Raffles Place commercial building seeking new owner

Chevron House, a commercial building located near the entrances to the Raffles Place MRT station, is reportedly available for sale. The building owner, Deka Immobilien GmbH — a unit of DekaBank Group of Germany — bought the premises in 2010 for around S$420M. The previous owner was a Goldman SachGroup-managed property fund.

The market price was understood to be S$700M based on anonymous sources. Recent prominent completed commercial deals includes:
– S$2.6B bid led by Malaysian IOI on a Marina Bay white site
– Sale of Sime Darby Centre in Bt Timah area by Blackstone to Tuan Sing
– Purchase of Wilkie Edge from Capitaland by Lian Beng Group

Chevron House is a skyscraper building in CBD housing Chevron Corp. The 262,650 sqft building consists of a 4-storey retail podium with a basement as well as a 29-storey office block.

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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.

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.

Perennial selling huge stake in TripleOne

TripleOne Somerset is a prime integrated development comprising two premium-grade office towers and a retail podium next to Somerset MRT station. Perennial Real Estate Holdings (PREH) is leading a group of investors that are selling their combined 70 per cent stake in TripleOne Somerset to Hong Kong’s Shun Tak Holdings.

PREH and six other shareholders of Perennial Somerset Investors (PSI), their holding company for TripleOne Somerset, are offloading a combined 61 per cent stake in the property for $305 million. PREH, which originally held 50.2 per cent of PSI, is divesting a 20.2 per cent slice while retaining 30 per cent. It will collect about $101 million for the sale, making a pre-tax gain of about $34.3 million.

The other six shareholders, all of whom have fully divested their stakes in PSI, are SingHaiyi Group, Boustead Projects, BreadTalk Group, Shun Fung Holdings, ROOI Holdings and Grandma’s Holdings.

Unified Elite Limited, another existing shareholder of PSI and a connected person to Shun Tak, will sell its 9 per cent stake to Shun Tak. The sale price was based on an agreed total property price of about $1.258 billion, or $2,200 per sq ft. The divestments are expected to be completed by June 30.

Demand for strata office and retail units plunges in first half of year

Demand for strata office and retail units fell sharply in the first half of this year with weak demand likely to persist for the second half, according to a report yesterday by property consultant Knight Frank.

This is the result of sellers being not likely to lower their price expectations while buyers remain wary given the rising stock and vacancy rates in the office and retail sector, said the firm.

The Total Debt Servicing Ratio (TDSR) regulation also continues to put a lid on demand from private individuals, it said.

Demand for strata-titled offices weakened sharply in the first half of the year, with 115 caveats lodged, 65.4 per cent lower compared with the same period last year. Compared with the second half of last year, transaction volume fell by 37.8 per cent to 185 caveats.Average prices of strata offices held firm in the first six months of this year at $2,536 per sq ft (psf) compared with $2,330 psf in the second half of last year.

Knight Frank observed that the weak leasing market has resulted in a “price war” among owners, with actual rents being concluded at about 10 per cent to 20 per cent lower than the initial asking prices.

As for strata-titled retail units, 119 caveats were lodged in the six months to June, down 52.2 per cent from 249 caveats lodged in the six months to December last year. No new projects were launched in the first half of this year.

Average prices for freehold resale units slipped by 16.8 per cent to $3,100 psf from $3,725 psf over the same period while average prices of resale leasehold units inched up 8.4 per cent to $2,404 from $2,218 psf.

The number of shophouses sold in the first six months slipped 18.4 per cent to 40 caveats from 49 caveats. However, average prices for freehold shophouses increased by 10.6 per cent to $3,291 psf from $2,975 psf.

Average prices for leasehold shophouses rose 16.5 per cent to $4,836 psf from $4,152 psf. Knight Frank said shophouse prices continued to rise as owners have high price expectations for “these rare and valuable assets”. But the falling transaction numbers suggest that potential buyers may have been deterred by the rising prices that could translate to lower yields, while loan curbs have significantly reduced the pool of potential buyers.

For the second half of the year, Knight Frank expects the overall number of strata office and retail units sold to remain flat compared with the first half at 180 to 220 units. This will bring the total number sold to some 420 to 470 units for the full year.

http://www.straitstimes.com/business/property/demand-for-strata-office-and-retail-units-plunges-in-first-half-of-year

Rare Commercial investment at District 7

A rare #01 shop along Jalan Sultan/North Bridge Road.

Property Details
Use: Shop  Size: 1997 sqft
Tenure: 99 years since 1970
Ceiling Height: 2.7m
Potential uses*: Financial institutions, F&B outlets, Retails Shops, Pubs, Furnishings and design showflats
(* subject to the approval of relevant authorities)

Sale price S$ 4,500,000 with potential 4% with existing lease.

Size: 1,997 sqft (185.53 sqm)  

Brief Description

This prime #01 shopspace is facing the main road of Jalan Sultan. With substantial human traffic during both office hours and off-peak times, it is an ideal location for F&B, finance, design and other high-value businesses.

With waterpoint installed in the premises, the potential is great for this shopspace. Ideal for business operators as well as investors.

Call David King @ 9477-2121 for more details.

Textile Centre

Textile Centre is a commercial property with residences, located at 200, Jalan Sultan in District 07. Textile Centre is primarily used for Retail and Office rental and sale. Textile Centre is within walking distance to Nicoll Highway MRT (CC5) and Lavender MRT (EW11). It is near to several bus stops along North Bridge Road, Jalan Sultan, Victoria Street and Beach Road.

Textile Centre is accessible via Jalan Sultan and North Bridge Road. Car parking options are available in the building as well as the neighbourhood (including Kampong Glam)

Amenities near Textile Centre
Textile Centre is within walking distance to the stretch of eateries and restaurants located at Jalan Sultan and the conservation hub of Kampong Glam.

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 for an array of amenities such as grocery and retail shopping, banks and more.

The upcoming Sports Hub and the Kallang Riverside are among the new developments that will spice up the neighbourhood in the years to come.

BHP giving up 4 floors in MBFC

BHP Billiton, the world’s biggest mining company, is giving up four floors in Singapore’s central business district as it prepares to spin off much of its metals production, according to a person familiar with the matter.

BHP, which has about 230,000 square feet of office space at Marina Bay Financial Centre Tower 2, is looking to vacate about 100,000 sq ft, said the person, who asked not to be named as the discussions are private. The company will rent two floors with an area of about 40,000 sq ft at CapitaLand’s new office tower CapitaGreen, the person said.

BHP plans to split off assets including its silver, manganese and aluminum operations into a newly formed company called South32 Ltd. to focus on larger businesses such as iron ore. BHP and South32 marketing teams will be based in separate offices in Singapore, according to an e-mailed response to queries from Bloomberg News.

A lease has been entered into for the CapitaGreen building, BHP said in the statement, without saying how much space it would take.

– See more at: http://www.straitstimes.com/news/business/property/story/bhp-said-be-vacating-four-floors-marina-bay-financial-centre-tower-2-20#sthash.MbUwAyio.dpuf

Rolling over debt keeps Singapore REITS in shape

Local real estate investment trusts (Reits) are faring better this year than in previous years, thanks to moves to reduce interest costs by aggressively rolling over debt at still-low rates, said a Standard & Poor’s (S&P) report yesterday.

Trusts have been tightening their belts on expectations that interest rates could rise over the next few years, which would have major repercussions as borrowing costs are a major component of their expenses, said S&P credit analyst Craig Parker.

“Trusts with sizeable debt exposure to floating interest rates are likely to suffer most.

“The severity of the impact will depend on the buffer that each Reit has relative to its financial policy,” Mr Parker noted.

“Still, we expect that rated Asia-Pacific Reits can largely shoulder the higher interest burden. The Reits are attempting to cut their interest costs and extending their debt tenors.

“They are also refinancing expensive debt incurred during the height of the global financial crisis at reduced rates.

“Furthermore, Reit managers are still holding back even though they have room to borrow substantially more.”

S&P upgraded CapitaCommercial Trust to A-/Stable due to an improving business profile and a more favourable view of its credit metrics. The ratings service also upgraded HongKong Land Holdings and HongKong Land Co to A/Stable due to its reassessment of their financial risk policies.

Growth in rental demand and rates here have been flat or slightly sluggish this year for properties in Reits rated by S&P.

“Nevertheless, we project a stable credit outlook for the Reits we rate,” said Mr Parker.

“The Reits have amassed high-quality portfolios that can withstand economic headwinds better than lesser-quality properties held by their competitors, sustaining their credit quality despite sluggish rental growth.”

Limited new retail assets in the near term will sustain high occupancy at most suburban malls in Singapore.

But retail rental growth has been subdued due to slowing tourist arrivals, he noted.

Meanwhile, office and industrial rents here are approaching peak levels, Mr Parker said.

Industrial rents have been strong and capital values have increased, with vacancy rates falling from a peak of 14 per cent in 2006 to 9.5 per cent this year.

– See more at: http://business.asiaone.com/news/rolling-over-debt-keeps-spore-reits-shape#sthash.QkWWlPq6.dpuf

Featured Property Listings

Looking to buy/rent properties in Singapore? Here are the featured listings for the week.

See http://www.sgbayhomes.com for more details.

No new eateries in 7 areas including Kampong Glam and Upper Paya Lebar

The Urban Redevelopment Authority (URA) has banned more new restaurants from setting up shop in seven locations to prevent parking problems from worsening. The new locations add to the URA’s list of areas where no additional eateries are allowed. There are now 18 areas on the list which was first started in 2002.

We look at four things about the move to rein in problems faced by residents in areas with many popular food joints:

1. Which are the seven new areas which now come under the URA restriction?

– Changi Road: Jalan Eunos/Still Road to Jalan Kembangan/Frankel Avenue

– Upper Paya Lebar Road: Lorong Ah Soo to Paya Lebar Crescent

– Bukit Timah Road/Dunearn Road: Binjai Park (Jalan Jambu Mawar To Jalan Jambu Ayer); Bukit Timah Road (Wilby Road to Elm Avenue); Bukit Timah Road (Anamalai Avenue to Fourth Avenue)

– Sembawang Road: Mandai Road to Transit Road

– Kampong Glam: Bounded by Victoria Street, Jalan Sultan, Beach Road and Ophir Road

– Kampong Bahru Road/Spottiswoode Park Road: Blair Road to Everton Road; Everton Road to Neil Road

– Jalan Riang

2. Which are the areas which are already on the list?

– Balestier Road: Thomson Road to Moulmein Road

– East Coast Road: Joo Chiat Road to Still Road; Still Road to Telok Kurau Road; Lothian Terrace to Siglap Road

– Joo Chiat Road Area: Joo Chiat Road (Changi Road to East Coast Road); Joo Chiat Place (Joo Chiat Road to Still Road)

– MacPherson Road: Woodsville Interchange to Kallang Pudding Road

– Upper Serangoon Road: Tampines Road to Lim Ah Pin Road

– River Valley Road: Zion Road to Kellock Road

– Geylang Road: Lorong 1 Geylang to Paya Lebar Road

– Tanjong Katong Road: Dunman Road to Mountbatten Road

– Greenwood Avenue: Junction Of Greenwood Avenue And Hillcrest Road

– Sembawang Road: Jalan Mata Ayer to Yishun Avenue 5

– Serangoon Garden Way: Kensington Park Road To Maju Avenue; Chartwell Drive To Penshurst Place

3. What’s the impact of the URA restriction on some of the areas on the list?

Joo Chiat

In Joo Chiat, traffic woes led the URA to stop issuing dine-in licences in 2008 to new eateries – unless the premises was originally marked for such use. Road dividers were installed to stop illegal parking.

Read the story here: URA firm on dine-in ban in Joo Chiat

Serangoon Gardens

The middle-class housing estate is packed with restaurants, coffee shops and cafes, as well as the popular Chomp Chomp and Serangoon Garden hawker centres. Acting on residents’ complaints, the URA imposed a ban in February 2012: No more Serangoon Garden shophouses can be turned into food joints.

Read the story here: Restaurant ban to ease traffic at Serangoon Garden

Sembawang 

Some 24-hour eateries were asked to close earlier following complaints from residents about noise, littering and parking woes.

Read the story here: Restaurant appeals against restrictions on opening hours

4. What about popular areas which are not on the URA list? Any measures in place?

The URA and other relevant authorities have also taken steps to address noise and traffic concerns in areas which are not on its list.

In Tiong Bahru where eateries and cafes have sprung up in recent years, the URA and Housing Board have turned down some new applications to turn shop premises into eateries. Residents have complained about noise, traffic and fewer shopping options.

Read the story here: Govt keeps lid on eateries in Tiong Bahru

In Yio Chu Kang Road, some restaurants were ordered to close after they failed to do enough to address complaints from residents despite being granted a grace period to fix the problem.

– See more at: http://www.straitstimes.com/news/singapore/more-singapore-stories/story/no-new-eateries-allowed-7-areas-4-things-know-about-the-#xtor=CS1-10