Singapore Property News: 16th to 31st October 2016

Real Estate News

Property Market Activities

Net office demand contracts in Q3, vacancy crosses 10% (BT, 29 October 2016)

The negative office demand in Q3 2016 coupled with a pick-up in office completions sent the islandwide office vacancy rate north – from 9.1 per cent at end-June 2016 to 10.4 per cent at end-September. Market watchers attribute the weaker demand to the sluggish economy and anaemic employment numbers. With a high volume of completions slated for 2017, along with persistently weak economic growth, office rental could continue to slide next year, before stabilising in 2018 due to a dearth of new completions, experts opined.

Singapore Q3 retail vacancies rise to 5-year high of 8.4% (BT, 29 October 2016)

The decline in both retail property rents and prices was slower in the third quarter than in the second, but vacancies rose to 8.4 per cent at the end of Q3 according to the latest data from the URA. The URA’s retail property rental index, which tracks the whole of the Central Region has slid 7.1 per cent since Q4 last year. Market analysts say the lack of purchasing power is due to the slow-moving economy and slack in the labour market causing an acute fall in household disposable income.

Singapore private home prices fall steeper 1.5% in Q3 as sales drop 12%: URA (ST, 28 October 2016)

Overall private home prices in Singapore fell 1.5 per cent in the third quarter from the second quarter, marking the 12th straight quarter of price decline following a slew of property cooling measures that have crimped demand for private homes and put a lid on prices. Sales of new private homes (excluding ECs) fell 12 per cent in the third quarter to 1,981 units from 2,256 units in the second quarter.

Total employment in Singapore contracted in Q3, second time since 2008/09 recession (BT, 27 October 2016)

According to the Manpower Research and Statistics Department’s “Labour Market Advance Release Third Quarter 2016”, total employment contracted by 3,300 in the third quarter. This was due mainly to a broad-based slowdown in employment growth coupled with an estimated 4,100 workers from the services, manufacturing and construction sectors being made redundant.

Singapore developers’ forecast: less gloomy but
still moody (BT, 27 October 2016)

The NUS-Redas Real Estate Sentiment Index, or RESI, survey for the third quarter shows continued improvement in both developers’ sentiment and overall sentiment in Q3 from Q2 but still signals a deteriorating market. Those surveyed identified that the issues likely to impact the real estate market are global and local economic headwinds, concerns about the labour market, tightening of finance and liquidity in the debt market and rising inflation and interest rates.

Developers’ private home sales set to jump in October (BT, 18 October 2016)

Despite the dim economic outlook and falling property prices, buyers are still very keen on new homes as evidenced by recent launches. After a relatively quiet August and September amid an absence of fresh project launches, developers’ private home sales are expected to soar this month, possibly to the highest monthly level this year, on the back of a few big new-project launches like Forest Woods and The Alps Residences.

509 new private homes sold in September, up 49% on year and 9% over August: URA (ST, 17 October 2016)

Demand for new private homes in Singapore recovered in September after a fall in August that was partly due to the traditional Chinese Hungry Ghost festival which typically sees weaker market activity, as well as fewer units launched for sale in the month. The city fringe led activity in September with 297 units sold, followed by 144 units of mass market homes and 68 units in the prime districts.

Decline in prices of private homes attracting more buyers (ST, 17 October 2016)

Despite lacklustre economic prospects, concerns over job security and rising vacancies, the demand for private homes this year seems to have kept pace with last year in the wake of falling prices. Several estate agencies said their agents closed around 20 to 40 per cent more transactions in the first nine months of the year than in the same period in 2015.

Rents drop with vacancies on the rise (ST, 17 October 2016)

Broad market trends are marked by falling rents and rising vacancies amid sluggish economic growth and a large supply of new units. There were 30,310 vacant private homes and a vacancy rate of 8.9 per cent as of June 30, according to the Urban Redevelopment Authority. Analysts expect the rental market to soften further, with suburban areas most vulnerable next year, when the bulk of units under construction are expected to be completed.

Government Land Sales

Residential reserve site at Serangoon North Ave 1 released for application (BT, 27 October 2016)

A private residential site at Serangoon North Avenue 1 that could potentially yield up to 505 units has been released by the Urban Redevelopment Authority (URA) on Thursday. The 99-year 1.7 ha leasehold site is located near Chomp Chomp Food Centre and Serangoon Garden Market. It has a maximum gross floor area of 42,973 square meters given its maximum building height of two storeys within the low-rise zone.

JTC launches two small industrial sites for sale (BT, 26 October 2016)

State industrial landlord JTC announced on 25 October 2016 that it has launched a confirmed list site at Tuas South Link 3 (Plot 22) and a reserve list site also at Tuas South Link 3 (Plot 15) under the H2 2016 Industrial Government Land Sales (IGLS) Programme. The 0.58 hectare Plot 22 is zoned for Business-2 development and has a 20-year tenure with a maximum permissible gross plot ratio of 1.4, and the 0.5 ha reserve list Plot 15 is zoned for Business-2 development and has a 20-year tenure with a maximum permissible gross plot ratio of 1.4.

Investment Sales

Hiap Hoe to offload unsold units of Cavenagh Road condo (ST, 31 October 2016)

Hiap Hoe has agreed to offload a company that owns the unsold units of WaterScape @ Cavenagh to its controlling shareholder Hiap Hoe Holdings for $31.1 million. With a subdued market and no signs of the lifting of cooling measures, Hiap Hoe has decided not to incur increasingly hefty penalty payments under the QC rules.

Swiss Club sells 3 plots of land at JLL auction (BT, 27 October 2016)

The Swiss Club has sold three vacant plots of land zoned for residential use in the Bukit Tinggi/Jalan Kampong Chantek vicinity to a Singaporean for a total of S$15.222 million. Market watchers note that two of the plots are long strips near the road, with only the third plot, with a land area of 25,861 square feet, viable for housing development.

A duplex penthouse at the Seascape condominium development in Sentosa Cove was sold at S$6.35 million, or S$1,497 psf, on the strata area of 4,241 square feet. The unit has four bedrooms and comes with a private lap pool, with a balance lease of about 90 years. A single storey detached house at Daffodil Drive in the Upper Thomson area fetched S$4.35 million. The freehold house has three bedrooms and was an estate sale.

Jurong Point put on market with over S$2b price tag (BT, 26 October 2016)

This translates to more than S$3,000 per square foot based on the commercial net lettable area of about 658,000 square feet within the suburban shopping centre that is being offered for sale by an equal joint venture between Guthrie GTS and Lee Kim Tah Holdings. The 1.07 million sq ft GFA Jurong Point stands on two sites, with remaining lease term of about 76 years and 89 years, with combined land area of 557,288 sq ft.

CDL unit exits entire interest in Summervale Properties for S$977.6 million (BT, 21 October 2016)

Through its third Profit Participation Securities platform, ordinary and preference shares will be issued to Green 18, a special purpose vehicle company whose shareholders are high net worth Singaporeans and companies wholly owned by Singapore citizens. CDL’s wholly owned subsidiary, Trentwell Management, will be appointed as the exclusive asset manager and marketing agent to manage, lease, market and sell the units of Nouvel 18
for the next five to seven years.

CCT to redevelop Golden Shoe Car Park (BT, 20 October 2016)

Capitaland Commercial Trust has submitted plans to redevelop Golden Shoe Car Park into a commercial development with commercial gross floor area of about one million square feet that will include an office tower up to 280 metres above ground, and an adjoining government-owned food centre. The trust aims to commence the redevelopment of Golden Shoe Car Park by the second half of 2017.

Lian Beng acquires Khong Guan Industrial Building for S$31m (BT, 17 October 2016)

Construction firm Lian Beng Group has acquired Khong Guan Industrial Building, an eight-storey freehold building at 20 Mactaggart Road for S$31 million or about S$544 per square foot. The building is zoned for “Business 1” use at a plot ratio of 2.5, with land area of 21,123 square feet and gross floor area of 57,019 square feet.

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