Category Archives: Office

Resale Strata Offices set to increase in demand and price

Straits TImes 2 Aug
Singapore’s property market is having a slower year but one market segment might be in for significant growth – resale strata-titled offices in the central business district (CBD).

Prices of these properties are poised to climb this year owing to healthy demand, particularly from Chinese buyers, according to property consultancy CBRE.

Chinese buyers are the most active, having invested heavily in office buildings such as Samsung Hub and Springleaf Tower, it said.

CBRE said prices of such office units could rise by 5 per cent to 10 per cent this year, citing limited supply and rising office rents.

The average price for strata office resales was $1,677 per sq ft (psf) in the second quarter, going by caveats lodged with the Urban Redevelopment Authority. For new sales, the average was $2,073 psf in the period.

Strata offices can appeal to Chinese companies from industries such as insurance and commodities. “These buyers likely have a big base in China where their business is booming, and they want to venture out of China and expand to Singapore.”

As a result of their thriving business back home, such firms may also have pockets deep enough for them to buy an entire office floor in Singapore rather than subdivided units.

One recent resale transaction of strata office space was the sale of the 14th floor of Samsung Hub in Church Street for $39.7 million about two months ago.

This works out to around $3,030 psf for 13,110 sq ft at the 999-year leasehold office tower, which has 30 storeys.

The buyer was a Chinese company believed to be in the trading industry.

The seller is believed to be Arch Capital Management, a Hong Kong-based private equity real estate firm with links to Ayala Group of the Philippines, according to a Business Times report.

Chinese firms also snapped up eight out of 12 floors of office space in Springleaf Tower, put up for sale in the second half of last year. Springleaf Tower is a 37-storey building in Anson Road. The firms were in insurance, shipping and commodities.

The seller of all 12 floors was SEB Asset Management, part of German pension fund manager SEB. Prices ranged from $2,200 psf to $2,400 psf, reports said.

Some companies may prefer to buy completed offices rather than units that are still under construction, so that they can move in immediately.

Buyers of office space also “don’t want to be held ransom to landlords, so they become landlords themselves”.

One main reason is a widely expected spike in office rents in the CBD over the next two years due to a supply shortage.

Analysts predict that prime office rents in the CBD could climb by as much as 15 per cent to 16 per cent this year from last year.

This pace of office rental growth could even be faster than that in major global cities such as London, New York and San Francisco, property consultancy JLL noted in May this year.

The office components of mixed developments such as South Beach near Raffles Hotel, DUO in Bugis and Marina One in Marina Bay could be completed within the next few years.

A similar article on strata office in Business Times (in the first quarter) was found and attached here for reference.

Click to access pg28-29.pdf

Office rents up in Q2

Sgbayhomes office

http://www.businesstimes.com.sg/premium/top-stories/office-rents-52-so-far-further-surge-expected-year-20140726

WHILE retail rentals have proved fairly flat so far this year, office rentals have been on a roll. They have already risen 5.2 per cent in the year to date, outpacing the 1.3 per cent full-year growth last year – and are likely to continue going up.

Analysts expect prime Central Business District (CBD) Grade A office rents to surge further by 7-15 per cent for the rest of the year, as tenants jostle for limited options amid a dearth of office space supply.

URA data released yesterday showed office rentals rising 2.8 per cent in the second quarter of this year – the highest quarterly growth in more than three years, and coming on the heels of a 2.4 per cent increase in Q1.

Rentals for offices in the Downtown Core (the CBD, City Hall, Bugis and Marina Centre zones) and the Orchard Planning Area registered a more pronounced increase of 3.2 per cent to a median S$10.03 per sq ft (psf) a month in Q2 – above the “psychological benchmark” of S$10 psf.

No office projects were completed in the CBD in the quarter, and there will be none soon as well – at least until CapitaGreen in Market Street is completed in December.

In fact, no CBD offices are expected to be ready until 2016, which is when three developments – Guoco Tower, Marina One, and Duo – come onstream. Not surprisingly then, vacancies fell from 10 per cent in Q1 to 9.6 per cent in Q2, and rents rose.

Savills Singapore research head Alan Cheong said: “During lease negotiations, the pendulum has swung in favour of landlords and caused signing rents to move closer to the asking rents.”

And tenants who seek smaller space tend to pay higher psf prices, partly also because they have less clout to bargain, he added.

This is all playing out against a backdrop of a global economy that has got on a more solid footing, creating a better business climate, which has in turn paved the way for more firms to ramp up growth plans, thus generating more demand for office space

R’ST Research’s director Ong Kah Seng said: “Office rents have been on a downward trend for the past two years post-financial crisis, so we are seeing some laggard rental recovery this year, in sync with the global economic recovery.”

Contrary to the upward trend in rents, however, the prices of office space – which is not so much a function of supply as it is a function of investment activity – stayed unchanged in Q2, following a 0.5 per cent increase in Q1.

CBRE research head Desmond Sim suggested that this could be because transactions in the quarter changed hands at market value, and so did not push up capital values.

Chia Siew Chuin, the director of research and advisory at Colliers, attributed this to a lack of new strata-titled office project launches in Q2.

Most office and retail space transactions tend to be of strata-titled units, rather than investment sales of a few floors or en bloc sales of entire buildings.

“The continued enforcement of the total debt servicing ratio (TDSR), which caps buyers’ loans, and concerns of an impending interest rate hike weigh on the ability of strata-titled office owners to significantly raise prices during the quarter,” Ms Chia said.

But she warned that the impending tightening in global liquidity could cause financial stress in open and trade-dependent markets like Singapore’s, and that some firms could hold back from expanding if rental costs accelerate at an unsustainable pace.

In retail space, rents rose by 0.6 per cent in Q2, after falling 0.3 per cent in Q1, so they essentially plateaued in the first half of 2014. URA’s index tracks base rents with gross turnover component for those to whom it is applicable.

Landlords may have become more careful with raising rents, now that they are under scrutiny; they also do not want to price themselves out of the market as retailers grow more resistant to rental increases, said CBRE’s Mr Sim.

Prices of retail space fell 0.3 per cent in Q2 after having stayed unchanged in Q1, similarly restrained by buyers’ loan restrictions.

“In the space of a year, the strata-titled retail sales market has had the wind dramatically taken out of its sails,” said Colliers’ Ms Chia.

Some 190 units changed hands in the first half, nowhere near the dramatic 642 transactions a year ago, pre-TDSR.

Most expect retail sales to stay flattish, or increase at inflationary levels at best, for the rest of 2014.

URA office and retail indices do not cover the whole island, but only 22 planning areas in the central area, including Downtown Core, Orchard, Marina East and South, and in fringe areas such as Newton, Outram, Bishan, Geylang and Queenstown.

Analysts like R’ST Research’s Mr Ong took issue with this, arguing that the suburban shopping sector was as active, if not more so, and that offices are decentralising and moving to locations outside the CBD. Much of the action in these two markets are not currently reflected in the data, he said.

Singapore’s retail rents inch up in Q2; Office rents in Singapore continue to rise: URA

http://www.businesstimes.com.sg/breaking-news/singapore/singapores-retail-rents-inch-q2-ura-20140725

RETAIL rents in Singapore rose 0.6 per cent in the second quarter, against a decline of 0.3 per cent in Q1, the latest property indices released by Urban Redevelopment Authority on Friday morning showed.

Prices of retail space dipped 0.3 per cent quarter-on-quarter in Q2 2014, after remaining unchanged in the first three months of this year.

The islandwide retail vacancy rate stood at 5.9 per cent at the end of Q2 2014, slightly higher than the 5.8 per cent at the end of Q1.

By the end of Q2 2014, there was total supply of 879,000 sq m gross floor area of retail space from projects in the pipeline.

http://www.businesstimes.com.sg/breaking-news/singapore/office-rents-singapore-continue-rise-q2-ura-20140725

OFFICE rents in Singapore continued to rise, climbing 2.8 per cent in the second quarter following the 2.4 per cent increase in the first quarter of this year.

According to data released by the Urban Redevelopment Authority (URA) on Friday morning, prices of office space remained unchanged in the second quarter compared to the preceding quarter, which saw a 0.5 per cent rise.

The island-wide vacancy rate of office space at the end of Q2 fell to 9.6 per cent, from 10.0 per cent at the end of Q1 2014.

The amount of occupied office space rose 22,000 sq m (nett) in Q2 2014, compared to the 6,000 sq m (nett) rise in Q1.

Prices of office space flat in Q2 after a 0.5% increase in Q1; prices of retail space fell 0.3 % after remaining unchanged in the previous quarter.

http://www.channelnewsasia.com/news/singapore/prices-of-office-retail/1281694.html

Sgbayhomes office

Prices of office space were flat in the second quarter after a 0.5 per cent increase in the first quarter, while prices of retail space fell 0.3 per cent after remaining unchanged in the previous quarter, the Urban Redevelopment Authority (URA) said on Friday (July 25).

Rental prices of office space in the second quarter rose 2.8 per cent from the previous three months, following the 2.4 per cent increase in the first quarter. Rental prices of retail space in the second quarter also increased, rising by 0.6 per cent in the second quarter, compared with the decline of 0.3 per cent in the January to March period.

As of end-June, there was a total supply of about 1.055 million square metre (sqm) gross floor area of office space in the pipeline, and a supply of 879,000 sqm gross floor area of retail space from projects in the works.

The amount of occupied office space increased by 22,000 sqm in the second quarter, compared with the 6,000 sqm increase in the previous quarter. During the quarter, the stock of office space decreased by 1,000 sqm, compared with the increase of 15,000 sqm in the previous quarter. As a result, the islandwide vacancy rate of office space at the end of June fell to 9.6 per cent, from 10 per cent at the end of March.

According to URA, the amount of occupied retail space increased by 38,000 sqm in the second quarter, while the stock of retail space increased by 49,000 sqm. As a result, the islandwide vacancy rate of retail space rose to 5.9 per cent at the end of June, up from 5.8 per cent at the end of March.

Developers’ pessimism deepens in Q2 Rising construction costs, inflation, interest rates seen roiling market

http://www.businesstimes.com.sg/premium/singapore/developers-pessimism-deepens-q2-20140723

DEVELOPERS are more pessimistic about the property market in the coming six months, citing rising cost of construction, inflation, and interest rates as factors that will likely have an adverse impact on market conditions.

The NUS-Redas Real Estate Sentiment Index Survey’s Future Sentiment Index – which measures sentiments towards the market outlook over the next six months – fell to 3.4 in Q2 compared with 3.9 in Q1.

A score under five indicates deteriorating market conditions while scores above five indicate improving conditions.

Meanwhile, the Current Sentiment Index slipped marginally, from 3.7 in the last quarter to 3.6.

Taken on a year-on-year basis, the Composite Sentiment Index (which measures overall sentiment) was weaker at 3.5 in Q2 compared to 4.5 previously.

Looking ahead into the next six months, the key potential risks are rising inflation/interest rates as identified by 75.4 per cent of respondents and rising cost of construction (63.1 per cent).

Equally worrying is the excessive supply of new property launches and a slowdown in the global economy, which were identified by 53.8 per cent of respondents.

However, 31.7 per cent of developers surveyed said that they expect moderately more residential launches in the coming six months, while 29.3 per cent said that they expect residential launches to hold at the same level.

In terms of unit price change, 26.8 per cent of them anticipate that residential prices will hold in the next six months, up from 26.3 per cent in the previous quarter. Majority of developers still expect unit prices to be moderately less (63.4 per cent compared with 64.8 per cent previously).

Of the various property sectors, prime and suburban residential sectors were the worst performing segments according to the survey.

The prime residential sector showed a current net balance of -72 per cent and a future net balance of -69 per cent; while the suburban residential sector showed a current net balance of -63 per cent and a future net balance of -65 per cent in Q2.

The current and future net balance percentage is defined as the difference between the proportion of respondents who have selected positive options and the proportion who selected negative options.

On the flipside, office was the best performing sector, with a current net balance of +41 per cent and a future net balance of +32 per cent.

In light of the high transaction cost and high property prices, 77.8 per cent of respondents said there will likely be strong outflows of investments into overseas real state markets in the coming 12 months.

These markets include the United Kingdom, Australia, and Malaysia.

GB Building floors for sale

http://www.businesstimes.com.sg/premium/singapore/three-gb-building-office-floors-sale-20140722

ABOUT 16,000 square feet of office space spanning three contiguous floors in GB Building in the Central Business District (CBD) have been put on the market for between S$32.1 million and S$33.7 million, or between $2,000 and $2,100 per square foot.

Each floor of the space, occupying the 20th to 22nd storeys of the Cecil Street building, ranges from 5,210 sq ft to 5,425 sq ft in size, is rectangular and column-free.

DTZ Debenham Tie Leung (SEA) is marketing the property, which is being sold with vacant possession.

GB Building comprises a 23-storey office tower atop three storeys of commercial space and has 67 years left on its lease.

It has three levels of basement carpark lots and is within walking distance of Tanjong Pagar MRT station on the East-West Line and the upcoming Shenton Way MRT station on the Thomson Line.

DTZ investment advisory services director Tan Chun Ming said that the property was a “rare opportunity” for owner-occupiers.

Given that the space is strata-titled, he expects keen interest from a range of investors looking to capitalise on the rising rental rates in the CBD.

A DTZ report has noted that average gross monthly rents in Marina Bay rose 6.5 per cent to S$12.25 psf in the second quarter from the first.

But average gross monthly rents for Shenton Way, Robinson Road and Cecil Street – older areas of the CBD – had stagnated at S$8 per sq ft.

Average office prices in those three areas inched up 0.2 per cent in Q2 from the previous quarter, supported by continued interest in strata-titled office units and en bloc office deals, as further rental increases are expected, said the report.

Based on caveats information from URA Realis, the top three strata floors of SBF Centre on Robinson Road, were transacted at an average price of S$3,069 psf in April. Last November, one strata floor at Eon Shenton on Shenton Way went at S$2,550 psf.

The expression of interest exercise for the GB Building space closes on Aug 21. Interested parties may submit bids for single or multiple floors.

FIVE adjoining shophouse properties at Club Street on sale for $22 million.

http://www.btinvest.com.sg/property/local/22m-asking-price-five-shophouses-club-street-20140703/

FIVE adjoining shophouse properties at Club Street have been put on the market with an asking price of $22 million.

BT Club Street Shophouse

They comprise Nos 1, 3 and 5 Club Street, which are three storeys high and have an attic, and Nos 7 and 9, which are two storeys high. All five have balance land tenure of about 80 years.

The properties are being marketed jointly by JLL and Historical Land Pte Ltd. The latter is a boutique property agency specialising in shophouses.

The five shophouses are being offered as a package. Nos 1, 3 and 5 are owned by Citystate Properties while Nos 7 and 9 are owned by Dr Ling Ai Ee, who is also one of the shareholders of Citystate Properties.

The $22 million asking price translates to $3,230 per square foot on floor area of about 6,800 sq ft. The shophouses are currently leased, with insurance company EQ occupying the ground level. The upper levels are leased out as residences.

A strong attraction of the properties is that they are part of a stretch of Club Street and Gemmill Lane that was recently rezoned to commercial use under Urban Redevelopment Authority’s Master Plan 2014. The stretch involved was previously zoned as “residential with first-storey commercial”.

In a circular issued on June 10 this year, URA said the zoning change is consistent with the commercial zoning for the rest of the shophouses along Club Street.

Historical Land director Simon Monteiro said: “With full commercial zoning, this means foreigners are now eligible to buy these shophouses.”

Foreigners require the approval of the Land Dealings (Approval) Unit of the Singapore Land Authority before they may purchase an entire shophouse on a site zoned for residential use, although they may buy a unit within a strata-subdivided shophouse building on residential-zoned land.

“In addition to offering prime frontage at the Club Street/Cross Street corner, a stone’s throw from the Telok Ayer MRT Station on the Downtown Line, these five shophouses make up a rare island-site in the popular Club Street locale which is steeped in history,” added Mr Monteiro.

Club Street was the last part of Chinatown to be developed, beginning in the early 1890s, according to architecture historian Julian Davison, who traced the provenance of the five properties for Historical Land.

The five shophouses on offer comprise two separate developments: Nos 7 and 9, which were most likely built in the late 19th century, and Nos 1, 3 and 5, which were built by business magnate Ezekiel Saleh Manasseh in 1924-1925.

A leading businessman and property developer in Singapore at the time, Mr Manasseh commissioned the architectural firm of Westerhout & Oman to build the shophouses that currently stand at Nos 1, 3 and 5 Club Street. The principal feature of the front facade is the central airwell. There is also a cantilevered balcony halfway up as well as a star-shaped pediment on top, intended to recall the Jewish Star of David, writes Dr Davison.

During World War II, Mr Manasseh was interned by the Japanese and died in 1944.

At a URA tender in August 1995, Citystate Management Consultants clinched Nos 1, 3 and 5 Club Street for $3.01 million while L&B Engineering picked up Nos 7 and 9 at $2.064 million. The properties were sold on 99-year leasehold tenure and with the requirement that successful tenderers had to restore them.

While activity-generating uses such as food and beverage outlets, and shops are allowed on the street level, URA in its June 10 circular stated that the shophouse owners and tenants are encouraged to use the upper storeys for residential or institutional use. Office use will be the only commercial use allowed on upper levels, as this is less likely to cause disturbance to the residents of the nearby Emerald Gardens.

Shophouse in Telok Ayer put up for sale — Euro Group’s asking price for 999-year leasehold property is S$20-22m

EURO Group, which is involved in a range of businesses including real estate, has appointed Cushman & Wakefield to find a buyer for a three-storey shophouse located a stone’s throw from Telok Ayer MRT Station.

BT Telok Ayer Shophouse for sale

The indicative asking price for No 25 Boon Tat Street, a 999-year leasehold property, is S$20-22 million.

Euro Assets Holdings (S), the owner, is selling the property with vacant possession. Located in the Chinatown-Telok Ayer Conservation Area, the shophouse is currently being spruced up.

Approval has been obtained from the authorities to use the first and second storeys and roof terrace as restaurant space, while the third storey is approved for office use.

Renovation works are expected to be completed in September this year. Sitting on 1,774 sq ft land area, the property has gross floor area of about 4,555 sq ft; in addition, there is 974 sq ft of uncovered space on the roof terrace. It has an internal lift.

The Chinatown-Telok Ayer Conservation Area is a key landmark for tourists due to its historical significance with the Chinese immigrant community in early Singapore. In addition, the area exudes a nostalgic charm both architecturally and historically, says Shaun Poh, executive director of capital markets at Cushman.

“Commercial shophouses, especially those with approved restaurant use, remain an attractive option for buyers in view of the increasing demand for F&B spaces and the limited supply. With its excellent location and palatable price quantum, the subject property is perfect for buyers who wish to invest in a commercial asset in the CBD or an end-user looking to run a restaurant business,” said Mr Poh.

Euro Group is involved in events/conferences, executive search and recruitment, advisory investment strategies, property and F&B businesses. It is also involved in commodity trading and resources related corporate transactions.

It has offices in Beijing, Hong Kong and Singapore.
http://www.businesstimes.com.sg/premium/singapore/shophouse-telok-ayer-put-sale-20140722

Burlington Square

BSQ 6 BSQ 5 BSQ 1

Address: 175 Bencoolen Street
Type of Development: Apartment / Commercial
Tenure: 99 years
District: 07
No. of Units: 179
Year of Completion: 1998
Developer: Wintrust Investment Pte Ltd (WingTai)
Unit sizes:
Studio: 667 sq ft
2 bedrooms: 861 – 990 sq ft
3 bedrooms: 1,119 – 1,350 sq ft
Penthouse: 3,035 sq ft

Burlington Square is primarily used for Office rental and sale. Burlington Square is close to Bugis MRT Station (EW12) and Bras Basah MRT Station (CC2). Upcoming new MRT station Rochor Station (DT13) will be less than 2 minutes walking distance from it.

It is near to several bus stops located opposite Burlington Square – 07517, after Sim Lim Square – 07531 and at Fortune Centre – 07518.

 

Condo Facilities at Burlington Square

Facilities are full and include covered car park, 24 hours security, swimming pools, BBQ pits, gym, tennis courts, steam bath, and a multi-purpose hall. Some units have roof gardens and there is also a communal viewing terrace that offers residents an outstanding view of the city skyline.

 

Amenities Burlington Square

Reputable schools such as Laselle College of the Arts and Singapore Management University are both within walking distances.

Cinema, restaurants and eating establishments, supermarkets, and shops are located at the nearby Bugis Junction Shopping Centre. Residents can go to the neighboring Sim Lim Square for a range of computer and electronic products at competitive prices.

Numerous other restaurants and eating establishments are scattered around the development. In addition, there are numerous pubs and bars located at Selegie Road, which is a stone’s throw away. Burlington Square has several eateries located within its buildings such as Café Lyubi Menya and Burger King Fast Food Restaurant.

Attractions like Fort Canning Park and Little India are just around the corner and interested residents can scour through the huge collection of books and electronic media available at the nearby 7-storey Singapore National Library.

For vehicle owners, travelling to the business hub and the buzzing Orchard Road shopping belt takes about 5 minutes, via Victoria Street and Bukit Timah Road respectively.

Burlington Square is within reasonable distance to NTUC Fairprice Supermarket. It is also an array of amenities such as grocery, retail shopping, banks and more.

Burlington Square is accessible via Bencoolen Street, Rochor Road and Jalan Besar.

 

Textile Centre

TC shop details2

 

TC1

Address: 200, Jalan Sultan, 199018
Type of Development: Commercial (Office/Retail)
Tenure: 99 years
District: 07
Year of Completion: 1974

Textile Centre is primarily used for Office rental and sale. Textile Centre is close to Nicoll Highway MRT (CC5) and Lavender MRT (EW11). It is near to several bus stops located at Jalan Sultan, Sultan Plaza – 01239, Jalan Sultan, Opp Textile Centre – 01231, Beach Road, Jalan Sultan Complex – 01411 and Beach Road, Saint John Headquarter – 01419.

Amenities near Textile Centre

Textile Centre is also within walking distance to the stretch of eateries and restaurants located at Jalan Sultan. Residents can head down to the nearby Bugis Junction shopping mall for amenities such as supermarkets, restaurants, banks, cinema, boutique shops, and more.

Textile Centre is within reasonable distance to Shop N Save, Cold Storage, Sheng Siong and I-Tec Supermarkets. It is also close to The Concourse Shopping Mall, Golden Landmark Shopping Complex, Sim Lim Tower, Bugis Point, Fu Lu Shou Complex, Parco Bugis Junction and Albert Complex.

Textile Centre is accessible via Jalan Sultan and North Bridge Road.

A few feeder bus services are available near Textile Centre. It is also close to several schools, such as Singapore Management University(SMU), Nanyang Academy of Fine Arts(NAFA), and Laselle College of Fine Arts.

For vehicle owners, driving from Textile Centre to either the business hub or the buzzing Orchard Road shopping district takes just above 10 minutes, via North Bridge Road and Bencoolen Street respectively.