Prime Office rents tipped to recover in 2018

Office rents tipped to recover in 2018

After a tough patch, prime office rents could find respite in 2018, likely boosted by tighter supply of new buildings and still-healthy leasing demand, said an international property consultancy firm.

Singapore Property Resources News - Prime Office rents tipped to recover in 2018

Singapore Property Resources News – Prime Office rents tipped to recover in 2018

It is forecasting a 3 per cent overall rental growth for Grade A office space in the Central Business District by the end of next year.

Rents of such office space has declined by about 20 per cent since a peak in the first quarter of 2015.

A lot of leasing is expected to happen. So there could be pick- up this year. In 2018, we could expect rents to stabilise and rebound towards the second half of the year, said an analyst with the firm.

The consultancy noted that the previous two downcycles in the office property market – during the global financial crisis in 2009 and the euro zone debt crisis in 2012 – did not last for more than two years.

Given that office rents are into their seventh quarter of decline, the firm believes there are some green shoots in that segment, which could be very near the trough of the market.

The average monthly office rent in Marina Bay is about $9.05 psf, Raffles Place at $8.72 psf, City Hall area at $8.42 psf and $7.86 psf in the Shenton Way/Tanjong Pagar sub-market, the consultancy said.

An influx of new office space has weighed on rents of late while weaker business sentiment crimped demand for space from the financial services and oil and gas sectors.

About 1.45 million sq ft of new supply hit the market here last year, and a projected 2.26 million sq ft could become available this year.

However, prospects look brighter from next year on, with about 805,000 sq ft of new office supply forecast for 2018, and 755,000 sq ft the following year.

As there are few projects beyond 2018, the market could possibly tilt back to the landlords’ side once the spaces are taken up. The next wave of new office supply will come in around 2020 to 2021.

Leasing for new mega office buildings such as Guoco Tower in Tanjong Pagar has been strong as firms take advantage of softer rents to upgrade to swanky new premises.

The total monthly values of CBD office leases have also grown over the last 10 years to $72.2 million in 2015, from $13.8 million in 2005.

The increase was partly attributed to a larger number of companies setting up regional offices here.

Adapted from: The Straits Times, 18 January 2017

Hillion Mall to open in Feb 2017

New Bukit Panjang mall to open in Feb

Bukit Panjang residents will have a spanking new shopping centre late next month when Hillion Mall opens for business.


SPR News – Hillion Mall Opens in Feb 2017

The complex, which will have a two-storey retail podium and two retail basement floors, is part of an integrated development and transport hub that will cater to more than 220,000 residents and 760,000 commuters.

The mall, developed by Sim Lian Group and Sim Lian Development, has a net lettable area of 174,730 sq ft. More than 90 per cent of that will be taken up by shops, with over 100 separate outlets.

Sim Lian Group said yesterday that about 30 per cent of the mall will be dedicated to food and beverage, and almost 45 per cent of the retail space will be allocated to lifestyle stores.

The facility, which opens on Feb 24, will offer residents a range of cuisines, from Japanese to Szechuan, and anchor brands like FairPrice, which will be open 24 hours, and foodcourt operator Kopitiam.

It will also have the first indoor playground in Bukit Panjang.

The mall is just below the 546-unit Hillion Residences, accessible via lifts from the shopping area. It is also directly connected to Bukit Panjang MRT station via an underpass.

The Bukit Panjang LRT station is nearby, as is a bus interchange.

Hillion Residences has three residential blocks and a site area of 204,000 sq ft, with a land tenure of 99 years.

Units range from one-bedders from 463 sq ft, to penthouses of 2,616 sq ft or more.

The mall obtained its temporary occupation permit on Dec 30 last year while the residential portion is expected to get the go-ahead on Sept 30 next year.

Mr Kuik Sing Beng, Sim Lian Group executive director, said: “In designing Hillion Mall as a family and active lifestyle hub, we focused on creating enjoyable experiences for everyone, young and old.

“In addition to its ideal location within the integrated hub, we have specially curated a combination of popular household brands with fresh retail concepts over four levels at Hillion Mall to meet the daily lifestyle needs of the community of families, students and the working crowd in the area.”

Adapted from: The Straits Times, 11 January 2017

New Directions for Jurong Point

Three parties shortlisted for Jurong Point

Macquarie, Blackstone and Frasers Centrepoint have been shortlisted for the purchase of Guthrie and Lee Kim Tah’s space in Jurong Point mall.

Three parties shortlisted for Jurong Point

Three parties shortlisted for Jurong Point

The Business Times understands that Macquarie and Blackstone have each offered about S$2.2 billion – crossing S$3,350 per square foot (psf) on the 658,000 square foot commercial net lettable area owned by the equal joint-venture between Lee Kim Tah Holdings and Guthrie GTS in Jurong Point. The net yield is about 4 per cent.

Frasers Centrepoint’s offer is said to be below S$2 billion. The trio are now doing due diligence on the asset before they finalise their bids.

The three are said to be among nine parties that made submissions during an expressions of interest (EOI) exercise that closed on Nov 18.

Singapore’s biggest suburban shopping centre, Jurong Point, is connected seamlessly to the Boon Lay MRT Station and Bus Interchange.

The asset was put on the market in the fourth quarter of 2016 with a price tag exceeding S$2 billion, translating to more than S$3,000 psf.

Other bidders who are understood to have participated in the EOI exercise include Link Reit of Hong Kong, PGIM (formerly Pramerica Investment Management) as well as some of Singapore’s big mall owners.

Private equity giant Blackstone is familiar with the Singapore property market.

Last year, it acquired a 75 per cent interest in three Singapore properties at 896 Dunearn Road, 315 Alexandra Road (next to Ikea) and 10 Jalan Kilang (off Jalan Bukit Merah) from Sime Darby; the deal valued the properties at around S$300 million. Blackstone also owns 21 Anderson Road, a 10-storey building of 34 units.

Blackstone’s Tactical Opportunities Fund was a partner in City Developments Ltd’s (CDL) S$1.5 billion profit participation securities exercise in 2014 to invest in the cashflows of CDL’s Quayside Collection asset on Sentosa Cove.

Macquarie does not own any real estate in Singapore, but has a presence elsewhere in Asia, including a big China retail portfolio.

Frasers Centrepoint Ltd group – including its sponsored shopping centre Reit, Frasers Centrepoint Trust – owns 12 malls on the island with more than two million sq ft net lettable area.

Guthrie and Lee Kim Tah are divesting a total net lettable area (NLA) of 702,000 sq ft – including 44,000 sq ft of space under the government’s Community/Sports Facilities Scheme (CSFS), which is being used by occupiers such as NTUC First Campus Co-operative’s My First Skool and voluntary welfare organisations.

There is a further space of about 59,000 sq ft under three strata retail units divested by Lee Kim Tah and Guthrie about two decades ago to Golden Village, NTUC FairPrice and POSB – taking the total net lettable area in Jurong Point to 761,000 sq ft.

The mall is nearly fully let.

Guthrie and Lee Kim Tah are offering their 702,000 sq ft in the mall through the sale of shares in companies that own this space.

BT reported earlier that the partners, having owned the property for many years, were keen to pursue new interests and opportunities. Lee Kim Tah was delisted in early 2015 and Guthrie in November 2013.

Jurong Point draws an average monthly visitorship of six million and has a catchment of 150,000 households within a five-kilometre radius, with potential for growth as the new town planned in Tengah is progressively developed.

Major tenants for the space at Jurong Point owned by Guthrie and Lee Kim Tah include FairPrice Xtra, Courts, Harvey Norman, BHG, Uniqlo and Kiddy Palace, in addition to three foodcourts.

Jurong Point stands on two sites; one has a balance lease term of about 76 years and the other, 88.5 years. Their combined land area is 557,288 sq ft.

The original Jurong Point was completed in 1995 and spans four levels of retail space (Basement 1 to Level 3). The CSFS space is on Levels 4, 5 and 6. The extension, which was completed in 2008, has three retail floors – Basement 1 and Levels 1 and 3.

About 1,000 carpark lots in Jurong Point are available for use by shoppers.

The mall’s total gross floor area (GFA) is 1.07 million sq ft; there is no unutilised GFA, but potential buyers would no doubt be looking at the possibility of raising the mall’s income by increasing the retail area and subdividing some of the anchor tenant spaces into smaller units to extract higher per square foot rentals.

Adapted from: The Business Times, 9 January 2017

3 things about Yishun’s upcoming integrated development Northpoint City

3 things about Yishun’s upcoming integrated development Northpoint City

North Park Residences - Facsade

North Park Residences – Facsade

Residents in Yishun can look forward to the development of Northpoint City, the latest addition to the rising number of integrated developments in Singapore’s suburbs.

Minister for Foreign Affairs and Law K. Shanmugam unveiled the latest development by Frasers Centrpoint Limited at the Northpoint City exhibition in Northpoint Shopping Centre this afternoon.

With a full integration of public shopping malls and private residential estates, the Yishun community is set to transform into a vibrant hub for its residents.

Although it is not slated to be completed until 2018, here are three things to know about the upcoming Northpoint City and what exciting things we can expect.

1. It will feature Singapore’s first Community Club in a shopping mall

Northpoint City will feature Singapore’s first Community Club located in a shopping mall, Nee Soon Central Community Club. It is also the first Community Club to be fully air-conditioned, moving from a “void deck CC” to a “lifestyle CC”, a name penned by the People’s Association (PA).

The idea was first suggested by Nee Soon Central MP Muhammad Faishal Ibrahim. The Community Club will offer programmes that the PA says will “promote community and intergenerational bonding”.

Residents, especially the elderly, will be able to relax in an air-conditioned environment. PA’s chief executive director Ang Hak Seng had also promised that there will be no additional costs to the residents for activity fees held in the Community Club.

2. It will fully integrate public and private spaces

Residents will soon be able to shop right at their doorsteps with the integration of commercial and residential spaces in Northpoint City.

The whole development will run like a dynamic self-sufficient town. Northpoint Shopping Centre, the largest mall in the North of Singapore, as well as the new shopping centre to be built across the street from it, will provide an array of shopping, dining, leisure and entertainment facilities.

A residential development will also be integrated into the commercial and retail spaces of the shopping malls, allowing residents greater convenience and transforming the area into an exciting place to live in.

3. It will feature a shopping underpass leading to the MRT station

There will be a shopping underpass that leads from Northpoint City to Yishun MRT station, the town garden and surrounding amenities, so residents can now make their walk to the station a more exciting and vibrant one.

Additionally, with an air-conditioned bus interchange in Northpoint city, residents can comfortably wait for their buses without going out into the heat.

These latest developments will help to create seamless connectivity and greater accessibility for residents living in the area.

Source: Straits Times – 1 August 2014

Robust demand for office space in Q2

Robust demand for office space in Q2

Robust demand for office space in Q2

Robust demand for office space in Q2

Singapore’s office property market saw stronger demand in the second quarter this year, all Grade A office micro-markets across the island have reached near-full occupancy rate at beyond 95 per cent.

According to the quarterly research report, the Shenton Way/Tanjong Pagar micro-market saw the highest occupancy rate of 99.4 per cent, up from 97.2 per cent in the first quarter. Demand came from a myriad of industries such as oil and gas, insurance, telecommunications and pharmaceuticals.

Upcoming office projects are also beginning to see some interest. CapitaGreen has achieved almost 12 per cent pre-commitment rate as at end-June. The project is expected to be completed by the year-end. Meanwhile, the landlord of South Beach Tower, expected to come on stream in the last quarter of this year, is reportedly in advance discussions to lease out another 20,000 sq ft of space.

The sales market also saw its fair share of activity. Strata-titled sales volume was supported by continued sales of new strata-titled office units at Vision Exchange at Venture Avenue.

Family-run businesses seeking investment opportunities also kept en bloc office investment sales activity up. A consortium comprising KOP Ltd, Lian Beng Group, KSH Holdings and Centurion Global acquired a 92.8 per cent stake in Prudential Tower for $512 million, or $2,316 per sq ft of net lettable area.

Average capital value of Premium Grade office space in the Raffles Place/New Downtown micro-market rose 0.9 per cent in the second quarter from the previous quarter to $2,692 per sq ft, while that for Grade A office space inched up 0.8 per cent to $2,420 per sq ft.

Source: Business Times – 1 July 2014

Tanjong Katong shophouse up for sale

Tanjong Katong shophouse up for sale

Tanjong Katong shophouse up for sale

Tanjong Katong shophouse up for sale

A freehold corner conservation shophouse in the Tanjong Katong Conservation Area has been put up for sale in a public tender with an indicative asking price of $8.38 million.

The two-storey property at the junction of Tanjong Katong Road and Wilkinson Road is owned by a group of local investors and has a land area of about 2,025 sq ft.

It is zoned as residential with commercial on Level 1 and has a gross plot ratio of 3.0.

The building is fully leased and occupied, with the ground floor taken by a restaurant and bar, and the upper floor occupied by boutique studio units.

There is a large public carpark across the road.

Nearby amenities include the Canadian International School (Tanjong Katong), Chatsworth International School (East Campus) and Parkway Parade.

The tender closes at 3pm on July 25.

Source: The Straits Times – 24 June 2014

Supply crunch sees CBD office rents rise

Supply crunch sees CBD office rents rise

Limited office space 'may boost rents this quarter'

Supply crunch sees CBD office rents rise

Limited supply is pushing up rents for offices in the central business district (CBD) but looming interest rate rises are deterring investors from buying.

Average CBD rents expanded 4 per cent to $9.96 per sq ft (psf) per month in the second quarter over the preceding three months, mainly due to the “stable take-up” by firms amid tightening vacancies.

The increase was at a slightly faster rate than the 3.9 per cent rise in the first quarter this year from the previous quarter.

CapitaGreen, a 700,000 sq ft office tower in the CBD, is expected to be completed by the end of this year.

The office components of mixed developments such as South Beach near Raffles Hotel, DUO in Bugis and Marina One in Marina Bay could also be completed within the next few years.

The average price of CBD office space inched up 0.5 per cent in the second quarter from the three months before to $2,445 psf.

However, other analysts say office rental growth could be less than expected.

Source: The Straits Times – 24 June 2014

Boutique hotel in Kg Glam up for sale

Boutique hotel in Kampong Glam up for sale

Boutique hotel in Kg Glam up for sale

Boutique hotel in Kg Glam up for sale

A boutique hotel, comprising three shophouses along Jalan Klapa, off Victoria Street in the Kampong Glam Conservation Area has been put up for sale with an indicative pricing of $17-18 million.

Located at 9, 11 and 15 Jalan Klapa, the shophouses are on total land area of 4,275 sq ft; the site has a balance lease term of about 92 years. The gross floor area is estimated at 7,911 sq ft.

The site is zoned for commercial use but is permanently approved for hotel use. The shophouses have 15 themed rooms (with an average size of around 215 sq ft), spanning across two storeys and a mezzanine level, a cafe lounge and a small pool.

The indicative pricing translates to a net yield of around 2-3 per cent, based on the current income stream from rooms as well as food and beverage operations.

Operating as Ardennes Hotel, the hotel’s occupancy rate averages around 70 per cent while the average room rate is about $200 per night. An expression of interest exercise is conducted for the property that will close on July 17.

The property is currently owned by a company controlled by a group of private investors who bought the three shophouses four years ago and converted them into a boutique hotel that it currently operates.

The property is being sold with vacant possession.

Meanwhile, those keen on shophouses in the Little India Conservation Area may want to check out three adjoining properties at 2, 4 and 6 Dunlop Street. The 999-year leasehold properties, which are zoned for commercial use, are on 2,475 sq ft of land area and have about 6,000 sq ft gross floor area.

The indicative price is $9.5 million. JLL, the exclusive marketing agent for the sale, is conducting an expression of interest exercise closing on July 10. The property is to be sold on vacant possession.

Source: Business Times – 17 June 2014

75 heritage buildings gazetted for conservation

75 heritage buildings gazetted for conservation

75 heritage buildings gazetted for conservation

75 heritage buildings gazetted for conservation

The Urban Redevelopment Authority’s (URA) 2014 Master Plan was gazetted yesterday, along with 75 heritage buildings slated for conservation.

The buildings, which were proposed for conservation under the Draft Master Plan 2013, include the Sri Krishnan Temple, Malabar Mosque, Alexandra Hospital and Queenstown Public Library.

A URA spokesman said: “We have safeguarded land to provide more housing options and amenities in mature and new towns. New housing areas . . . have thus been re-zoned to reflect their future residential uses.”

Many of the residential land parcels whose plot ratios were increased in the 2014 Master Plan were state-owned.

With the gazetting of the 75 buildings yesterday, a total of 7,200 buildings have been conserved in Singapore since URA started its conservation efforts in 1989. The gazetting concludes a year-long review of the Draft Master Plan 2013.

The spokesman said that there were no major changes between the Draft Master Plan 2013 and the gazetted Master Plan 2014.

The Master Plan is a statutory land use plan that charts the physical development of Singapore for the medium term.

Source: Business Times – 7 June 2014

Seven ground-floor units at Holland Road Shopping Centre for sale

Seven ground-floor units at Holland V mall for sale

Seven ground-floor units at Holland V mall for sale

Seven ground-floor units at Holland V mall for sale

A group of retail units on the ground floor of Holland Road Shopping Centre has been put up for sale.

The seven freehold strata-titled shops face Holland Avenue, and are home for at least the next six years to supermarket chain Cold Storage.

The 24-hour grocery outlet occupies about 12,260 sq ft and is also the anchor tenant at the four-storey shopping mall in Holland Village that was built in 1972.

The latest valuation of the properties places them at about $7,500 per sq ft (psf), or $92 million. In the past year, the average selling price of the mall’s retail units was about $5,300 psf.

A 484 sq ft unit changed hands for $2.38 million – or $4,913 psf – last November, according to caveats lodged with the Singapore Land Authority. The same month, a 344 sq ft shop was sold for $2.17 million – or $6,300 psf.

Cold Storage’s lease will be expiring in 2020, and owners can renew it closer to its expiry or divide the units for sale according to their strata titles.

The grocery store has been at the mall for more than 30 years. The centre’s other familiar tenants include craft shop Lim’s Art and Living and Thambi Magazine Store.

Under the Urban Redevelopment Authority’s Master Plan, Holland Village has been designated as an “identity node” – places with distinctive character. There are plans to build more retail offerings within a 6ha extension over the next two years.

Named the “Holland Village Extension”, it will comprise two land parcels – 1.3ha and 1ha in size – for housing, and a 2.3ha site designated for mixed-use development.

Potential buyers have until 3pm, July 11, to express their interest in the seven retail units.

Source: The Straits Times – 3 June 2014