One Tree Hill Gardens sold for S$65m

Lum Chang Holdings Limited is acquiring One Tree Hill Gardens for S$65 million, below the owners’ asking price of S$72.8 million. This is the first collective sale for this year. This collective sale translates to a land rate of S$1,664 per square foot (psf), based on the site area of 3,629.1 sq m (39,063 sq ft). The transaction is subject to approval from the Strata Titles Board.

The site is located at the junction of One Tree Hill and Jalan Arnap. It enjoys easy access to Orchard Road, and is within 300 m from the upcoming Orchard Boulevard MRT station along the Thomson-East Coast Line. The Lum Chang Group intends to redevelop it to residential landed homes for sale.

Toh Tuck Site attracted overwhelming number of bids

An overwhelming 24 bids were submitted for the tender of a residential plot in Toh Tuck Road — the second highest number of bids submitted in a residential government land sales (GLS) tender since 2009, when the tender for a parcel in Westwood Avenue attracted 32 bids.

Malaysian property developer SP Setia International put in the highest bid at S$265 million — S$939 per square foot per plot ratio (psf ppr). In second place was Singhaiyi Investments with a bid of S$260.2 million (or S$922 psf ppr); and in third place, Centrex Developments with a bid of S$250.9 million (or S$889 psf ppr).

In November 2012, World Class Developments, a unit of Aspial Corporation, won the tender with the highest price of 23 bids for an Upper Bukit Timah plot. The 60-year leasehold was developed into the “retirement resort”, The Hillford.

The 18,721.4 square metre (sq m) site can yield a maximum gross floor area of 26,210 sq m, or about 325 units — a manageable size for property developers. SP Setia plans to build a five-storey 320-unit development on the plot.

The top bid translates to a break-even price of about S$1,450 psf, and launch price of about S$1,600 psf.

Hunger for sites among developers and an expectation of a turnaround in the market are possibly the key factors that intensified the bidding, besides the attractiveness of the site and the affordable capital outlay. The recent easing of cooling measures and the positive reading of the Q1 2017 flash estimates are possible underlying contributory factors.

Government support for business costs

THE government will continue to keep a close eye on business costs, even as it took the stance of letting market forces set the price of rentals. But where there are possible market failures, such as when it is not commercially-viable to provide space for startups, the government will step in – and has indeed done so.

In the retail and the F&B (food and beverage) sectors, rental costs as a share of business costs is around 30 per cent. Rental costs make up between 0.7 and 4.8 per cent of total business costs in the manufacturing sector, and constitute about 5 per cent of business costs in most services sector.

Rentals across all sectors – industrial, commercial, retail and office spaces – have been declining for the past 3 years– thus the rental problem has not been so severe.

JTC has set up LaunchPad@one-north 2 years ago and future plans include building a network of LaunchPads around Singapore — the next one to be completed in the Jurong Innovation District in 2017.

The government has ways to support businesses, such as the Capability Development Grant (CDG), the SME Working Capital Loan and Automation Support Package (ASP). CPG defrays up to 70 per cent of qualifying project costs and thus encourages businesses to build business capabilities. SME Working Capital Loan has catalysed over S$700 million and 4,800 loans as of Dec 31, 2016, to the benefit of about 4,300 SMEs. Under the initiative, SMEs can access unsecured working capital of up to S$300,000 to help them address cash flow concerns and growth financing needs. The CDG and ASP schemes, which help companies achieve productivity improvements through automation, collectively supported 226 automation projects in 2016.

The government also introduced Bridging Loan for Marine & Offshore Engineering (M&OE) companies in November 2016 and enhanced the Internationalisation Finance Scheme for M&OE.

Both schemes aim to facilitate the access of these M&OE companies to working capital and financing to stabilise the sector as it copes with prolonged weaknesses in oil prices. Applications for loans amounting to over S$90 million have been approved as of February 2017. These support measures are expected to catalyse about S$1.6 billion in loans over one year.

The government continues to monitor the sector closely by tracking indicators such as order books and output levels, and evaluating feedback from industry players.

Samsung Hub Office sold at S$3280 psf

The 20th floor of the 999-year-leasehold Samsung Hub office tower is sold at S$43.07 million or S$3,280 psf based on the strata area of 13,132 sq ft. Standard Commodity Trade Centre Pte Ltd is selling the space on a vacant possession basis to Lei Shing Hong Properties (Singapore). The buyer plans to occupy the space for its own use.

The company is part of Hong Kong-based Lei Shing Hong group, which is involved in businesses ranging from retailing premium cars, trading and securities brokerage, to property development and investment. The S$3,280 psf fetched for the 20th floor is identical to that for the 21st level back in 2014.

Six Tg Pagar conservation shophouses up for sale

A row of six adjoining conservation shophouses in Tanjong Pagar has been put up for sale at an indicative price of $57.8 million.

The guide price for the units – 48 to 56 Peck Seah Street – works out to about $2,900 per sq ft, based on the existing gross floor area of 19,938 sq ft. The shophouses sit on three separate land lots and have a combined land area of 8,213 sq ft. The site is zoned commercial under the Chinatown (Tanjong Pagar) Historic District Conservation Area in the 2014 Master Plan.

The units, which are owned by a fund managed by Phoenix Property Investors, have a 33m-wide road frontage and are near the Tanjong Pagar MRT station.

The private equity property fund acquired the shophouses in January 2015 for $42.8 million from shipping firm K Line (Singapore).

New projects in the area include Tanjong Pagar Centre, the upcoming Frasers Tower and the redevelopment of CPF Building.

P&G investing US$100m into innovation centre in Singapore

Global consumer goods giant Procter & Gamble (P&G) is to invest US$100 million (S$140 million) over the next five years to set up its first digital innovation centre in Singapore. Up to 50 new staff could be hired.

Called an E-Centre, the project was officially launched yesterday in partnership with the Economic Development Board. As it does not have a single, fixed location, staff involved in its activities will work either in P&G’s Singapore Innovation Centre in Biopolis Street or its offices at The Metropolis.

This E-Centre will develop digital solutions for Asia-Pacific operations, synchronising the supply chain to increase revenues and lower inventory while serving emerging retail channels more efficiently.

Some projects in the pipeline include machine learning, where algorithms allow machines to predict parameters within the supply chain for better accuracy, as well as process automation, which uses robotics to eliminate repetitive tasks.

The centre will also use data analytics to optimise product distribution and marketing strategies across the region. For example, by analysing an area’s demographics data, P&G will be able to determine the potential sales growth and prioritise store distribution accordingly.

Sime Darby Centre@Bt Timah sold to Tuan Sing

Developer Tuan Sing Holdings bought Sime Darby Centre in Bukit Timah for $365 million. The property at 896 Dunearn Road sits on a commercial site of 140,886 sq ft (part freehold /part 999-year leasehold) with an allowable gross plot ratio of 1.8 and a maximum permissible gross floor area of 253,595 sq ft. It is 96 % occupied over a net lettable area of around 202,712 sq ft. The tenants include kitchenware retailer ToTT, Scanteak, Cold Storage and ChildFirst pre-school.

New York-based private equity giant Blackstone Group had bought 70 % stake in Sime Darby Centre for just under $200 million last year from Malaysian palm oil producer Sime Darby Berhad, according to media reports.

This means Tuan Sing’s purchase resulted a 25% gain for Blackstone on its investment. There is a significant potential for commercial activities that can serve the needs of the vast residential community in the vicinity, thus the asset can generate long-term revenue and profit.

Prime Waterfront Homes and Living in Singapore

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