singapore property weekly issue 44

8/2/2019 Singapore Property Weekly Issue 44

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Issue 44Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 Singapore Property News This Week

p8 Should Shoe-box Factories Be Allowed?

p12 Resale Property Transactions

(March 7 March 13)

Welcome to the 44th edition

of the Singapore Property

Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 44

Singapore Property This Week

Page | 2Back to Contents

Residential

Freehold Westvale Condominium up for

collective sale

The 32-unit strata walk-up development

located along 334 Pasir Panjang Road is

asking for $85.5 million or $974 psf ppr based

on a 1.4 gross plot ratio. The building sits ona 62,710 sq ft site zoned 'residential' that can

be redeveloped up to a maximum of five

storeys. If the additional 10% GFA allowed for

balcony area is taken into account, the new

potential 96,574 sq ft GFA would mean a

price of $892 psf ppr and a potential

development of 115 800 sq ft-units. However,

the additional balcony space would also

mean a development charge of $625,000.

The site is expected to be popular given its

proximity to NUS and the Haw Par Villa MRTStation and the scarcity of freehold sites in

the area. The tender will close on April 19.

Commercial

Rents for prime office space to slow

With most deals concluded since the

beginning of 2012 being less than 25,000 sq

ft, we can see the decline in demand for such

spaces fromthe banking and financial

institutions that typically rent large prime

spaces. Occupancy levels and rental rates

are likely to continue their decline with the

decreased demand coupled with increased

supply from newly completed projects.


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Nevertheless, a sharp decline in the rent is

not expected nor is the decline expected to

last, especially with only two Grade A office

projects to be completed in the next two

years. In the meantime, firms in other

industries have begun taking up large spaces.

Some MNCs are also planning to set up

regional headquarters here, which will

contribute to the overall occupancy rates even

if the deals tend to be for small or medium

spaces.

JLLs average gross effective monthly rental

value for Raffles Place Grade A office space

(excluding Marina Bay) has fallen by 4-5% in

Q1 2012 from $9.75 psf in Q4 2011 and it

also predicted a 9-11%fall to $8.70-8.80 psfby end-2012. CBREs estimates reflected a 3-

4% decline from 2011s year-end figures and

a 15% year-on-year decline is expected for

the whole market, including Grade A spaces

which includes Marina Bay, Raffles Place and

Marina Centre, leading toa rate of $9.35 psf at

end-2012 from $11 psf at end-2011. Vacancy

rate for Grade A Raffles Place (including

Marina Bay) office space is also expected to

increase from 8.7% in Q4 2011 to 12.5-13%

by end-2012.

Supply-wise, 1.35 million sq ft net lettable

area of office space is expected to becompleted this year, with another 2.4 million

sq ft in 2013 and 1.5 million sq ft in 2014.

Rents of retail spaces to plateau in 2012

Average retail rents are expected to plateau in

2012, and increases, if any, would probablybe between 1-2%. This is probably a result of

new policies that will lower the proportion of

foreign workers companies in the service


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sector can employ to 45% from 50% in July,

which meant that productivity costs will

increase, and in turn affect the rental

rates.The average prime retail rate for all

locations remained unchanged at $29.90 psf

in Q1 2012. In particular, the average prime

rents for the central Orchard Road belt,

Orchard Road fringe and Marina Centre, City

Hall and Bugis rentals remained unchanged

at $41.60 psf, $24.10 psf and $29.40 psf

respectively in Q1 2012, while the rents for

such spaces at the city fringe and suburban

regions experienced some minor changes

at$22.50 psf and $32.10 psf respectively in

the same period. While prime retail spaces

will continue to see demand and increases in

rental rates by 2-3% given its scarcity, more

retailers are considering retail spaces located

in the city fringe and suburban

areas,especially those situated in residential

or new growth areas with high-income

residents who can afford to spend more. This

has led to an increase in supply of retail

space in these areas; 55% and 21% of the

upcoming 2.7 million sq ft net lettable retail

space are from suburban areas and fringe

areas respectively.

Competitive bidding for Serangoon

industrial plot

The 0.8 hectare 58-year leasehold industrial

plot located at Serangoon North Avenue 4

attracted a top bid of $47.1 million or $216.68

psf ppr from Soon Hock Property

Development, just 0.4% above the next

highest bid. The high bids from these two

developers might be due to the developers

confidence in increasing the saleable floor

area of the site or their inexperience in

industrial property market.


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The competitive bidding could also be

attributed to the general lack of industrial

sites in the region. The site with a 2.5

maximum gross plot ratio is zoned Business

1, and its expected breakeven price and

selling price are $340-380 psf and $450-$500

psf respectively.

Expression of interest exercise for

Macpherson freehold industrial building

The seven-storey freehold industrial building

located 37 Mactaggart Road in Macpherson

is asking for$26 million or $612 psfbased on

its total GFA of 42,480 sq ft or $1,532 psf

basedon the 16,968 sq ft land area. Zoned

for Business 1 industrial use, the2.5 gross

plot ratio site could potentially fetch $800-880

psf based on saleable floor area once a new

freehold industrial development is built. The

site is likely to be popular since such

properties with cold room facilities are rare in

this area. Furthermore, with the ABSD,

investors have been turning from the

residential sector to the industrial sector. The

site could potentially be refurbished or

redeveloped for strata sale, if the approval

from relevant authorities is granted. The

building is currently leased out to a single

tenant whose tenancy expires in 2014. The

exercise will close on April 18 at 3pm.

New mall in Orchard in H2 2013 -

Orchardgateway

The mall is part of Orchardgateway, an

integrated development consisting of two

towers - 20-storey hotel-retail development

located next to Somerset MRT station and an

11-storey office-retail development named

[email protected] mall straddles

the two towers, which are diagonally opposite


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SINGAPORE PROPERTY WEEKLY I 44


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134 strata lots with a share value of about

74%. The tender will close on May 3.

Prices and rents for industrial property set

to fall

While prices and rents of strata industrial

properties reached a record high in 2011,

having an increase of 30% and 15-20%

respectively, they may have reached their

peak and are expected to fall this year by 5-10% and up to 8% respectively. The increase

in land supply to 24 ha for the Industrial

Government Land Sales Programme, and the

new conditions on strata subdivision of

industrial development might be one

contributing factor.

SINGAPORE PROPERTY WEEKLY I 44
http://www.moneymatters.sg/


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Should Shoe-box Factories Be Allowed?

By Mr. Propwise

A recent investigative report by The Straits

Times found a diverse array of non-industrial

businesses and institutions taking up space in

industrial estates. A check by the reporter

across places like Woodlands Industrial Park,Jalan Pemimpin, Alexandra Industrial Estate

and Henderson Industrial Park found furniture

markers and warehouse operators co-located

with offices, churches, tuition centers, travel

agencies and fashion retailers.



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Rental arbitrage is the root cause of this

phenomenon

The root cause of this phenomenon is what I

call rental arbitrage businesses takingadvantage of lower rents in industrial areas

(around $2 psf) versus commercial buildings

(up to around $9 psf).

These non-industrial users are technically

violating URA guidelines as these spaces are

meant for businesses like manufacturing,

storage, workshops and certain e-businesses.

There is also some allowance for supporting

facilities like childcare centers and canteens.

If the URA investigates these violations they

can ask the business to stop, failing which

they can be fined up to $200,000 or even

jailed.

Some observers argue that these non-

industrial businesses are hurting genuine

industrialists as they push up rents in these

spaces, while others argue that forcing these

non-industrial businesses out will hurt the

growth of SMEs as they cant afford

commercial space in the first place.

The end of shoe-box factories?

Even Minister Khaw has chimed in by

chastising non-industrial tenants who are

abusing lower rents in industrial buildings,

labeling what theyre doing as wrong. At the

center of this controversy are units known as

shoe-box factories that are as small as 50-

100 sqm.

We first saw the shrinking of apartments asproperty prices rose and developers strove to

maximize their selling price per square foot

while keeping total unit costs affordable



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for investors. As the Government continued

clamping down on the residential sector with

anti-speculation measures many investors

shifted their attention to the commercial and

industrial sectors.

And developers, ever ready to take

advantage of any opportunity to cash in,

started creating smaller units in industrial

projects that they could strata-title and sell to

these yield-hungry investors.I think it wasimplicitly known by the developers and

investors right from the beginning that the

potential tenants for these shoe-box factory

units would largely not be industrial users.

For some reason, approvals for these projects

were given by the relevant authorities anyway.

However, according to Minister Khaw, JTC

has estimated that a genuine industrial end-

user would need at least 150 sqm of space,

and the URA has also used a similar norm.

Thus going forward, we are not likely to see

new industrial developments with shoe-box

units they will likely not secure the

necessary approvals.

Does industrial zoning still make sense?

Given the medias and the Governments

attention this issue, the URA might also start

cracking down on violators. I believe that this

would be an unnecessary blow to the SME

sector in Singapore.

In the first place, are there enough genuine

industrial users to fill the space? One of the

landlords quotes in The Straits Times article

mentioned that he gets one enquiry for largerspaces measuring 20,000 sqft or more versus

four to five calls for spaces of 1,000 sqft or

less. There is simply less demand



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for large-scale industrial activity, especially in

general purpose industrial buildings.

Furthermore, older industrial buildings built

without facilities such as loading bays will find

it hard to get genuine industrial tenants. Does

it then make sense to leave these spaces

vacant or to be more flexible in their usage?

Furthermore, the lower rents in industrial

areas are supposed to help industrialists keep

business costs low. In effect, they are a

subsidy by the Government to help the

industrial sector stay competitive in a tough

global market. But are they then saying that

industrialists (whether SMEs or not) are worth

subsidizing while non-industrial SMEs are

not? The definition of industrial use is already

fairly grey does it make sense to penalizecertain types of businesses while subsidizing

others? Do industrial users add more value to

the economy versus other types of

businesses?

High rentals can be fatal to SMEs

Many SMEs can simply not survive if forced to

pay full commercial rents, which will be a

drain on their startup capital even as they

struggle to build a customer base and make

profits. I have a friend in the fashion retail

business who says that it is almost impossible

for any new entrant to survive in malls today

with rents of close to $20 psf. A 1,000 sqft

shop can cost $20,000 per month in rent,

which can be fatal to the proprietor if businessis bad for a few months.

In order to encourage and nurture the growth

of SMEs, perhaps the Government can

consider the relaxation of the use of these

spaces. Doing so could unleash a flurry of

commercial activity in otherwise deterioratingindustrial areas, while at the same time giving

SMEs the space to get a foothold in the

market without being crushed by huge rental

overheads.



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Non-Landed Residential Resale Property Transactions for the Week of Mar 7 Mar 13

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

2 SPOTTISWOODE PARK 850 740,000 870 993 RIVER PLACE 872 1,140,000 1,308 99

3 DOMAIN 21 1,281 1,650,000 1,288 99

3 THE METROPOLITAN CONDOMINIUM 1,399 1,650,000 1,179 99

5 THE PARC CONDOMINIUM 1,302 1,500,000 1,152 FH

5 LANDRIDGE CONDOMINIUM 1,711 1,950,000 1,139 FH

5 THE CASSANDRA 1,313 1,270,000 967 FH

5 BAYVILLE CONDOMINIUM 1,259 1,080,000 858 FH

5 PARK WEST 1,894 1,500,000 792 99

7 THE 101 840 1,344,000 1,601 9997 SULTAN GATE PLACE 1,119 1,085,000 969 999

8 CITYLIGHTS 893 1,340,000 1,500 99

8 CITY SQUARE RESIDENCES 1,507 2,100,000 1,394 FH

8 CITY SQUARE RESIDENCES 1,507 2,080,000 1,380 FH

8 KERRISDALE 1,270 1,370,000 1,079 99

8 KENTISH GREEN 1,098 910,000 829 99

9 HELIOS RESIDENCES 1,668 5,350,000 3,207 FH

9 VIDA 840 2,226,629 2,652 FH

9 BELLE VUE RESIDENCES 3,175 7,050,000 2,220 FH

9 RIVERGATE 1,496 2,992,000 2,000 FH

9 RIVERGATE 1,055 2,100,000 1,991 FH

9 CAIRNHILL CREST 2,013 3,500,000 1,739 FH

9 URBANA 1,313 2,180,000 1,660 FH

9 8 @ MOUNT SOPHIA 1,141 1,730,000 1,516 103

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

10 GRANGE RESIDENCES 2,583 6,900,000 2,671 FH10 BEAUFORT ON NASSIM 1,496 3,600,000 2,406 FH

10 KUM HING COURT 1,625 3,235,000 1,990 FH

10 REGENCY PARK 3,175 5,350,000 1,685 FH

10 VIZ AT HOLLAND 861 1,328,000 1,542 FH

10 ONE JERVOIS 990 1,500,000 1,515 FH

10 MILL POINT 1,044 1,566,000 1,500 999

11 RESIDENCES @ EVELYN 1,539 2,668,000 1,733 FH

11 NOVENA SUITES 947 1,638,000 1,729 FH

11 RESIDENCES @ EVELYN 2,250 3,620,000 1,609 FH11 NINETEEN SHELFORD ROAD 700 990,000 1,415 FH

11 PAVILION 11 1,485 2,100,000 1,414 FH

11 AMARYLLIS VILLE 1,238 1,720,000 1,389 99

11 AMARYLLIS VILLE 1,238 1,700,000 1,373 99

11 CITY EDGE 1,152 1,566,720 1,360 FH

12 THE RIVERINE BY THE PARK 1,302 2,180,000 1,674 FH

12 TRELLIS TOWERS 1,647 1,770,000 1,075 FH

12 SUNVILLE 915 915,000 1,000 FH

14 THE WATERINA 700 760,000 1,086 FH

14 KEMBANGAN PLAZA 883 818,000 927 FH

14 SIMSVILLE 980 880,000 898 99

14 SIMSVILLE 980 870,000 888 99

14 SIMSVILLE 969 845,000 872 99

14 THE SUNNY SPRING 1,109 955,000 861 FH



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Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

14 SIMSVILLE 1,238 1,000,000 808 99

14 ESCADA VIEW 1,442 1,150,000 797 FH

14 GUILIN MANSIONS 1,076 840,000 780 FH

14 GUILLEMARD VIEW 1,206 900,000 747 FH

14 DELIGHT COURT 1,324 957,000 723 FH

14 WING FONG COURT 1,055 750,000 711 FH

14 ATRIUM RESIDENCES 2,271 1,488,888 656 FH

15 THE MAKENA 1,636 2,280,000 1,394 FH

15 GRAND DUCHESS AT ST PATRICK'S 1,507 1,988,000 1,319 FH

15 HAWAII TOWER 2,239 2,850,000 1,273 FH

15 COSTA RHU 990 1,250,000 1,262 99

15 ONE FORT 1,055 1,300,000 1,232 FH

15 EMERALD EAST 926 1,130,000 1,221 FH

15 WATER PLACE 1,227 1,450,000 1,182 99

15 WATER PLACE 1,356 1,540,000 1,135 99

15 CALLIDORA VILLE 1,141 1,290,000 1,131 FH

15 HAIG COURT 1,550 1,650,000 1,065 FH

15 CHAPEL COURT 1,690 1,780,000 1,053 FH

15 DUNMAN PLACE 1,389 1,400,000 1,008 FH

15 GALLERY 8 1,206 1,090,000 904 FH

15 MANDARIN GARDEN CONDOMINIUM 1,528 1,380,000 903 99

15 EASTVILLE APARTMENTS 1,001 890,000 889 FH

15 LAGUNA PARK 1,615 1,410,000 873 99

15 GIDEON'S LODGE 1,313 1,100,000 838 FH

16 COSTA DEL SOL 1,475 1,650,000 1,119 99

16 CASA MERAH 1,249 1,285,000 1,029 99

16 THE SUMMIT 1,238 1,248,000 1,008 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

16 CHANGI GREEN 1,055 1,050,000 995 FH

16 EAST MEADOWS 1,227 1,070,000 872 99

16 BEDOK COURT 2,260 1,750,000 774 99

16 KEW GREEN 2,971 1,800,000 606 99

17 CARISSA PARK CONDOMINIUM 926 850,000 918 FH

17 EDELWEISS PARK CONDOMINIUM 1,625 1,370,000 843 FH

18 LIVIA 1,270 1,170,000 921 99

18 RIS GRANDEUR 1,539 1,368,000 889 FH

18 MODENA 1,550 1,350,000 871 99

19 KOVAN MELODY 1,302 1,365,000 1,048 99

19 RIO VISTA 1,378 1,230,000 893 99

19 KENSINGTON PARK CONDOMINIUM 1,582 1,400,000 885 999

19 RIO VISTA 1,249 1,000,000 801 99

19 CENTRAL VIEW 1,216 935,000 769 99

20 BOONVIEW 1,292 1,438,000 1,113 FH

20 RAFFLESIA CONDOMINIUM 915 1,000,000 1,093 99

20 BISHAN 8 1,195 1,300,000 1,088 99

20 BRADDELL VIEW 1,615 1,180,000 731 99

20 BRADDELL VIEW 1,615 1,138,000 705 99

21 MAPLEWOODS 1,507 1,820,000 1,208 FH

21 HIGHGATE 1,227 1,215,000 990 FH

21 PANDAN VALLEY 1,335 1,300,000 974 FH

21 SOUTHAVEN I 1,528 1,200,000 785 99

21 SHERWOOD TOWER 1,518 1,050,000 692 99

23 THE DAIRY FARM 1,281 1,200,000 937 FH

23 GLENDALE PARK 1,044 970,000 929 FH

23 HAZEL PARK CONDOMINIUM 1,389 1,250,000 900 999



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NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

23 HILLVIEW REGENCY 1,130 980,000 867 99

23 CASHEW HEIGHTS CONDOMINIUM 1,647 1,426,680 866 999

23 CENTURY MANSIONS 1,001 860,000 859 FH

23 PARKVIEW APARTMENTS 936 750,000 801 99

23 REGENT GROVE 1,259 910,000 723 99

23 PALM GARDENS 1,206 868,888 721 99

23 PARKVIEW APARTMENTS 1,270 882,000 694 99

23 PALM GARDENS 1,206 815,000 676 99

25 CASABLANCA 1,195 885,000 741 99

25 ROSEWOOD 2,745 1,500,000 546 99

26 SEASONS PARK 1,292 995,000 770 99

26 CASTLE GREEN 1,152 877,000 761 99

27 SELETARIS 1,313 920,000 701 FH

27 SELETARIS 1,625 1,030,000 634 FH
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singapore property weekly issue 44

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