Business Times: Mass-market sector rebounded in ‘06: CBRE

September 29, 2007
Mass-market sector rebounded in ‘06: CBRE
Non-landed projects in non-prime areas turn in strong sales volume
By CONRAD TAN

MASS-MARKET property sales actually staged a recovery last year, earlier than widely believed, said property consultant CB Richard Ellis (CBRE) yesterday.

In a study of the take-up rates of new non-landed projects in non-prime areas, CBRE found that the mid-tier and mass-market projects turned in strong sales volume in 2006, although prices for these segments only began rising this year.

‘Until now, the market had perceived that these segments trailed the luxury segment in their recovery, and had begun to recover only in early-2007, in terms of volume and price,’ it said.

An analysis of the new units launched last year and the corresponding take-up volumes ’shows otherwise’, it said.

It found that 68 per cent of the new projects launched last year in the West Coast, in districts 5 and 21, were taken up. Similarly, take-up rates for projects in districts 15 and 16 were about 90 per cent – ‘not far’ from the take-up rates of 74 per cent for projects in the prime districts 9 and 10 and 96 per cent for those in the downtown and Sentosa Cove areas.

‘Of course, in terms of pricing, the mass market and mid-tier projects have only begun to inch up in the previous two quarters of 2007,’ said Joseph Tan, executive director for residential property at CBRE.

‘But the strong sales of non-prime projects since a year ago show the return of buying power for upgraders and private homeowners, who, at that time, saw good investment value in the projects, while anticipating the upside in prices later on.’

Since then, the number of projects on the market has increased dramatically.

The number of new units launched in the west has tripled from a year ago, with the launch of One-north Residences, One Rochester, Botannia and The Parc Condominium, it said.

Meanwhile, the number of new units launched in the Newton/Novena area has doubled from 578 units in 2006 to 1,351 units so far this year. Take-up rates have been ‘very healthy’ at 90 per cent, said CBRE.

In districts 15 and 16 in the east, the take-up rate so far this year has been ‘equally strong’ at 85 per cent.

Residential rents have also risen sharply ‘due to the shortage of apartments for lease following the slew of collective sales of existing developments in the past two years’, said CBRE.

After rising 18.7 per cent on average in the first half, rents are expected to increase by another 8-10 per cent in the third quarter.

Rents in the popular areas of Tanjong Rhu, Meyer Road, East Coast, Dunman, Joo Chiat and Siglap have gone up 40.9 per cent since the fourth quarter of 2006, with median rents now at $2.62 per square foot per month.

The next biggest increase in rents were for apartments in the Orchard Road, Grange Road, Tanglin and Bukit Timah areas, where rents have gone up by 37.5 per cent to $3.74 per square foot per month on average.

The residential market is likely to remain active in the final quarter of this year, amid strong growth in the economy, CBRE said.

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Business Times: Office demand spills out of CBD as rents soar

September 29, 2007
Office demand spills out of CBD as rents soar
Temporary supply shrinkage adds to space crunch: DTZ
By ARTHUR SIM

(SINGAPORE) Office rents across Singapore have all breached historic highs, says real estate consultant DTZ Debenham Tie Leung, with Raffles Place now commanding average monthly rents of $14.50 per square foot (psf).

This represents an increase of 11 per cent over the previous quarter.

And despite the completion of the 81,460 square feet of new office space at 135 Cecil Street during the quarter, the office market still suffered a net loss of 455,390 sq ft of stock due to the demolition of Asia Chambers Building and the addition and alteration works going on at two existing office blocks – OUB Building and Ocean Building.

The authorities have been trying, among other measures, to address the crunch by making short-term lease office space available.

DTZ executive director (consulting and research) Ong Choon Fah said: ‘The rapid rise of office rents is likely to impel prospective tenants to source for lower-cost alternatives outside the CBD.’

In its report, DTZ highlights that CBD fringe and decentralised areas like Alexandra and Novena have been attracting much of this spill-over demand.

In particular, the Alexandra zone now enjoys full occupancy with average monthly gross rents at $6.80, an increase of 13 per cent quarter on quarter.

In the Orchard Road zone, monthly rental increases are significantly higher at 25 per cent quarter on quarter and now the rents stand at $10.60 psf per month.

Future supply can be expected from government land sales sites.

In the third quarter, three sites were sold.

Two were at Anson Road/Enggor Street, going to Mapletree Investments and LaSalle Investment Management, while one site was at Beach Road, which went to a consortium consisting of City Developments, Istithmar and El-Ad Group.

DTZ believes the sites could generate an estimated 1.03 million sq ft of gross floor area of office space.

It also noted that there is another 5.7 million sq ft of commercial space from various government sources available in H2 2007.

But with demand from the financial sector for office space not expected to decline anytime soon – DTZ cites a Bank for
International Settlements report which ranks Singapore as its fifth-largest centre for foreign exchange trading – interim government initiatives have had to be introduced to alleviate some pressure.

The Urban Redevelopment Authority launched two transitional office sites at Scotts Road and Tampines Concourse with 15-year leases in the quarter, with the site at Scotts Road drawing 11 bidders.

And DTZ also estimates that at the end of the third quarter, 663,766 sq ft of short-term lease office space has been made available through the Singapore Land Authority.

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Business Times: Q3 rents for high-tech industrial space up 15%

September 29, 2007
Q3 rents for high-tech industrial space up 15%
By ARTHUR SIM

THE average monthly rent for high-tech industrial space has increased by 15 per cent in this quarter to $3.45 per square foot per month, real estate consultant DTZ Debenham Tie Leung reported.

High-tech industrial space includes business park and science park space such as Changi Business Park and International Business Park, and rents there now range from $3 to $4.50 psf per month. The monthly asking rent for the newly completed Eightrium @ Changi Business Park is also in the vicinity of $4 psf.

DTZ executive director (consultancy and research) Ong Choon Fah attributed the increasing rents to the continuing spillover demand for conventional office space.

The latest figures showed that business parks experienced a 5 per cent drop in occupancy in the second quarter of this year due to the completion of Eightrium @ Changi Business Park and Xinlinx Asia Pacific’s business park development at Changi Business Park Vista.

Mrs Ong added: ‘Notwithstanding the dip in occupancy rate, demand for business parks remains strong.’

HSBC will take up 10,000 square feet of space at the Comtech, she noted.

Islandwide, private industrial stock, which includes factory and warehouse space, rose one per cent to 295 million sq ft in the second quarter. The average occupancy rate of private factory space rose marginally by 0.1 of a percentage point quarter-on-quarter to 90.7 per cent in the second quarter while islandwide occupancy rate of warehouse space stood at 89 per cent.

Separately, JTC Corporation launched a 20,867 square metre land parcel at Jalan Tepong for sale yesterday. Industry executives expect this site, which is the second of the two industrial sites for the year to be launched under the Government Land Sales Confirmed List, to go for between $380 and $400 per sq m per plot ratio. The site has a plot ratio of 1.4 and can be used for light industry, general industry, warehousing, utilities or telecommunications.

Demand for high-tech space could see new entrants into the market building their own facilities.

Jones Lang LaSalle (JLL) associate director (industrial markets) Tahlil Khan said that his firm is working with a number of organisations and is looking at public tenders and direct allocation of sites ‘depending on the preferences, accommodation needs and objectives of the occupier’.

David Wilton, JLL regional director and head of industrial (Asia) said that users were unlikely to find space at what he called ‘the existing business park or high-tech inventory’.

He said that these users were left with three options: purchase land to occupy; commission a leased facility; or negotiate with owners/developers on facilities under development or construction.

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Straits Times: My HDB flat’s a condo

Sep 29, 2007
My HDB flat’s a condo
Dawson Estate in Queenstown will be the new face of public housing – flats done condo-style by top home-grown architects By Tan Hui Yee, Housing Correspondent

GROUND-LEVEL parks extend to the doorsteps of residents’ homes and flats come with ceilings tall enough for lofts to be built. These perks are not the latest offerings of swanky condo projects but new ideas for public housing in Queenstown.

Conceived by top local architects and unveiled at the Housing Board’s (HDB) ongoing Remaking Our Heartland exhibition, the new concepts also promise to bring high-rise communities closer and promote an environmentally sustainable lifestyle.
At the heart of all this future action is Dawson Estate, a 60ha district in Queenstown bounded by Margaret Drive, Tanglin Road, Alexandra Road, Commonwealth Avenue and Queensway.

This former housing and entertainment hot spot was developed in the 1950s by the HDB’s predecessor, the Singapore Improvement Trust.

It now has just 3,000 flats and tracts of land ripe for redevelopment after blocks of flats were cleared in the 1980s and
1990s.

It is expected to house about 10,000 more apartments in the future.

To bring a fresh spin to public housing, the HDB took the unprecedented step of commissioning Surbana International
Consultants, Woha Architects and SCDA Architects earlier this year to conceptualise three separate precincts comprising 3,100 homes.

The brief: to introduce flats with seamless access to greenery, waterscapes and surrounding facilities, and promote closer ties, all on a tight budget.

While the HDB was tight-lipped about the construction budget it gave the architects to work with, SCDA’s design principal Chan Soo Khian estimated that he had to design flats that could be built with roughly half of what it would cost to put up luxury condos fully fitted with items like wardrobes and cabinets.

Most HDB flats do not come with fittings.

The HDB said it will work closely with the private architects to develop a cost-effective design.

Each firm had its own ideas: Surbana extended a future linear park into a winding landscaped path around the blocks; SCDA gave the bigger flats enough vertical space for lofts; and Woha envisioned a block facade reflecting individual home owners’ tastes.

Said Mr Chan: ‘Doing a public-housing project means you have to work within tighter constraints. It means, in a modern way, your design is purer.

‘You don’t depend on embellishments to make it a good project. You’re not worried about the inside, what kind of fitting is going where. In some (private) projects, you spend so much time just worrying about the kitchens and fittings.’

But certain private-housing elements are likely to pop up in the Dawson projects.

Woha, which recently won a prestigious Aga Khan Award for Architecture for its private project 1 Moulmein Rise, wants to offer the monsoon window it introduced there as one of the options for Dawson home buyers.

This contraption is a bay window with a horizontal opening that lets the breeze in but keeps out the rain.

Woha’s founding director Richard Hassell said: ‘It’s not going to be expensive housing, just smarter in design.’

Work on the first of these Dawson flats is expected to begin in the next three to four years.

The upcoming estates will give new families a higher chance of living near the city centre, said head of HDB’s urban design unit Kathleen Goh.

Currently, new flats near the central areas tend to be built only when existing residents in the vicinity are being resettled, leaving a limited number for newcomers.

The upcoming 3,100 homes in Dawson are likely to be fully available to new families.

Ms Goh revealed that families buying separate homes in the same housing estate would be able to buy adjoining units.

These units could also be combined sideways or even vertically to encourage different generations to live together. Their layouts will be flexible so that families can make adjustments if their needs change.

So far, the exhibition has drawn 62,000 visitors. One of them is architect Khoo Peng Beng, who designed the first 50-storey public-housing blocks here, now under construction in Tanjong Pagar.

Back in 2002, when his firm ARC Studio Architecture + Urbanism proposed having high-rise gardens and sky bridges link seven towers for the international design competition for that project, such ideas were still relatively novel.

He said: ‘HDB has come a long way. For a long time, the evolution of HDB design was very functional. This time, I think there is a more emotional and integrated approach to how we look at public housing.’

If the Dawson proposals are well-received, the HDB will consider inviting private architects again to conceptualise future public-housing projects.

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