% the studio apartments for elderly buyers who wish to downsize from their current home nearby.

(Source: Business Times)

Effects of Jan cooling measures unclear: NUS

A paper from NUS’s Institute of Real Estate Studies (IRES) argues that it is unclear that the cooling measures announced in January have been successful in mitigating home price inflation. It was found that while price volatility seemed to have reduced due to earlier policy measures, the magnitude of month-on-month price changes has increased for the overall SRPI since October 2012. Knight Frank suggested that this could be due to a high proportion of buyers who are investors of completed homes in Central Region. IRES argued that following the latest January measure, transaction volumes and prices fell in February but have since recovered thanks to the strength of the housing market in Non-Central Region, with its 13.5% year-on-year increase, compared with a 3.2% gain for the Central Region. Flash estimates from IRES on 28 May 2013 showed that the overall SRPI grew 1.9% month-on-month in April. The Central Region sub-index climbed 1.3%. In the non-Central Region, prices climbed 2.4% after dropping 0.2% in March.  Year to date, the biggest increase of 5% has been recorded for the small unit sub-index followed by Non-Central Region (3.9%). Prices in Central Region have appreciated 1.6%, while the overall SRPI increased 2.8%.

(Source: Business Times)

Market welcomes once again House of Tan Yeok Nee

The House of Tan Yeok Nee, a gazetted national monument along Penang Road, is back on the market. Its owner ERC Holdings, which purchased the freehold property at slightly over $60 million last year, is believed to be looking at over $100 million. The House of Tan Yeok Nee was built in 1880s and named is named after a wealthy Teochew businessman, and was restored in 2000. The property sits on land of about 32,000 sq ft with a strata area of about 58,000 sq ft and its net lettable area at about 23,000 sq ft. The property is currently fully leased to the University of Chicago Booth School of Business, and the lease will run out in 2015. The tender for The House of Tan Yeok Nee will close on July 5.

(Source: Business Times)


Offices in S’pore among the costliest in Asi-Pac region

Despite the downward trend in S’pore prime office rents, they remain among the highest in the Asia-Pacific region. Hong Kong, Tokyo and Singapore were ranked as the three most expensive office locations among 28 Asia-Pacific cities in 1Q13, according to the Commercial real estate consultancy Colliers International. Q1 annual gross rents of Singapore’s CBD Premium and Grade A office space were US$81.19 psf, with a q-o-q fall of 2.4% from US$83.21 psf in 4Q12. The average monthly gross rents of Singapore’s CBD Premium and Grade A office space eased by 0.7 per cent q-o-q to S$8.41 per sqf end of March, whereas Grade A office rents in Hong Kong only rose q-o-q by 0.03% in 1Q13.

The office rent differential between the cities has increased from 35.6% in Q4, 2012, to 39%in 1Q13. Colliers predicted rents to continue sinking and cited, however, that rental demand in Singapore could rise due to its regional hub status and the upturn in its economy.

(Source: Business Times)

Freehold building up for sale with $37m reserve

A freehold industrial building off Paya Lebar Road is up for sale by public tender at a reserve price of $37 million. Henley Industrial Building, which is located at a 27,161 sq ft site and has a plot ratio of 2.5, works out to a cost of $545 psf ppr. No development charge is payable for the four-storey development, which now has 17 industrial units and is zoned “Business 1”. CBRE, which is handling the sale, said that the breakeven cost for the site was $792 psf. Similar units such as Primex and AZ@Paya Lebar have been sold at between $850 and $1,300 psf. CBRE also noted that companies were increasingly looking to own their own premises given the current low interest rate environment. The area is close to major public transportation nodes, including the Bartley MRT station, and the upcoming Paya Lebar Commercial Hub is a short drive away. The tender closes at 3pm on July 5, 2013.

(Source: Business Times)

Over longer term, Marina Bay rents will head north

Rents at Marina Bay are expected to head north following a period of consolidation even as businesses are drawn south to Marina Bay from the CBD. Average gross rents for Grade A offices in Marina Bay were 17.5% higher than those at Raffles Place in 1Q13, at $10.12 psf per month versus $8.61 psf per month in the CBD. CBRE noted that Marina Bay has historically commanded higher office rents due to its large floor plates of more than 30,000 sq ft, which are ideally suited to the requirements of major multinational companies and financial institutions. Rents in Marina Bay are expected to creep upwards from 2014 after this period of consolidation. CBRE predicted rents in the Marina Bay area to breach $12 psf over the next two to three years, given the limited supply in the area. As for the residential component M+S noted a healthy interest for the residences, which range from one- to four-bedroom units, including penthouses. Comprising 1,042 units, Marina One Residences is slated to be launched in H2 this year. On the office front, Marina One will offer floor plates of up to 39,000 sq ft, and two high-density floors of about 100,000 sq ft each, located on higher floors.

(Source: Business Times)

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