Home prices near Rail Corridor may rise

OWNERS of property near the old Malaysian railway track could reap some benefit when the area is refreshed.

Prices in some areas might enjoy a lift once the 24km path from Tanjong Pagar to Woodlands, known as the Rail Corridor, is revamped.

The Urban Redevelopment Authority (URA) on Wednesday sought ideas from design professionals on how to develop the historic strip of land.

The aim is to ensure the path remains continuous and at the same time reflect its heritage as a railway line while preserving its green nature.

Six areas would come in for special attention: the former Bukit Timah and Tanjong Pagar railway stations, the old Bukit Timah fire station, two areas near the Kranji and Buona Vista MRT stations and a stretch near Sungei Pang Sua canal in Choa Chu Kang.

That could give home owners potential gains to look forward to, although the residential areas near the old track are mostly already pricey private landed houses in the Bukit Timah district, including Holland Road and Rifle Range Road.

There are light industrial areas in Bukit Merah and Buona Vista, while Kranji to the north is more thinly populated, with some industrial activity.

Owners of property near the track have already reaped some benefit from the termination of rail services, which meant no more noisy trains rolling by, said Mr Nicholas Mak, SLP International executive director.

That had previously dragged down property values by 1 to 2 per cent. But the end of rail services means this is no longer the case.

Still, there already tends to be a premium in the nearby precincts as some are gazetted Good Class Bungalow Areas, including Ewart Park and King Albert Park, said Mr Desmond Sim, CBRE research head for South-east Asia and Singapore.

But values typically appreciate after announcements such as the latest one from the URA, and additional gains may be expected as new capital investment takes form, said Dr Chua Yang Liang, JLL research head for South-east Asia and Singapore.

“A lot of the potential upside will depend on… how the additional land that has been freed up is integrated with the surrounding area, and whether these enhancements are in line with the overall ambience and characteristics of the neighbourhood,” he added.


CBD office glut seen squeezing rental yields

Concerns over an impending glut of office space in the Central Business District are growing with a flood of new units in the wings.

This new space represents less than 20 per cent of the entire office stock in the city centre now.

But the influx is still worrying many analysts and comes as developers have built more office units to cater to investors switching out of the residential market.

Another feature of this trend is that to keep lump-sum prices affordable, developers have taken to building smaller offices, translating to higher per sq ft (psf) prices.

But industry players are divided over the rental prospects of these small units for investors, given the competition from other new units and existing ones.

Owners at Prudential Tower in Cecil Street, for instance, are carving more units from its total sellable area to extract more value from the investment, adding to the burgeoning supply.

Offices previously sized as half-floor (5,102 sq ft to 5,952 sq ft) or full-floor (about 12,000 sq ft) will now be sold at sizes from just 635 sq ft to 2,013 sq ft.

The selling price of $3,100 to $3,300 psf represents a healthy premium over the $2,316 psf paid for the building.

Of the 259 offices at the upcoming GSH Plaza – formerly Equity Plaza – about 22 per cent of the units will span 480 to 800 sq ft.

Marketing agents are promising rental yields of 3 per cent for these offices, implying monthly rents of about $10 psf.

But analysts said the reality seems to be well short of that figure as monthly rents of CBD strata offices are going for about $6.50 psf to $8.50 psf now.

Size matters for strata office units, said Ms Christine Li, director of research at Cushman & Wakefield. “If the unit is 500 sq ft and you’re hoping to rent at $10 psf, that’s about $5,000. With that, you can get a decent-sized serviced office with a full suite of facilities. It could offer tenants a better value proposition.”

Tenants in the CBD are typically finance and tech firms drawn to larger floor plates, she added.

Demand for smaller strata offices could come from firms setting up representative offices here, but those form only a small pool.

At least 1.02 million sq ft of new strata office space, concentrated in Shenton Way, will be added by 2018, figures from Cushman & Wakefield showed.

This comes from at least six projects due for completion in the next three years. They include Far East Organisation’s PS100, which has 100 units ranging from 420 sq ft to 517 sq ft, and SBF Centre, with 197 offices, most of which are from 592 sq ft to 1,442 sq ft.

Oxley Holdings is building Oxley Tower with 104 units from 947 sq ft to 1,346 sq ft and WyWy Development’s Crown @ Robinson will have 86 units from 592 sq ft to 1,152 sq ft.

“Competing for tenants among the various strata-titled office projects in the CBD, as well as the increased supply from mega office projects completing in 2016, would make the market competitive as a whole,” said Ms Chia Siew Chuin, director of research and advisory at Colliers.

“Any rental upside could be limited.”


Shophouses are attractive investment in Singapore: Colliers

In a recent Colliers White Paper released on 17 Mar 2015, Colliers noted that shophouses in Singapore remain a very attractive investment class of properties in land-scarce Singapore. Median rent of shophouses rose from $4psf in 2012 to $5.42 psf in end 2014. Capital values rose 37% to a high of $3772 psf in end 2014.

Mohammed Sultan Shophouse


Centrepoint plans major S$50m facelift

After a series of high-profile tenant departures in recent weeks, Centrepoint will be undergoing a S$50 million revamp, mall owners Frasers Centrepoint Malls announced on Thursday.

Scheduled to commence in May, the “asset enhancement initiative” was first conceived in 2014 and is expected to stretch over 16 months.

Major renovation works have been tabled for the basement and ground floors of the iconic 32-year-old mall, along with an integration of the main building with the basement annexe.

Additionally, the mall’s Orchard Road entrance will see a major revamp with a widened street frontage allowing passers-by direct access to both floors, along with greater shop visibility for retailers.

Centrepoint’s family-friendly offerings on Level 3 will continue to be at the forefront of its redesign considerations, said the mall, with new drop-off and pick-up points on the ground floor as well as stroller and wheelchair-friendly features built in throughout all floors for families with children and the elderly.

Beyond physical upgrades, the mall will also plug in a lineup of activities, events and promotions to bring new buzz to the revamped building.

The announcement comes amid a succession of pullouts by long-time tenants. Anchor tenant Robinsons vacated its space in May last year after 31 years. Marks & Spencer will close its outlet on March 29 to focus on other stores islandwide, said its owners, the Dubai-based Al-Futtaim group, which also owns Robinsons.

Elsewhere in the mall, Chinese restaurant Teochew City Seafood Restaurant shuttered last year after a 25-year stay while Cold Storage is scheduled to close on April 1 and electronics retailer Harvey Norman will pull out of its Level 3 space by May.

Replacing Marks and Spencer on Level 2 and Harvey Norman on Level 3 will be a “gourmet precinct and an expanded fashion zone”, said the mall.

According to Christopher Tang, chief executive of Frasers Centrepoint Commercial, a division of Frasers Centrepoint Limited, the initiative is part of “an ongoing strategic initiative” aimed at refreshing the malls within the group’s portfolio.

The mall’s over 60 existing tenants such as Starbucks, Gap and Metro will continue operations as usual during the renovation, he added.

The mall’s Orchard Road entrance will see a major revamp with a widened street frontage allowing passers-by direct access to both floors, along with greater visibility for retailers.


St Regis Residences penthouse sold at $15.8m loss

THE owner of a penthouse at St Regis Residences booked an eye-popping loss of $15.8 million when he sold the apartment last month. It is the biggest loss ever made on an apartment sale here.

The two-storey unit in Tanglin Road, with a swimming pool on the upper floor and views of Nassim Road’s greenery, first made headlines in 2007 when Japanese billionaire Katsumi Tada shelled out a record-smashing $28 million – or $4,653 per sq ft (psf) – for it.

Mr Tada’s generous offer back then gave the lucky seller a profit of $12.77 million, but it has turned out to be an astonishingly bad investment and underscores how fortunes have turned in the high-end property market, where more instances of loss-making transactions are surfacing.

The new owner is Andy Chua, who owns Yun Nam Hair Care. He snapped up the 6,017 sq ft apartment at the 173-unit project in a cash transaction of $12.2 million, or $2,028 psf, according to records lodged with the Singapore Land Authority.

The sale was executed in Tokyo and took just two weeks to complete, instead of the usual eight to 12 weeks, possibly due to the fact that it was a cash transaction.

Mr Tada is believed to have left the property vacant all this time.

Samuel Eyo, managing director of Singapore Christie’s Homes, reckons Mr Chua may have got a bargain given that the price was low for luxury projects in the area, which sell for between $2,500 and $3,000 psf.

Mr Tada is by no means the only high-end owner to get his fingers burnt lately, as luxury home values have dived 20 per cent from their peak in 2013.

A 2,626 sq ft unit at luxury condo The Coast at Sentosa Cove went for just $1,190 psf in January, booking a loss of $1.215 million for its seller.

Mr Tada, the 17th-richest man in Japan with a fortune of US$1.5 billion (S$2 billion) according to Forbes, is the president of Daisho Group – the firm which acquired The Westin Singapore hotel from BlackRock for $468 million in December 2013. That set another record at $1.5 million per hotel room key.

Mr Chua also made headlines last year when he paid US$2.2 million to score a private lunch with American investment magnate Warren Buffett.

Mr Eyo believes more bargains of the St Regis kind will emerge as interest rates rise. Affluent investors too are shopping around for a good deal.

“The ultra-rich would rather cash out of assets they have no use for, to invest in other assets that could rake in a profit larger than the loss,” added Mr Eyo. “To them, it’s just part and parcel of investing.”

– See more at: http://business.asiaone.com/news/st-regis-residences-penthouse-sold-158m-loss#sthash.1OMimGxc.dpuf

Capri by Fraser transacted at more than S$200M

A UNIT of Frasers Centrepoint Limited is paying S$203.4 million for Capri by Fraser, Changi City.

The price translates to nearly S$650,000 per room for the 313-room “hotel residence” – or a serviced apartment- hotel hybrid – which is on land with a balance lease term of about 54 years.

The 12-storey property is being sold by Ascendas Frasers Pte Ltd, an equal joint venture between Ascendas Land (Singapore) and Frasers Centrepoint.

Market watchers say it is just a matter of time before Frasers Centrepoint offers the asset to its sponsored trust, Frasers Hospitality Trust (FHT). The property was listed in FHT’s prospectus in June 2014 as part of the future acquisition pipeline for the trust under a right of first refusal arrangement with Frasers Centrepoint, which is the trust’s sponsor.

Capri by Fraser, Changi City opened in 2012. Its 313 studios (ranging from 32 square metres to 70 sq m) are equipped with kitchenettes.

The hotel residence is part of a mixed development located next to Expo MRT Station and within Changi Business Park that Frasers Centrepoint developed jointly with Ascendas on a 4.7 hectare site that the partnership clinched at a tender in 2008 conducted by JTC Corporation.

The two bagged the 60-year leasehold land parcel for S$150.8 million or S$119 per square foot per plot ratio.

The mixed development also includes One@Changi City, comprising about 650,000 sq ft of net lettable area of business park space spanning nine levels, and the Changi City Point mall.

The project’s hotel residence component was Frasers Centrepoint’s first Capri property and cost S$124 million to develop, according to an article in May 2012.

In term of the S$650,000 per room pricing, Donald Han, managing director of property consulting group Chestertons, said the price is reflective of the market – taking into account the location, tenure and the fact that the performance of the property has stabilised since it has been trading for a few years.

“I would expect yield to be 6-plus per cent before it is offered to Frasers Hospitality Trust,” he said.


SMEs set for a boost from budget 2015 schemes

THE host of support schemes proposed in Budget 2015, if effectively leveraged, can level the playing field for small and medium-sized enterprises (SMEs), startups and large corporations in talent recruitment and retention.

This was among the key takeaways from Wednesday’s Impact & Possibilities talk, organised by The Business Times and The SME Magazine, that aimed to fill business owners and entrepreneurs in on how to make the most of this year’s Budget.

SkillsFuture, for one thing, allows SMEs to tap an enlarged pool of talent – including fresh ITE (Institute of Technical Education) and polytechnic graduates – via placements and on-the-job training, said Leslie Loh, entrepreneur and founder of professional training academy LithanHall.

“Training is almost free (now),” he added, citing the SkillsFuture Earn and Learn Programme and various other employer grants such as Workforce Development Authority’s Course Fee Funding and Absentee Payroll Funding. Not only does employee training drive business performance, that SMEs and startups can provide more training opportunities allows them to compete better with large corporations in talent recruitment and retention, said Mr Loh.

The perceived lack of training benefits and uncompetitive remuneration have been reasons why employees traditionally preferred large corporations, he said. But SMEs and startups in fact make attractive employers, as they offer multi-disciplinary jobs, unlimited learning and growth opportunities, a dynamic working environment and a helicopter view to the entire business. “Employees in SMEs and startups are more likely and equipped to become entrepreneurs themselves too.”

That said, as long as companies are willing to rethink their work processes and invest in productivity improvement, there are no lack of grant options, said Mr Loh.

The Productivity and Innovation Credit (PIC), for instance, is one that cuts across many sectors, said Ng Hian Meng, head of small and medium businesses sales at StarHub.

Labour-intensive companies that want to improve payroll processes, logistics companies that plan to establish fleet management systems, and even childcare centres that wish to automate attendance-taking can apply for PIC, he said.

For the more proactive SMEs and startups that want to venture overseas, there are various internationalisation schemes available too, added Victor Tay, chief operating officer of the Singapore Business Federation.

But grants – which cover a fraction of business costs – should only be a catalyst to do more, said Kurt Wee, president of the Association of Small and Medium Enterprises. Companies should leverage grants to transform work processes and do more with less.

“If SMEs don’t do that, they will be at risk,” he said.


Prime Waterfront Homes and Living in Singapore


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