Singapore Property News: 16th to 31st January 2017

Real Estate News

Property Market Activities

Condo launches to drive new home sales up (ST, 31 January 2017)

The new private home market is expected to welcome as many as four project launches by April. They are Park Place Residences at Paya Lebar Quarter, Grandeur Park Residences in Tanah Merah, Clement Canopy in Clementi and Seaside Residences in Siglap. New home sales typically get a lift when a major project debuts on the market, particularly with brisk demand for smaller and more affordable units. Last month, developers sold just 367 new units – the lowest level in 10 months – on the back of a paltry 90 new units launched. Despite the subdued monthly sales, the number of new private homes sold last year still hit 7,972 units, up by about 7 per cent from the 7,440 shifted in 2015.

High-end property prices drop in 2016 (ST, 28 January 2017)

Values in prime districts – from the Central Business District to Orchard Road and Tanglin – declined 1.2 per cent over 2016, but that was a better performance than in other parts of the island, according to Urban Redevelopment Authority (URA) figures. URA noted in data out on Thursday that prices fell 2.8 per cent in the city fringe and 3.4 per cent in the suburbs. The high-end market also recorded the biggest increase in the number of transactions last year, up 48.7 per cent over 2015, easily beating the 27.2 per cent rise in the city fringe and the 3.7 per cent rise in the suburbs. Experts expect that prices will fall further, albeit at a gentle pace.

Savvy buyers zoomed in on CCR last year, URA data shows (BT, 27 January 2017)

Government data released on 26 Jan showed the region was 2016’s outperformer in terms of percentage increase in transaction volumes. The total number of private homes sold in CCR through both primary and secondary markets surged 48.7 per cent in 2016 over the preceding year. This is a faster pace of increase compared with the 27.2 per cent rise in transaction volume in the RCR and a 3.7 per cent increase in the OCR. The increase in CCR sales volumes was accompanied by greater price resilience in the region. URA’s price index for non-landed homes in CCR posted a relatively modest drop of 1.2 per cent in 2016 – compared with the price contractions of 2.8 per cent in RCR and 3.4 per cent in OCR.

Industrial prices, rents in 7th straight quarterly fall (BT, 27 January 2017)

Industrial prices and rentals continued their decline for a seventh consecutive quarter in the last three months of 2016. Prices fell a further three per cent in the fourth quarter, and rentals by 0.5 per cent, said JTC on 26 Jan. For the year, industrial prices retreated 9.1 per cent, and rentals, 6.8 per cent. This was steeper than the 1.7 per cent decline in prices and the 2.1 per cent in rentals in 2015. JTC has been ramping up supply to arrest the surging of prices and rentals in recent years, with about 2.4 million sq m of industrial space coming onstream this year. JTC said this is higher than the average annual supply of around 1.8 million sq m and demand of 1.3 million sq m of the past three years.

Commercial rent, price slide worsens in 2016 (BT, 27 January 2017)

Rents and prices of commercial space in Singapore fell at a faster rate last year compared to 2015, with office vacancies rising to a near five-year high since Q1 2012 after some large projects were completed. Data released on 26 Jan by the URA showed that rents of office and retail space have fallen more than 8 per cent in 2016, steeper than the 6.5 per cent drop for office rents and 4.1 per cent fall in retail rents in 2015. The downward pressures are unlikely to go away just yet, given the impending supply and soft demand as the economy stays subdued, analysts say.

Singapore property comeback seen, boosting shares of large developers (BT, 26 January 2017)

Singapore’s home prices are set to make a comeback after a three-year losing streak, and analysts think property developer stocks are the best way to play that rebound. Amid a restructuring push to boost a slowing economy, the government could signal its intention to reconsider property cooling measures as early as the budget speech in February, according to an expert.

Industrial prices, rents continue decline in Q4, but occupancies inch up: JTC (BT, 26 January 2017)

Prices of industrial space in Singapore fell a further 3 per cent in the fourth quarter of 2016, while rentals dipped 0.5 per cent, according to official JTC statistics released on 26 Jan. For the full year, industrial prices and rentals have retreated 9.1 per cent and 6.8 per cent respectively. About 2.4 million sqm of industrial space is estimated to come onstream in 2017, higher than the average annual supply and demand of around 1.8 million sqm and 1.3 million sqm respectively in the past three years. This is likely to exert further downward pressure on occupancy rates, prices and rentals.

Developers to keep playing quantum price game this year (BT, 17 January 2017)

Developers sold 8,136 private homes last year, up 9.4 per cent from the 7,440 units they moved in the previous year – and the best showing in three years. The pick-up is a reflection of improved sentiment and demand, say analysts. An analyst opined that developers will have to be mindful about pricing because it’s still a price-sensitive market on account of the property cooling measures and rising interest rate environment. Given that land prices have risen in the past 12 months, the clear denominator to play around with would be the unit size, while lower construction costs due to the slow economy helps alleviate cost pressures for developers.

Developers’ private homes sales slide to 367 units in Dec (BT, 16 January 2017)

Developers sold 367 private homes (excluding ECs) in December 2016, less than half the 860 private homes that they sold in November 2016 but close to the 384 units that they moved in December 2015. Including ECs, which are a public-private housing hybrid, developers found buyers for 580 units in December 2016, down from 1,111 units in November 2016 but higher than the 508 units that they sold in December 2015.

Public Housing

Demand for HDB resale flats expected to remain strong this year (BT, 17 January 2017)

The number of resale transactions for public housing flats rose 7.8 per cent to 20,813 cases last year from 19,306 cases in 2015. The latest figure is also the highest in four years. An analyst suggested that homebuyers might have sensed that prices in this segment had stabilised and may not fall significantly if they continued to wait. HDB resale flat prices are currently in consolidation phase, with marginal price movements. On 26 Jan, HDB said that its resale flat price index dipped 0.1 per cent in the fourth quarter of 2016 over the preceding quarter. The drop for the whole of last year was also 0.1 per cent.

East Coast may offer 6,000 new HDB flats (ST, 17 January 2017)

Home hunters could soon get a shot at new Housing Board flats with coveted sea views along Singapore’s East Coast. The Government is looking into creating a new Bayshore district, which includes 6,000 HDB flats – a huge change for the overwhelmingly private estate area located on reclaimed land. Another 6,500 units will be set aside as private homes. If they materialise, these Bayshore flats would be the first HDB homes built along the East Coast since the old-generation Marine Parade flats constructed in the 1970s, some of which have fetched more than $900,000 on the resale market in recent months.

Investment Sales

MBS parent firm eyeing $5b sale of 49% stake in its Shoppes mall (ST, 28 January 2017)

Las Vegas Sands, the parent company of MBS, wants US$3 billion to US$3.5 billion (S$4.3 billion to S$5 billion) for the stake, but it needs the green light from the Singapore Government before a sale can take place. The agreement that allowed Las Vegas Sands to build the resort and casino stated that the company cannot sell any part of the 800,000 sq ft mall for at least 10 years, and only then after official approval. The 10-year period expires in March.

Perennial-led consortium sells 70% stake in TripleOne Somerset for S$350m (BT, 26 January 2017)

Perennial Real Estate Holdings led a consortium of vendors to sell a 70 per cent stake in TripleOne Somerset to Hong Kong-listed Shun Tak Holdings for S$350 million. Perennial will receive about S$101 million for the 20.2 per cent interest that it is selling, retaining a 30 per cent share in the office and retail development. The other sellers include SingHaiyi Group, Boustead Projects, and BreadTalk Group.

Roxy-Pacific buys five shophouses for S$17m (BT, 24 January 2017)

UOL Group has clinched an option to purchase a freehold 69,858-square-foot site at 45 Amber Road for S$156 million. The site, which currently holds a horticultural and gardening retail centre, has a plot ratio of 2.0 and is being sold by Sin Lian Huat Co. The District 15 site is within walking distance of the upcoming Marine Parade and Tanjong Katong MRT stations, which are estimated to be completed in 2023.

UOL plans to buy 69,858 sq ft site at 45 Amber Road for S$156m (BT, 23 January 2017)

Property developer Roxy-Pacific Holdings has agreed to acquire five adjoining two-storey shophouses on Upper Bukit Timah Road for S$17 million in total, it said in a Singapore Exchange filing on 24 Jan. The shophouses make up a freehold residential site with an estimated total land area of 10,256 square feet and an existing plot ratio of 2.5 under Singapore’s 2014 land use master plan.

CIT to divest Ubi property for S$22.1m (BT, 23 January 2017)

Cambridge Industrial Trust announced on 23 Jan that it has entered into an agreement with RBC Investor Services Trust Singapore Limited for the proposed sale of the remaining leasehold interest in a property located at 55 Ubi Avenue 3 for S$22.1 million, excluding divestment costs and application, goods and services tax. The five-storey light property has a gross floor area of about 141,135 square feet with remaining land tenure of approximately 39 years. The completion of the sale is subject to approval by the Housing and Development Board and is expected to take place in May 2017.

Lian Beng-led consortium in S$207m deal to sell 79,500 sq ft space at Prudential Tower (BT, 21 January 2017)

A consortium led by Lian Beng Group (Epic Land) is selling 17 strata office units at Prudential Tower for S$206.59 million. This works out to S$2,600 per square foot based on the strata area of 79,459 sq ft. Prudential Tower is on a site with a balance lease term of 78 years. The buyer is understood to be a separate account managed by One Tree Partners, a relatively new private equity fund management outfit. After the latest sale of the 17 strata units, Epic Land is said to be still left with about 60,000 sq ft of space at Prudential Tower.

Shanda gaming empire co-founder buys GCB (BT, 20 January 2017)

The Chinese turned Singaporean co-founder of Shanda Group is understood to have picked up a Good Class Bungalow along Cable Road, within the Chatsworth Park GCB Area, for S$23 million. The price works out to S$1,518 per square foot (psf) based on the freehold land area of 15,148 square feet. Inclusive of this deal, 2016 ended with 37 transactions in GCB Areas totalling S$788 million – an improvement on the 33 deals totalling S$715 million in 2015 and 28 deals amounting to S$626 million in 2014.

Freehold residential site near Orchard Rd for sale (ST, 18 January 2017)

A blue-chip freehold residential site near Orchard Road that can be used for landed homes has been put on the market with a price of at least $72.8 million. One Tree Hill Gardens comprises six maisonettes and seven apartments in a three-storey block on a site spanning 3,629.1 sq m or 39,063 sq ft, meaning the asking price works out to a land cost of $1,864 per sq ft. It is around 300m from the upcoming Orchard Boulevard MRT station on the Thomson-East Coast Line.

CapitaLand offloads The Nassim (BT, 17 January 2017)

Capitaland on 16 Jan said it has sold its 100 per cent stake in Nassim Hill Realty to an unrelated private company, Kheng Leong, for S$411.6 million. CapitaLand admitted that the agreed property value at S$2,300 per square foot on the strata area represented a bulk sale discount of about 18 per cent from the current individual unit sale price of the remaining 45 unsold units of The Nassim. CapitaLand said it is doing this to avoid paying extension charges of S$9.3 million, which would kick in from August 2017.

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