UBI business space for rent

Looking for a high ceiling, prime location and good image space, look no more. Asking $2psf.

Call King at 94772121 for more details.


UB Point is a brand new, 6-storey, multi-tenanted development offering more than 147,000 sq ft of B1 industrial space with common facilities such as passenger and cargo lifts, loading/unloading bays with dock-levellers and sheltered car park lots. UB Point is located within an established light industrial area and is easily accessible via PIE and is a ten-minute walk to the MacPherson MRT.

Space for Lease
Unit sizes: 1,200 – 29,500 sq ft

Alibaba unit to have overseas HQ in Singapore

The cloud-computing arm of Chinese e-commerce giant Alibaba will base its overseas headquarters in Singapore as it gears up to expand globally. Aliyun, as the unit is known, will serve businesses investing in Southeast Asia, with a focus on Chinese operations.

Aliyun vice-president Ethan Yu said in a statement yesterday: “The city state is a natural springboard into the Asia-Pacific region, not only for us, but for our target audience.

“We are seeing healthy demand for cloud-related data management services in Singapore because of the ease of doing business, comprehensive transport and telecommunications connections and robust intellectual property regime.”

Last year, Alibaba opened a Singapore office at One Raffles Place where a small number of staff from the financial, logistics and Aliyun teams are now based, said an Alibaba spokesperson yesterday.

Alibaba plans to recruit more engineers and business development staff here, although it has not set a target number “since we believe we need to find the right people to meet the needs of those local customers”, said the spokesman.

“Aliyun welcomes gifted talents with sophisticated knowledge of the Asian markets,” she added.

Aliyun will also launch a cloud data centre here early next month, after announcing plans to set up here last month. It will be its seventh centre with others in mainland China, Hong Kong and Silicon Valley. It also plans to open centres in Dubai, Germany and Japan.

Mr Yu told CNBC that the new facility here could “become the biggest we have outside China” and give the cloud division an edge in the face of stiff competition from US cloud giants such as Amazon Web Services and Microsoft.

Alibaba is cooperating with local service providers to establish the data centre, but its location and the number of servers it will house cannot be disclosed as such information is highly sensitive, the Alibaba spokesman said.

Singtel is one of Aliyun’s local partners having entered into a cloud-computing alliance in June. Besides collaborating on hybrid cloud-computing services, the tie-up lets Aliyun use Singtel’s servers instead of building its own.


Mortgagee sales of larger homes on the rise

Larger homes are increasingly going up for mortgagee sale, amid higher interest rates and a slumping leasing market.

The smaller pool of buyers for such prime properties and the tougher lending rules mean that strapped owners often have no choice but to let the bank step in and put the home up for sale.

There were 99 homes put up for mortgagee sale in the first seven months of the year, well up from the 51 in the same period last year and 11 in 2013, according to figures from Colliers International.

Landed homes have figured more prominently as well, with 18 going under the hammer in the seven months to July 31 this year, up from 10 last year and seven in 2013.

Most of the landed properties put up for auction by lenders were on larger sites, such as corner terrace, semi-detached or detached houses, said Ms Grace Ng, deputy managing director of Colliers International.

“Borrowers who are experiencing difficulties in servicing their loans face difficulties in disposing of their properties due to the higher price tags that come with these larger landed homes,” she added.

Cooling measures, including the Additional Buyers’ Stamp Duty and loan curbs, have also made it difficult for potential buyers to get loans. On top of that, landed properties can be bought only by Singaporeans and permanent residents with approval.

A good class bungalow (GCB) in Binjai Rise and a detached house in One Tree Hill were among the properties that have gone under the hammer in mortgagee sales in the seven months to July 31. No caveats have been lodged for the bungalow, while the One Tree Hill house sold for $9.38 million in June.

An increasing number of apartments listed for mortgagee sale this year have been large, with floor areas of over 1,500 sq ft, noted Ms Ng.

“These sizeable non-landed homes, which were popular during the market boom in 2007 and 2008, are now languishing in demand – suffering from a wane in both foreign and local buying interest due to affordability concerns following stringent loan curbs.”

Owners are also finding it hard to find tenants for these units because of reduced housing budgets for expatriates, which then leads to difficulties in servicing their loans.

A 4,133 sq ft duplex penthouse at the Seascape in Sentosa Cove and a 1,873 sq ft Orchard Scotts unit were two put up for auction. The Seascape unit sold for about $5.8 million in May, at a $5.2 million loss, while the Orchard unit went for $2.8 million in June, at a loss of about $824,000.

Large apartments tend to be popular at auction as they attract more owner-occupiers, while smaller units appeal more to investors, who have become wary in a softening rental market, said Ms Mok Sze Sze, head of auction and sales at JLL.

“Four-bedroom apartments in central locations are popular among (occupiers). Larger houses involve much higher quantum in sale price – thus, the pool of buyers is relatively smaller,” she said.

Overall, 19 properties with a total value of $35.3 million were sold via mortgagee sale in the first seven months of the year, up from 12 homes valued at $15.7 million last year and five properties worth $7.7 million in 2013, said Colliers.

The number of mortgagee sales should go up in tandem with the expected rise in interest rates and softening in rents, and could hit 200 by the year end, said Colliers’ Ms Ng.

The figures will still be lower than those during the Lehman Brothers crisis in 2008, when 270 properties were put up for mortgagee sale, and well below the 452 properties put up during the 1998 Asian financial crisis.

Pioneer estate now a ghost town

Singapore’s first 10-storey flats, colloquially known as “chap lau chu” in Hokkien, are seven blocks of brown and beige-coloured flats in Commonwealth Drive.

Built in the early 1960s, this pioneering “mini estate” introduced Singaporeans to the concept of a self-contained “public housing precinct” with several tall housing blocks next to a food centre.

Decades later, the once-bustling neighbourhood lies vacant.

After the area was earmarked for redevelopment in 2008, residents of blocks 74 to 80 and businesses cleared out by early last year.

The abandoned estate has sat in limbo since, awaiting the wrecking ball which is expected to strike later this year.

Entrances to the stairways of flats are gated and padlocked to keep away loiterers.

An eerie silence hangs in the aisles of shuttered provision stores and the odd childcare centre or barber shop below the blocks.

In the courtyard lies a worn-out playground and pavilion that were once a distraction to children and their elderly caregivers on many an afternoon.

“It has an eerie vibe, especially when night falls and you see the leaves scattered all over the desolate streets,” said Mr Jason Seow, 45, a former Tanglin Halt resident who returned to photograph the place before it is torn down.

As the nation relentlessly renews itself, more housing estates have been left deserted.

These are curious places, caught in between yesterday and tomorrow, with everything intact but its inhabitants gone.

Over the last decade, 19 projects have been completed under the Housing Board’s Selective En bloc Redevelopment Scheme. This means that residents in all these 19 areas have vacated their flats.

However, the old blocks of flats in seven of these sites are either still in various stages of demolition or set aside for interim use or conservation today.

The ghost town in Commonwealth Drive has become a spot for some to linger.

On a warm weekday evening, two Chinese construction workers cut through the blocks to get groceries from the supermarket across the road. On the way back, they went to sit on the concrete floor at the fringe of Block 76, shelling peanuts and drinking rice wine.

They later used a small sandy track that winds through the dense vegetation to get back to their nearby worksite.

Security supervisor Tong, who declined to give his full name, found himself early for his night shift that same evening and sat down at a stone table for a rest.

“This is a special place because there’s no one here and the quiet clears my mind,” said the 65-year-old.

After 20 minutes, he left via another shortcut that office workers use to pass through the empty estate to get to Biopolis and Commonwealth MRT station.

Hollowed-out neighbourhoods like these can also become hot spots for crime. In April, a researcher was slashed in the dim and derelict shortcut at night. Her employer, the Agency for Science, Technology and Research (A*Star), has advised staff against using the public footpath.

Surveillance cameras have since been installed there by JTC Corporation. The Housing Board said it conducts inspections every day to “deter unauthorised entry into the vacated site”.

The seven blocks are part of the authorities’ biggest housing redevelopment project to date, with 3,480 flats in 31 blocks in Tanglin Halt Road and Commonwealth Drive slated for demolition.

Affected residents have the option of moving to new flats in the nearby Dawson estate.

Residents said the abandoned estate’s destruction seems inevitable, given that its once-distinctive “10-storey” look is now overshadowed, literally, by modern skyscrapers with futuristic names such as Galaxis, Sandcrawler and Fusionopolis.

Yet one stubborn presence continues to haunt the forlorn corridors – karung guni man Chua Thiam Seng, 62.

The long passageways below the flats are strewn with cardboard boxes and cans that he collects from occupied flats and coffee shops across the road.

“This is my office,” he said with a toothless grin. Mr Chua has been a rag-and-bone man in the neighbourhood for the past 20 years.


Draycott Eight bulk sale is about to be sealed

A DEAL is said to be nearing for the bulk sale of a stack of 23 units at Draycott Eight owned by a German core fund managed by Morgan Stanley, BT understands.

The price could be slightly above S$150 million, or around S$2,200 per square foot based on the total strata area of 68,419 sqft.

The sale of the Draycott Eight units is expected to be effected through the sale of shares in a company that owns the 22 four-bedders and a penthouse. Most of the units are understood to be leased.

Developed by Wing Tai, Draycott Eight comprises 136 units in three blocks of 24 storeys each. The 23 units owned by the Morgan Stanley-managed fund are in a block that also has another 23 units owned by a fund managed by Alpha Investment Partners. Alpha purchased its units in 2010 for slightly more than S$157 million or about S$2,300 psf from another Morgan Stanley-managed fund. The two funds bought their respective stacks of units at the same time in 2007 at an identical price of S$2,600 psf.

Other bulk transactions of apartments since late last year include Blackstone’s en bloc purchase of 21 Anderson Royal Oak Residence, a 10-storey property with 34 units. The price was S$164 million, or S$1,917 psf – based on the total strata area of 85,552 sq ft. Blackstone has also picked up 17 units at Paterson Suites for S$2,100 psf or close to S$80 million from a fund in the Real Estate Capital Asia Partners (Recap) series managed by SC Capital Partners. Both are completed freehold developments.

Other bulk transactions include the sale of the last 16 units at 111 Emerald Hill, a 40-unit completed freehold condo project, and Straits Trading’s divestment of 14 units at The Holland Collection for S$53.8 million to Haiyi Holdings, a private vehicle of Chinese businessman Gordon Tang and his wife.

Meanwhile, listed SingHaiyi Group has said it plans to sell the subsidiary that is the developer of the freehold City Suites along Balestier Road to the project’s main contractor; only about 10 per cent of the 56-unit project had been sold as at the date of the announcement in early April.

Typically these bulk sales are effected through a change in ownership of shares in a special purpose vehicle (SPV) that owns the apartments or which developed the project. Thus these purchases do not entail payment of the up to 15 per cent additional buyer’s stamp duty, according to tax experts and conveyancing lawyers. Even the regular buyer’s stamp duty of up to 3 per cent does not apply to such share purchases; instead the stamp duty rate payable is 0.2 per cent of the net asset value or the market value of the company, whichever is higher.

However there are other issues involved in buying a property through a company because one would have to do due diligence to make sure there are no hidden liabilities, said KPMG executive director Leonard Ong. “Moreover an investor that acquires a property through the purchase of shares in an SPV or property development company, and subsequently sells the property may end up with a higher tax liability on the profit from the transaction because of the lower cost base for the property reflected in the company’s books.”

Knight Frank’s latest Prime Global Cities Index tracking luxury residential property prices released on Wednesday showed Singapore posting the biggest year-on-year fall of 15.2 per cent as of June 2015, among the 35 cities covered by the index. For the first half of this year (June 2015 vs December 2014), the drop for Singapore was 7.9 per cent.

Shophouse deals affected by buyer-seller price gap

A FEW shophouse transactions have taken place recently.

These include one at Hongkong Street that changed hands at S$14.45 million. The price works out to about S$1,780 per square foot on gross floor area (GFA) of some 8,100 sq ft. Located at 31 Hongkong Street, the shophouse is on a 1,747 sq ft site with a 99-year lease topped up in December 2007.

The price is lower than the S$1,899 psf on GFA fetched for another shophouse on the same street, at No 39, in March.

This can be partly attributed to the land area for No 31 being 20 per cent smaller than No 39. Moreover, the balance lease term of 91 years for No 31 is shorter compared with the remaining land tenure of 97 years for No 39.

For both properties, their respective maximum GFAs allowed based on the 4.2 plot ratio designated for the area have been achieved; that means there is no untapped GFA. The area is zoned for commercial use under the Urban Redevelopment Authority’s Master Plan 2014.

Hongkong Street is part of the Upper Circular conservation area, a secondary settlement – which means the front of the building has to be conserved but the rear can go up to six storeys.

The seller of No 31 is understood to be a shipping company that will take a short-term lease from the buyer, 8M Real Estate. Thereafter, 8M Real Estate plans to spruce up the asset and bring in a food and beverage tenant on the ground floor and office tenants on the upper levels, said 8M Real Estate director Ashish Manchharam, who set up the boutique property investment outfit late last year. He was formerly from JLL’s investments team.

What drew me to Hongkong Street, he said, is how the location is being revitalised with the entry of new F&B operators. Office tenants also like the area as it is near the CBD and close to Clarke Quay MRT Station, he added.

The ground floor of No 39, which changed hands earlier this year, will soon be home to the award-winning restaurant Bacchanalia, which closed earlier this month at its old premises at the Masonic Hall in Coleman Street.

Other trendy eateries and watering holes along Hongkong Street include bars Vasco and 28 Hongkong Street, and Spanish restaurant FOC. The F&B business in the location will be supported by the opening of a couple of new boutique hotels along Hongkong Street, said Mr Manchharam. Existing hotels on the street include Fragrance Hotel and Hotel Clover.

8M Real Estate also owns five shophouses at 112 -116 Amoy Street, as well as 22 Gemmill Lane behind. Luke’s Oyster Bar & Chop House will occupy the ground floor of 22 Gemmill Lane later this year.

8M Real Estate is looking for restaurant operators for its 10,000 sq ft ground floor space at its Amoy Street asset to replace Beng Hiang Restaurant, which has moved out. Office tenants on the upper levels include Telstra units Ooyala and muru-D.

Other recent shophouse deals include OCBC’s sale of two adjoining shophouses at 743 and 745 Havelock Road for S$12.11 million. The sale was done through a tender handled by Knight Frank.

The bank has also sold 382 Geylang Road for S$5.1 million.

At a Colliers International auction last week, a two-storey freehold corner shophouse at 362 Tanjong Katong Road was sold for S$6.35 million. At the same auction, two strata commercial units at 1 and 1B Figaro Street were sold together for S$6.45 million. The units are on the ground floor in a row of two-storey shophouses, which have a 9,999-year leasehold tenure. These three properties were sold by Bamboo Group and marketed jointly by Historical Land and Colliers.

Knight Frank executive director Mary Sai noted that shophouse transactions have been affected by the buyer-seller price gap.

Most sellers are sticking to their asking prices, believing in the rarity value of shophouses; moreover these properties would already be generating rental income. However, TDSR (total debt servicing ratio)-hit buyers have to come up with more cash. With owners’ asking prices translating to 2.5 to 3 per cent gross yields – barely covering borrowing cost – it may not be a very compelling proposition for the buyers, said Ms Sai.



137 Cecil Street believed to be sold above $200M

Another office block is sold in August. 137 Cecil Street, formerly known as Aviva Building,  is been sold to a buyer from Shanghai. Surnamed Zhou, he had earlier looked at 158 Cecil Street and then 112 Robinson Road before turning his attention to 137 Cecil Street.

The property has a net lettable area of 67,550 sqft with floor plates of about 4800-5700 sqft. URa has granted written permission in July 2015 for two units on the first level to be used as restaurants.

Seller Cheong Sim Lam was understood to have asked S$220 million. Talk in the market is that the price was negotiated at the range of S$210-215 million. In June last year, Mr Cheong sold the next door Cecil House at 139 Cecil Street to a joint ventre between Vibrant Group and DB2 group. The 11-storey office block was valued at S$110 million, with a balance lease term of 66 years.

Prime Waterfront Homes and Living in Singapore


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