Tag Archives: Marina Bay

Samsung Hub Office sold at S$3280 psf

The 20th floor of the 999-year-leasehold Samsung Hub office tower is sold at S$43.07 million or S$3,280 psf based on the strata area of 13,132 sq ft. Standard Commodity Trade Centre Pte Ltd is selling the space on a vacant possession basis to Lei Shing Hong Properties (Singapore). The buyer plans to occupy the space for its own use.

The company is part of Hong Kong-based Lei Shing Hong group, which is involved in businesses ranging from retailing premium cars, trading and securities brokerage, to property development and investment. The S$3,280 psf fetched for the 20th floor is identical to that for the 21st level back in 2014.

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Asia Square Tower 2 in Capitaland Acquisition plans

Capitaland is said to be in exclusive negotiations to acquire Asia Square Tower 2 from Blackrock. Based on sources, the price under negotiations is above S$2,700 psf. The recent sales of Asia Square Tower 1 in June 2016, and the GLS in November 2016 won by IOI Properties @ S$1689 psf,  demonstrate strong confidence in the office market in Marina Bay area. Tower 2 comprises of offices and the Westin Hotel. It was over 90% occupied as in end 2016.

QIA bought Asia Square for $3.4b

Qatar Investment Authority (QIA) bought the 43-storey office tower from US PE giant BlackRock. The psf figure based on this sale price is at $2720, lower than the $3520 psf offered for Straits Trading Building a week ago. The net lettable aread is at 1.25m sqft, at a yield in excess of 3%. The anchor tenant is Citibank, together with Google and Julius Baer. QIA also own the Raffles Hotel and other properties.

Asia-Square-Tower-1-and-2

Prime office rents seen softening further

OFFICE rents in Singapore’s Central Business District (CBD) likely peaked in the first quarter of this year, with further softening becoming more pronounced as more tenants opt for cheaper decentralised offices and financial institutions consolidate amid an uncertain economic outlook.

Key projects seen weighing down office rents in the Raffles Place and Marina Bay area in the second quarter were Asia Square in Marina Bay as well as CapitaGreen in Raffles Place.

According to some consultants, there was an aggressive marketing strategy to fill up Asia Square amid a potential divestment of Tower 1 by BlackRock Inc. The sale is said to have drawn bids from Norway’s sovereign wealth fund, CapitaLand and Keppel Land.

“As Asia Square Tower 1 is going through divestment exercise, it is in the landlord’s interest to fill up the building quickly,” said Cushman & Wakefield research director Christine Li.

In Marina Bay, Grade A effective direct rents – which are based on per floor basis and account for rent holidays and other incentives – slipped to S$11.01 per square foot per month (psf pm) in Q2, down from S$13.22 psf pm in Q1, Cushman & Wakefield estimated. In Raffles Place, rents dipped to S$10.66 psf pm in Q2 from S$10.92 psf pm in Q1.

Data released by the Urban Redevelopment Authority (URA) showed that office rents in the Central Region weakened by 2.6 per cent in the second quarter, after rising 0.6 per cent in the first quarter.

Ms Li is projecting a decline of 2 per cent in overall CBD prime office rents for each quarter in the second half, with the Marina Bay area more susceptible to rental fluctuations since some 58 per cent of the tenants there are banking tenants – of which many are reviewing their space requirements – compared with about 49 per cent in Raffles Place.

Savills head of research Alan Cheong said that he is expecting another 3-5 per cent slide in prime office rents in the CBD in the second half compared with the first half.

According to Colliers International, cost-conscious companies that do not require a CBD front office are making plans to move out of the financial district to reduce their occupancy costs.

Germany’s automotive firm Daimler Group, for instance, is moving from Centennial Tower in City Hall to about 55,000 sq ft at Westgate Tower in Jurong East with an estimated 30 per cent rental savings. Insurance company Great Eastern Life is also taking up close to 33,000 sq ft at Westgate Tower. Mechanical engineering services firm Beca has reportedly leased 26,000 sq ft at Westgate Tower, relocating from Anson Centre in Shenton Way.

Knight Frank head of consultancy and research Alice Tan noted that the current lack of demand from potential large-space tenants, adding that with the possible deterioration in market sentiment, “downside risks on Singapore’s rental growth could become more pronounced going forward”.

A report released by Knight Frank last week showed a 1.4 per cent drop in prime office rents in Raffles Place and Marina Bay based on 2,500 to 5,000 sq ft of net lettable area and flagged that Singapore’s prime office market is at a stage of accelerating decline in the rental cycle.

“As global and domestic business conditions turned cautious, leasing activities in Singapore’s office market are showing signs of weakening,” Ms Tan added. “Typical large space occupiers, in particular financial institutions, are holding back their expansion plans or are going through a consolidation phase by relocating to alternative locations or consolidating their offices to fewer locations in the CBD.”

Ms Li noted that a growing amount of shadow and secondary space is easing the supply crunch this year as some large bank tenants give up more space in Raffles Place and Marina Bay.

For tenants whose leases expire next year, they will be “spoilt for choice” as about four million sq ft of prime office space and 2.3 million sq ft of business park space (out of which 1.1 million sq ft comes from MapleTree Business City II) will be completed, Ms Li added.

http://www.btinvest.com.sg/dailyfree/prime-office-rents-seen-softening-further/

Marina One Residences launch receives lukewarm response

Luxury project Marina One Residences opened its doors to the public on Saturday (Oct 11) but saw a lukewarm response, with only 20 units sold. Its developer had cleared 300 units in the past week during private sales.

Business owner Lim Jit Song, who was at the public launch, was looking for a unit for investment purposes. The 39-year-old eventually settled for a S$1.7 million one-bedroom unit on the 13th floor, which works out to almost S$2,300 per square foot (psf).

Mr Lim said: “First of all, the location is very good, it is in the Marina area. Price-wise, it is also very reasonable. We saw the furnishing and it is very good – we are very happy with that. There are three MRT stations around, and amenities within walking distance. The last point – the developer is very dependable. So with all these reasons … we decided to go for it.”

The project is a joint-venture between Temasek Holdings and Malaysia’s state investment arm Khazanah Nasional. It is their second residential development after DUO Residences in Bugis, which was launched in November last year. Buyers had snapped up more than 60 per cent of DUO’s 660 units in just three days. Prices had averaged S$2,000 per square foot, with over S$2,600 per square foot for a studio apartment.

Private sales for Marina One started on October 3 to those purchasing multiple units. The developer said the majority of its buyers are Singaporeans (70 per cent). Malaysians make up 20 per cent, while the remaining 10 per cent are Indonesians and Chinese.

One analyst described the sales as “commendable” for the current market, but said prices – which now range from S$1,960 to S$3,100 psf – might need to be lowered to further boost demand.

Ku Swee Yong, CEO of Century 21 Singapore, said: “The current competition of the unsold units along the Shenton Way stretch, up to Tanjong Pagar, as well as future Government Land Sales of parcels around Marina One would affect investment sentiments in the project.” Mr Ku said units from older projects nearby are going at competitive prices, averaging about S$2,000 to S$2,500 psf.

The launch of Marina One comes on the back of lacklustre sales in the city area, weighed down by property cooling measures. In the second quarter of this year, 95 high-end homes were sold, down from 121 units in the previous quarter and 365 units in the same period last year. Prices in the city area have also declined for the fifth consecutive quarter since Q1 2013.

Its developer is also taking a cautious stance. The project has two residential towers comprising about 1,000 units, but only one tower is currently open for sale.

http://www.channelnewsasia.com/news/singapore/marina-one-residences/1410012.html

Dining in CBD becoming a lifestyle

A food and beverage (F&B) culture has sprung to life in Singapore’s financial district recently on the back of a growing population of office workers, residents and visitors there, according to a report on Tuesday.

Dining in the central business district (CBD) could become even more popular in future, property consultancy Colliers said.

It noted that more than 10 years ago, the CBD was “often characterised as one-dimensional, with office buildings laid out side by side with its worker population plying 9 am to 5 pm work hours”.

But the district has since been steadily transformed by high-rise residences, the integrated resort and other business hotels alongside gleaming new office towers, it said.

“The increased level of human activity in the CBD has led to an explosion of the food and beverage (F&B) culture in Singapore’s financial district, where all types of dining concepts and watering holes can be found catering to every price and taste,” Colliers said in its report, released yesterday.

The CBD takes in Raffles Place, Shenton Way, Tanjong Pagar and Marina Bay. It is part of the “Downtown Core”, which also includes City Hall and Bugis.

The number of office workers and residents in the financial district has shot up in recent years.

The working population in the downtown core is estimated to have expanded from 239,000 workers in 2003 to 356,000 last year – an increase of almost 50 per cent over the 10-year period, said Colliers.

City living has also grown more popular since the launch of the 646-unit Icon in Gopeng Street in 2003 and the 1,111-unit The Sail@Marina Bay in 2004, it said.

There are about 5,300 completed high-rise private homes in the CBD now.

“The increase in office-working population during the weekdays, the live-in population of residents and business travellers staying in the 2,561-room Marina Bay Sands (MBS) and other hotels in the CBD, and the transient tourists who make their way to the attractions at MBS, the Merlion Park and Gardens by the Bay, have created a critical mass where F&B trades can flourish,” noted Colliers.

The detailed report can be found:

http://www.colliers.com/-/media/Files/APAC/Singapore/Research-Reports/TP-Sept2014.pdf

Singapore Flyer may find a new owner soon.

http://www.channelnewsasia.com/news/singapore/struggling-tenants-pin/1333002.html?cid=FBSG

It has been more than a year since the Singapore Flyer was placed under receivership. But tenants may soon have some clarity about their future; Channel NewsAsia understands that a new owner of the giant observation wheel may be announced soon.

News reports say that local tourism investor and operator Straco Corporation could acquire the Flyer soon. The company suspended trading of its shares on Wednesday (Aug 27).

Many tenants say business has been hit by flagging tourist numbers, but some are holding on to hope that the situation will improve, especially with the possibility of a new buyer coming on board.

Some, like SSP Singapore, which runs popular outlets Popeyes and O’Learys Sports Bar and Grill, have had to cut manpower and adjust their business models. Popeyes has reduced its staff from 13 to just five, and SSP Singapore says sales there have dropped by “more than 50 per cent” since mid-2011. Meanwhile, O’Learys Sports Bar & Grill has tweaked its business model – it now seeks to attract corporate clients to hold events.

Said Mr Parmod Kumar Verma, regional general manager of SSP Singapore: “We were the anchor tenants when we moved here, and business was better then because it was a new location, so there was a lot of hype about Singapore Flyer.  We used to get a lot of people here. Our core business is at the airport and we are used to getting good business. (Moving here) was testing the waters, and I would say it has not quite been up to expectations.”

The Flyer’s changes in management and lack of support for tenants also contributed to this, he added.

Other operators like the Singapore Food Trail are turning to promotions and offers to boost their business. Non-F&B retailers are also struggling. At its peak, motion simulation ride XD Theater thrilled about 80 customers every day, but the numbers have slowed.

Said XD Theater manager Bernard Rio: “Initially, when we started in 2012, business was quite good. But over the last year, business has dropped a little bit, I think maybe like 10 to 15 per cent. There are fewer tourists coming here.”

However, the doom and gloom is not universal. Some outlets say they have been unaffected by the Flyer’s downturn in fortunes, while others have even seen improvements in their business, thanks to tie-ups with travel agents.

Mr Bhandari Rajender Kumar, managing director of Singapore Hospitality Group, for example, says the group’s Royal Palm restaurant has seen a 30 per cent increase in business every year since it opened, due to its good relationships with travel agents.

But this may not last, as travel agents say the Flyer is facing stiff competition from newer attractions in Singapore. More tourists are choosing to go the “free and easy” route instead of joining group tours, and showing a preference for attractions that are more centrally located and that offer a more diverse range of activities. There are also more options for those who want to view the Singapore skyline.