Category Archives: Orchard/River Valley/Holland

Districts 9 & 10

Malaysian Developer Bought 1 Draycott Park for $72M

A unit of Malaysian property developer Selangor Dredging has bought a prime freehold residential plot in the plush Orchard area.

Champsworth Development (50 % owned by SDB International, a subsidiary of Selangor Dredging) paid $72 million for 1 Draycott Park. The sale price includes a development charge of about $15.3 million, translating to about $1,787 per sq ft per plot ratio, for the 17,442 sq ft site.

The developer purchased the land via private treaty from Ms Seow Ai Ling and Mr Tang Wee Houe who is an architect.

The developer said it was considering building “exclusive mid-rise apartments” on the site, which now has a seven-storey block built in the 1990s, with eight apartments ranging from 860 sq ft to 6,200 sq ft. The site, zoned residential, can be redeveloped up to 36 storeys high.

The site is in the residential enclave of Claymore Hill and Ardmore Park, near the Tanglin Club and American Club, which is also within walking distance of Orchard Road.

The purchase will be 30 per cent paid for with internal funds and the rest with bank borrowings. The break-even price for the new development is expected to be between $2,700 and $2,800 psf.

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

One Tree Hill Gardens sold for S$65m

Lum Chang Holdings Limited is acquiring One Tree Hill Gardens for S$65 million, below the owners’ asking price of S$72.8 million. This is the first collective sale for this year. This collective sale translates to a land rate of S$1,664 per square foot (psf), based on the site area of 3,629.1 sq m (39,063 sq ft). The transaction is subject to approval from the Strata Titles Board.

The site is located at the junction of One Tree Hill and Jalan Arnap. It enjoys easy access to Orchard Road, and is within 300 m from the upcoming Orchard Boulevard MRT station along the Thomson-East Coast Line. The Lum Chang Group intends to redevelop it to residential landed homes for sale.

Closing up the Circle Line starting in 2018

Advance preparatory works to make the Circle Line a complete loop, by joining HarbourFront station to Marina Bay station, have begun. Tenders for the civil works are expected to be awarded by the year end, and construction will begin in 2018Q1

The 4-km CCL6 line will close the loop for the CCL by connecting HarbourFront Station to Marina Bay Station. When the three CCL6 stations of Keppel, Cantonment and Prince Edward are completed in 2025, the CCL will have a total of 33 stations, including 12 interchange stations with other MRT lines.

Expanding the rail network to more areas such as the southern edge of the existing CBD, CCL6 will support direct east-west travel. Besides reaching new commuters, the extension will allow those travelling between the south-western and south-eastern ends of the line – such as from Pasir Panjang to Nicoll Highway – to have more direct and quicker access.

The stage is being set to build the three new stations that will complete the Circle Line. Keppel station will serve commuters at Keppel Distripark, while Cantonment station will be near Tanjong Pagar Railway Station and offer access to Spottiswoode Park Estate. The Prince Edward station will be near Palmer Road, where heritage landmarks are.

The extension will also serve part of the Greater Southern Waterfront, a massive mixed-used development that will commence once the Tanjong Pagar, Keppel and Brani port terminals are relocated to Tuas after their leases expire in 2027.

Preparatory works include relocating affected facilities at PSA Keppel Terminal for the construction of Keppel station, dismantling the platform canopy structures of Tanjong Pagar Railway Station and the relocation of Shenton Way Bus Terminal for the construction of Prince Edward station.

Investment property sales drop in Q1

FROM a high base in the fourth quarter of last year, big-ticket property transactions of at least S$10 million declined substantially in the first quarter.

However, the mood in the market is decidedly positive – with much anticipation of the imminent mega transactions of Jurong Point mall, and Asia Square Tower 2 in the CBD.

“Investment market sentiment is positive and the price gap has mostly disappeared except for hotels,” said CBRE executive director, capital markets, Jeremy Lake.

In particular, the tone of investors towards the office sector seems to have reversed dramatically. “The oversupply in the Singapore office market is yesterday’s story, and today’s story is all about the recovery and rental growth,” said Mr Lake.

Figures compiled by Savills Singapore showed that S$5.2 billion of investment sales of property, as these big deals are known, were sealed in Q1, down 34.8 per cent from S$8 billion in Q4 last year. However, the Q1 number is double the S$2.5 billion in the same year-ago period.
Photo: The Business Times
Photo: The Business Times

Both Savills and Cushman & Wakefield (C&W) estimate that some S$2.7-2.8 billion of deals in the commercial property segment were transacted in January to March this year – giving it a share of slightly over 50 per cent of total investment sales.

Major transactions include the S$881 million sale of a 70 per cent stake in TripleOne Somerset by a consortium led by Perennial Real Estate Holdings to Stanley Ho’s Hong Kong-listed Shun Tak Holdings, and Manulife’s S$747 million purchase of PwC Building at 8, Cross Street, from DBS.

Savills said the S$2.8 billion of commercial property investment sales in Q1 was a 41.9 per cent increase from the nearly S$2 billion in the previous quarter.

The residential sector saw S$2.1 billion of big-ticket sales in the first quarter, giving it a 40.2 per cent share. On a quarter-on-quarter basis, however, the Q1 tally was down almost 12 per cent, according to Savills.

C&W Singapore research head Christine Li highlighted the flurry of bulk residential sales in Q1 as some foreign housing developers sought to offload their remaining unsold units ahead of regulatory sales deadlines imposed on them under the government’s Qualifying Certificate rules – to avoid paying hefty penalties.

A string of last-minute deals were also inked on the night of March 10 – including TwentyOne Angullia Park, The Line @ Tanjong Rhu, Robin Residences and The Lumos – before the new Additional Conveyance Duties (ACD) took effect the next day.

The ACD plugged a loophole that some bulk buyers in Singapore residential projects had been using to enjoy significant savings in stamp duties.

Savills Singapore managing director Steven Ming said: “Unless annual residential prices are expected to rise significantly in the coming years, it is unlikely that institutions will return to the bulk residential sales market as the hefty 18 per cent stamp duty cuts deep into their required rates of return.”

The effect of this would be the shift of interest by institutional investors to other sectors of the real estate market here, he added.

Industrial properties posted S$344.2 million of investment sales in the first quarter, down 67.8 per cent quarter-on-quarter.

CBRE and Savills expect the total investment sales for 2017 to be in the S$18-20 billion region – down from around S$23 billion last year. C&W expects the number to remain in the S$20 billion range.

Mr Ming of Savills commented that with institutional investor interest expected to be diverted from residential towards the office, retail and hospitality sectors here, investment sales are expected to continue despite yield compression.

“As both private equity funds and ultra high net worth individuals have either raised new money or have a need to diversify to reduce concentration risk, yields have potential to remain low and go lower as prices will either hold firm or even edge up,” he reasoned.

Ms Li of C&W noted office asset prices are already starting to trend upwards, with rents expected to bottom this year.

In similar vein, CBRE Research’s head of Singapore and South-East Asia, Desmond Sim, argued that as the office recovery story gets more real in terms of rising commitment rates for new projects such as Marina One, this will push more institutional investors to be ready to commit.

CBRE predicts that by the end of the year, seven out of 10 institutional investors who are looking at the Singapore office sector will be ready to buy – up from five out of 10 investors now, which in turn is a higher ratio than just one out of 10 investors a year ago.

Regina Lim, JLL’s head of capital markets research, South-east Asia, observed that in the past four years, Singapore has seen a gradual decline in office demand, retail sales, food and beverage receipts, and gross domestic product growth.

As a result, the republic’s attractiveness to overseas institutional investors has waned, and they have gravitated to Australia, Japan and China commercial property, which have stronger growth stories.

“However, capitalisation rates in these markets have compressed and now Singapore looks less expensive in comparison to these markets.”

Mr Sim of CBRE said that on the residential sector front, while bulk purchases of units from developers have now become harder to do, there may be a bright spot in collective sales. “We should see more interest in en bloc sales from land-hungry developers, especially in the face of limited supply through the Government Land Sales Programme.”
– See more at: http://news.asiaone.com/news/business/investment-property-sales-drop-q1#sthash.8H86fsyp.dpuf

Asia’s ultra rich still favours Singapore real estate

The property market of Singapore remains high on the agenda of Asia’s ultra-rich. Its commercial properties are a top consideration for Asian ultra high net worth individuals (UHNWIs) keen on this asset class, moderately ahead of the UK and the US.

Singapore’s residential market is the second most likely place for Asian UHNWIs to own an overseas home, after the UK, according to the recent Attitudes Survey in Knight Frank’s wealth report.

There are some 46,080 UHNWIs, each having a net worth of over US$30 million excluding their primary residence residing in Asia-Pacific, based on data from New World Wealth. Singapore continues to appeal especially to the Asian community to live, work and set up businesses. Districts 9 and 10 are still highly favoured by the ultra wealthy given their prime location, close proximity to high quality amenities and schools.

The overall slide in property prices due to the government’s cooling measures has also enhanced the value proposition of Singapore property, with demand for property gradually returning as seen in the improved transaction volumes last year.

The property consultancy also selected 20 prime city markets and calculated, based on the typical luxury residential value for each city and the exchange rate at the end of 2016, how many square metres US$1 million can buy in each city.

As of end-2016, the most expensive prime homes – generally defined as the top 5 per cent of each market by value – turned out to be Monaco, Hong Kong, New York, London and Geneva, followed by Singapore.

Online Stores getting offline presence amidst slump

The falling rental rates provide a silver lining for online retailers amid the current retail slump.These retailers have a chance to venture offline and into shopping malls. Last month, for example, online furniture retailer HipVan opened its permanent 11,000 sq ft flagship store at The Cathay in Dhoby Ghaut.

Lifestyle retailer Naiise similarly opened its 8,500 sq ft flagship store in that mall last June. Other online retailers, such as Reebonz, Love Bonito and Ohvola, have opened short-term stores in Suntec City and Orchard Gateway, to catch shoppers who want to see, touch or try on a product before buying.
 The islandwide vacancy rate for retail space was 7.5 per cent at the end of last year, up from 4.5 per cent at the end of 2013, Urban Redevelopment Authority (URA) data showed.
The Median rental rate per sq ft per month for the Orchard Road area is $9.82, the first time it fell below $10. The median rental rate for retail space in the third quarter of last year was the lowest on record. 

The median rental rate for retail space in the third quarter of last year was the lowest on record, falling to $9.82 per sq ft per month for the Orchard Road area – the first time it fell below $10, according to URA data.

Naiise has five other stores in malls such as Westgate and 112 Katong, which offer self-collection services for online orders. Its online plus offline strategy has paid off, with its six retail stores combined now generating more revenue than its online store.

 

HipVan co-founder Danny Tan, 33, said the retail slump has benefited his business, which now occupies the space formerly rented by sportswear brand Adidas. The store is seven times larger than HipVan’s previous pop-up space in Millenia Walk and Suntec City. It features more than 1,000 of HipVan’s bestsellers, including beds, dining tables and rugs. Its website attracts 200,000 to 300,000 views a month, while revenue has been growing by 12 per cent on average every month.

Meanwhile, high-end fashion retailer Reebonz, whose lease for its pop-up boutique in Suntec ends next year, is moving into its own eight-storey building in Tampines this month. The building will house a permanent showroom.