Residential

Residential leasing market favours tenants

More completions and tighter controls on the overseas labour workforce are reported to cause the rental market to hit turbulence. According to a report by Savills Singapore, the residential rental market is turning to favour tenants, but with strong demand still expected over the next half a year. The rental market was optimistic in the Q3 2013 with a record number of 15,083 rental transactions, which is an 11.6 percent increase from the previous quarter. This could be attributed to the 5.1 percent growth in GDP for Singapore year-on-year, lower unemployment rates, and foreign nationals planning to relocate to Singapore in light of the Fair Consideration Framework (FCF).

(Source: Business Times)

URA to clamp down use of “SoHo”

The Urban Redevelopment Authority (URA) is curbing the use of the term “small office home office” (SoHo) for commercial and residential units by developers. This is because people may be led to think that such units can be used as homes and offices concurrently or interchangeably. In fact, SoHo is a marketing term which does not refer to any specific use or type of development. The planning permission for a residential SoHo unit only gives it clearance to be used as a home. A separate application must be made to use it as a home-office with several restrictions on the kind of business that can be conducted there. Developers may market such units at a higher price, and it may be too late for buyers to realize that the units cannot be freely used as a home and an office, especially now that there are more shoebox units headed for completion. Developers and their marketing agents have been issued a circular which urges them to make it clear to prospective buyers upfront on the approved use of the development.

(Source: Business Times)

Largest joint roll-out of BTO and SBF units

The latest launch of 8,952 Housing and Development Board (HDB) flats has rolled out the largest joint of Build-to-Order (BTO) and Sale of Balance Flats (SBF) units that buyers can choose from. Among the 8,952 units, 4,978 are BTO flats in six projects in five non-mature estates – Bukit Batok, Hougang, Jurong West, Sembawang and Woodlands. This number increases from the 8,262 BTO and SBF flats launched in September 2011. OrangeTee Singapore predicted that the demand for BTO flats this time could moderate as they are being released with SBF flats, which promise a shorter waiting period and could mop up some of the demand.

(Source: Business Times)

Singapore home prices fall faster in October

According to the National University of Singapore’s Institute of Real Estate Studies, the Singapore Residential Price Index fell to 159.1 points in October, decreasing 1.2 percent from September as the government’s efforts to cool the property market are taking effect. The index of September itself already declined 0.9 percent from the previous month.  Home sales have also been decreasing in the past four months following the new rules in June governing how financial institutions grant property loans to buyers. According to Ms. Alice Tan, head of consultancy and research at Knight Frank LLP Singapore, the latest statistics show that price quantum is still the key consideration for many prospective homebuyers.

(Source: Business Times)

Strong demand for two adjacent plots at Upper Serangoon View

Despite the decreasing new private home sales, there has been good response to two adjacent plots at Upper Serangoon View with each plot garnering eight bids. The top bid for both sites was from Kingsford Development, at $522.43 psf ppr or $258.8 million for Parcel A and $201.6 million for Parcel B. Parcel A is 165,125 sq ft wide and is located next to Rio Vista condo, while Plot B has a land area of 128,644 sq ft. The Urban Redevelopment Authority (URA) rolled out the two adjacent sites and then closed the tenders for both sites on the same day – the first time URA has attempted with two adjacent parcels. Earlier this year, URA also conducted simultaneous tender closings for three executive condominium (EC) sites – two in Punggol and one near Jurong Country Club.

(Source: Business Times)

Commercial

More competition for Singapore Reits

As a major Asian hub for real estate investment trusts (Reits) in over a decade, Singapore is now facing external challenges and domestic constraints. Other markets in the region are establishing their own Reit and business trust (BT) frameworks, and hence will compete with Singapore increasingly for listings. For example, the Philippines and Thailand already have regulations for Reits in place. India is expecting to issue its final guidelines on Reits early next year. Singapore Reits going overseas may have to compete against these Reits for assets. In addition, Singapore would have to resolve several domestic issues such as development caps and sunset clauses which threaten its tax advantages. Despite all of these, the regulatory regime in Singapore still remains attractive and it does not impose any restrictions on ownership of foreign assets. Singapore is currently the only market where purely offshore assets can be listed.

(Source: Business Times)

Singapore Reits bring more problems

Real estate investment trusts (Reits) may be a hit with investors, yet they also bring more problems. S-Reits have been blamed for causing rents and inflation to spike, especially for retail and industrial properties. Bigger Reit players are also criticised for crowding out smaller developers. Corporate governance watchers are concerned that managers may buy low-quality assets or overpay just to increase its portfolio size and collect higher fees. The quality of foreign assets listed in Singapore also raises questions, especially if they come from a jurisdiction with its own Reit regime. However, other industry players believed that Reits are not to be blamed for everything. For example, rents and prices have risen, but Reits were not the sole factor and that correlation does not equate to causation. Increasing rental rates may be due to the strong economic expansion Singapore has enjoyed, with demand still chasing supply.

(Source: Business Times)

JTC launches four industrial sites for sale by public tender

JTC Corporation launched four industrial sites zoned for Business-2 development in Woodlands Industrial Park E9 and Tuas South for sale by public tender on Nov 29. The plot in Woodlands has a lease of 30 years, maximum permissible gross plot ratio of 2.5, and a land area of about 197,992.3 sq ft with gross floor area (GFA) of about 494,980.6 sq ft. Mr. Ong Kah Seng, director at R’ST Research, expected the site to garner a top bid of about $110-$130 psf ppr and to be well received, especially that the government has recently planned to develop Woodlands into a work-live-play regional centre.

(Source: Business Times)

Two new malls to open in Jurong and Bedok

CapitaMalls Asia will open two new shopping malls in Jurong and Bedok. The Westgate shopping mall in Jurong East will be opened next Monday. The seven-storey mall will have a net lettable area of 410,000 sq ft, roughly the size of Raffles City’s retail area.

(Source: Business Times)

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