Category Archives: Leisure and recreation

Raffles Place among the latest to be affected from retail slump

One Raffles Place are hit harder by the retail slump than those in Orchard Road because of office workers’ limited shopping hours and minimal tourist traffic.

Travel products store Tumi, watch brand Swatch, jeweller Pandora and shoe brand Melissa have decided not to renew their leases and will shut soon.

The bigger tenants, which take up prime space on the ground floor, are leaving, upsetting smaller tenants, which claimed they were not told of the moves prior to them renewing their leases.

The Body Shop outlet on level three, which is moving out on Thursday next week, has not been making a profit. Other tenants moving out include Evergreen Stationery, Yami Yogurt and Blow + Bar hair salon.

3 years after its opening in 2014, most of these crowd-pullers have shut or will move out by next month, as the retail slump claims yet another casualty. Lingerie brand Victoria’s Secret, fashion retailer Uniqlo and cafe Paris Baguette have already closed their stores at the six-storey mall next to Raffles Place MRT station.

Its anchor tenant, Swedish clothing retailer H&M, has not confirmed if it will be moving out when its lease ends, providing some respite for the mall.

A 24-hour Orchard Road?

According to Mr David Tang, chief executive of Metro’s retail business, Orchard Road should be the street that never sleeps.

He said it would be nice to have a “day Orchard” for shopping and an Orchard that comes alive at night, with restaurants or watering holes that could attract young people too, especially when food as a major draw is what Singapore is good at.

Recent initiatives to attract shoppers back to Orchard includes pedestrianising Orchard Road and including special events to draw crowds. However it is not so simple just to close Orchard Road. The crux of the story is to give the shopper enough reason to return to this prime shopping belt. Shopping is no longer just going to shop somewhere; people are also looking for community places. Thus it is crucial that Orchard Road also becomes a community space for activities, events and for people to hang out.

http://www.visitsingapore.com/see-do-singapore/places-to-see/orchard.html

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.

Queenstown site bid signals positive market sentiment

A large residential site in Queenstown able to yield about 1,110 units has been triggered for sale, in a sign of improving market sentiment. A developer committed to bid at least $685.25 million for a 2.11ha Stirling Road site. The site has been on the Government Land Sales reserve list since March 2010, which was made up of two adjacent sites once offered separately but merged into one site in 2012.

The 99-year leasehold site is next to Tiong Ghee Temple and near Anchorpoint shopping centre. As it is one of the larger sites on offer, analysts said the bid reflected better market sentiment, and developers’ growing appetite for residential land.

Many developers are running low on land and have to demonstrate that they have longer- term corporate growth strategies.Being a prime city-fringe site, it is also likely to generate much interest and attract buyers easily. Competitive bidding are expected.

Based on a maximum permissible gross floor area of 954,328 sq ft, the bid translates to a price of $718 per sq ft (psf) per plot ratio. Bids are expected to climb further, to between $830 psf and $950 psf.

It is noted though of unsold supply in Commonwealth Towers, Queens Peak and an upcoming project in Margaret Drive. The pricing will likely take a cue from Queens Peak, with an average of $1,640 psf, and Commonwealth Towers, at an average of $1,654 psf.

Sime Darby Centre for sale

Blackstone Group plans to sell Sime Darby Centre in Bukit Timah, one of the office and retail assets it acquired last year from Malaysian palm-oil producer Sime Darby Berhad, according to people familiar with the matter.

Located in an ageing commercial block along Dunearn Road and directly in front of King Albert Park MRT station, Sime Darby Centre houses tenants like kitchenware retailer ToTT, Scanteak, Cold Storage and ChildFirst pre-school. The block consists of builtup area of 250,000 sq ft — 80 per cent is office space and the rest is retail. The development sits on freehold and 999-year leasehold land parcels zoned for commercial use and with 1.8 plot ratio.

Blackstone owns a 70 per cent stake in the Sime Darby Centre and Sime owns the rest. The conglomerate, Malaysia’s biggest listed palm-oil producer, sold some property assets in Australia and Singapore to help pare debt.

The site could attract bids from large and mid-sized Singapore developers including Far East Organization, City Developments, Frasers Centrepoint and United Industrial Corp.

The New York-based private equity firm expects to fetch about S$300 million for Sime Darby Centre, which it bought for just under S$200 million last year. Blackstone in May acquired a majority stake in three Singapore property assets, including the Sime Darby Centre, in a deal that valued them at about S$300 million.

Blackstone, which manages more than US$100 billion (S$140 billion) in real estate assets worldwide, in the past has bought residential apartment blocks in Singapore’s prime area.

Shophouses in the vogue again among investors

Investment in Singapore shophouses has stabilised and shows signs of picking up after taking a hit following the introduction of a loan curb in 2013. Total transaction value has been rising in the past two years even though the number of caveats lodged remained fairly steady at just over 100 a year.

Transaction value rose by about 7.6 per cent to $707.07 million last year, from $657.3 million in 2015. Demand for shophouses fell off a cliff in 2014, after the imposition of the total debt servicing ratio (TDSR) framework at the end of June 2013.

Three adjoining 999-year tenure shophouses in Amoy Street in Tanjong Pagar were recently acquired by an institutional fund for $59.6 million, or about $2,500 per sq ft, based on the floor area. In another deal, a family office bought a shophouse at 54 Boat Quay for $12.9 million or about $2,985 psf on the floor area.

Office properties, seen as a proxy for shophouses, have faced challenging leasing environment as a deluge of new office buildings weighed on rents in recent years. The average rental yield for shophouses ranges from 2.5 to 3.5 per cent, depending on the tenure of the asset.

Frasers Tower received strong interest ahead of its completion

About 30 per cent of upcoming Frasers Tower, in the heart of the Central Business District, has been leased – or has received a leasing proposal. The relatively strong interest comes even though the 38-storey office building in Cecil Street is not due to be ready for tenants for more than a year.

The interest came from multi-sector conglomerates, legal services and technology firms, including the first signed lease with The Executive Centre, a serviced office provider, which will take up an entire floor covering 20,000 sq ft.

The supply pipeline favours Frasers Tower, as there are just a few new developments in the core CBD from mid-2017 until the end of 2020: Marina One, UIC Building and the redevelopment of the CPF Building. Frasers Tower has 663,000 sq ft in total net lettable area. An adjacent three-storey building will host food and beverage tenants.