Here’s our summary of the important residential, commercial and industrial news this week. We hope this helps you to save time catching up on the news!
Peace Centre and Peace Mansion up for collective sale at $675 million
For the third time, 40-year-old Peace Centre and Peace Mansion at One Sophia Road are up for collective sale again. The asking price this time round has been reduced to $675 million, down from $700 million the last time. Sitting on a 76,618 sq ft site, the plot can potentially yield a project with GFA of approximately 627,852 sq ft. Adding to the asking price an estimated upgrading premium of $145 million that the developer has to pay, so the total cost is approximately $1,306 psf ppr. The tender ends on August 3.
Private home sales decrease in June as buyers become more price sensitive
Analysts attributed the significant slowdown in private home sales last month – a 25% month-to-month decrease in the number of private homes sales (excluding EC) to 1,182 – to greater price sensitivity among the buyers. According to Colliers International, about 50% of the 1,182 private home sales in June were sold at a price below $1,000 psf. On the developer’s side, developers are likely to be more cautious when it comes to bidding for new sites. CBRE also predicted that developers are likely to maintain the size of three-bedroom family-sized units compact at approximately 1,000 sq ft and price them under $1 million.
HDB launched 3,600 units across seven BTO projects in Sengkang, Bukit Panjang, Yishun, Tampiness, and Jurong West
Due to rising demand for public housing, HDB launched approximately 3,600 units across seven BTO projects: Anchorvale Isles which has 675 flats and Fernvale Riverbow with 1,154 flats in Sengkang, Segar Meadow with 300 flats and Segar Palmview with 682 flats in Bukit Panjang, Yishun Natura with 364 flats in Yishun, Golden Carnation with 149 studio apartments in Tampines, and Golden Orchid with 232 studio apartments in Jurong West. HDB, which intends to provide more variety for home seekers and increase the chance of first-time flat buyers to get their own flats by launching more BTO units, plans to launch a total of 25,000 BTO units in the whole of 2011. Till July, HDB has already launched around 15,500 flats for 2011.
Shop house and strata shop sales decreased 19% and 8% respectively from H2 2010 to H1 2011: Knight Frank
The total value of shop houses transacted decreased 19%, from $624.21 million in H2 2010 to $505.18 million in H1 2011. According to Knight Frank, the decrease could be due to owners’ high asking prices and limited availability of conservation shop houses for sales. Although strata shops might be a better investment option for investors who seek a lower price quantum, the total value of strata shop transactions decreased 8% from $268.75 million in H2 2010 to $246.75 million in H1 2011. Knight Frank mentioned that shop house sales volume will remain low and the current run-up in capital values will slow down, while strata shop sales will continue to increase.
Rent increased at a faster rate for high-tech industrial space in Q2 due to rising office rents: DTZ
Rents for high-tech industrial space (including business parks) increased in Q2 due to stronger demand brought about by office tenants shifting to cheaper locations as office rents increased rapidly. Private high-tech space average monthly gross rent increased 4.5% over Q2 to $3.45 psf pm, up from a 3.1% hike in Q1. The average monthly gross rent for first-storey conventional industrial space increased 2.4% over Q2 to $2.15 psf pm, while upper-storey space increased 2.9% to $1.75 psf pm. Also, DTZ mentioned that the capital value of freehold upper-storey factory space increased 5.6% from Q1 to $395 psf.
Office rents continue to rise although analysts mentioned that office lease deals had started to moderate since end of Q2
Although analysts mentioned that office rentals had begun to moderate since the end of Q2, office spaces such as those in Asia Square Tower One, whose asking monthly rent falls between $14 psf to $16 psf, are drawing higher prices than other office spaces in the vicinity. MGPA mentioned that rent for Asia Square Tower One will hit a high $16 psf pm. Over at Marina Bay Financial Centre’s Tower 3, the asking month rents ranged between $12 to $13 psf. Also, average gross monthly rental value of offices in Raffles Place in Q2 2011 increased 9% from end-2010 to $9.80 psf.
KNP Properties submitted top bid of $64.5 million for an industrial site between Pioneer Road North and Soon Lee Street
A 30-year leasehold industrial site between Pioneer Road North and Soon Lee Street, which has a maximum GFA of 366,836 sq ft, obtained a top bid of $64.5 million ($176 psf ppr). The top bid, which was submitted by KNG Properties, was 7% higher than the second highest bid of $60 million ($164 psf ppr) submitted by NSS Development. CBRE noted that KNG Properties had secured two other 30-year leasehold industrial sites in the vicinity in 2009 and 2010. Combined with its latest bid, the three sites have a total GFA of more than one million sq ft and will give KNG Properties a dominant influence in the area.
Applications by owners of Fuji Xerox Towers and Cecil Court to convert their buildings to residential use unsuccessful
Some building owners, which include owners of Fuji Xerox Towers on Anson Road and Cecil Court on Cecil Street, are said to be unsuccessful in their applications to convert their buildings into residential use. According to URA, these sites are zoned for office use to ensure that there is enough office space in the CBD area to meet the growing demand brought about by strong economic growth and outlook. Also, a developer mentioned that redeveloping office space within the CBD area into residential use will worsen traffic congestion when the number of cars increased. However, URA will still evaluate such redevelopment and rezoning proposals for sites within the CBD on a case-by-case basis.
RQAM wants to expand its portfolio, especially in Marina Bay and CBD areas
RQAM, which already has One Raffles Quay and Marina Bay Financial Centre in its portfolio, is keen to develop Grade A office space of more than four million sq ft. With One Raffles Quay and Marina Bay Financial Centre Tower One and Two fully let, RQAM will work on leasing the 1.3 million sq ft of prime office space in the already 60% leased Marina Bay Financial Centre’s Tower Three. RQAM also plan to officially launch Marina Bay Suites, which has already sold 139 out of 221 units through previews at $2,295 psf each, in the near future