GuocoLand, a Singapore-listed developer, yesterday launched the commercial and retail portions of its coming Tanjong Pagar Centre, saying it expects the Republic’s Grade A office leasing market to remain tight despite an expected onslaught of supply, as more companies move to the Central Business District (CBD) from the fringe areas.
About four million sq ft of supply will be added to the CBD from now till 2018 and, despite softer interest from traditional CBD office occupiers such as financial institutions, demand from technology, law and energy firms is gaining traction.
“If you look at the supply and demand situation, net absorption a year is about one million in the CBD. From 2015 till 2018, supply in the CBD will be roughly four million sq ft over these four years. In a broad stroke, that’s an equilibrium between supply and demand,” GuocoLand Singapore’s managing director Cheng Hsing Yao said yesterday.
“We have gone past the days when financial institutions were in a very aggressive mode of expansion. Having said that, it’s not (a situation where) there’s no activity among financial institutions … But beyond them, we’re also seeing tech (and) social-media firms coming to the CBD. They come to the CBD because talents want to be at a prestigious address, so it becomes important for companies to relocate to the CBD, not forgetting also that many companies are expanding,” he added.
Mr Cheng’s comments came after the Economic Development Board (EDB) forecast slower growth in Singapore’s fixed asset investments this year at S$9 billion to S$11 billion, after securing S$11.8 billion in 2014.
In a sign that demand for CBD offices remains strong, Mr Christopher Fossick, Singapore and South-east Asia managing director for property consultancy firm JLL, noted that other new developments there, such as South Beach and CapitaGreen, are “almost all taken up”.
“Net growth will come from the fact that supply is tight; occupancy is 94 per cent and there will not be any new buildings in the CBD from now until (Tanjong Pagar Centre) … If we continue on the historic average of about one million sq ft take-up every year, in a year, the 94 per cent (occupancy rate) will likely grow to about 97 per cent,” he said, adding that Grade A office rents would grow moderately in tandem from the current range of S$10.60 to S$12.90 per sq ft per month.
GuocoLand has started discussions with potential tenants for its 890,000 sqft office space and 100,000 sq ft retail component. The development will also consist of Clermont Singapore hotel, the 181-home Clermont Residence and a 150,000 sq ft urban park.
The remaining 16 unsold units in 111 Emerald Hill, a 40-unit completed condo project, are understood to have changed hands. The transaction was effected through a sale of shares in the company that developed the 12-storey freehold project.
The deal is understood to value the 16 units at a total of S$75 million to S$76 million, which translates to the low S$1,700 psf range based on the strata of around 44,000 sq ft. The units sold comprise three and four-bedroom apartments.
Under the deal inked last month, the shares in Emerald Land Pte Ltd were sold by a fund managed by LaSalle Investment Management to entities fully owned by Singapore citizens. The project received Temporary Occupation Permit in 2011.
The 24 units in the project that had been sold were transacted between November 2010 and January 2014 at prices ranging from S$2,214 psf (for a fourth floor unit in January 2014) to S$3,030 psf (for an 11th floor unit in January 2013).
Industry watchers note that the S$1,700-range psf pricing for the recent sale reflects the decline in luxury condos price as well as a discount for the bulk transaction.
Moreover, the 16 units that changed hands include the project’s four penthouses, which have roof terrace areas, and this would also have diluted the psf price.As Emerald Land is now fully owned by Singapore citizens and assuming it has been granted a clearance certificate from the Land Dealings (Approval) Unit as well as cancellation of its Qualifying Certificate (QC), it would not be under any restrictions on its options for the 16 units.
It would be free, for instance, to lease them out or hold them for as long as it wants.
Under the Residential Property Act, a foreign company, defined as one that has even a single non-Singaporean shareholder and/or director, has to get a QC from the LDAU before it may buy a private residential site.
The sale of the 16 units at 111 Emerald Hill is said to have been brokered by Savills, which last year also arranged the sale of 17 units at Paterson Suites for S$2,100 psf or close to S$80 million by a fund in the Real Estate Capital Asia Partners (Recap) series managed by SC Capital Partners.
The buyer was Blackstone, which in late-2014 also did an 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. JLL brokered that deal. Both projects are completed freehold developments.
All eyes now are on 23 units at the Draycott Eight condo owned by a German core fund managed by Morgan Stanley.
CBRE and Savills have been appointed to find a buyer for the 22 four-bedders and a penthouse with a total strata area of 68,419 sq ft. Draycott Eight is on a site with a balance lease term of about 82 years. Based on market talk, the asking price is S$2,300 psf, which would amount to S$157.4 million.
Cushman & Wakefield executive director (capital markets) Shaun Poh said that going ahead, “I do not think we’ll see many more such bulk purchase deals of high-end condo units because of a lack of opportunities with a structure where the incoming buyer can take over shares in an existing company owning the units.
This potentially allows the buyer to take over the company’s loan.
“On the other hand, if a corporate buyer were to acquire the residential units on the asset level, it would be subject to the 20 per cent LTV (loan-to-value) limit.”
Another point, said Mr Poh, is that the sellers in all the recent bulk deals are funds, “which are more motivated sellers because of the fund life”.
“In contrast, local developers stuck with unsold units are mostly not prepared to give deep discounts even for bulk purchases because they can afford to wait.
An incoming investor may also not be willing to mop up the balance units in a newly completed residential project by taking over the development company, as that would mean assuming the liabilities of the developer.
This includes the defects liability period accorded to the earlier buyers of units in the project,” said Mr Poh.
Perched on a hill at the edge of the Central Business District is a shrine where the remains of a beloved Muslim saint rest.
Every day, up to 100 visitors from Singapore and beyond make their way up its 49 steps to pray and lay flowers on the marble grave of renowned healer Habib Noh, who died in 1866.
The Haji Muhammad Salleh mosque management board called a tender in January – which closes at the end of this month – to upgrade the worn-out facilities at 37 Palmer Road, where the 1903 shrine is housed.
The rejuvenation effort will include repairs to its leaking walls and ceilings, as well as a new paint job. A lift will also be installed to allow elderly visitors easy access to the hilltop shrine.
“These additions and alteration works have been a long time coming,” said management board chairman Izammuddin Mohamed Ali. “The last time we upgraded the place was in the 1980s.”
The mosque started a fundraising drive for the upgrading project about six years ago and has raised $2 million so far.
The upgrade will also mean a refreshed prayer hall and better toilet and ablution facilities.
The mosque, which can hold up to 1,200 worshippers, will also be better ventilated.
The renovation will start in the middle of this year and take about nine months. There will be a temporary worship area at an open space nearby.
Mr Izammuddin said “great care” has been taken to ensure the historic structures’ key architectural features remain untouched during the upgrade.
It is hoped the compound will one day be given preservation or conservation status by the National Heritage Board or the Urban Redevelopment Authority (URA).
Ensconced near hotels, banks and the Keppel Viaduct, the fate of the Tanjong Pagar site is uncertain.
Members of the mosque management board fear it could be at risk of redevelopment since it sits on prime land.
“We hope it can stay for the long term and be here for future generations since it provides solace and tranquillity to visitors in this busy area,” said Mr Izammuddin.
The shrine and the larger Tanjong Malang area have been flagged by the Singapore Heritage Society for years as having heritage value.
The society said the area has important layers of history from the colonial period to the present day that are hard to find elsewhere in Singapore.
The URA told The Straits Times the mosque is part of a larger area where “longer-term plans have not been firmed up”.
Its spokesman added: “The conservation of any of the buildings in the area will be studied as part of the longer-term plans for redevelopment of the area.”
Driver Salim Saman, 52, who has been worshipping at the mosque for decades, said: “It will be a shame if it isn’t protected. It is well- known to people from all walks of life, even beyond our shores, and is an important part of Singapore’s landscape.”
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As early as the first half of next year, commuters will be able to take an MRT train to the western tip of the island and get a panoramic view of Singapore’s industrial heartland along the way.
Details have been revealed of the new MRT Tuas West Extension, which will feature Singapore’s tallest viaduct at 23m above ground – almost twice the height of the average MRT viaduct. At Gul Circle, the first of the extension’s four stops, the station ceiling will be 33m above ground – about the height of a 10-storey Housing Board block.
There are two reasons for the heights. First, the 7.5km, $3.5 billion extension goes over the Ayer Rajah Expressway viaduct at the Pan-Island Expressway interchange. Second, a 4.8km portion of the line is being integrated with a road viaduct, which runs below the rail line.
It will be the first twin-tier viaduct in Singapore, with the new elevated dual three-lane road designed to relieve Tuas’ infamous heavy traffic load, which is set to become heavier once the port is moved there in 2030.
The structure is supported by a series of massive columns, each designed to bear 13,000 tonnes of weight. Columns at existing rail viaducts carry 5,300 tonnes of weight each.
Project director Andrew Yap said the piles for the columns go as deep as 60m into the ground.
Mr Yap, 62, a Land Transport Authority veteran who built the first MRT line in the 1980s, said most of the columns are already up and more than half of the horizontal beams are in place.
“Overall, the project is over the halfway mark,” he said.
Work started in late 2011, and is slated to be completed next year. Mr Yap would not commit to a more specific time, but going by the progress so far, it could be ready by the first half.
The most challenging parts of the project have already been tackled. Mr Yap said these include diverting major utilities serving Tuas and upgrading a 1km-long drain in Tuas Road.
The MRT extension is expected to carry 100,000 commuters a day to Tuas, an area currently not well served by public transport.
The project includes a 26ha depot that can hold 60 trains. It will join depots in Changi, Bishan and Ulu Pandan that serve the East-West Line.
Mr Yap said structural provisions have been made for a Tuas South extension.
The Gul Circle station will incorporate a platform serving the Tuas South extension that accommodates a split-viaduct design. Instead of eastbound and westbound tracks facing each other across a platform, one is above the other. While this design has been employed in underground lines, Mr Yap said this will be the first time for an elevated line.
The northern end of the Tuas West Extension includes a 300m overrun track, a braking buffer that can also facilitate future extensions of the line.
Second LaunchPad is in planning stage; three new blocks will be added to the first facility
THE government is planning to set up a second LaunchPad for startups even as it expands the first one – JTC LaunchPad @ one-north – with the construction of three new blocks.
The existing LaunchPad at Ayer Rajah Crescent – which comprises blocks 71, 73 and 79 and is jointly spearheaded by JTC Corporation and Spring Singapore – offers facilities such as co-working, incubation, and startup space for entrepreneurs.
The three new blocks – 75, 77 and 81 – will provide an additional 12,000 square metres of space and house 250 more startups. These blocks will be completed over 2016 and 2017.
At the existing LaunchPad, block 71 is about 95 per cent filled,block 73 is about 50 per cent taken up and block 79 is more than 80 per cent occupied. It will house about 500 startups and 35 incubators.
The new LaunchPad will be in the vicinity of JTC’s CleanTech Park, which is next to Nanyang Technological University (NTU). Plans for the new facility are still underway, but its main tenets are similar to the current site.
Locating it next to NTU and within the vibrant living laboratory in CleanTech Park will allow startups to benefit from the proximity to research experts and academia from the university and the industries and businesses, noted Heah Soon Poh, assistant chief executive officer of JTC’s Cluster Group.
In addition to providing physical facilities, other means of supporting the entrepreneurial community in Singapore include the opening of Block 71 San Francisco, said Prime Minister Lee Hsien Loong on Friday, when he officially opened JTC LaunchPad @ one-north. Block 71 San Francisco will help connect Singapore’s startups to the US market and startup eco-system of mentors and investors, said Mr Lee.
Taking the LaunchPad community to the next level will be the newly privatised Action Community for Entrepreneurship, said Minister of State for Trade and Industry Teo Ser Luck. Its welcome centre and collaborative ideation space at block 79 will be a one-stop shop for new entrepreneurs and also be a focal point for players to connect and network.
With this match between the “software” and the “hardware”, it will be possible to replicate this model in other parts of the world, said Mr Teo.
Entrepreneurial activity in Singapore has increased steadily over the years, with the number of employing startups growing from 24,000 in 2005 to 42,000 in 2013. The proportion of startups in higher-value sectors has also grown. Startups in these knowledge-intensive, technology sectors comprised 39 per cent of all active startups in 2013, an increase from 33 per cent in 2005.
Singapore’s startup sector employs about 9 per cent of the country’s workforce. About 20 per cent of Singapore respondents in the latest Global Entrepreneurship Monitor Report have indicated their intention to start a business within the next three years.