Tag Archives: URA

Landed house market on upward trend amidst dropping prices

538 landed homes were sold in the second quarter – this is the highest quarterly volume since the fourth quarter of 2012. Overall, the number of landed homes sold has increased, driven by falling prices and limited supply of landed homes. URA flash estimates released recently indicated that prices of landed residential properties fell further by 0.4 % for Q2, down from a 1.8 % drop in the previous quarter.

The market for good class bungalows (GCBs) is lukewarm although the market for smaller bungalows in GCB areas is on a rise. Good class bungalows (GCBs) are the most prestigious segment of landed property in Singapore.

On the GCB front, a caveat was lodged on June 12 for the most expensive one sold this year. The latest GCB sold was a $46 million bungalow in Queen Astrid Park on a 29,709 sq ft site, reportedly purchased by the family who controls oil trading group Hin Leong.

20 sales have taken place in GCB areas so far this year, worth a total of $432.2 million. These include properties with a plot size of less than 1,400 sq m. This is markedly more than the 14 transactions in the same period last year, which totalled $298.36 million.

Another upmarket landed segment, Sentosa Cove, has contrasting statistics. Sales at the exclusive waterfront precinct shot to seven this year from just four for the same period last year.


CFE calls for government to review land use and planning guidelines

The Committee on the Future Economy (CFE) calls for greater land-use flexibility by allowing complementary activities to be located near each other–  value chains and industries can be integrated and synergies enabled among developments in a precinct.

Given the blurring line between services and manufacturing, the CFE also proposed that flexibility of land use be allowed in industrial areas as this will open the way for businesses of different sectors and functions to co-locate, find synergies and catalyse innovation.

The Urban Redevelopment Authority (URA) is working with state industrial landlord JTC and the Economic Development Board (EDB) under Ministry of Trade and Industry.

Industry players say Singapore may need to create more zoning categories or expand existing definitions of use for industrial space.

Another planning guideline – that of the “60-40 rule”, which requires at least 60 per cent of gross space in a building or strata unit to be used for industrial activities, with at most 40 per cent left for ancillary purposes – is another restrictive policy that needs review.

The government has, in the past, rolled out “white” sites and business park white zones in the Master Plan to offer developers some autonomy in deciding the most appropriate mix of uses for each site. However, it has remained prescriptive in listing permissible uses and planning specifications for these sites.

The US practises what is called “performance zoning”, under which land development and use are circumscribed by performance standards; for example, these standards can limit the intensity of development by stipulating the maximum level of noise or strain on the transportation system.


Scheme for underground links in Orchard Road

Urban Redevelopment Authority (URA) has scheme that provide cash grants for malls to build underground links along Orchard Road. The incentive started in 2004 and gives up to $28.7k psm for the construction of underground walkways. However there are little take up for the incentive. The biggest obstacle cited is cost, among other challenges.  Another challenge is the fear among malls that the links will allow flow to competitors.


Conserve the old but add some new extra space – Pearl Bank

That is the gist of a plan by owners of the historic Pearl Bank Apartments – and they have won tentative backing from the Urban Redevelopment Authority (URA).

The URA sees merit in conserving the horseshoe-shaped project in Outram, at 38 storeys the tallest residential building here when built in 1976.

It is also prepared to consider supporting some increase in gross floor area (GFA), in line with the management committee’s plan.

The owners want a conservation order for the building and propose that the GFA limit be lifted so a new residential block can be added. If they get the approvals, they then hope to entice a developer to rejuvenate the building.

The committee has called an extraordinary general meeting with owners tomorrow to seek consent from subsidiary proprietors.

A URA spokesman said that as the proposal affects the entire development and interests of subsidiary proprietors, all of them must be aware of the plan and agree. But she also said it “welcomes the ground-up initiative by the management committee to conserve Pearl Bank Apartments as there are merits for its conservation”.

“When the distinctive horseshoe-shaped building was completed in 1976, it was the tallest residential building in Singapore and had the highest density for residential development,” she told The Straits Times.

The conservation bid was set in motion last month, when owners representing about 45 per cent of overall share value voted to submit the application for voluntary conservation and redevelopment to the URA. More than 98 per cent were in favour.

The committee said in the letter to owners that it received a positive reply from the URA, as the authority is prepared to consider a maximum 15 per cent increase in GFA over and above the existing approved GFA of 55,102 sq m. This is subject to a cap of 430 units in all, including the 280-unit existing block, it said.

Under the plan, drawn up by the firm of Mr Tan Cheng Siong, who designed the original block, a 27-storey residential block may be built on the area now occupied by a five-storey carpark.

It will have a rooftop garden, a swimming pool and a bridge to the existing block’s 28th-floor common space. The owners will also ask the Singapore Land Authority to extend the 99-year lease.

The bid for conservation and redevelopment comes after three attempts at a collective sale from 2007 to 2011 – with no takers, owing to the high asking price.


China Square Central could be site for future service apartment development

A serviced apartment could be built at China Square Central, a development right in the heart of Chinatown.

Property firm Frasers Hospitality is eyeing the site for one of its Capri by Fraser outlets, The Straits Times understands.

The company already has a Capri near Changi Airport.

Frasers Commercial Trust (FCOT), a related entity which owns China Square Central, said the Urban Redevelopment Authority has given provisional permission for new work at the complex at 18, Cross Street.

This includes possible alterations to the centre as well as an additional gross floor area of 172,223 sq ft for hotel use. The site, which had an assigned gross plot ratio of 4.2, has also been rezoned to have no gross plot ratio.

FCOT’s manager is “still evaluating and exploring all options” on the property, which may be subject to other regulatory approvals, as well as commercial and financial viability, it said, adding that “no decision has been made”.

Frasers Hospitality operates the 313-unit Capri by Fraser in Changi Business Park, which opened in 2012.

Capri units are hybrid hotel and serviced apartments and cater to guests on shorter stays.

Frasers Hospitality also operates four other brands – Fraser Suites, Fraser Residence, Fraser Place, and Modena by Fraser, which is focused on China.

While there are many boutique hotels in the Chinatown area, plus the 367-room Parkroyal on Pickering, there is just one serviced apartment – Ascott Raffles Place, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia.

Ms Chia Siew Chuin, director of research and advisory at Colliers International, said the serviced apartment sector is generally considered more resilient and less volatile than the hotel market due to the longer average length of stay. At the same time, rising demand for shorter stays has meant the emergence of a new class of serviced apartments with hotel licences, she said.

Apart from Capri, these include the Ascott Raffles Place and the Pan Pacific Serviced Suites Beach Road.

Experts note that there appears to be an ample supply of hotel rooms, with no urgency for new construction given the falling tourist numbers on the back of uncertainties in the region, including the political events in Thailand.

No hotel sites feature in the first half of next year’s Government Land Sales programme.

CBRE’s Mr Sim said that the plans for Chinatown would support retail activities in the area.


19 land sites released for sale; expected to yield 8,770 homes

Kallang Bay view

Nineteen land sites were launched for sale on Thursday (Dec 4) under the first half of the Government Land Sales (GLS) Programme for 2015.

The 19 sites – six Confirmed List and 13 Reserve List sites – can collectively yield up to 8,770 private residential units once developed, the lowest in five years.

These will include 1,010 executive condominium (EC) units and 265,000 square metres of gross floor area of commercial space, the Ministry of National Development (MND) said.

In October 2014, National Development Minister Khaw Boon Wan had said that the supply of sites under the GLS Programme will be reduced.

Confirmed List sites go on sale regardless of interest from developers, while Reserve List sites are triggered for a public tender only if a developer makes an acceptable opening offer.

The Confirmed List comprises six private residential sites, including one EC site in Choa Chu Kang. Altogether, the parcels can yield about 3,020 private homes, lower than the 3,915 units offered in previous land sales programme in the second half of 2014.

Property watchers said the reduction is expected.

Ms Chia Siew Chuin, director of research and advisory at Colliers International, said: “The Government is likely to have taken into consideration the upcoming supply and the fact that the sales market is very slow.

“All things considered, the Government would have then decided to pull back the number of supply in the private residential market.”

However, the significant drop in the number of ECs expected has taken property watchers by surprise.

Only one EC site is on the Confirmed List and it can yield up to only 490 units. This compares to the estimated 1,520 units that could be developed from the Confirmed List of the last land sales programme in the second half of 2014.

Real estate firm PropNex said this is due to the fact that second-timers will have to pay a resale levy when they buy an EC in future.

Mr Mohamed Ismail, CEO of PropNex Realty, said: “Therefore, the Government probably has been a little bit more cautious not knowing how the demand is going to be and not to flood the market.”

“The concern will only be because ECs are truly meant for the Singaporeans’ aspirations, and those who cannot afford private property. And I suppose overall, I think we need a healthy number of ECs, in the ballpark of about 3,000 every year,” he added.

The Reserve List comprises nine private residential sites, one commercial and residential site, two commercial sites and one White site – where multiple uses are permitted. These sites can yield about 5,750 private residential units.

“Supply from the GLS Programme, together with supply from projects in the pipeline, will be adequate to meet the demand for private housing and commercial space over the next few years,” MND said.


The residential sites on the Confirmed List are located in the Outside Central Region and Rest of Central Region, the ministry said.

The commercial and residential site at Holland Road, originally placed on the second half of the 2014 Confirmed List, is the first sale site to be launched as part of the Holland Village Extension plan unveiled in the Master Plan 2014.

A Concept and Price Revenue Tender will be called for this site to ensure that the future development “enhances the unique charm and distinctive urban village character of the Holland Village Identity Node”, MND said.

It added that the site was transferred from the Confirmed List to the Reserve List to give developers more time to study the site and tender evaluation criteria before triggering it for sale.


A second commercial site in Woodlands Regional Centre at Woodlands Square has been released for sale under the Reserve List.

“This will sustain the development momentum of Woodlands Regional Centre as a major commercial node outside the city, in line with the Government’s objective of decentralising employment centres to bring job opportunities closer to homes,” MND said.

The Reserve List will have two other sites for predominantly office developments – a White site at Marina View and commercial site at Beach Road. Together with the Woodlands Square site, these sites will allow developers to initiate the development of more office space if they assess that there is demand, the ministry said.

Apart from the GLS Programme, the Government will also make available other supply of land and properties through its various agencies. These include localised retail facilities at parks, selected HDB estates, industrial estates, MRT stations, sport facilities, community centres and the leasing of vacant state properties for commercial uses, MND said.


New property zone in the making

IN what could be a precursor to the creation of a new class of space – between office and light industrial – JTC Corporation is understood to be spearheading the development of a building, expected to be in Woodlands, that will provide affordable space for rental to companiesthat provide manufacturing-related services but do not have industrial production in Singapore.

This is in response to feedback in recent years from trade associations that there is a lack of affordable office space in Singapore. At the same time, many businesses do not qualify for the use of cheaper premises zoned for Business 1 (or B1) use, where typically light industrial and warehouse uses are allowed – since they do not have manufacturing operations here.

Moreover, the Urban Redevelopment Authority (URA) has a planning rule that effectively forbids the use of industrial space as pure offices. In the past few years, the authorities have strengthened enforcement action against unauthorised use of B1 space.

This has led to calls from some quarters urging URA and JTC to relax the definition of permitted uses in the B1 zone – to keep pace with the changing industrial production landscape, with a blurring of the traditional division between manufacturing and services.

However, instead of relaxing B1 use – which could be seen as penalising those that have been adhering to the approved uses of this zone and condoning those that have been flouting planning regulations – the authorities seem to prefer a new intermediate zone between B1 and commercial.

Industry observers reckon that rental in the new building could be slightly higher than that for B1.

It is thought that JTC is planning a pilot project to get a sense of the level of genuine demand for such space. If there is deep demand, the statutory board could offer more of such space or even sell land with the new zone through the Government Land Sales Programme for development by the private sector, guessed analysts.

Market watchers commented that the Woodlands location is ideal to test demand for the proposed zone.

Its proximity to Iskandar Malaysia would allow companies to locate their factories in Iskandar where industrial space is cheaper and house supporting value-added services in the JTC pilot project, said a market observer.

Preliminary information about the new building could be released over the next few months, BT understands.

When contacted, JTC said: “URA’s Master Plan 2014 identified several new growth areas that will provide new commercial and business spaces and bring jobs closer to homes. They include the Woodlands Regional Centre, which is envisioned to be a vibrant live-work-play business hub with new transport connections . . .

“JTC is working with URA and the relevant agencies on the detailed plans for these growth areas. We are engaging industry players to get ideas.

The details are still being worked out.”

Market expectations are that JTC is likely to allocate space in the proposedprojectona rental basis to qualifying users only if they meet stringent criteria that are likely to include proof that their organisation is involved in manufacturing – even though production is located overseas.

Such tenants could potentially use the space for their headquarters, distribution hub, buying office, design centre, servicing and other approved functions. Clear-cut office uses such as the activities of advertising firms, lawyers and front-end operations of banks will not be allowed in the new zone.

DTZ South-east Asia chief operating officer Ong Choon Fah said: “The nature of manufacturing has changed with the knowledge-based economy and so there is a need for the definition of manufacturing space to evolve alongside this transformation.”

Currently, at least60 per cent of total floor area in each strata unit in a B1 development must be set aside for core industrial activities such as clean and light manufacturing, assembly and repair, or warehouse and storage.

The other 40 per cent may be for supporting purposes including ancillary offices.

However, standalone offices that do not support core manufacturing activity by the same occupier in the same premises do not qualify for B1 use. The rule is intended to ensure industrial space is used predominantly for industrial activities.

– See more at: http://news.asiaone.com/news/singapore/new-property-zone-making#sthash.gwEmjsVA.dpuf

JTC seems to be taking an incremental planning approach through the proposed intermediate zone between Business 1 (B1) and commercial uses. Had it opted for a big-sweep rezoning of some areas of Singapore from say B1 use to the new zone, that would cause major problems for both owners and tenants of B1 premises.

JLL head of South-east Asia research Chua Yang Liang said: “A step-by-step measured approach will allow JTC to test-bed the proposed zone, study the impact and adjust the concept if necessary before widening its implementation. To do a widespread change of use overnight from B1 could create severe knock-on effects in the market.

“For instance, there may be repercussions for occupiers who are validly operating within B1 premises if the landlord decides to go for an upgrade to this intermediate zone – because the landlord would then want higher-paying tenants commensurate with his additional investment in the property.”

Agreeing, an industrial property analyst said: “The whole look and ambience of the building would also change . . .”

On the other hand, if the owner decides to stick to B1 zoning, the genuine B1 tenants may continue to operate in the building but tenants whose activities don’t comply with B1 usage have to leave. Even if some time is given for the transition, such occupiers would still have to leave within a definite timeframe, he added.

From a landlord’s perspective, there could be big monetary implications. The owner of a B1 building considering getting his property rezoned to the new use with a view to complying with the law – for instance, if he has tenants whose activities are not permitted for B1 zone (such as pure office use) – would be staring at the prospect of paying a substantial differential premium to the state for the enhancement in use.

DTZ South-east Asia chief operating officer Ong Choon Fah said: “If you suddenly change the rules of the game, it could jolt the market. It is better to take an incremental planning approach and test out new concepts gradually.”

Knight Frank executive director (industrial) Lim Kien Kim said that JTC’s move to develop a new building under the planned intermediate zone would further weaken industrial rents. “The government has created a lot of Business 1 space in the past few years through the GLS Programme. So now they are clamping down on unauthorised use of such space and going to create legal space for these people. That will potentially drive down demand for B1 space and have an adverse impact on B1 rents and capital values.”

He also suggested that JTC should consider piloting the new zone at one of its projects such as Seletar Aerospace Park, CleanTech Park and MedTech Hub, where there is some vacant space – instead of developing a new building in Woodlands to try out the concept.

However, Mrs Ong said: “There may be some vacancy in these projects but they are intended for very specific use. It takes time to germinate and nurture ideas; for instance, one-north also took a while before it took off.

“As lead agency in this space, JTC will always push the boundary and experiment with new space because it can take a longer-term view. JTC has to be the initiator and innovator. Once the market has accepted the new concept, the private sector can start to develop.”

The authorities’ decision not to relax permitted uses for the B1 zone – at least for now – is unlikely to go down well with industrial property agents who have been lobbying for such a move. A key plank of their argument is that Singapore’s manufacturing landscape is changing; there is now less traditional “hard core” production here but more service type activity as the Republic ascends the production value-chain.

Of course, a broader range of uses for B1 zone would also make it easier for agents to lease out such space, boosting demand, rents and prices. There is market talk of investors who have been stuck with B1 units, especially those snapped up in projects built to office specifications instead of being designed to cater to the needs of genuine industrialists. It is difficult to lease out such units given the strict enforcement by the authorities against illegal use of industrial space.

Some analysts point out that had the authorities acceded to a request to allow standalone offices, for instance, that would penalise those who had been adhering to the approved B1 uses.

“Moreover,” Mrs Ong said, “it would undermine the push towards developing decentralised offices in places like Paya Lebar and Jurong East.”

The incidence of businesses illegally using B1 space as pure offices (that is, without any core industrial or warehousing activity) gathered momentum during the office shortage that preceded the 2008 global crisis. At the time, office rents were shooting up and more companies had quietly moved into premises zoned for B1 use, to keep a lid on rental expense.

Moreover, B1 developments are typically near major transport nodes and in established areas such as MacPherson, Ubi and Tai Seng – making them an attractive alternative space for office tenants.

Around the 2011-2012 period, there were mounting complaints that such tenants whose activities were not in compliance with B1 use, were driving up rents for genuine industrial users. About the same time, a string of new strata projects on B1 sites came to the market boasting features and specifications that more closely resemble office buildings than industrial premises. Units in such developments were the subject of much speculative demand.

So the authorities stepped up enforcement action against tenants and landlords who were flouting the rules on B1 uses. And in early 2013, a seller’s stamp duty was introduced on industrial property to discourage short-term speculative activity that could distort industrial property prices and raise occupancy costs for businesses.