Retail rents in S’pore stabilising

Retail rents in S’pore stabilising

By Ng Baoying,
SINGAPORE : Positive consumer sentiment and the Great Singapore Sale have provided some support for the retail property market in Singapore, according to property consultants DTZ.

It said given the general uncertain global outlook, tenants have resisted committing to higher rents, and this has kept the retail sector stable during the second quarter.

Going forward, analysts said they see at most a marginal increase of 2 to 3 per cent in rents for the rest of this year.

313@Somerset is part of the new wave of malls making a splash in Orchard Road. All together, some 5.4 million square feet of new retail space will be available by 2012.

Analysts said these new malls will lead the retail property rental market, while older ones will see rents stabilise at current levels, with little upside.

Donald Han, Managing Director, Cushman & Wakefield, said: “The new malls are looking at rentals higher than existing malls at Orchard Road. They’re looking at anything from 20-30 per cent higher. Prime retail space is always in demand.”

Cushman & Wakefield noted that there is little risk of oversupply as international retailers clamour for a piece of the Singapore market.

And although inflation may dampen domestic consumer spending, analysts said external demand from strong tourist arrivals is likely to offset that.

Mr Han said: “Into the next six months with the F1 arriving in September, we’ll only see a higher number of tourists on shore, which will effectively see higher tourism receipts, (a) positive spillover in spite of high inflation numbers over the next six months or so.”

With more malls fighting over the same tourism dollar, analysts said malls are starting to work harder to attract customers.

Turner Canning, Associate Director, Retail Consulting, Cushman & Wakefield, said: “(There is) a lot of criticism (that)… a lot of malls are cookie cutter, (with) similar shops, just in different configurations. You’re going to see that changing. It’s a global trend that malls are becoming more themed.”

Bringing in new retail choices is also another trend.

Chua Chor Hoon, Senior Director, Research, DTZ, said: “We notice that there are more new second-line brands coming, like Just Cavalli, which is a second line to Robert Cavalli. Emporio Armani is also coming. There are also more luxury brands from Europe coming here.”

This is in line with efforts by the Singapore Tourism Board to rejuvenate Orchard Road, turning it into one of the world’s premier shopping belts.

Analysts also said there is no fear that the Orchard belt will cannibalise suburban malls, as they serve different markets.

Ms Chua said: “The suburban malls… are in the heartlands, near residents. (They are) easily accessible. They serve residents’ daily needs, like groceries, daily wear necessities, personal services. These are complementary. In fact, the rentals in suburban malls can be as high as those in Orchard.” - CNA/ms

Source : Business Times - 05 July 2008

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Singapore Kovan Residences preview sells 50

Singapore Kovan Residences preview sells 50

Average price is $870-900 psf; buyers mostly Singaporeans
MORE than 50 units have been sold at Kovan Residences since a private preview party last Saturday.
 
Poolside ambience: Kovan Residences will have 512 apartments in eight blocks, all 18 storeys high 
The average price at the 99-year leasehold condominium next to Kovan MRT Station is between $870 per square foot (psf) and $900 psf. And the units sold so far include three penthouses that fetched about $2 million to $3 million each.

Buyers up to now are mainly Singaporeans, most of whom have private home addresses, although a few HDB upgraders have also bought.

‘We have attracted buyers who are purchasing for their own occupation as well as for investment because of the convenient location next to an MRT station,’ said Centurion Properties CEO Tony Bin, whose company is the majority shareholder of the project’s developer Centurion Kovan. Lian Beng is another shareholder, with a 19 per cent stake.

Centurion Properties is ultimately controlled by UOB-Kay Hian stockbrokers Han Seng Juan and David Loh Kim Kang.

Last Saturday, they invited 150 business associates, friends and relatives to a private preview at the showflat, which eventually resulted in the 50-plus units being sold. Kovan Residences is also being marketed to Messrs Han and Loh’s business associates in China and Hong Kong.

The lowest-priced unit in the development is a two-bedroom apartment for just over $700,000. The most expensive is a penthouse below $4 million. Three-bedroom apartments start from $1 million.

Kovan Residences will have 512 apartments in eight blocks, all 18 storeys high. The 16 penthouses in the development range from around 2,400-4,600 square feet and come with a private pool or a Jacuzzi. The project is being developed on a 190,000 sq ft site bought in a state tender in October last year for $436 psf per plot ratio.

Another new project being offered this weekend is Livia at Pasir Ris Drive 1. The average price is said to be $650 psf.

 
Source : Business Times - 05 July 2008

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Six bids logged for Singapore green building project

Six bids logged for Singapore green building project

But contractors sound caution with requests for longer warranty period
By JAMIE LEE

SINGAPORE’S first zero energy building (ZEB) project has attracted six bids for the main tender and interviews with four ’serious’ bidders will start next week, the Building and Construction Authority (BCA) said yesterday.
The tender to convert the BCA Academy into a net zero energy building has drawn bids ranging from $10.4 million to $11.8 million.

The six companies that tendered are: ACP Construction, Dokota, Logistics Construction, Lexon Furniture & Construction, Shanghai Chong Kee Furniture & Construction and Stallion Development. All six are mid-size unlisted companies. ‘We have six that came in. There are four serious ones that we are going to proceed with tender interviews next week,’ Ang Kian Seng, deputy director of technology and innovation development at BCA, said on the sidelines of a ZEB seminar.

Of the four short-listed firms, three are Singaporean while one is a Chinese company, he said.

BCA closed the construction tender on June 6. It has already awarded the building’s solar energy tender to Singapore firm Grenzone for $1.7 million.

 
 
In a sign of caution, some suppliers and contractors for renewable energy projects are ‘over-specifying’ with requests for warranties as long as 20 years, said Lee Siew Eang, who heads the research centre set up by BCA and the National University of Singapore. This is double the usual warranty period for specialised building projects and could raise costs as much as 40 per cent, said Eugene Seah, executive director of Davis Langdon & Seah.

‘There is a benchmark in the industry and the maximum is usually 10 years,’ he said.

Companies are seeking 20-year guarantees because while solar panels tend to last for that long in temperate regions, they could be damaged faster by Singapore’s tropical weather.

‘When (the panels) are exposed to the afternoon sun, it can be over 50 degrees. With rain and thunderstorms, you can go down to 28 degrees, so there is expansion and contraction. That element of uncertainty is still there,’ said Prof Lee.

Singapore lags regional neighbours such as Malaysia, Japan and Thailand, which are also constructing ZEBs.

The ZEB project was launched in November last year. By 2009, the BCA Academy will be fitted with solar panels to generate electricity that is transferred into a normal power grid.

The amount of energy produced will match the amount of power consumed in the building.

ZEB, which will cost about 10 per cent more than a conventional building, will become a test centre for other green building technology, such as energy- efficient lamps and fan-ventilation systems.

The target is to run the building on 70 per cent less energy than a conventional building. ZEB is expected to run on 86 kilowatts per hour (kwh) per sq metre, compared with 230 kwh per sq metre for standard buildings.

 
Source : Business Times - 05 July 2008

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Singapore Retail therapy to bargain hunt - GSS goes low key

Singapore Retail therapy to bargain hunt - GSS goes low key

Muted economic climate makes it harder for labels to attract buyers
By NISHA RAMCHANDANI

(SINGAPORE) As the Great Singapore Sale (May 23 - July 20) starts to draw to a close, figures reveal that sales are seeing some growth. However, some retailers say that they’ve had to woo customers who are showing more restraint this year by holding out for better buys.
Still, this doesn’t come as a complete surprise to those in the industry.

‘Last year was fantastic but this is difficult to maintain, particularly so because of the change in the economic outlook. Last year was wonderfully promising where the economy was concerned,’ said executive director of the Singapore Retailers Association (SRA), Lau Chuen Wei.

The top line figures are there but ‘we don’t know about the bottom line yet, especially as costs have been rising phenomenally. Sales also vary on sectors’, Ms Lau added.

So while retailers have indicated that sales are coming in, they’ve also had to pull out all the stops to get them.

Wing Tai Retail, which has a portfolio of 17 brands such as G2000, Karen Millen and Topshop, says that there were ups and downs across the different brands culminating in a single-digit growth.

 
 
‘This year is not very fantastic. Last year, people were anxiously shopping. Now, people are waiting for the best discounts. We see a lot of brands having to offer sharper discounts in order to match up to last year,’ explained executive director of Wing Tai Retail, Helen Khoo, who added that some of their brands had to follow suit.

Retailers in Wisma Atria, for instance, have offered discounts of up to 70 per cent.

Founder and general manager of home-grown fashion label bYSI Tan Yew Kiat said bYSI saw ‘a growth in sales but it wasn’t as significant as last year’. He reckoned that sales grew by about 10 per cent, although this was half of the revenue growth last year. bYSI, which has 12 stores in Singapore, saw the strongest demand for its outlets that are located in the city.

For Wisma Atria, centre-wide performance was ‘encouraging’ with an increase of over 4 per cent in May over the same period last year. However, it was the fashion retailers in the mall that really scored with ’some reporting year-on-year sales growth of up to almost 50 per cent’, said Amy Lim, general manager, Macquarie Pacific Star Property Management.

Promotions and extended shopping hours were also other strategies employed to attract more customers. Wisma Atria launched a shopper loyalty programme - Who’s Who - that allows shoppers to convert their spending into points to redeem for rewards.

For jeweller Poh Heng, sales for this year’s GSS have remained in line with last year’s, the company revealed. Its sales period spans the entire GSS period.

A previously released report by MasterCard shows that the first weekend of the GSS (May 23-25) got off to a strong start, raking in some US$37.2 million of sales, up nearly 25 per cent from US$29.9 million in 2007. According to the SRA, apparel did particularly well in the first two weeks of the GSS although sales wound down across the board as the GSS wore on, as per normal.

But with another two weeks or so to go before the GSS wraps up for real, some retailers are still holding out for a happier ending.

‘Poh Heng expects sales to pick up further as GSS continues,’ asserted Chng Hwee Siang, director of Poh Heng Jewellery.

 
Source : Business Times - 05 July 2008

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Wealthy clients to zip around F1 party circuit - Singapore

Wealthy clients to zip around F1 party circuit - Singapore

Private banks in high-stakes race to wow clients and woo millionaires
By SIOW LI SEN

(SINGAPORE) Tread carefully near the Padang during the last weekend of September. Otherwise, chances are you’ll be stepping on one of the thousands of millionaires that the city’s first Formula One race is certain to attract.
 
F1 upgrade: Kueh pie tee will be served around the Padang with lobster and caviar fillings 
Many of them will be clients of private banks - invited to the Sept 26-28 F1 race - as their hosts vie to throw the sexiest parties with the most oomph.

The competition around the circuit will be every bit as fierce and the F1 tickets are just a small part of the cost.

‘It’ll be very competitive during that period - everyone’s going for the sexiest venues. You’ve got to have glamour and prestige, you’ve got to be more creative,’ said one private banker.

Standard Chartered Bank is bringing in 200 clients with many flying in from other parts of Asia, as well as the Middle East, Africa, Europe and the Americas.

Said V Shankar, group head of origination and client coverage, Standard Chartered Bank: ‘The F1 is the most significant investment we have made in a client entertainment opportunity in recent times in Singapore.’

He added: ‘We will cater to the tiniest of details and ensure that our clients have a fantastic and memorable experience at the world’s first night race. We are planning on unique dinners and other opportunities for our guests to meet each other and build networks.’

Altogether, 13,000 corporate tickets costing $3,500 to $7,500 each for a seat in the Paddock Club are being snapped up by financial institutions and other major sponsors who are treating the inaugural F1 night race as a serious marketing tool.

‘There are more parallels than one might think between banking and Formula One - there is a drive for excellence in both,’ said Francois Monnet, managing director and head of private banking, South-east Asia and Australasia, Credit Suisse. Credit Suisse, first sponsor and official partner of the BMW Sauber team, is inviting an estimated 900 international guests from its private bank, investment bank and asset management divisions. The tie-up is used to convey the bank’s brand and image across its target markets.

Another 300-plus grandstand tickets have also been reserved for Credit Suisse staff to purchase.

ING, the major sponsor of Renault team, is hosting some 1,000 mainly private banking clients.

While many of those invited are local millionaires, captains of industry and personalities, bankers told BT that they will also be flying in a fair number of clients from all over the world for the first ever F1 night race.

To help some of these jetsetters feel at home, servings of Singapore’s humble kueh pie tee dish - to give a local flavour, but not too much - are being upgraded with lobster and caviar fillings.

Organisers said finding exclusive and glamorous venues to host parties involved quite an effort because international clients are tough to impress.

The Royal Bank of Scotland (RBS), which is a major sponsor of the Williams team, will host 400 clients to a cocktail at the old Supreme Court building where they will have a chance to get up close and personal with F1 legend and three-time world champion Jackie Stewart.

Said Alan Goodyear, country executive, RBS Singapore: ‘RBS will be holding an exclusive gala cocktail at the old Supreme Court on Thursday evening before the F1 weekend to give our clients an experience of F1. The venue has been chosen because of its proximity to the F1 race track and because it is one of the iconic buildings of Singapore.’

RBS group CEO Fred Goodwin will be flying in to entertain the bank’s private and corporate clients, which include some of the top business leaders in Asia and Europe, he said.

RBS, which owns RBS Coutts, one of the UK’s oldest private banks, last year bought the Netherlands’ biggest bank ABN Amro in the largest bank takeover ever in history.

Singapore’s F1 will be an opportunity to bring together local and international clients and relationship managers from RBS, RBS Coutts and ABN Amro, said Mr Goodyear.

OCBC Bank is the only one of the three local banks to invite about 100 lucky customers to F1.

‘We will host our top- tier customers at the prestigious F1 Paddock Club. Our guests at the OCBC dedicated Paddock Club suite will not only enjoy the food and entertainment provided by the F1 Paddock Club, they will also have VIP access to the pit area to get close to the racers and cars,’ said Koh Ching Ching, head of group corporate communications, OCBC Bank.

The guest list of Singapore Telecommunications, the title sponsor of F1, runs into the hundreds, said spokesman Peter Heng.

 
Source : Business Times - 05 July 2008

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Mindy Yong

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Soaring rents pushing PRs to buy Singapore flats

Soaring rents pushing PRs to buy Singapore flats 

They account for 20% of resale-flat purchases, say agents

By Jessica Cheam 
 
PERMANENT residents (PRs) are flocking to buy Housing Board resale flats as high rents start to make ownership a more attractive option.
Sales to PRs have rocketed in the past two years, say property agents, and the keen army of buyers is helping to keep prices buoyant in an otherwise-flat market.

Property agencies PropNex and ERA Realty told The Straits Times that in recent months, about 20 per cent of total HDB home sales were driven by PRs.

This is a four-fold increase from two years ago, when PRs bought just 5 per cent of the homes sold, said ERA’s assistant vice-president Eugene Lim.

Last year, PRs accounted for about 10 per cent of sales, said PropNex chief executive Mohamed Ismail.The sales figures are even more striking for smaller flats like three- or four-roomers, with PR buyers snapping up 45 to 50 per cent of the stock, added Mr Lim.

HSR Property Group reports similar figures. PRs bought about 18 per cent of HDB homes recently, said executive director Eric Cheng.

The three agencies command about 80 per cent of the HDB resale market.

Last year, 29,436 resale flats changed hands. If the volume holds for this year, it will mean about 6,000 flats could be snapped up by PRs.

With HDB rents rising so fast, buying now ‘makes more economic sense’ than renting, say analysts.

Rents for a four-room flat in an established estate ranged from $1,000 to $1,200 two years ago. Today, they are $1,800 to $2,000, said Mr Ismail.

The penny has dropped for Mr N.E. Shanmugam, who had been renting here for eight years.

He pays $1,200 for a three-room flat in Tampines and was initially looking for a bigger unit to move when his lease expired next month. But with rents shooting up, he faced a monthly outlay of $1,800 for a five-roomer.

‘It didn’t make sense. I’m better off buying my own home,’ said the 56-year-old project manager, who is married with a one-year-old son.

Mr Shanmugam has just bought a five-room flat in Sengkang valued at $380,000. His mortgage will be $1,500 - well under what his rent would have been.

Singapore’s burgeoning PR population - and their purchasing power - has been singled out as one of the factors driving HDB resale prices.

While private home prices inched only 0.4 per cent this quarter, HDB flat prices climbed 4.4 per cent, following a 3.7 per cent rise in the previous quarter.

Singapore’s PR population rose from 287,500 in 2000 to 386,800 in 2005, according to the Department of Statistics.

Property agencies say about 70 per cent of the PR buyers are from China and India with the rest from countries such as Malaysia and the Philippines.
 

Source : Straits Times - 05 July 2008

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Mindy Yong

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