Tag Archives: office

JLL: investment sales set for bull run in 2017

According to consultancy JLL in a new report, property investment sales are set for a bull run after a spectacular start to the year. The positive outlook is being driven by the office, and possibly the retail and residential sectors.

The overall value of real estate investment deals soared 67 % in the first quarter to $4.99 B – of which $4.47 B was from the private sector.

Private investment sales of office property accounted for $2.12 B – the sector’s strongest first-quarter showing for the past 9 years. The $2.12 B figure was a 60.6 % rise from the fourth quarter, and more than treble that of a year ago. Last year’s private-sector investment sales stood at $19.06 B.

The top two office deals in the first quarter were entity sales. One was the sale of the entire interest in the holding company of PwC Building in Cross Street to an indirect unit of Manulife Financial Corporation for $760.6 M. The other was the divestment of the entire interest in Plaza Ventures – the owner and developer of GSH Plaza in Cecil Street – to Hong Kong-listed Fullshare Holdings for $725.21 M.

JLL noted the potential for the full-year sales of private office assets to surpass the $6.49 B recorded last year, considering the recent deal for One George Street and sizeable assets available in the market, including Asia Square Tower 2 in Marina Bay.

The residential segment, registered $1.69 B in private investment sales for properties valued at $5 M and above in the first quarter.
For retail and industrial sectors, private investment sales more than doubled that from the previous year in the first quarter: $280 M for retail and $390 M for industrial.

JLL predicts a bright investment sale outlook for the year, driven by the recent sale of the $2.2 B Jurong Point mall and upbeat sentiment in the private residential market. A growing appetite for collective sale sites by developers facing depleting land banks and limited supply of sites from the Government could also lend support to investment sales.

139 Cecil Street now majority owned by Zhou family from Shanghai

Formerly named Cecil House and now known as DB2Land Building, 139 Cecil Street has an estimated land area of 7,936 sq ft. The approved GFA for the addition and alteration works reflects an 11.2 plot ratio (ratio of maximum GFA to land area) – the same plot ratio stipulated under URA’s Master Plan 2014 for the commercial-zoned site.

Under the proposed refurbishment granted written permission by URA last year, there will be food and beverage use on the first storey, offices from the second to 14th floors and a mechanised car park from basement to the fifth storey. The 16th storey will have a communal roof terrace and F&B space.

The Zhou family from Shanghai picked up an office block at 137 Cecil Street last year, and bought a 60 per cent stake in the company that owned the next-door property at 139 Cecil Street.

The latest deal is said to value the 11-storey property at S$140 million. It has a balance lease of around 64 years.

Written permission was granted by Urban Redevelopment Authority (URA) for a refurbishment exercise to build additional floors to 16 storeys, costing about S$20 million.

The Zhou family has paid S$75 million for a 60 per cent stake in Ececil Pte Ltd, which owns 139 Cecil Street, to a joint venture between Vibrant Group and DB2 Group. Vibrant announced the completion of the sale in a regulatory filing last week. The Vibrant-DB2 joint venture continues to hold the remaining 40 per cent in Ececil. It acquired 100 per cent of Ececil in 2014 from Cheong Sim Lam in a deal that valued the office block at S$110 million.

The major refurbishment, or “addition and alteration” works, will see the gross floor area (GFA) of the property increase from 68,809 sq ft currently to 88,886 sq ft; the latter figure is estimated to yield about 75,300 sq ft strata area.

The next-door property at 137 Cecil Street, which was once known as Aviva Building, is now named Hengda Building after the Zhou family’s Shanghai Hengda Group, which is involved in real estate and other businesses.

Mr Cheong, a member of the family that developed International Plaza in the 1970s, gained control of the two adjacent buildings from Yi Kai Group and Fission Group shortly after the duo teamed up to acquire the two properties in July 2009 for S$100.80 million.

New office units for sale in Little India

Centrium Square, a development out of the former Serangoon Plaza in Serangoon Road, will be launched for sale expected to be held by end Feb 2016. The 19-storey freehold project consists of 231 strata units (143 office units, 39 medical suites and 49 retail shops). According to the marketing agent OrangeTee.com, 78 office units will be launched first. The sizes range from 570 to 1012 sqft. Indicative pricing is expected to be between $2600 – $2800 psf before an early bird discount. The retail units are not for sale, however.

Samsung Hub’s office sold at $3175psf

AT LEAST two sizeable strata office deals have been done lately in the Raffles Place area: Level 19 of Samsung Hub, and half of the 11th floor at Prudential Tower.

The 19th floor of Samsung Hub along Church Street has been sold for nearly S$41.7 million or S$3,175 per square foot (psf) based on the strata area of 13,121 sq ft. The buyer is said to be a foreign party purchasing the space purely as an investment. Market watchers say that might have resulted in the psf price being lower than the S$3,225 psf fetched for the whole of the 18th floor spanning 13,132 sq ft, sold last month.

In that transaction, which amounted to S$42.35 million, the buyer is believed to an Asia-based group involved in the oil and gas business among others, looking to occupy the space; existing leases on the floor run out in phases starting later this year. An owner occupier may be more motivated to pay a higher price than an investor. The lease on the entire 19th floor was recently renewed until 2017. The net yield to the buyer is believed to be sub-3 per cent.

The 18th and 19th floors each comprise six strata units.

The seller of both 18th and 19th floors is Church Street Holdings – a partnership between Buxani Group and a group of offshore investors advised by Mukesh Valabhji of Seychelles-based Capital Management Group.

With the latest sale, Church Street Holdings has sold five of the six floors in the 999-year leasehold building that it acquired from OCBC in 2007 for S$1,560 psf or S$122.4 million. The six floors were Levels 16-21. The company is now left with Level 21, for which it is said to have received unsolicited offers.

Savills is said to have brokered the sale of the 19th floor.

Over at Prudential Tower, which is on a site with about 80 years’ balance lease, half of the 11th floor space, under a single strata unit of 5,952 sq ft, has been sold for S$2,750 psf or S$16.368 million. CBRE brokered the sale, which was made to a Chinese construction group that currently occupies rental premises elsewhere in Singapore and plans to eventually occupy the Prudential Tower space it is purchasing. The space is currently leased to two tenants; the leases are said to expire next year.

The unit is being sold by a consortium that earlier this year bought Keppel Reit’s 92.8 per cent stake in the building for S$512 million or nearly S$2,316 psf on net lettable area.

Comprising KOP Limited, Lian Beng Group, KSH Holdings and Centurion Global, the consortium is said to be preparing to launch an expression of interest exercise for the other half of the 11th floor of Prudential Tower, spanning 5,102 sq ft under a single strata unit. CBRE will be marketing the unit in Singapore, while Savills will do the overseas marketing. The pricing expectation is expected to be in excess of S$2,750 psf.

Also available for sale is a half-floor unit, also 5,102 sq ft, on Prudential Tower’s 16th floor owned by the consortium. Galven Tan, director (investment properties) at CBRE, noted that the strata office market is still seeing keen buying interest from potential owner occupiers.

Market watchers, note, however, that since the total debt servicing ratio framework was introduced in June last year, strata office investors have found it harder to get loan approval compared with those buying the space for their own use.

http://www.businesstimes.com.sg/real-estate/samsung-hubs-19th-floor-sold-at-s3175-psf

Best-Selling Commercial Units in Districts 7 and 8 for the 1st Half of 2014

No.1 ARC 380 (32 units sold)

ARC 380

 

Location: 380 JLN BESAR

Units sold: 32 units (31 OFFICES, 1 SHOP)

$Psf sold: S$2,366 – S$5,880

Transacted $ per unit: S$1,695,700 – $6,468,700

Tenure: FreeHold

Average Floor Square Feet per unit sold: 971psf (334psf – 2,734 psf)

Arc 380 consists of 144 strata titled office units and 23 strata titled retail shops of freehold tenure. As the rare Freehold Offices/Shop @ Jalan Besar. Arc 380 is strategically located in a prime location with constant flow of both human and vehicular traffic in huge volumes. Bendemeer MRT (Downtown Line) will be within minutes walk.

No.2 SUNSHINE PLAZA (11 units sold)

sunshine plaza

Location: 91 BENCOOLEN ST

Units sold: 11 units (7 OFFICES, 4 SHOPS)

$Psf sold: S$1,867 – S$4,919

Transacted $ per unit: S$1,120,000 – $2,277,000

Tenure: 99 YEARS FROM 19-MAR-1997

Average Floor Square Feet per unit sold: 577psf (248psf – 1098 psf)

Sunshine Plaza is a 99-year Leasehold commercial property located at 91, Bencoolen Street, 189652 in District 07. Sunshine Plaza is primarily used for Office rental and sale. Sunshine Plaza is close to Bras Basah MRT (CC2) and Bugis MRT (EW12). It is near to several bus stops located at Middle Road, Opp Prime Centre – 07571, Bencoolen Street, Aft Prinsep Link – 04029, Bencoolen Street, Fortune Centre – 07518 and Selegie Road, Peace Centre – 07011.

 

No.3 THE PLAZA (7 units sold)

SAMSUNG CSC

SAMSUNG CSC

 

Location: 7500A BEACH RD

Units sold: 7 units (7 OFFICES)

$Psf sold: S$1,649 – S$1,991

Transacted $ per unit: S$658,000 – $1,438,000

Tenure: 99 yrs from 03-SEP-1968

Average Floor Square Feet per unit sold: 527psf (334psf – 872 psf)

The Plaza is a 99-year Leasehold commercial property located at 7500, Beach Road, 199591 in District 07. The Plaza is primarily used for Office rental and sale. The Plaza is close to Nicoll Highway MRT (CC5), Bugis MRT (EW12) and Promenade MRT (CC4). It is near to several bus stops located at Beach Road, Plaza Parkroyal – 01529, Beach Road, Opp Plaza Parkroyal – 01521, Beach Road, The Gateway – 01519 and Beach Road, Opp The Gateway – 01511

No.4 GOLDEN MILE COMPLEX (5 units sold)

Golden_Mile

Location: 5001 BEACH RD

Units sold: 5 units (4 OFFICES, 1 SHOPS)

$Psf sold: S$905– S$1,408

Transacted $ per unit: S$180,000 – $1,750,000

Tenure: 99 yrs from 04-AUG-1969

Average Floor Square Feet per unit sold: 607 psf (183 psf – 1281 psf)

Golden Mile Complex  is a high-rise commercial and residential building on Beach Road in Kallang, Singapore. The building was formerly known as Woh Hup Complex. The complex has 411 shops and 500 parking places.

Golden Mile Complex is primarily used for Office space rent and sale. Golden Mile Complex is close to Nicoll Highway MRT Station (CC5), Bugis MRT Station (EW12) and Lavender MRT Station (EW11). It is near to several bus stops located at Golden Landmark, Beach Road – 01429, opposite Golden Mile Complex – 01421 and at St.John Headquarters – 014119

New tenants in CBD as global banks exit or downsize

http://www.btinvest.com.sg/dailyfree/new-faces-cbd-global-banks-exit-20140813/
As the global banks in Singapore restructure and downsize their offices in the central business district (CBD), a crop of tenants – new media, consumer products and insurance companies – have steadily taken over.

Global finance houses, comprising banks and private equity firms, still take up three-fifths – a massive 11 million square feet – of downtown office space, but their expansion has slowed markedly.

Chris Archibold, JLL’s head of markets in Singapore, said: “From 2005 until slightly after the global financial crisis, the financial houses were major contributors to the net take-up in Singapore, but now, they are no longer contributing to the take-up.”

These global financial houses have given up 500,000 sq ft of space in the city in the last three years. For example, Barclays has given up two floors in Marina Bay Financial Centre, and LinkedIn has moved in.

Credit Suisse is said to be planning a phased exit from One Raffles Quay this year; Citibank is looking into releasing some space at its Capital Square office.

Mr Archibold said: “Banks have been shrinking their capital-intensive businesses such as investment banking, as a result of regulations put on them since the financial crisis.

“Compliance requires them to hold more capital, which makes these businesses less profitable. Banks are now more focused on costs than ever before because margins are down for a lot of their core and non-core segments. They are thus less prepared to hold onto surplus space.”

Among the newer downtown tenants is Google, which has expanded its Asia-Pacific headquarters here, taking four floors in Asia Square. The same Marina Bay building now also houses a cluster of re-insurers such as Swiss Re and SCOR.

Twitter, Booking.com and eBay have all been opening new offices or expanding existing ones.

PayPal is housing its international headquarters in Singapore, split between Suntec Tower 5 and Millenia Tower; Facebook plans to double its space at 158 Cecil Street.

The mix can make for strange bedfellows.

Hugh Andrew, who heads asset management for the Asia-Pacific at BlackRock, which owns Asia Square, said: “You have this very bizarre dichotomy of Citibank bankers in their shiny shoes and guys in flip flops and shorts in the same elevator.”

General Motors has moved its Asian headquarters from Shanghai to OUE Bayfront, taking over 30,000 sq ft from the Bank of America Merrill Lynch.

Insurer Aon is building its Asia-Pacific hub in SGX Centre, and toy maker Lego has set up office in Marina Bay Financial Centre.

From the landlords’ perspective, the diversification is a plus because it makes their properties less susceptible to the peaks and troughs of financial market cycles.

Retailers in the CBD also welcome the new tenant mix; the new-media firms, especially, do not necessarily operate on the traditional Monday-to-Friday, 9am-to-5pm routine, so they can provide a catchment to support a seven-day trade.

Most CBD retailers are now open only five days a week.

To be sure, no other industry comes close to owning the space the global financial houses still occupy. The new industries are not replacing them “by any stretch of the imagination”, said Mr Archibold.

But the phenomena of global banks’ shrinking spaces is not peculiar to Singapore; it is also playing out in the major financial centres of Hong Kong, London and New York.

Prices of office space flat in Q2 after a 0.5% increase in Q1; prices of retail space fell 0.3 % after remaining unchanged in the previous quarter.

http://www.channelnewsasia.com/news/singapore/prices-of-office-retail/1281694.html

Sgbayhomes office

Prices of office space were flat in the second quarter after a 0.5 per cent increase in the first quarter, while prices of retail space fell 0.3 per cent after remaining unchanged in the previous quarter, the Urban Redevelopment Authority (URA) said on Friday (July 25).

Rental prices of office space in the second quarter rose 2.8 per cent from the previous three months, following the 2.4 per cent increase in the first quarter. Rental prices of retail space in the second quarter also increased, rising by 0.6 per cent in the second quarter, compared with the decline of 0.3 per cent in the January to March period.

As of end-June, there was a total supply of about 1.055 million square metre (sqm) gross floor area of office space in the pipeline, and a supply of 879,000 sqm gross floor area of retail space from projects in the works.

The amount of occupied office space increased by 22,000 sqm in the second quarter, compared with the 6,000 sqm increase in the previous quarter. During the quarter, the stock of office space decreased by 1,000 sqm, compared with the increase of 15,000 sqm in the previous quarter. As a result, the islandwide vacancy rate of office space at the end of June fell to 9.6 per cent, from 10 per cent at the end of March.

According to URA, the amount of occupied retail space increased by 38,000 sqm in the second quarter, while the stock of retail space increased by 49,000 sqm. As a result, the islandwide vacancy rate of retail space rose to 5.9 per cent at the end of June, up from 5.8 per cent at the end of March.

Developers’ pessimism deepens in Q2 Rising construction costs, inflation, interest rates seen roiling market

http://www.businesstimes.com.sg/premium/singapore/developers-pessimism-deepens-q2-20140723

DEVELOPERS are more pessimistic about the property market in the coming six months, citing rising cost of construction, inflation, and interest rates as factors that will likely have an adverse impact on market conditions.

The NUS-Redas Real Estate Sentiment Index Survey’s Future Sentiment Index – which measures sentiments towards the market outlook over the next six months – fell to 3.4 in Q2 compared with 3.9 in Q1.

A score under five indicates deteriorating market conditions while scores above five indicate improving conditions.

Meanwhile, the Current Sentiment Index slipped marginally, from 3.7 in the last quarter to 3.6.

Taken on a year-on-year basis, the Composite Sentiment Index (which measures overall sentiment) was weaker at 3.5 in Q2 compared to 4.5 previously.

Looking ahead into the next six months, the key potential risks are rising inflation/interest rates as identified by 75.4 per cent of respondents and rising cost of construction (63.1 per cent).

Equally worrying is the excessive supply of new property launches and a slowdown in the global economy, which were identified by 53.8 per cent of respondents.

However, 31.7 per cent of developers surveyed said that they expect moderately more residential launches in the coming six months, while 29.3 per cent said that they expect residential launches to hold at the same level.

In terms of unit price change, 26.8 per cent of them anticipate that residential prices will hold in the next six months, up from 26.3 per cent in the previous quarter. Majority of developers still expect unit prices to be moderately less (63.4 per cent compared with 64.8 per cent previously).

Of the various property sectors, prime and suburban residential sectors were the worst performing segments according to the survey.

The prime residential sector showed a current net balance of -72 per cent and a future net balance of -69 per cent; while the suburban residential sector showed a current net balance of -63 per cent and a future net balance of -65 per cent in Q2.

The current and future net balance percentage is defined as the difference between the proportion of respondents who have selected positive options and the proportion who selected negative options.

On the flipside, office was the best performing sector, with a current net balance of +41 per cent and a future net balance of +32 per cent.

In light of the high transaction cost and high property prices, 77.8 per cent of respondents said there will likely be strong outflows of investments into overseas real state markets in the coming 12 months.

These markets include the United Kingdom, Australia, and Malaysia.

GB Building floors for sale

http://www.businesstimes.com.sg/premium/singapore/three-gb-building-office-floors-sale-20140722

ABOUT 16,000 square feet of office space spanning three contiguous floors in GB Building in the Central Business District (CBD) have been put on the market for between S$32.1 million and S$33.7 million, or between $2,000 and $2,100 per square foot.

Each floor of the space, occupying the 20th to 22nd storeys of the Cecil Street building, ranges from 5,210 sq ft to 5,425 sq ft in size, is rectangular and column-free.

DTZ Debenham Tie Leung (SEA) is marketing the property, which is being sold with vacant possession.

GB Building comprises a 23-storey office tower atop three storeys of commercial space and has 67 years left on its lease.

It has three levels of basement carpark lots and is within walking distance of Tanjong Pagar MRT station on the East-West Line and the upcoming Shenton Way MRT station on the Thomson Line.

DTZ investment advisory services director Tan Chun Ming said that the property was a “rare opportunity” for owner-occupiers.

Given that the space is strata-titled, he expects keen interest from a range of investors looking to capitalise on the rising rental rates in the CBD.

A DTZ report has noted that average gross monthly rents in Marina Bay rose 6.5 per cent to S$12.25 psf in the second quarter from the first.

But average gross monthly rents for Shenton Way, Robinson Road and Cecil Street – older areas of the CBD – had stagnated at S$8 per sq ft.

Average office prices in those three areas inched up 0.2 per cent in Q2 from the previous quarter, supported by continued interest in strata-titled office units and en bloc office deals, as further rental increases are expected, said the report.

Based on caveats information from URA Realis, the top three strata floors of SBF Centre on Robinson Road, were transacted at an average price of S$3,069 psf in April. Last November, one strata floor at Eon Shenton on Shenton Way went at S$2,550 psf.

The expression of interest exercise for the GB Building space closes on Aug 21. Interested parties may submit bids for single or multiple floors.

Shophouse in Telok Ayer put up for sale — Euro Group’s asking price for 999-year leasehold property is S$20-22m

EURO Group, which is involved in a range of businesses including real estate, has appointed Cushman & Wakefield to find a buyer for a three-storey shophouse located a stone’s throw from Telok Ayer MRT Station.

BT Telok Ayer Shophouse for sale

The indicative asking price for No 25 Boon Tat Street, a 999-year leasehold property, is S$20-22 million.

Euro Assets Holdings (S), the owner, is selling the property with vacant possession. Located in the Chinatown-Telok Ayer Conservation Area, the shophouse is currently being spruced up.

Approval has been obtained from the authorities to use the first and second storeys and roof terrace as restaurant space, while the third storey is approved for office use.

Renovation works are expected to be completed in September this year. Sitting on 1,774 sq ft land area, the property has gross floor area of about 4,555 sq ft; in addition, there is 974 sq ft of uncovered space on the roof terrace. It has an internal lift.

The Chinatown-Telok Ayer Conservation Area is a key landmark for tourists due to its historical significance with the Chinese immigrant community in early Singapore. In addition, the area exudes a nostalgic charm both architecturally and historically, says Shaun Poh, executive director of capital markets at Cushman.

“Commercial shophouses, especially those with approved restaurant use, remain an attractive option for buyers in view of the increasing demand for F&B spaces and the limited supply. With its excellent location and palatable price quantum, the subject property is perfect for buyers who wish to invest in a commercial asset in the CBD or an end-user looking to run a restaurant business,” said Mr Poh.

Euro Group is involved in events/conferences, executive search and recruitment, advisory investment strategies, property and F&B businesses. It is also involved in commodity trading and resources related corporate transactions.

It has offices in Beijing, Hong Kong and Singapore.
http://www.businesstimes.com.sg/premium/singapore/shophouse-telok-ayer-put-sale-20140722