Office Rentals

In the BT article dated Dec 22, "Office landlords sweeten deals as market weakens" by Kalpana Rashiwala, several industry experts were interviewed on the direction of Office rentals.

Jones Lang LaSalle....

predicts that the average monthly rental value for Grade A Raffles Place (excluding Marina Bay) will ease about 5.1-14.4 per cent over the next 12 months, from about $9.75 psf to $8.35-9.25 psf in Q4 2012. It also projects that the Grade A Raffles Place (including Marina Bay) office vacancy rate will rise from about 10 per cent this quarter to 12.5-13 per cent by end-2012, given a more bearish outlook on demand. Net office take-up for the same location will remain in positive territory in 2012 but weaken to 830,000 sq ft from about 1.75 million sq ft this year, according to JLL.

On the supply side, JLL notes that islandwide, between 2012 and 2015, some 5.5 million sq ft of new office space for lease (excluding strata-titled developments such as Paya Lebar Square) will be completed. Of this, some 1.3 million sq ft is already leased, leaving 4.2 million sq ft available. Adding the remaining 800,000 sq ft of the 2011 supply that has yet to be let gives a total of five million sq ft available over the next four years. This works out to 1.25 million sq ft per annum.

The historical average 20-year (1991-2010) islandwide take-up was about 1.5 million sq ft per annum.

Chris Archibold, head of markets at JLL, says:

'Given Singapore's enhanced international value proposition, one would logically expect average annual take-up numbers over the next 10 years to be higher.

'The demand numbers are hard to predict and are very much dependent on the global economy. Impact on rents is hard to gauge as it's very much dependent on demand and market sentiment. In the near term, the global outlook is likely to have a negative impact on office space take-up; however, in the medium term, Singapore is well positioned.'

So the truth is that the medium and long term outlook is difficult to predict.
However, analysts are generally bearish on the short term outlook due to the Eurozone crisis.


Knight Frank .....
They appear to be the most pessimistic.
Director (office) Robert MacDonald says:

'The first half of 2012 will almost certainly see landlords increasing incentives (rent-free periods), and additional benefits to attract tenants, such as fit-out capital contributions, will become more common.'

'...headline office rents could contract by up to 15 per cent by end-2012. All eyes are focused on the European debt crisis and the resulting economic reaction, which will have a direct impact on market sentiment in Singapore. The extent of decline will be more transparent towards the end of Q1 2012.'

BT reported increased agent commissions from one month's rental to between 1.2 months and two months' rent on a typical two or three-year lease.
Another perk , reported by BT...
"landlord of a brand new Grade A office development keen to maintain high headline rental levels in the building is said to be prepared to offer a 5-6 month rent-free period for a 2,500 square foot space - from 1-2 months half a year ago."
Mr MacDonald notes that new-build Grade A rents in Singapore are 45 per cent lower than comparable developments in Hong Kong.


CBRE .....
Executive director Moray Armstrong, says:

'Landlords will have differing reactions in a more competitive leasing environment. Some may wish to increase incentives or inducements while preserving face or signing rents, while others may just allow signing rents to adjust to the prevailing market level.'

CBRE figures show that the average monthly rental value for Grade A offices - covering the Marina Bay, Raffles Place and Marina Centre locations - has been flat in Q4 from the Q3 figure of $11.06 per square foot, translating to a full-year rise of 11.7 per cent. This follows a 22.2 per cent appreciation in 2010.

Mr Armstrong foresees Singapore office rents easing next year but does not expect any dramatic rental correction as was seen post-global financial crisis, when the average monthly Grade A rental slumped nearly 60 per cent over six quarters, from $18.80 psf at the peak in Q2 and Q3 2008 to $8 psf in Q1 2010.

'Rentals going into GFC were at artificially high levels, driven by extraordinarily low vacancy rates of sub-one per cent for over two years. This accentuated the rent correction. These conditions don't exist today; rentals are manageable and relatively competitive compared with other regional centres.'

Mr Armstrong expects office demand to remain positive in 2012. 'While there are precious few leasing requirements in the key banking sector - where the growth spurt appears to be over - we're encouraged by a number of new entrants coming into Singapore from a few sectors (such as) in the energy, commodities and consumer industries, and law firms.

'We've seen some initial signs that certain global industries are viewing Singapore favourably for expansion, partly due to uncertainty in the West arising from prospects of increasing taxes and an uncertain political landscape. Singapore could emerge a net beneficiary.'


Savills ....
Director (commercial space) Agnes Tay observes

'Tenants may want longer leases and more options for renewal as they seek greater security of space - and yet due to uncertain business conditions, they would also like some flexibility in the lease agreement that the landlord will consider taking back some of their space should they no longer need it, with an agreed compensation formula.'

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My Thots.....

In the immediate near term, most experts tend to be cautious--- to be pessimistic.
CEO of KReit, Ng HL has to be very brave (or reckless? ) to call the timing and nudge Kepland to release OFC to KReit , during such a period of uncertainty.

ABSD Property Curbs

What is the intention of the Additional Buyer's Stamp Duty (ABSD) curbs ?
First, let's look at the policy measures introduced since 2010 to see the Big Picture:

Summary of policy measures in 2010 and 2011
Feb-10 ----- Introducing Sellers' Stamp Duty (SSD) on all residential properties and residential land that are bought after today and sold within 1 year from the date of purchase. Lowering LTV limit to 80% for all housing loans provided by financial institutions and regulated by the MAS

Aug-10 -----  Increased holding period for imposition of SSD from the current 1 year to 3 years. Increased minimum cash payment from 5% to 10% of valuation limit. Decreased LTV limit for housing loans granted by financial institutions from 80% to 70%

Jan-11 ----- Increased SSD period from 3 year to 4 years. Increase SSD to 16% within the first year, 12% within second year, 8% within  third year and 4% within fourth year. Lowered LTV from 70% to 60% for individual buyers and 50% for non individual buyers

Dec-11 ----- Foreigners and non individual buyers to pay additional buyers stamp duty (ABSD) of 10%. PRs owning one and buying second and subsequent property will pay ABSD of 3%. Singapore citizens owning two and buying third and subsequent property to pay 3% ABSD.

These are mainly demand-side measures---- calculated to discourage or defer real demand.
Remember that the govt also have supply-side measures----- land releases to ensure that developers can tender for plots to meet the supply spikes.
Ostensibly, the Dec 11 measures are anti-speculative since the ABSD targets additional purchase of properties beyond the 1st and it follows an incremental layering approach by the policymakers to prevent a bubble from forming in the property sector.

The only difference is that this time it discriminates  between SG citizens, PRs and foreigners with graduated deterrence's (ABSD).

Foreigner demand as a percentage of total transactions has risen from 13% last  year to 17% for 10M11. Recent data showed that foreigner buying activity had become increasingly broad based, moving into the mass and mid-end market segments, compared to the more high-end focus previously.
One way to look at the ABSD measures is to look at it as one of incremental policy layering ----- speculative  hot money from foreigners (corporate and individual) and  PRs being targeted was a logical policy outcome. Low interest costs, the high SGD and the desirability of SG as an attractive destination for HNWIs will facilitate hot money inflows which will gravitate towards properties; given the markets abhorrence for derivatives and hedge funds.

But, if the demand is genuine, that is if SG is so desirable to the HNWIs, would the measures be effective? IMHO, Yes, as it will skew foreigner demand towards the higher end sector ---- those who can afford high ABSD will be able to afford high end properties!! So the policy discourage speculation at the mid end and mass market sectors and is pro-SG citizens ( an important consideration during elections).
Foreigners from the United States, Switzerland, Liechtenstein, Norway and Iceland are exempt due to certain clauses in their free-trade deals with Singapore. However, buyers from these countries, excluding permanent residents, comprised only 1.7 per cent of all foreigner purchases of non-landed homes this year---- meaning that those most affected will be the Chinese, Indonesian and Indians.

What will the foreigners do, if they have to reside here for investment and biz reasons and cannot buy?
The answer is simple----- they will gravitate towards rental of properties!!

The other big question is one of timing----- why now?
Given the Eurozone uncertainties and the glacial pace of growth in the US, there is likely to be a period of  monetary easing (QE to be exact) and low interest rates in the West. Hot Money will flow to  Asia  eg HK, China, SG etc.....
So while the aneamic economic growth in Europe and the US slow global growth in trade terms, it will cause hot money to seek growth in faster growing Asia which has huge potential for economic growth due to domestic consumption arising from the surging population growth.
Hence, the direction of  hot money flows is not difficult to fathom----it will gravitate to where there is less controls.
SG due to its open and market friendly policies is a hot favorite.
The policymakers do not have a choice in coming up with the latest ABSD measures, if they want to slow down the rate of property price increases; given the drastic measures in HK and China.

Developers are of course "peeved" about the timing and the anti-speculative measures and are lobbying for their removal--- that is the raison detre for REDAS and it is no surprise that they do so.
Developers have come up with new tactics to keep sales going.
Latest BT update on Monday 12/12/2011, by Uma Shankari, says...

Other developers said it was 'business as usual' at their showflats, but admitted that sales were slower compared to a week ago.

For the most part, buyers are now waiting for prices to fall. Property agents noted that there was a 'steady flow' of potential buyers at showflats - but most left without buying anything.

This is even as many developers - including Far East Organization, Wing Tai Holdings and City Developments - are offering packages to offset the stiff new measures.

Far East is offering a 5 per cent relief package to affected buyers at all of its already-launched projects.

It will reimburse buyers 3 per cent of the unit price to offset the new stamp duty, and buyers will also get furniture vouchers worth 2 per cent of the flat price.

Wing Tai and City Developments are also offering relief packages at selected projects, BT understands.

.


But will property prices collapse 30%, as some analysts say?
That is NOT the intention of the policymakers; whom will adjust and recalibrate policies if the prices drop excessively.
IMHO, the policymakers seek a gradual incremental rate of property price rise------ not a collapse !!

High End Deals

Savills did a study of High End Deals in the Housing Market and this was reported by  KALPANA RASHIWALA in the BT,  in an article "High-end home deals fewer this year: study" , on 5/12/2011.



Non-PR Foreigner share in the high end condos in choice districts  and bungalows in Sentosa have increased according to Savills; said the BT article.

Breakdown by Nationality

 From BT

Reasons?
1) Chinese fleeing restrictions on property buying in their home market and instead parking their monies in Singapore's property market.

2) Investors fleeing the economic gloom in Western economies  to favour the relatively healthier economies in Asia.

3) Singapore is seen as a property buying destination in Asia for its transparency, political stability and relative safety----AAA rating in the eyes of these HNWIs.


Who are these buyers ?

Breakdown by Country

From BT

High End Apartments for Jan-Nov 2011

Indonesians

Have been the top buyers since 2007---- Up from 15.4 % in full-year 2010 to 16.4 % during Jan-Nov 2011. However, the 236 upmarket apartments/condos they have bought this year is about 35 % lower than the total number of caveats last full yr.

 Mainland Chinese

Their share of total buying doubled from 5.8 per cent to 11.8 per cent.

Their purcahses of of high-end apartments has risen from 136 for full-year 2010 to 170 in Jan-Nov 2011

Indians
They were the fourth largest foreign buyers of high-end apartments in Jan-Nov 2011, with 31 caveats or a 2.2 per cent share of total purchases.

They  did not  feature among the top five nationalities of foreign buyers in 2007

A longer-term comparison reflects a similar picture. The number of high-end apartments bought by Indonesians has roughly halved from 438 in 2007 to 236 in Jan-Nov 2011, while the number of caveats lodged by mainland Chinese has quadrupled from 43 to 170.

Sentosa Cove for  Jan-Nov 2011

Chinese are the biggest foreign buyers (PRs and non-PRs combined) of bungalows.

They purchased five of the total 20 bungalows transacted in Jan-Nov this year.

Singaporeans bought eight bungalows.

Non-PR foreigners have 35% of th share of purchases.

Average price of bungalows transacted on Sentosa Cove has risen 11.1 % from $1,910 psf on land area for full-year 2010 to $2,122 psf for January-November 2011.

In absolute dollar quantum, the average price per bungalow transaction has appreciated 7.7 per cent from $17.1 million to $18.4 million.

The total number of Sentosa Cove bungalows transacted has slipped from 54 last year to 20 in Jan-Nov 2011.

Breakdown by Region
From BT

My Thots.....

As long as SG remains an open economy, HNWIs will continue to invest in high end properties here.

Note, that Non-PR Foreigners need approval to buy landed properties outside of Sentosa.

Bedok Residences

See SGX announcement by Capitaland/Capitamall Asia

On Sunday Night, 500 people were reported to be on the queue.
But, some reporters and naysayers doubted the queue---- they say agents were creating the queues to evoke interest.

But, think about it.
Agents earn commissions, they cannot create demand if there really is none; since they will have outgoing expenses to pay the students/retirees on the queue w/o correspondng incomes.

The OCBC analyst who "kicked tyres"  and did a site check was more accurate.

After enquiring with three agents, however, we found they would only hire a replacement to wait in line if we were committed to buy and submitted cheques. From these data-points, we judge that there is robust demand for the launch and expect a strong sales performance in terms of both units sold and average selling prices later this week.

Indeed, judging by the SGX annnouncement, as at 5pm; 350 units out of the 450 units released for sale on the 1st day is a very good response for Capitaland/CMA.

 Of the total 583 units, 450 units were released for sale today. As of 5 pm today, 350 units have been sold of which 15% are one-bedroom units, 28% are one bedroom + study units, 36% are two-bedroom units, 16% are three-bedroom units, 4% are four-bedroom units and 1% are penthouses. The average price per-square-foot is S$1,350.



Indicative pricing was SGD 1200 to 1400 psf.
So SGD 1350 psf, is on the high side.

The site was bought for S$788.9m in Sep 2010, and has a site area of 268,047 sq ft with a lease term of 99 years (plot ratio 3.5) ====> cost of land psf is SGD 841 psf ppr.

But, this is a mixed development, so cost of land for for the residential dev is probably at about SGD 600 psf with building costs at about SGD300 psf.

At SGD 1350psf vs the SGD 900 psf total costs; GPM approx. 33%.

Who are snapping up the High End condos?

A 3,003-sq-ft, 4-bedroom apartment in the The Marq (Premier Tower) at Paterson Hill is reported by the BT, to have sold for nearly $6,850 psf ($20.5 m), topping the previous record set in August for $6,394 psf

Who are snapping up these High End  condos?

Excerpts...

'The majority of buyers in this segment are foreigners. Singaporean buyers typically aim for Good Class Bungalows, since the absolute price for a GCB is quite similar to that for a luxury apartment in a project like The Marq,' says Jones Lang LaSalle's head of residential and national director Jacqueline Wong.

'It is foreigners, who don't qualify to buy a GCB, who are the main players looking at luxury condos right now. Their interest in buying property in Singapore has never dissipated; their interest is still there. But due to the global uncertainty including European debt crisis, everybody's more cautious, more selective now. They want value buys or fire sales - but these are difficult to find in Singapore as our high-end developers are deep-pocketed,' added Ms Wong.



Why ?
A possible reason is design, and exclusivity, it seems.....

....the developer's track record of consistently improving its product in terms of quality, design and concept. 'It has always reinvented itself. Take The Marq, for instance. The Signature Tower has an interlocking design for each of the apartments (which are over 6,000 sq ft) so that it feels like a penthouse even for units on lower floors - with double-volume ceiling height in the living and dining area and a private pool for each apartment.

'(SC Global chairman and chief executive) Simon Cheong has paid careful attention to the project's details even in the common areas like the lobby. There's a club lounge/ library where they serve drinks, and the gym is fully equipped. There's a concierge service, and sculptures and other artwork on display in various parts of the development.'

So it seems, the foreigners are still snapping up despite the resilently high prices.

What is Kepland up to?

What is Kepland up to?

First, they sold OFC to KReit-Asia.
Now they are selling Robinson Centre housed under Alpha  Core Real Estate Fund, managed by Keppel Land unit, AIP ( Alpha Investment Partners).
Alpha bought Robinson Centre for $145 million in 2006 from GuocoLand.
According to BT, they are selling it to  a Taiwanese investor for nearly SGD 300 m ( $2,240 psf NLA).

Excerpts....
The price being paid by the Taiwanese party set to buy Robinson Centre is thought to reflect a net yield in the region of 3.5 per cent, based on the building's current rental income stream. The prospective buyer is looking at Robinson Centre as an investment - that is, with a view to collecting rental income from it - rather than for redevelopment, BT understands.
Robinson Centre was completed about 11 years ago. Investment sales of office blocks have gathered momentum since last month, say market watchers.

KReit-Asia is paying $2,380 psf net of rental support, for OFC.

Question is:
What is Kepland up to?
Is there an impending buying opportunity coming up?

Other Big Q is:
Why are all the Institutional Investors snapping up the Office Towers now?
If U read the Research reports by  local Equity Analysts and Property Analysts, Office Properties are facing a downturn. But, the smart money seems to think otherwise.

Excerpts...
....last month, Royal Group Pte Ltd, controlled by Asok Kumar Hiranandani and his son Bobby, acquired two adjacent 999-year leasehold office blocks at Phillip Street in the Raffles Place area for a total of about $283 million, or an average price of $2,350 psf. One Phillip Street was sold for $2,050 psf and Commerce Point (at 3 Phillip Street) at $2,490 psf.

Another deal last month involved the sale of a 50 per cent stake in a company whose sole asset is the 12-storey freehold Finexis Building, a smallish office block at 108 Robinson Road.
The transaction was based on the office block's latest valuation - in July - of $110 million or about $2,043 per square foot on its total strata area of 53,830 sq ft, which is understood to be close to the building's net lettable area.


Go figure.

Foreign Property Buyers

The Straits Times
Nov 16, 2011
The case for curbs on foreign property buyers
Entry of foreigners into mass-market homes bears careful watching

By Esther Teo

SOME Singaporeans are clearly worried that the growing numbers of foreigners buying private homes are driving prices ever higher - and out of the reach of some local buyers.

This concern has been heightened by a fairly new trend for foreigners to buy mass-market homes, a segment in which they had previously taken little interest.

These, of course, are the same homes that many upgraders aspire to buy.

Are restrictions on foreigners' purchase of private homes, proposed by some, warranted?

First, consider the figures. In the first eight months of this year, one in three buyers of non-landed private residential properties was a non-Singaporean.

Among buyers of private homes - excluding landed property which is more regulated - the proportion of foreigners, including permanent residents (PRs), is creeping up. Last year, it was 28 per cent.

Foreigners are also increasingly turning to new developments. A recent Business Times report showed that foreigners, excluding PRs, bought 843 uncompleted private homes from developers in the third quarter, up nearly 20 per cent from 703 homes in the previous quarter. Their share of the total number of uncompleted private homes sold by developers rose from 16.3 per cent in the second quarter to 20.1 per cent in the third quarter.

Foreigners, excluding PRs, accounted for 16 per cent of all private home purchases in the first half of the year, up from 12 per cent last year.

Perhaps the biggest worry for many Singaporeans is the fact that foreigners are now encroaching on the mass-market segment.

Foreigners' share of homes sold at price tags of under $1 million - taken as a proxy definition of a mass-market home - rose to 28 per cent in the first nine months of this year. It was 19 per cent in 2009 and 22 per cent last year, according to caveats lodged with the Urban Redevelopment Authority.

At recent launches of mass-market developments such as Parc Vera in Hougang, foreigners and PRs made up about 20 per cent of sales, compared to below 10 per cent a few years ago.

In the past, foreigners largely went for expensive homes in districts nine, 10 and 11, and this had minimal impact on the average Singaporean, said Dennis Wee Group director Chris Koh. However, they are now making a splash in the suburban leasehold mass market, he noted.

Faced with such statistics, it is little wonder that some attribute the surge in private home prices to record highs - up 18 per cent last year and a further 6 per cent in the first nine months of this year - to purchases by foreigners.

Amid this concern, some experts like Chesterton Suntec International research head Colin Tan have suggested that curbs on foreigners buying private residential properties could temper the rapid rises in prices.

To a certain extent, foreigners already face curbs on property purchases. Foreigners can buy landed homes only in Sentosa Cove. If they are PRs, they may buy some types of landed housing elsewhere, but only with approval.

The sale of resale Housing Board flats is also restricted to Singaporeans and PRs who meet certain criteria.

But the market for private condominiums is largely open to foreigners, who invest in this market on a level playing field with citizens.

Those who call for curbs point out that Singapore's real estate sector is vulnerable to speculative capital flows.

With interest rates set to stay low for the next couple of years, the plentiful funds washing around the market seeking better returns could well cause price volatility if there are no curbs, they argue.

Last month, MP Christopher de Souza (Holland-Bukit Timah GRC) suggested restrictions on foreigners buying homes. He cited Australia, which has rules that limit foreigners to buying only new properties, which they can subsequently sell only to Australians.

Singapore, like other open economies such as Hong Kong and Britain, does not restrict foreigners from purchasing private condos and apartments.

Others have suggested less onerous financing-related measures such as caps on the number of mortgages foreigners can take out or reducing further for them alone the proportion of a property's value they may borrow.

Dennis Wee's Mr Koh suggested one way would be to introduce a capital gains tax for foreigners who make gains from selling private property here. Or simply keep or impose an additional sellers' stamp duty on foreigners who sell within a stipulated period, he said.

Another suggestion from Knight Frank group managing director Danny Yeo is to differentiate between those who have a stake here and those who do not.

Long-term residents, such as PRs and foreigners working here, should not be subject to restrictions as they also need a home in Singapore. But the purchases of foreigners who do not live or work here could be subject to curbs, he said.

But as National Development Minister Khaw Boon Wan noted last month, it is important to ensure that housing policy shifts do not unwittingly harm the economy and society. Rising prices also cannot be attributed solely to foreign purchases. There are many factors at play, such as low interest rates and Singapore's strong economic fundamentals, he emphasised.

In any case, foreigners are already subject to the same anti-speculation measures as locals - including a sellers' stamp duty of up to 16 per cent. This has creamed off some speculative froth, with prices moderating for the past eight consecutive quarters - inching up just 1.3 per cent in the three months to Sept 30.

Taken together, the case for more curbs on foreign purchases is mixed. A further surge in demand from foreigners can raise prices beyond the reach of locals.

At the same time, any measure that curbs demand in one segment risks cooling down the entire market, especially with a slowing economy.

There may be a case for more calibrated measures: for example, to dampen demand for mass-market homes from foreigners who do not live or work in Singapore.

But the timing and extent of any such move are critical. For now, the trend of foreigners buying into mass-market homes is certainly one that bears careful watching.

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My Thots....

Delicate balancing act needed.
IMHO, given the open nature of our economy and society, we are unlikely to go the Aussie way.
U cannot have employment and immigration policies that promote openness and yet, have housing policies that run counter to those.
But, upgraders aspirations will put political pressures on the policymakers.

Asia Square Tower 1

Published November 9, 2011

Two-thirds of Asia Square Tower 1 taken up By UMA SHANKARI TOWER 1 of Asia Square, the newest office building in the Marina Bay financial district, is about 68 per cent leased at rents between $12-16 per square foot per month, the project's head of leasing, Luke Moffat, said in an update.

Mr Moffat, who was speaking to reporters after the tower's grand opening last night, added that he expects Tower 1 to be fully let by the middle of 2012.

He also does not see rents being reduced in order to secure tenants. 'We don't see it as a period where we will have to drop rents, but things will be a bit slow.'

The 43-storey Asia Square Tower 1 has some 1.26 million square feet of office space. Around 32 per cent of the space has yet to be leased, though Mr Moffat's team is negotiating with a few tenants, he said.
One potential tenant in the financial sector could possibly take up a few high-rise floors, BT understands.

Companies that have already signed leases include Citibank (which will take up nine floors), Google (three-and-a-half floors) Bank Sarasin and White & Case.

The guest-of-honour at the opening ceremony, Emeritus Senior Minister Goh Chok Tong, said that Asia Square introduces the latest innovation in design, building technology and efficiency, which will advance Singapore's goal of building a world-class business district.

'Looking ahead, we must continue to upgrade Singapore's business infrastructure in order to meet the changing needs of global business and finance and to serve the financing and investment needs of a growing Asia.

'Our business spaces should be innovative and flexible, and our downtown should provide attractive lifestyle options for those who work, live and play here.'

Asia Square's Tower 2 will be ready in 2013. The building will be the first development in Singapore's new downtown to integrate a 305-room five-star Westin Hotel.

Asia Square is owned by MGPA, a private equity real estate investment advisory company which counts Australia's Macquarie group among its shareholders.

BT

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My Thots...

Prime Office still looks good, if this BT article is correct.

Chijmes

Published October 28, 2011

Suntec Reit sells Chijmes for $177m to Pua-linked entity OSIM's Sim holds stake in the entity; Pua, Sim also linked to a nearby project By MINDY TAN SUNTEC Real Estate Investment Trust (Suntec Reit) is selling Chijmes for $177 million to an entity whose shareholders include Pua Seck Guan's Perennial Real Estate group and OSIM boss Ron Sim.

Mr Pua and Mr Sim are also joint majority shareholders (40 per cent stake) in the nearby Capitol project, which will have retail/theatre, hotel and residential components.

According to a Perennial spokesperson, this acquisition provides good synergistic opportunities between the Chijmes and Capitol sites.

'We like this site because it's a good opportunity to own an iconic heritage landmark commercial site, and it's very rare to get an opportunity to invest in such a large commercial site right in the downtown core of Singapore CBD (central business district), with a low plot ratio of 0.8,' said the Perennial spokesperson.

HSBC Institutional Trust Services (Singapore), as trustee of Suntec Reit, entered into a property sale agreement with PRE 8 Investments Pte Ltd for the 154,062 sq ft plot located along Victoria Street.
With a gross floor area of 127,793 sq ft, the $177 million price tag translates into about $1,385 psf ppr (per sq ft per plot ratio). The area was valued at $143.7 million by DTZ Debenham Tie Leung (SEA) as at Oct 15, placing the divestment at 23.2 per cent above the valuation.

Suntec Reit is expected to recognise an estimated gain of about $39.5 million following the divestment.
The sale of Chijmes follows an expressions of interest exercise conducted by Colliers International.
According to Suntec Reit's results for the third quarter ended Sept 30, the property posted revenue of $2.7 million and net property income of $1.8 million during the quarter.

Going forward, PRE 8 Investments intends to spend some $40 million to rejuvenate the asset.
'In terms of efficiency of the asset, it will be enhanced; the tenancy mix will be reviewed and optimised; and in terms of ambience, a lot can be done to improve and blend it with the precinct. Over time, we hope to enhance the rental revenue from this asset.'

Chijmes has 79,794 sq ft of net lettable area and includes several conservation buildings and two gazetted national monuments - Chijmes Hall (the former CHIJ Chapel) and Caldwell House.
Chijmes is on a site with a remaining lease of about 79 years. It has 97 car park lots and is located opposite Raffles City and the City Hall MRT Station. Tenants include Lei Garden Restaurant and Harry's Bar.

The completion of the divestment is expected to be sometime in January 2012.

BT
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My Thots.......

It will be very interesting to see what the enterprising pair of Pua and Ron Sim will do to transform  the Chijmes site. ARA the manager for Suntec Reit practically slept on it and must consider themselves very lucky that they are able to unload Chijmes to the pair paid at such a high price. Poor property managers but great asset traders? - maybe
http://www.businesstimes.com.sg/sub/companies/story/0,4574,462328,00.html?

China New Home Sales

Published October 19, 2011

China home prices rise in fewer than half its cities Market correction has started following govt curbs, say analysts (SHANGHAI) China's home prices gained in fewer than half of the 70 cities monitored by the government in September for a second month as sales eased following harsher policies to curb the risks of asset bubbles.

New home prices in the most affluent cities, including Beijing, Shanghai, Shenzhen and Guangzhou, were among 30 that were unchanged from August, the statistics bureau said on its website yesterday. A total of 16 cities posted month-on-month declines in housing values and 24 recorded gains.

'The correction in China's property market has already started,' Yao Wei, a Hong Kong-based economist at Societe Generale SA said. Home prices would need to fall between 5 per cent and 10 per cent before the government eases its curbs, she said.

The government increased downpayment requirements and mortgage rates on some homes this year and issued home purchase restrictions in about 40 cities.

Chongqing, one of the only two cities the government imposed property taxes in this year, posted the steepest decline as prices dropped 0.4 per cent from August, while Changsha, Kunming, Yinchuan and Luoyang had the largest gain of 0.3 per cent, the bureau's data showed.

Prices rose in 69 of the 70 cities from the same time last year, with the city of Wenzhou reporting the only decline, according to the data. China's Premier Wen Jiabao visited the city in eastern Zhejiang province this month amid reports of surging bankruptcies among private companies unable to repay debt to so-called underground lenders.

In August, 16 cities posted a decline in home prices and 31 were unchanged from July, the first time fewer than half of the locations recorded a gain, according to Samsung Securities.

China's biggest property companies reported mixed sales data last month. China Vanke Co, the country's largest listed developer, said September's sales dropped 12 per cent from a year earlier, and China Overseas Land & Investment posted an 18 per cent decline. Evergrande Real Estate Group, the country's second biggest by sales, said September sales surged 79 per cent.

China's property sales rose 23 per cent to 3.9 trillion yuan (S$775.5 billion) in the first nine months, while development investments gained 32 per cent in the period to 4.4 trillion yuan, according to government data yesterday.

China's property investment may be holding up due to social housing and delayed construction expenses, Nicole Wong, a Hong Kong-based analyst at CLSA Asia-Pacific Markets, said.

Luxury home developers are finding it harder to resist price reductions as banks in 14 cities including Shanghai and Guangzhou raise mortgage rates for first homes by as much as 50 per cent, Shanghai Securities News said yesterday.

The government's home price data may not fully reflect market trends because there are 'hidden price adjustments' to housing values, including incentives such as the absorption of interest by developers, Ms Wong said. -- Bloomberg

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My Thots....

Whatever, the 'hidden price adjustments' may be, the data points to cooling...

New Home Sales for Sg

Please see......

http://www.businesstimes.com.sg/sub/news/story/0,4574,460942,00.html? 

Published October 18, 2011

No sign of slowdown in private home buying Analysts say strong sales are driven by developers rolling out new projects By KALPANA RASHIWALA (SINGAPORE) The latest developer sales numbers for September gave no hint of any slowdown in private home buying.

Most analysts said September's surprisingly strong sales, released yesterday by the Urban Redevelopment Authority, were driven by developers rolling out new projects, especially in Outside Central Region, where mass-market developments are located, at prices that buyers still found reasonable.

'There is fear of investing in alternative instruments and relative safety in a brick-and-mortar asset class like real estate. Interest rates are still low,' notes DTZ's SE Asia chief operating officer Ong Choon Fah.

The 1,631 private homes excluding executive condos (ECs) developers sold in September was up 20.7 per cent month on month and the second best showing so far this year (after April's 1,805 units). The number of private homes launched in September - 1,919 - was also the second highest year to date after the 2,055 units in April.

In addition, developers sold 433 executive condos (ECs) last month, up about 49 per cent from August. CB Richard Ellis executive director Li Hiaw Ho says sales momentum for ECs was likely to have been boosted by the $2,000 increase in the monthly household income ceiling for new EC buyers to $12,000 announced in mid-August.

Including ECs, developers found buyers for 2,064 units in September, a month-on-month increase of 25.8 per cent.

 Analysts say that to some extent, last month's strong sales were driven by launches. Developers released 2,493 private homes including ECs in September, up almost 81 per cent from August.
Outside Central Region or OCR (where mass-market projects are located) was the star performer, accounting for 78.4 per cent of total 1,919 units launched and 81 per cent of the 1,631 units (excluding ECs) sold in September. Launches and sales in OCR were led by A Treasure Trove near Punggol MRT Station, which saw 683 units sold last month at a median price of $915 psf.

Colliers International's analysis showed that about 59 per cent of the 1,631 private homes sold by developers in September were priced at $1,000 psf or less.

Based on monthly sales data, developers have sold 4,380 private homes for Q3 2011 (although URA will release the final figures for Q3 on Oct 28, factoring in returned units). The preliminary Q3 number is 1.4 per cent lower than the Q2 figure and takes the tally for the first nine months of 2011 to 12,419, slightly ahead of the 12,051 in the same period of 2010, notes Credo Real Estate executive director Ong Teck Hui. 'This shows the market momentum in 2011 is holding well. It is possible that 2011 will end with almost as many units sold as in 2010 - unless a major calamity occurs in Q4,' he added.

For the whole of last year, developers sold 16,292 private homes and 1,052 ECs. EC sales in the first nine months of 2011 totalled 2,468.

Top sellers in September included EuHabitat at Jalan Eunos (138 units at median price of $1,191 psf) and The Meyerise at Meyer Road (108 units sold at $1,789 psf median price). Arc At Tampines, the first EC project launched after the announcement of the higher income ceiling for EC buyers, registered sales of 233 units at a median price of $734 psf in September.

Knight Frank chairman Tan Tiong Cheng feels the buying momentum could continue. He argues that developers can launch new projects at lower prices as land prices at recent state tenders have fallen.
Meanwhile, MCL Land is said to have sold out over the past two weeks its 121-unit freehold cluster housing project Este Villa in the Seletar Hills area. An intermediate terrace house has a strata area of about 3,400 sq ft and is priced at about $2.1-2.2 million on average or about $600-plus per square foot.

BT's analysis showed that home buyers returned about 70-plus units in September, including EC units. Euhabitat topped the list with 17 units returned, followed by Boathouse Residences (12 units) and The Luxurie in Sengkang (5 units).

The priciest unit sold by a developer in September was a unit at The Marq on Paterson Hill, which sold for $4,612 psf, followed by a Scotts Square unit which fetched $4,059 psf.

BT

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 My Thots...

Fact is demand is strong due to affordibility--- 59 % of the 1,631 private homes sold by developers in September were priced at $1,000 psf or less.

Price point is important in the mass mkt segment and at the moment $1,000psf appears to be the benchmark; and still holding.

Landed Homes

http://www.businesstimes.com.sg/sub/news/story/0,4574,460296,00.html?   Published October 13, 2011

Approvals for PRs buying landed homes set to plunge By UMA SHANKARI (SINGAPORE) The number of approvals given to permanent residents (PRs) who want to buy landed homes in Singapore is set to fall by more than half after the criteria was tightened further recently, Law Minister K Shanmugam said yesterday. 'After the further tightening, I suspect we are looking at very few people who would qualify. I think probably less than half of those who had previously qualified - under the previous already strict criteria - would qualify now. I'd be surprised if approvals are more than 50 per year,' Mr Shanmugam said. 'Our belief is that landed property is primarily for Singaporeans and the exceptions have to be very rare.' Mr Shanmugam was speaking to reporters after visiting a black-and-white bungalow at Goodwood Hill. The Ministry of Law said that the criteria was tightened 'recently' but declined to provide a more exact date. A ministry spokeswoman said that over the last three years, the ministry had received an average of about 230 applications a year from PRs for the purchase of landed residential property. On average, about 60 per cent of the applications were approved. With the revised criteria, the approval rate could drop by more than 50 per cent, she said. This means that the number of approvals could fall from around 138 a year to Mr Shanmugam's prediction of not more than 50. Foreigners who are PRs currently own about 3.5 per cent of the total stock of 70,000 landed homes in Singapore. This includes properties in Sentosa Cove, where the government has made a decision to liberally allow purchases by foreigners. Foreigners cannot buy such properties without the prior approval of the law minister. And only foreigners who are PRs can apply to purchase landed properties. Mr Shanmugam told The Business Times in an interview in July that his ministry regularly reviews the rules to ensure that they are current and relevant. And yesterday, he said that the 'strict' criteria were tightened further this year. 'We have reviewed it further this year . . . as we are even stricter, it (the number of approvals) may fall by half,' Mr Shanmugam said. The Law Ministry spokeswoman added that PRs who want to buy landed properties must demonstrate that they are making a 'very significant economic contribution' to Singapore. 'Some discretion is also exercised by considering the commitment shown to Singapore by the applicants, including how rooted they and their children are in Singapore,' she said. 'Since the criteria have been further revised this year, the approval rate is expected to fall further from the already small number of approvals in the past years.'

BT

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My Observations & Thots.....
138 out of 70K is 0.2%;  so not significant enuf to affect the property mkt for landed homes.
More likely that the policy change is meant to reflect the benefits of citizenship.
Will these PRs then be encouraged to become citizens?

Sg news...

http://www.channelnewsasia.com/stories/singaporelocalnews/view/1158892/1/html

MND sees Tengah, Bidadari as potential new towns

By Joanne Chan | Posted: 12 October 2011 1852 hrs

SINGAPORE: The government sees Tengah and Bidadari as potential residential towns as it plans ahead for a growing population.

This was mentioned on Wednesday in the National Development Ministry's addendum to the President's Address.

The addendum was issued by Minister Khaw Boon Wan.

Highlighting his ministry's commitment to achieve sustainable economic, social and environmental outcomes, Mr Khaw said: "We will balance competing land demands to achieve sustainable economic, social and environmental outcomes. We will create underground space and reclaim from the sea, wherever viable.

"We will also build infrastructure ahead of demand and start to prepare for new towns at Tengah and Bidadari. They will not be needed soon, but we are planning ahead so as to retain flexibility."

Mr Khaw also reaffirmed his ministry's goal to provide good, affordable housing.

He noted that more Singaporeans are now eligible for housing grants and public housing, after the income ceilings for singles and families were raised in August.

Mr Khaw acknowledged the "sudden rise in housing prices following the sharp economic recovery has worried many Singaporeans".

He said his ministry is "taking active measures to address the temporary imbalance in supply and demand."

The monthly income ceiling to buy executive condominiums (ECs) was raised from S$10,000 to S$12,000 in August.

As of end-September, the HDB received 140 bookings from buyers who previously did not qualify.

Singles too have benefited after the income ceiling for a housing grant was raised from S$3,000 to S$5,000.

HDB has approved 75 applicants who were previously not eligible.

HDB is also speeding up the construction of new flats.

To cater to needs such as wanting to stay near parents or to take advantage of a location's amenities, HDB said that where possible, it will build its new flats in mature estates such as Queenstown and Bishan.

Another aim is to provide vulnerable families with a roof over their heads.

Madam Praveen, 27, has benefited from the Public Rental Scheme.

Previously staying with her parents, Madam Praveen now has a two-room rental flat in Punggol.

Madam Parveen, who lives with her husband and two children, had faced difficulties in getting a rental flat.

"My parents had to sell their house and we had no place to stay. I got rejected the first time because they said my husband is a foreigner... I had to give birth to my son in order to get this rental flat," she said.

To qualify for a rental flat under the Family Scheme, the main applicant must be a Singaporean and the other a Singaporean or Permanent Resident.

HDB said the stock of rental flats will be increased to 57,000 units by 2015.

But rental housing is not a long-term solution, and HDB said it will work with social agencies to render help.
Videos and text of President Tony Tan's speech at the opening of parliament are available here


- CNA/cc

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Observations....

Note the similarities between HK & Sg policies.

EC Site Bids

http://www.remisiers.org/cms_images/research/Research-Oct10-Oct14_2011/sgprop121011_flash_DBSV.pdf

EC site attracts 11 bids

The tender for an Executive Condominium (EC) site located at the junction of Pasir Ris Drive 3/ Pasir Ris Link attracted a high number of 11 bids. This site is adjacent to a condominium site, which attracted 13 bids recently. We  believe that the strong interest is in part due to the  change in government policy (a raise in monthly income  ceiling to purchase the ECs), as well as the decent  response for recent EC launches and nearby launches.

A tie up between Ho Lee Group and Maxdin submitted  the highest bid at S$291 psf ppr for the site. Ho Lee  Group will hold a 70% stake, while Maxdin, a subsidiary  of UE E&C Ltd (part of the United Engineers group) will  take a 30% stake. The group plans to build a 400-unit  project on the 1.8 ha site, which can house a total GFA of  419,978 sf. The project, comprising units of various sizes, is expected to be launched towards late March next year.


The bid price of S$291 psf ppr is fair and is in line with  market expectations. The tight range of the 11 bids which fell between S$214-291psf also indicated consistent expectation of the prices for end products. We expect breakeven cost to be around S$550-580 psf and the project should generate a 15-20% profit margin if sold at S$650 - 680 psf. Recent transacted prices for ECs range between S$622 - 731 psf.

The latest land transaction continues to highlight our view that developers are taking a cautious stance
towards property prices as there appears to have no element of forward pricing. At the same time, they are likely to continue to replenish their land bank selectively, supported by healthy balance sheets. Property stocks are trading at a steep 40% discount to asset backing and appear to have factored in much of the anticipated deterioration in prices. Prefer UOL with its multi-growth engines.

HK news...

OCTOBER 12, 2011, 2:32 A.M. ET
Hong Kong to Build Subsidized Homes
By Chester Yung

HONG KONG—Saying property prices remain far beyond many local households' reach, Hong Kong Chief Executive Donald Tsang Wednesday unveiled plans to resume construction of subsidized homes.

"We share the public concern about rising property prices and the difficulty in buying affordable small and midsize flats," Mr. Tsang told lawmakers in his final policy address, saying the government will provide more than 17,000 subsidized homes for sale over four years starting in 2016-17.

Such a program was widely expected, as Mr. Tsang, who has just under nine months left in office, has promised in recent months to address housing, a sore spot for his administration in the past few years.
"To be flexible, the actual number of flats to be built or put up for sale each year will depend on the demand at that time," Mr. Tsang said, adding that the government may stop building and selling the flats when private residential markets meet the demand.

The program would be a modified version of the government's earlier Home Ownership Scheme, by which low-income residents could buy housing at subsidized prices. It was abandoned in 2003 after developers complained that government intervention in the property market contributed to a sharp drop in residential property prices.

Mr. Tsang will step down at the end of June after serving the maximum two terms. His final policy address comes at a critical time for the city as social tensions simmer over inflation and property prices. Hong Kong's underlying inflation rate hit a three-year-high of 6.3% in August, up from 5.8% in July, while private-home prices—driven by abundant liquidity and persistently low interest rates—have surpassed the peak hit in 1997. Home prices rose 12% in the first eight months of this year after surging 56% over the two years ended last Dec. 31.

WSJ

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My Thots...

Much expected...
Note the starting date of 2016.
And the qualifier :  "the government may stop building and selling the flats when private residential markets meet the demand"

"Tsang introduced a new Home Ownership Scheme that will provide more than 17,000 flats over four years from 2016 onwards. Families with a monthly income of 20,000 to 30,000 Hong Kong dollars ($2,570 to $3,850) will be eligible to buy flats priced at 1.5 to 2 million Hong Kong dollars ($192,800 to $257,000) with a floor space of 400 to 500 square feet"

Sg Property news.... Loans

Published October 8, 2011

Fixed rate home loans more popular as Sibor rises Analysts expect local interest rates to rise due to slower S$ appreciation By SIOW LI SEN AS interest rates threaten to inch higher, more home loan buyers are turning to fixed rate loans for peace of mind. The key three-month Sibor or interbank rate yesterday ended at 0.38 per cent. Although unchanged from the previous day, it is now up almost 12 per cent from a month ago when it hit a low of 0.34 per cent on Sept 9. DBS Bank, the largest home loan provider here, said 20 per cent of new borrowers now go for its interest rate cap package, first launched in August. Since Sept 1 the rate has been sitting at 1.49 per cent. A DBS spokeswoman said that while the outlook for interest rates is to remain low for an extended period, the volatile global economic environment has created risks and uncertainties. 'To give customers peace of mind when it comes to their mortgage repayment, which is a long-term commitment, DBS introduced three-month Sibor floating rate packages with interest rate cap in August,' she said. 'Under this unique scheme, customers benefit from the current low interest rate and at the same time, enjoy certainty if interest rate starts to rise. 'Since its introduction, 20 per cent of our customers who have opted for the 3-month Sibor packages have taken up this scheme,' she added. More and more analysts expect local interest rates to rise further given the slower economic growth outlook which could lead the Monetary Authority of Singapore to slow down the rate of appreciation of the Singapore dollar at next week's monetary policy statement. 'We expect a slower rate of appreciation of the SGD which means that interest rates will rise relative to the US interest rates,' said Wei Zheng Kit, Citi economist. The three-month Sibor could rise to 0.50-0.70 per cent, depending on the stand the MAS takes next week, he said. Bankers said that given the uncertainly it will be better for borrowers to opt for a package which gives flexibility. Alan Lau, Maybank Singapore head of consumer banking, said that traditionally its fixed rate home loan packages have been very popular with its customers, but in recent months, more have gone for the interbank-pegged packages, in part due to the low interbank rates environment. 'Yet there is a segment of customers who take a short-term view that Sibor rates will remain relatively low but want to hedge their risks against possible uptrend of interest rates after 12 months,' he said. Maybank's hybrid home loan packages which come with the first-year rate pegged against the three-month Sibor and thereafter fixed rates for the second or second and third years will cater well for this group of customers, said Mr Lau.

BT
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My Thots....

Too much uncertainty due to volatilities, so clients are playing safe.

Published October 6, 2011

Singapore ranks high on property investment listIt is 9th in a field of 25, at US$10.8b; leaders are New York and London By KALPANA RASHIWALA (SINGAPORE) Gateway Asian cities feature prominently in Cushman & Wakefield's report on the biggest and fastest-growing cities in real estate investment for the year ended the third quarter of 2011. Singapore came in ninth in the list of top 25 cities that attracted the most capital into real estate, comprising office, retail, industrial, hotel and serviced apartment properties but excluding development sites. The island republic drew US$10.8 billion of investment in the 12 months to Q3 2011, up 87.2 per cent year on year. New York City (US$29.7 billion) nudged ahead of London (US$27.2 billion) into first place. However, London topped the global ranking for attracting foreign property investment with US$14.2 billion invested in the year to Q3 2011. The figure was down 9.6 per cent year on year. This was followed by Paris and New York. Singapore was in fourth position, with US$3.9 billion of investments. The figure was up 63.4 per cent year on year. Beijing and Nanjing were in fifth and sixth positions. 'With economic uncertainty and financial risks both impacting further on sentiment in recent months, momentum has slowed in the market, but supply levels are up in some markets, notably of late London, and strong activity is expected to be maintained, albeit with deals taking longer to close as due diligence remains high,' said the report, Winning In Growth Cities 2011/2012. The cities experiencing the highest growth in investment volumes include Singapore (No 7) and Seoul (No 9). Chicago, New York and Boston were the top three. London emerged as the top city for global office property investment with US$18.9 billion of deals, followed by New York (US$14.1 billion) and Paris (US$12.5 billion) and Tokyo (US$11.5 billion). Seoul, Hong Kong, Shanghai and Singapore were in sixth, seventh, 10th and 11th positions respectively. For industrial property investments, Singapore was top with US$3.65 billion in the year to Q3 2011, up 345 per cent year on year. Los Angeles was second with US$2.81 billion, followed by Hong Kong (US$1.76 billion). Hong Kong led the field for retail investment up to end-Q3 this year with US$6.99 billion, boosted by the HK$18.8 billion (S$3.2 billion) sale of Festival Walk in Kowloon Tong by Swire Properties to Singapore's Mapletree Investments. The Rhine-Ruhr metropolitan area in Germany and New York were in second and third places, followed by Manchester and London. In the hotel sector, Singapore was in eighth position with US$1.3 billion of deals. Six of the world's top 10 locations for hotel investments over the 12 months to Q3 2011 were in the United States, led by New York (US$4.2 billion). Cushman & Wakefield managing director of capital markets (Asia Pacific) John Stinson said: 'The lion's share of the global appetite for development sites up to Q3 2011 was taken up by Asia, which dominated the entire top 25 field.' Beijing was top with US$24.5 billion of investments in all property development sites, followed by Shanghai (US$13.7 billion), Dalian (US$11.5 billion), Wuhan (US$11.3 billion) and Suzhou (US$10.7 billion). Singapore was sixth with US$10.4 billion of development sites sold; Hong Kong was seventh (US$9.4 billion) and Tokyo was ranked 21st. Except for these three, the rest of the top 25 cities for development site investment deals are in mainland China. 'While investors are still keen to acquire development sites, overall volumes are now easing as policy tightening in China aimed at reducing the risk of overheating in the residential sector in particular, leads to lower levels of activity,' said the report. 'Economic factors alone do not make up a great global city. Transport, education, liveability and ease of doing business all become important differentiating factors as gateway cities around the globe compete for the investment dollar. Asia again figures strongly considering these often ignored parameters. Said Mr Stinson: 'Singapore is the No 1 port in the world for container throughput, closely followed by another five cities all based in Asia - Shanghai, Hong Kong, Shenzhen, Busan and Guangzhou. Singapore ranks No 4 globally as a financial centre. 'On the human side, Singapore ranks No 1 for personal safety in top global tourist locations. 'There is no doubt that economic, social fabric and culture (goals) combined with investor sentiment place many Asian cities in the top global ranking with Singapore winning gold in many surveys.'

BT
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My Thots.....

Many No 1s.... many top rankings....
 Flow of foreign investments into Sg assets means higher asset prices; there are "plus and minus" arising from this.
Policymakers have a tough job balancing those "plus and minus" - the concomitant inflow of foreigners, accentuation of the wealth gap, rising costs...
But, Sg cannot go back, RoA (rest of Asia) is developing and our niche is in continuing with policies that enhance the "global city" qualities of Sg.

Sg property news... Orchard Rd rentals

Published October 5, 2011

Prime Orchard Rd retail rents up 5% q-o-q : CBRE This marks the first quarterly increase since Q3 2008. Average rents in Orchard Road were $30.11 psf pm in Q2 2011. 'We are witnessing almost full occupancy at Orchard Road malls,' said Letty Lee, CBRE's director for retail services. 'New-to-market brands continue to actively explore taking up Orchard Road space, encouraged by fresh opportunities offered by newly available large prime space - including with the recent exit of Borders at Wheelock Place.' Rentals should hold steady for the fourth quarter, she added. DTZ Research last week said that the average gross fixed rent of prime first-storey space in the Orchard/Scotts Road area increased by 0.5 per cent on quarter to $40.20 psf pm in Q3 2011. The two property firms use different baskets of retail space to track rents. CBRE's report also said that prime suburban rents rose 2.9 per cent quarter on quarter to $29.75 psf pm in Q3 2011, from $28.90 psf pm in Q2. CBRE estimates that some 657,000 sq ft and 1.57 million sq ft of retail space will be completed in 2012 and 2013, respectively. PRIME retail rents in Orchard Road rose 5 per cent quarter on quarter to average $31.60 per square foot per month (psf pm) in Q3 2011, according to a new report from CB Richard Ellis (CBRE).

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Observations....

Orchard Rd prime rentals showing growth

Sg Office rents....

October 5, 2011, 1.23 pm (Singapore time)

S'pore prime office rents mostly flat in Q3   SINGAPORE - Office rents in Singapore's central business district were largely flat in the third quarter, while rental growth in other areas moderated as slowing economic growth weighed on demand for office space, DTZ Research said on Wednesday. The average gross rent for office space in Raffles Place in downtown Singapore was US$9.80 per square foot per month July-September. Along the central business district, rents at Marina Bay and Marina Centre were unchanged quarter-on-quarter while those at the Shenton Way area rose 2.0 per cent from the previous quarter to US$7.75 per square foot per month. 'Leasing activity remains subdued as occupiers become increasingly wary of the uncertain global economic outlook,'said Cheng Siow Ying, DTZ's executive director of business space said in a statement. She added that although some occupiers were holding back their expansion plans, there were space expansion needs from selective business sectors such as financial and professional services, IT-related companies and energy companies. -- REUTERS

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Observations....

Office rents....
Prime Office, flattish to slight growth....

Sg Property... Landed homes

October 6, 2011, 11.24 am (Singapore time)

Landed homes' price growth outpace non-landed in Q3: DTZ By CARINE LEE

The limited availability of landed homes drove the average resale price of leasehold landed homes in non-prime districts up 3.8 per cent quarter-on-quarter, while non-landed leasehold condominiums in suburban areas grew at a slower pace of 2.5 per cent quarter-on-quarter.

Freehold landed homes in the prime districts of 9, 10 and 11 saw a quarter-on-quarter price increase of 2.8 per cent in Q3. In contrast, the average resale price of luxury condominiums in the prime districts of 9, 10 and 11 were unchanged in Q3.

According to DTZ Research, primary home sales averaged 1,373 units per month in July and August, slightly above the monthly average of 1,358 units over the last four quarters from Q3 2010 to Q2 2011.
Secondary home sales averaged 1,278 units per month in July and August, which was 23.2 per cent lower than the monthly average of 1,665 units sold in the secondary market from Q3 2010 to Q2 2011.
DTZ notes that as the lodging of caveats is voluntary and can be delayed, the number of secondary units actually sold in the secondary market could be higher.

'As many of these buyers are buying for owner-occupation and investment beyond four years due to the seller's stamp duty measure, they probably take a longer-term view and are thus less worried about the current global economic uncertainties. However, if the global outlook worsens and the economy continues to slow down, this will eventually affect buying sentiment and lead to less exuberant purchase activity,' said Chua Chor Hoon, head of DTZ SEA Research.

BT

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Observations.....

Slowing....
But positive growth for landed prices with a faster rate of growth than non-landed.

Singapore landed home prices grew at a higher rate than that of non-landed homes in the third quarter of 2011, said DTZ Research.