Tag Archives: marina one

Upcoming Office space may not be enough

Fears are emerging of a possible office space crunch despite the soaring skyscrapers framing the ever-changing central business district (CBD) skyline.

No commercial sites were on the confirmed list of the Government Land Sales (GLS) programme for the first half of 2015 released last week. These sites go on sale regardless of interest.

This has fuelled concerns in some quarters that despite a slew of new commercial buildings slated for completion in the next three years, space could still be in short supply down the line.

Industry players say the new buildings should meet demand for office space in the Downtown Core – which covers the CBD, City Hall, Bugis and Marina Centre areas – in the short term.

But some fear a possible crunch, amid an increasingly diversified profile of tenants looking to set up shop in the core business district.

The Straits Times understands that developers are keen to see more commercial sites go on sale.

The GLS programme for the first half-year has only a 0.78ha plot in Marina View and Union Street and a 2.1ha commercial site on the reserve list – requiring bidders to first submit an acceptable opening offer to trigger a tender.

The two sites could yield 1.89 million sq ft of commercial space.

“As office developments tend to be large, we do not always need to supply an office site on the confirmed list every half-yearly,” the Urban Redevelopment Authority (URA) said in response to queries from The Straits Times.

“New office supply from the GLS programme is intended to meet demand in the medium term, after factoring in a construction period of about five years.

“Our supply of office space in the Downtown Core will also need to be balanced against our efforts to build up new commercial centres outside the city centre to bring jobs closer to homes.”

About two-thirds of 11.8 million sq ft of commercial space are in the central areas, which will be enough to meet demand “in the next few years”, said URA.

But experts believe supply will be patchy up to 2018. Beyond that, the lack of new supply is “becoming starkly obvious”.

CapitaCommercial Trust’s 702,000 sq ft CapitaGreen will be completed by the end of the year. The 500,000 sq ft office component of the South Beach integrated project is set to be ready too.

After a dearth of fresh supply next year, about 3.2 million sq ft of office space – the size of Marina Bay Financial Centre – from four projects is expected to flood the market in 2016: M+S’ DUO in Beach Road and Marina One in Marina Bay, GuocoLand’s Guoco Tower in Tanjong Pagar and UOL Group’s 5 Shenton Way.

The supply will be trimmed yet again in 2017, with just 805,100 sq ft coming on stream from Frasers Centrepoint’s commercial site in Cecil Street and Tuan Sing’s redevelopment of Robinson Towers.

“Historically, it’s always been a feast or famine in Singapore’s office space if you look at the supply chart. Landlords and occupiers will have to time their renewals and leasing plans according to that,” noted Mr Desmond Sim, research head at CBRE, Singapore and Asia Pacific.

The result is that rents of Grade A space – in top-quality buildings – could pick up at a faster clip in 2018, said Mr Sim.

Already, monthly rents have picked up 17 per cent, from $9.66 per sq ft (psf) since the trough in the third quarter of last year, to $11.20 psf now.

However, Ms Tan Li Kim, head of research at Cushman and Wakefield, estimated demand for office space would be 4.4 million sq ft by 2018, against the 5.3 million sq ft of space that could be available by then, if the upcoming projects are developed on time.

This supply would be from different office micro markets within, so any rental fluctuations are expected to even out, she said.

One micro market that has stood out would be the offices in the Marina Bay precinct, for instance, said Mr Moray Armstrong, executive director of office services at CBRE.

The URA has made plans for 10.8 million sq ft of new office space under its Master Plan 2014.

But, as Mr Armstrong put it: “The million sq ft question is where and when the next landmark Marina Bay development will arise.”

http://business.asiaone.com/news/after-the-feast-the-famine-may-be-lurking

MARINA ONE saves developers’ sales in October

DEVELOPERS may have sold more units in October than in September, but take away just one project and the picture is decidedly less rosy.

In all, developers sold 765 private homes in October, 18 per cent higher than the 648 units sold in September, according to data released by Urban Redevelopment Authority on Monday. But this was mostly boosted by brisk sales at a single large-scale launch, Marina One Residences, which sold 334 of its total 400 launched units.

As SLP International executive director Nicholas Mak put it: “If Marina One Residences was taken out of the equation, the sales volume in October would be the lowest for the whole of 2014.

“Other than Marina One Residences, the sales in the other top sellers were all less than 50 units each in October. Therefore, there is still a long way to go for the local real estate market before a firm and steady recovery is in sight.”

Year-on-year, sales have fallen 31 per cent from the 1,104 units sold in October last year. These figures exclude executive condos (ECs). If ECs are included, developers sold 855 units in October, above September’s 707 units.

Marina One Residences is part of a mega mixed-use project by Temasek Holdings and Khazanah Nasional, located just behind the Marina Bay Financial Centre. Its units were sold at a median price of S$2,228 per square foot in October. Consultants credited its appeal to its attractive pricing, prime inner city location and proximity to MRT stations.

It was also the only new residential project launch in October. Mr Mak noted, too, that out of the 334 units sold, more than 300 units were bought through private sales, rather than a public launch.

Besides the Marina development, buying activity was supported by Coco Palms in Pasir Ris, Lakeville at Lakeside, and The Skywoods along Dairy Farm Heights.

“Buying demand was not totally absent in the market, but it had to be drawn out by attractive pricing,” said Mohamed Ismail, chief executive of PropNex.

The higher sales volume in October was also a result of the higher launch volume, again skewed by Marina One Residences. New launches rose 26 per cent to 649 units. Again, taking away Marina One Residences, the launch volume would have tanked.

Ong Teck Hui, national research director at JLL, said: “The lack of new launches in October, despite this period being considered a window of opportunity to secure some sales (before the year-end festivities begin), shows that developers are not confident that there is sufficient demand to achieve a decent take-up.

“Due to the challenging market conditions, developers seem to prefer to let the year slip by and tackle the challenges afresh in 2015. It is unlikely that the market will see any significant resurgence in launches and sales for the rest of 2014, and it looks set to close as the most dismal year since 2008 when the market was hit by the global financial crisis.”

Eugene Lim, key executive officer of ERA Realty Network, too, expects that developers may hold back launches and focus on clearing units from their existing projects in the last two months of the year. He expects primary market sales of 400-700 units for November and December each.

Year-to-date, 6,705 new units have been sold, compared to nearly 15,000 sold for the whole of 2013.

The last two months of 2014 could round this figure up to 7,500, say the more bearish analysts, or 9,000, say the optimists.

Already, Lake Life EC has sold 534 out of 546 units this month. TRE Residences in Geylang has sold about 50 of its 250 units. Sophia Hills at Mount Sophia has not released its sales figures but according to a source, its showflat was quiet over its launch weekend.

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

Marina One to be launched in a cautious tone

M+S Pte Ltd, the developer behind the mega mixed-use project Marina One, is taking a calibrated tack with its upcoming launch of the residential units in the development, and is dangling early-bird discounts of 10 per cent on selected units.

On the expected launch date of Oct 11, it will release only 150 to 200 units in the first block, instead of all 521 at a go.

It will also hold back the release of the 521 units in the second residential block until after the project’s temporary occupation permit (TOP) is issued, said Kemmy Tan, the chief operating officer of M+S.

Prices at Marina One Residences will range from S$1,960 to S$3,100 per square foot (psf), which is on par with transacted prices in the area, she added.

Market watchers believe that holding back half the residential units until TOP is a move to avoid flooding the market with too many units upon the project’s completion in 2017, which could weigh on the rental market in that area.

Nicholas Mak, the executive director at SLP International, said: “This is to reassure buyers that they are not going to flood the market, but it does not change the fact that there are 1,042 units in the project.”

But Ms Tan explained that the rationale for holding back the second residential block was to allow the developer to “ride on the future growth of Singapore”.

M+S is not required to finish selling the units within a stipulated time because it does not come under qualifying certificate (QC) rules, under which a developer has to finish building a residential project in five years and sell the units within two years of its completion.

M+S, a joint venture between Temasek Holdings and Malaysian sovereign wealth fund Khazanah Nasional, was set up after a historic land swop between the two countries.

Its other project in Singapore, the 660-unit Duo Residences in the Ophir-Rochor area, is already 94 per cent sold.

Ms Tan said she expects the profile of buyers for Marina One Residences to be similar to that of Duo Residences, where 70 per cent of buyers are Singaporeans and 14 per cent, Malaysians; some of these buyers were bulk purchasers.

While the window for expression of interest will close only this Sunday, the first 150 to 200 units to be released are already over-subscribed, she said.

The pricing list from agents indicates that a one-bedroom unit of 700 sq ft starts at S$1.4 million; a two-bedder of 1,001 sq ft starts at S$2 million, and a three-bedder of 1,539 sq ft, at S$3.46 million.

Some consultants note that such price levels could still prove challenging, given similar price quantums for some freehold units in prime districts. In addition, there are more developments coming up in the Marina Bay area.

Ms Tan said, however, that Marina One is expected to draw empty nesters looking for city apartments, investors looking to rent to expatriates and seasoned buyers scouting for “trophy assets” here.

Potential buyers can be looking at a rental yield of 2 to 3 per cent in the area and capital appreciation, given URA’s masterplan for Marina South, she said.

One major draw of the project is “the Green Heart” – a biodiversity garden of lush greenery covering 65,000 sq ft and featuring a 13.2 m high waterfall, she added.

The project is also seamlessly connected to four MRT lines via three stations – the Marina Bay station, Downtown station and the future Shenton Way station.

Ms Tan said: “We are ready (to launch) and there is demand, especially since Duo is substantially sold at 94 per cent. I have buyers who come to me to ask when we are going to launch this.”

Marina One attracting investor interest

In the slow property market, the developer of the expansive Marina One Residences is dangling a 10 per cent early bird discount as it releases about 200 units.

The units, at one of two residential towers, with 1,042 units in all, will be launched only after the project gets its temporary occupation permit.

But developer M+S said it is “very pleased” with the interest in the preview period, which started on Sept 13.

“Over 800 people came to our showflat in the first weekend,” said M+S chief operating officer.

The project’s location and connectivity – near four MRT lines – and its backing by Khazanah Nasional and Temasek Holdings make it an attractive investment.

The project will be officially launched for sale on Oct 11. Bulk sales of at least three units will begin today.

Already, more than 200 prospective buyers have put in expressions of interest.

M+S will likely release 150 to 200 units at $1,960 to $3,100 per sq ft (psf) at the launch – more, subject to response.

This translates into starting prices of $1.4 million for one-bedders of 657 to 775 sq ft, and more than $2 million for two-bedders, which range from 969 to 1,130 sq ft.

The project also has three- and four-bedders and penthouses, with penthouse prices on application, but at least above $20 million for the 6,469 to 8,568 sq ft units.

Of the prospective buyers, about 70 per cent are investors and the other 30 per cent are owner-occupiers.

About 20 per cent of prospective buyers are foreigners so far with strong Malaysian interest. M+S has a sales gallery in Kuala Lumpur as well.

While rental yields are expected to be 2 to 3 per cent, it could improve significantly in years to come.

“We are looking to be the continued location of choice in the long term…We have a critical mass in retail offerings and are not just a standalone residence, compared with other developments.”

Overall, Marina One, scheduled for 2017 completion, comprises a gross area of about 3.67 million sq ft – two 34-storey residential towers, two 30-storey Grade A office towers with about 1.88 million sq ft of net lettable area, a 140,000 sq ft retail area for about 110 shops, and a 65,000 sq ft garden.

The company is still negotiating the leases, but has already found an anchor gym operator as well as foodcourt operator.

Commercial space crunch in central area

Space crunch drives up office rents in CBD and Suburbs, as reported in today’s ST.

A space crunch in the Central Business District (CBD) and the completion of new suburban developments drove up office rents islandwide in the second quarter, consultants said.

The data underlines two key trends: One is that firms that do not need a downtown address are relocating to the cheaper sites on the outskirts while CBD rents are rising on the back of robust demand for limited space.

Average rents for Grade A office space in the CBD jumped 10.7 per cent overall to $10 psf per month in the second quarter from the preceding year, according to property consultancy Cushman & Wakefield.

The average gross rent in Marina Bay was $12.95 psf per month, a marginal 0.4 per cent higher than in the first quarter.

Another consultancy, DTZ, also estimated yesterday that average gross rents in Marina Bay rose 6.5 per cent to $12.25 per sq ft per month in the second quarter from the preceding three months.

Consultancies may come up with different rental estimates due to the varying baskets of properties that they track.

Rents in the Raffles Place and Shenton Way areas were cheaper than in Marina Bay.

In Raffles Place, Cushman said the average gross monthly rent grew 3.5 per cent in the second quarter from the first to $10.25 psf per month.

Rents in the older part of the CBD around Shenton Way, Robinson Road and Cecil Street stayed stagnant at $8 psf per month on average, said DTZ.

Cushman said the leasing momentum in the CBD would likely continue in this half of the year, with keen interest expected from companies in the business services and technology sectors.

Businesses that do not need to have a presence in the CBD are relocating to city fringe areas or the suburbs where rents are more competitive, it added.

Still, suburban rents shot up faster than those in the CBD in the second quarter compared with the same period last year, according to a report by consultancy Chestertons.

They leapt 22.6 per cent in April through June over 2013 to $5.70 psf per month on average while CBD space climbed 4.7 per cent to $9.64 psf per month.

This jump in suburban rents was mainly because newly completed Grade A office space there bumped up prices.

These completions include The Metropolis in Buona Vista and Jem in Jurong.

However, he said that landlords were unlikely to raise rents much soon.

“We expect landlords to adopt a tenant-retention strategy instead of raising rents significantly in 2014 or 2015, losing ‘loyal’ tenants and facing looming vacancies in 2016 when supply and relocation options are aplenty.”

DTZ said yesterday that around 2.7 million sq ft of office space will be completed between now and the end of next year.

Beyond next year, however, the pipeline supply of office space will reach a new peak of about 3.9 million sq ft in 2016, with about 60 per cent of that located in the CBD, it said.

Major buildings expected to be completed in 2016 include Guoco Tower in Tanjong Pagar and Duo Tower in Bugis.