URA to up lease period of Scotts Rd site

URA to up lease period of Scotts Rd site

By KALPANA RASHIWALA

THE lease period for the Urban Redevelopment Authority’s (URA) first transitional office site, at Scotts Road, is to be increased from the proposed 10 years to 15, the authority said yesterday.
The extension is being made in response to market feedback that most investors prefer a longer lease to recoup their investments and to meet the needs of prospective tenants.

In view of the change, the closing date for the tender has been extended by three weeks to Aug22, to give more time for interested investors to reconsider their bids, the URA said.

Industry players generally welcomed the news. ‘At 10 years, it could not work out for investors; they’re likely to end with a loss from the venture. At 15 years, it can be a marginally profitable venture,’ said an industry observer.

CB Richard Ellis (CBRE) executive director Li Hiaw Ho said: ‘It’s probably workable at 15 years. We’ve heard of potential tenants who are interested, and are looking for a developer to build a transitional office building on the site and lease the whole building to them.

‘They reckon rents should be lower than in the CBD or Orchard Road and the location is convenient, right next to Newton MRT station.’

CBRE estimates the maiden transitional plot should generate about 140,000 sq ft net lettable area of offices.
 
URA has previously said it expects a low-rise development of three to four storeys which can be built quickly in about a year.

‘The site is likely to be awarded for about $100-$150 per square foot per plot ratio,’ Mr Li estimated.
Source : Business Times - 27 Jul 2007

S’pore’s private home prices rise 8.3% in Q2

S’pore’s private home prices rise 8.3% in Q2 
SINGAPORE’S private home prices climbed 8.3 per cent in April-June from the previous quarter to their highest level since the first quarter of 1998.
The Urban Redevelopment Authority (URA) said on Friday the price index for private residential homes rose to 147.8 for the second quarter, from 136.5 in the previous three-month period.

The second-quarter gain follows a 4.8 per cent rise in the first three months of 2007, prompting concern about possible overheating in the real estate market.

Last week, the URA raised its re-zoning tax on developers, a move that is expected to slow the city-state’s frenzied redevelopment.

The central bank said on Wednesday that it was increasingly concerned over the growing risk that rising property prices posed to the banking sector.

‘The banking sector exposure to the property and construction sector is significant,’ said Mr Heng Swee Keat, the managing director of the Monetary Authority of Singapore. — REUTERS

Source : Straits Times - 27 Jul 2007

Expats moving to cheaper areas as prime rents soar

Expats moving to cheaper areas as prime rents soar 
Surge in moves leads to boom for movers, executive relocation firms
By Erica Tay 

BUSINESS is booming for moving companies in Singapore as soaring rents force expat families to bail out of pricey areas in favour of cheaper outlying suburbs.
Demand is so great that some executive relocation firms are reporting a 15 to 25 per cent increase in charges and double the volume of business from last year.

The expat outflow has been most notable in blue-chip districts such as Holland Road, Bukit Timah and Tanglin, where rents have gone through the roof.

Average flat rents in districts 9, 10 and 11 - which include the upscale Orchard/Cairnhill, Tanglin/Holland Road and Newton/Bukit Timah enclaves - have rocketed by 36 per cent in a year, said real estate consultancy Savills Singapore.

Renting a unit at the posh Ardmore Park condominium now costs $17,000 to $19,000 a month, for example.

Rental increases started biting in March, sparking a house-hopping surge that has swamped moving companies serving the corporate accounts of multinational corporations (MNCs).
One company reported that the volume of moves has doubled from a year ago.

Asian Tigers K.C.Dat, which specialises in relocating executives of MNCs, is finding it hard to cope with the growth in business.

‘The volume of local moves is double what we handled last year, and this is after we turned away an equal volume because demand was just too high,’ said group general manager John Lim.

Most of those moving are ‘high-end executives, with rental budgets of $8,000 to $15,000 a month’, he added.

Another relocation specialist, UniGroup Worldwide UTS Singapore, said its volume of local moves began to surge in March, when it was 35 per cent higher than the same time last year.

By June, UniGroup’s monthly volumes of local moves were up 86 per cent year-on-year.

‘Nearly 80 per cent of the increase in local moves can be attributed to expatriates moving from districts 9, 10, and 11 to outlying areas such as Upper Bukit Timah, Ang Mo Kio or locations along the East Coast,’ said the company.

As well, Crown Worldwide has enjoyed a 30 to 35 per cent increase in the number of local moves for expat families.

Its general manager for household goods, Mr William Lee, said: ‘We have seen several cases where people moved because they couldn’t afford to live at the same place any more.’

The expat musical chairs occurs mostly at the end of the month, when residential leases usually end.

Expats are being caught in a classic supply-demand squeeze. Singapore’s recent rush of collective sales - where entire condominiums are bought by developers to be torn down and redeveloped - is slashing the supply of rental flats in choice districts, while the booming economy is drawing in more expats and so pushing up housing demand.

‘Low vacancy levels, coupled with strong demand from overseas staff as well as from tenants and owners displaced by collective sales, are expected to translate into rising rents over the short to medium term,’ said Mr Simon Hill, regional director of residential leasing at Savills.

‘We note that there is little room for negotiation on asking rents,’ he added.

The trend looks unlikely to ease soon, with Savills predicting a 15 to 20 per cent increase in luxury home rents over the rest of the year, ‘while rents in fringe/ suburban areas will follow suit, benefiting from the spillover demand’.

‘We are also likely to see a growing number of expatriates choosing to buy rather than rent.’

Source : Straits Times - 27 Jul 2007