Residential

More land for private homes in Central Region up for tender

Up from 28.9 per cent in H1 2014, the proportion of private housing supply in the Central Region has increased to 33.2 per cent in H2 this year for the Government Land Sales (GLS) programme. This is an 18.1 per cent increase from the private housing supply land sales in H2 last year, which was at 15.1 per cent. It is also a substantial jump from the low 8.6 per cent in H1 2012. According to the Urban Redevelopment Authority (URA), the sale and development of residential sites in the Central Region will bring homes closer to jobs in the city. This will ease pressure on the transport infrastructure as commuting time between home and work is reduced. Tan Tiong Cheng, the chairman of Knight Frank believes that this is the right time to reduce the proportion of private housing supply Outside Central Region (OCR) from the GLS confirmed list as demand for suburban private condos have fallen, with the adequate supply of new BTO HDB flats.

(Source: Business Times)

Sale of private condos doubles in May

According to the Urban Redevelopment Authority (URA), 1,470 private condos were sold in May, which is almost 96 per cent more than the 749 units sold in April. This is the highest recorded sales since June 2013. The increase in sales is likely due to the increase in the number of condos launched last month. In May, 1,790 condo units were launched as compared to just 600 units in April. Ong Teck Hui, national director of Research and Consultancy at JLL believes that the strong showing and increased launches reflects developers’ confidence in the market and shows that buyers are still in the market. However, market analysts believe this positive trend will not persist in June, as it is a seasonally slow period due to the school holidays.

(Source: Business Times)

Commercial

Boutique hotel in Kampong Glam selling for $17-18 million

A boutique hotel with a total land area of 4,275 square feet, in Kampong Glam Conservation Area is up for sale. Its indicative pricing is at $17 to $18 million. While the area is zoned for commercial use, the site is permanently approved for hotel use. The boutique hotel which comprises of three shop houses located at 9, 11 and 15 Jalan Klapa, has a balance lease term of 92 years and a gross floor area of about 7,911 square feet. The hotel has 15 themed rooms of about 215 square feet, over two storeys and a mezzanine level. It will be sold with vacant possession said Shuan Poh, from Cushman & Wakefield, the marketing agent for the hotel.

(Source: Business Times)

Two hotels to spring up in Joo Chiat

It is believed that InterContinental Hotels Group (IHG) has signed a memorandum of understanding to operate two new hotels in Joo Chiat. Located next to 112 Katong, the hotels are to be built on the former Joo Chiat Police Station at East Coast Road. According to the Urban Redevelopment Authority, the building has to be restored due to its historical significance. If the MOU leads to signed management contracts, the two hotels will be branded as Holiday Inn Express, and Hotel Indigo. The 99-year leasehold site which was won by Master Contract Services and Keong Hong Construction for $352.8 million, or $1,326.11 per square foot of potential gross floor area, has a maximum gross floor area of 266,041 square feet and is expected to be launched in 2017.

(Source: Business Times)

More shorter-tenure industrial sites launching in H2

To keep prices affordable, more shorter-tenure industrial sites will be released in H2 said the Ministry of Trade and Industry (MTI). In mid-2012, the government shortened tenures of sites sold under the Industrial Government Land Sales (IGLS) programme to a maximum of 30 years, down from the previous 60-year maximum. According to MTI, this will increase the flexibility for land redevelopment. Among the 15 sites to be launched in H2, 3 are 20-year leasehold plots, which are the shortest leases ever offered. The combined area of 15 sites stands at 18.87 ha, and 9 of them are on the confirmed lists. While the shortened leases will help developers manage costs, Tan Boon Leong from Colliers International believe that developers will still bid highly for a good site. Nicholas Mak from SLP International also agrees that shortened leases may not ease costs, land costs do not make up the bulk of the development costs for industrial buildings.

(Source: Business Times)

Shorter leases have pros and cons

Shorter leases reduce speculations but makes reselling and financing difficult. According to analysts, reducing lease from 60 to 30 years should lower its value by 25 per cent. For example, a 60-year leasehold Business-1 plot at Ubi Ave 4 sold for $2,333 per square metre per plot ratio (psm ppr) in March 2011. However, a nearby plot was sold for 21 per cent less at $1,851 psm ppr two years later, when the government shortened its lease by almost half. Yet, shorter leases mean that construction and purchase costs are spread over a short time. Not only so, it may result in higher monthly mortgages and thus reduce the liquidity and cash flow of the company, said Mervyn Koh from UOB Group. Reselling of the property is also a problem with shorter leases as owners may struggle to finance the property. Nonetheless, Ong Kah Seng from R’ST Research believes that by reducing lease periods, the government can keep land speculation in check.

(Source: Business Times)

Jurong Lake District to be largest commercial centre outside of CBD

The Jurong Lake District (JLD) will become the largest commercial centre outside of the Central Business District (CBD) and it is used as a test bed for initiatives under the smart nation scheme. JLD will comprise of a mixed-use urban precinct for sustainable development and connectivity, according to the Minister for Communications and Information, Yaccob Ibrahim. As identified in the Urban Redevelopment Authority’s Master Plan, JLD will be one of the new growth areas that will be pushed for economic developments in the coming 10 to 15 years. Smart nation applications that improve the quality of life and support sustainability will be tested in JLD.

(Source: Business Times)

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