Singapore Property News This Week #240

Residential

Property investments in 2016 expected to exceed 2015

According to Colliers International, real estate investment volumes in Asia-Pacific in 2016 is expected to exceed 2015 as long-term yields will outweigh short-term macro-economic and political threats. More than half of the respondents for a survey by Colliers said they would increase their real estate allocations in the coming year. Cities like London, Paris, New York, San Francisco, Tokyo and Sydney are among the primary targets for global cross-border investors in the next year.

(Source: Business Times)

The Verge to make way for serviced apartments

Located at Little India, The Verge which is a shopping mall, has been sold for $317 million to make way for serviced apartments. The site has 80 years of balance lease and is intended to be redeveloped into serviced apartments, a mall and a block for offices or retail. The gross development value of the project is estimated at $480 million. The site which is about 66,662 sq ft has been zoned for white use with a 3.5 plot ratio. Redevelopment works are expected to commence in 2017.

(Source: Business Times)

Commercial

Retail rental projected to fall by 5% in 2016

Market experts predict that in 2016, retail rental will fall by as much as 5% due to the oversupply of retail space. As rents fall and tenant sales decline, landlords are increasingly trying to lure back bigger tenants that they were once inclined to shoo away. According to Alice Tan from Knight Frank, it will take almost four years for the market to absorb the upcoming new retail space, base on current net demand. She believes that in the Central Region, retail rental will fall between 3 to 5% in 2016. Donald Han from Chesterton also predicts that there will be a fall in rents. He added that competition from e-commerce and lower tourist arrivals will contribute to the decline in rents.

(Source: Business Times)

Rental gap narrows between suburban and Orchard malls

Due to a larger local catchment and lower susceptibility to tourist spending, market experts explained that the rental gap between suburban and Orchard malls are narrowing. This was led by the rentals in the Central Region which recorded a 3% drop. Compared to the 2.9% fall in rentals of suburban malls, data from Savills showed that Orchard malls had suffered a 4% drop in rentals in the last three quarters. The average prime rent of Orchard Road malls was 1.09 times of that in suburban mall since the start of the year, according to Knight Frank’s computations. This is lower than the 1.12 times and 1.13 times that was computated in 2014 and 2013 respectively.

(Source: Business Times)

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