Singapore Property News This Week #197

Residential

Sims Urban Oasis selling for $1,295- $1,595 psf

More than 100 units at Sims Urban Oasis condominium have been sold since the start of its sales. Out of the 1,024 units available, about 200 units were launched for sale. These units range from one to five bedroom units. The units are priced between $1,295 and $1,595 psf. Located at Aljunied, the condominium project has a 99 year lease. According to Cheng Hsing Yao from GuocoLand Singapore, about 90 percent of the buyers are Singaporeans and half of the buyers are owner-occupiers. Cheng believes that the convenient location of the condominium project will increase its appeal. The condominium is within walking distance to Aljunied MRT station and is a stone’s throw away from the Paya Lebar Commerical Hub. Not only so, the condominium project will consist of a 300 square metre childcare centre, which willappeal to younger buyers, said market experts. Despite its realistic pricing, Ong Kah Seng from R’ST Research believes that sales of Sims Urban Oasis may slow down. Ong added that the developer may have to provide a five percent discount to further entice buyers.

(Source: Business Times)

Redas: property prices may fall further if cooling measures are not lifted

Augustine Tan from the Real Estate Developers’ Association of Singapore (Redas) said that there is a need to monitor the effects of the government’s cooling measures. This is to ensure that property prices will not fall further than intended. Tan added that there may be an oversupply of residential properties as more private homes were completed in the last few years. According to Tan, a total of 75,000 new private residential units will be completed from 2015 to 2019. This supply in residential property may create a downward pressure on property prices and home rentals. Nonetheless, other developers believe that only certain markets would be negatively affected by the cooling measures. One such market would be the luxury homes market. This may be due to the implementation of tighter loan restrictions that may affect buyers’ ability to finance more expensive homes. Nonetheless, developers believe that this fall in property prices may be less substantial in the overall market.

(Source: Business Times)

QC rules still applytoresidential projects that are converted to serviced apartments

According to the Singapore Land Authority, land that has been purchased under a qualifying certificate (QC) is bounded by the QC conditions even when a developer has sought approval to convert the development into serviced apartments. This means that to avoid paying extension charges, developers will have to sell the entire project within two years of its completion. According to the Business Times, developers may be inclined to convert private residential projects to service apartments as demand in the residential market shrinks. However, a spokesperson from the Singapore Land Authority says that the developer will still have to sell the entire development even when a development is converted into serviced apartments, because service apartments need to be under a single ownership. Thus, QC conditions will still apply to residential developments that are converted to serviced apartments.

(Source: Business Times)

Commercial

GSH Plaza to be sold for between $2,900 psf and $3,600 psf

GSH Plaza, which was previously known as Equity Plaza, will be sold for between $2,900 psf and $3,600 psf. Located next to Republic Plaza, GSH Plaza is 28 storeys high and consists of strata office units that range from 440 square feet to 1,600 square feet. Due to the small size of the units, market experts believe that most of the strata office units would cost around $3 million per unit. According to the Business Times, 259 strata office units will be on sale. All of these units are located on Levels 3 to 28. The building has a balance lease of 73 years, and will be vacated next month as it undergoes renovation works. Renovation is expected to last up to two years.

(Source: The Straits Times)

Cushman: stock of secondary space in 2015 and 2016 will total 1.13m sq ft

Market experts predict that the stock of secondary space will increase due to an increase in newly completed office projects. Experts believe tenants with expiring leases may relocate to these new offices, thus increasing the stock of secondary space. Estimates by Cushman & Wakefield show that the stock of secondary space in 2015 and 2016 will total to about 1.13 million square feet. Christine Li from Cushman & Wakefield said that this amount will be the highest that is recorded in Singapore. Typically, there will be a stock of about 300,000 to 500,000 square feet of secondary space every year. About 680,000 square feet of secondary space will be available this year while another 450,000 square feet of secondary office space will be available in 2016. Despite the increase in secondary space, Li believes that this increase in supply will be matched by the increase in demand. In fact, demand for office space has been rising since 2012, said Li. Desmond Sim from CBRE added that the absorption rate of secondary office space has been healthy. He believes that an increase in supply of office spaces will not result in higher vacancy rates.

(Source: Business Times)

DC rates fall by 3% for non-landed use but increases by 2% for commercial use

According to the Business Times, development charge (DC) rates have been cut by 3 percent on average for non-landed residential use. This is the second consecutive drop in its yearly revision according to analysis by JLL. A fall between 2 percent and 13 percent was observed in 73 out of the 118 sectors that were surveyed by the Ministry of National Development and the Chief Valuer. However, for commercial use, DC rates have increased by an average of 2 percent. Sectors that saw the largest rise in DC rates include Maxwell Road, Telok Ayer Street, Hoe Chiang Road and Keppel Road. These sectors experienced an increase of 9 percent in their DC rates. Market experts believe that the increase in DC rates is due to increase in prices for office spaces and shophouses in the CBD. On the other hand, DC rates have not changed for landed residential use and industrial use. The DC rates for hotel sites and hospitals have also remained constant. The new rates will be implemented for sites that are enhanced between March 1 and August 31.

(Source: Business Times)