Went to an Open house at Brentwood Villa and Villa Madeleine this week. There are beautiful houses right at the periphery of Orchard area. Convenience is definitely is an understatement. The interiors were also luxurious. At 2300sqft of luxury living space right in the prestigious district of district 9 it is only at $10k per month ie slightly over $4psf. A bigger house at Villa Madeleine that is twice the size is available for only $15.2k. That’s only $3.7psf.
In Business Times last week, a report on the retail landscape of Singapore wrote about hot the retail landlords are adapting to the current market lull. Recently the retail landlords are moving from the heyday trends which involved slicing retail spaces into smaller units to lease out at higher rents per square foot, to luring back the bigger tenants they were once inclined to shoo away. The emphasis is about maintaining occupancy and preserving rents, keeping a balance in large and small retail tenant mix.
In the current phase of softening rents and dwindling tenant sales is leading to an anticipated fall in retail rents next year, with retail rental declines in 2016 go as far as 5 per cent. The looming supply of retail space is also a worrying factor, together with issues of manpower crunch, lower tourist arrivals and the strong Singapore dollar as well as competition from e-commerce.
Based on the past three-year average annual net demand for retail space to project the level of space take-up ahead, it will take close to four years to absorb the upcoming new retail space, which is more than 2 million sq ft of gross retail space to be completed next year.
Anchor tenants like as childcare, daycare centres, fitness centres, commercial schools and medical centres provide ready and captive customers during the weekdays to shopping malls.
A large tenant compared to more smaller tenants results in less work for the landlord in terms of lease management. Among them, Raffles Medical opened a multi-disciplinary medical centre at newly renovated Shaw Centre in June and Harvey Norman just expanded its store space at Millenia Walk with the opening of its new 100,000-sq-ft flagship outlet in the mall.
There are also emerging new-to-market concepts, for e.g
- Top Japanese cooking school ABC Cooking Studio at Takashimaya,
- Urban Ski, a new indoor snow sports centre, at Millenia Walk,
- Singapore’s first Apple store at Knightsbridge next year,
- Emporium Shokuhin, Singapore’s first integrated Japanese emporium that took up over 34,000 sq ft of space in Marina Square,
- South Korean Pororo Park, which opened its first and largest South-east Asian character-themed indoor playground spanning 11,000 sq ft at Marina Square’s new retail wing last month.
- A major commercial school taking up some 100,000 sq ft of space at Marina Square.
Retail andlords are now more open to new retail concepts which are either destination-centric or offer unique brand positioning. For e.g. the strategy of attracting activity-driven tenants is paying off for Pontiac Land’s Millenia Walk, like the specialised F&B offerings with the opening of Nihon Street. For the department stores, they will likely continue to consolidate in the near term amid weak retail sales, high business cost and manpower constraints.
Marks & Spencer vacated The Centrepoint, John Little closed its Marina Square and Tiong Bahru stores and Metro closed its outlet at Compass Point in August and will be closing its City Square Mall outlet by the end of this year. Wing Tai, which carries brands such as G2000 and Topshop in Singapore, has said it plans to close some of its retail outlets.
The challenging retail environment is keeping landlords on their toes to refresh their mall offerings. CapitaLand recently converted Tampines Mall’s level 5 open roof to a new education hub with well-known educational centres such as Yamaha Music School, Julia Gabriel Centre, MindChamps and Stalford Learning Centre. It is also redeveloping Funan DigitaLife Mall into an integrated development. For FCT, the proportion of F&B tenants has increased in malls like Causeway Point, Changi City Point.
A bungalow in Sentosa Cove fronting the Serapong Golf Course and overlooking the sea, has changed hands for S$23.8 million or S$2,775 per square foot (psf) on the land area of 8,576 square feet.
Located along Lakeshore View, the property is on a site with a balance lease term of 89 years.
The psf price is the highest for a bungalow transaction in Sentosa Cove in the past two years. However, it is shy of the S$2,922 psf and S$2,952 psf that two nearby villas on the same road fetched in June and May 2013 – both prior to the introduction of the total debt servicing ratio (TDSR) framework in late-June that year.
The latest bungalow transacted at Lakeshore View has three and a half levels, including a roof terrace with a jacuzzi. In all, the property has four bedrooms, a theatre room and a swimming pool; the total built-up area is around 10,000 sq ft.
The buyer, a Chinese businesswoman, has lodged a caveat for the property – having been granted an option to purchase the bungalow and exercised it, both last month. The sellers are three siblings from a Hong Kong family, two of whom are British citizens and the third, a Singapore citizen.
Over the past two years, from October 2013 to October 2015, villas on Sentosa Cove have sold at between S$1,386 psf and S$2,612 psf, going by URA Realis data.
That said, he highlighted that the discount between the latest transaction and the S$2,900-plus psf for the two nearby villas is a reflection of sellers lowering their price expectations in the face of softening demand due to the property cooling measures.
Mr Tay said that he was confident that there would be a couple more deals by year end. BT understands that, including last month’s Lakeshore View deal, he has brokered the sales of three villas on Cove this year.
The other two are a property at Treasure Island that was sold for S$14.3 million or S$1,706 psf to a Chinese citizen who is a Singapore permanent resident, and a bungalow on Pearl Island sold by the developer, Ximeng Land. The price for the second property, which spans three storeys and basement, with about 8,000 sq ft built-up area, is believed to be S$14-plus million or over S$1,900 psf. The Pearl Island villa purchase was not caveated.
Foreign buyers eyeing villas on Sentosa Cove are mostly Asians, noted Mr Tay. Some Singaporeans are also keen on investing in a villa in the waterfront housing district. “Ultimately, Sentosa Cove is an enclave with only 360-plus bungalows. There is no more land that is to be released on Sentosa Cove for villas.”
While viewing activity by potential buyers in the Cove is higher compared to a year ago, transaction volumes are nowhere near pre-TDSR levels. Inclusive of the Lakeshore View transaction, six bungalows would have changed hands year to date. This is double the three deals for the whole of last year. In 2013, the figure was 18 transactions while that for 2012 was 23.
Back in 2009, there were 36 deals, followed by a record 54 transactions in 2010 before activity began slowing to just 24 deals in 2011 – due to the onset of property cooling measures.
Project Lifestyle, which runs Witbier Cafe (left), was fined $35,000 yesterday for flouting a ban on bars and pubs in the Kampong Glam conservation area. It is the first such case to be prosecuted in court. The firm had ignored repeated enforcement notices to rectify the breach in planning permission.
Penthouses and 3 – bedroom units available for rent as well as sale. Call David king for more details.