Real Estate Lastest Monthly News Market Review Report

Real Estate Lastest Monthly News Market Review Report

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Real Estate Lastest Monthly News Market Review Report

Mindy Yong 杨雯诗

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Developers still putting up project plans

Developers still putting up project plans

URA has received 4 applications to convert space in CBD

By EMILYN YAP

THE property market may be subdued, but developers are not sitting still. A check with the Urban Redevelopment Authority shows some are still putting up proposals to convert office space or embark on residential and commercial projects.

URA told BT it has received four applications to convert office space in the central area to other uses since it lifted the ban on doing so in October last year. ‘These applications are now being evaluated and are pending final approval,’ said a URA spokesman.

In a bid to ease the office space supply crunch that built up during the boom years, URA called a halt to such conversions in May 2007. It later removed the ban as the supply of office space coming on stream started to increase, while the economy began to slow. URA did not identify the buildings involved in the applications, but some property owners have revealed plans to convert office space.

CapitaMall Trust, for instance, said last week that it was ‘in talks with the authorities to optimise the integration plan for The Atrium@Orchard and Plaza Singapura’ and that work could start by end-2010 subject to market conditions and official approvals.

URA has also granted approval for close to 10 commercial and private residential projects, according to its Q1 2009 real estate statistics released yesterday.

UIC Investments (Properties) received provisional permission in January to develop office and retail space with gross floor areas (GFAs) of 114,500 sq ft and 48,000 sq ft respectively at the UIC Building in Shenton Way. Some 593 residential units could also take shape at the site.

The South Beach consortium - comprising City Developments, a Dubai World unit and Elad Group - has been given the go-ahead to develop 560 hotel rooms across a GFA of 474,100 sq ft at its Beach Road project. The site may include office space with a GFA of more than 632,100 sq ft, and retail space with a GFA of 158,000 sq ft. The project is tipped to receive a temporary occupation permit in 2014.

BT understands there will also be a residential component in the South Beach project, although this did not appear in the URA statistics. The data only shows development approvals for uncompleted private residential projects if they have at least 200 non-landed property units.

YTL Corp, which bought the Westwood Apartments in Orchard Boulevard in 2007, has obtained provisional permission to develop shop space with a GFA of 1,500 sq ft and 39 hotel rooms across 78,200 sq ft at the site. BT understands the residential component similarly did not show up in the URA statistics, because there are less than 200 non-landed units.

In February, UOL Group subsidiary Hotel Plaza got URA’s nod to re-use the GFA in The Plaza’s podium block to create 273 hotel rooms.

Source : Business Times - 25 April 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Watch this vacant office space

Watch this vacant office space

Vacancies hit 10% in Q1; broader property market sees prices fall across sectors; rentals also slide, URA data shows

By KALPANA RASHIWALA

SINGAPORE’S property sector continues to take the bumpy slide down, with the office market gathering its share of bruises.

This segment took a hit for the second consecutive quarter, government data showed. The broader property market also saw prices and rentals slipping.

The take-up of office space fell nearly 323,000 sq ft in Q1 2009 after sliding 366,000 sq ft in Q4 last year.

That sent islandwide vacancies for offices up from 8.8 per cent at end-Q4 2008 to 10 per cent by end-Q1 2009 - the first time that Singapore is seeing double-digit office vacancies since late-2006.

CB Richard Ellis executive director (office services) Moray Armstrong reiterated the Singapore office market could see negative take-up for the whole of this year in excess of one million sq ft. ‘Many of the corporates we talk to are well advanced in implementing their restructuring programmes. From this, we deduce we may be going through the period of sharpest contraction in office demand now. Contraction may ease in the second-half,’ he said.

‘The outlook for office rents remains bearish because of the negative take-up and the onset of greater supply from completion of new office developments,’ he added.

CBRE expects office vacancies to rise sharply going forward. Rival firm Colliers International predicts that the average gross monthly rental of Grade A space in the central business district will ease by up to 30 per cent over the next three quarters of 2009 from the Q1 level - which was already 22 per cent lower than at the end of last year.

The weak demand in the office sector also rubbed off on business park space, which saw negative take-up of about 215,000 sq ft in Q1, against positive take-up of some 10,700 sq ft in Q4 2008. Vacancy rate for the sector increased from 6.2 per cent in Q4 2008 to 9.7 per cent in Q1 2009.

In the private residential segment, URA’s overall islandwide price index slipped 14.1 per cent in Q1 over the preceding quarter, slightly steeper than the flash estimate decline of 13.8 per cent. The Q1 drop was also the biggest quarterly drop to date. The index has now eased 21.2 per cent since peaking in Q2 last year.

Colliers International director Tay Huey Ying says: ‘Mass market homes could see more gradual price corrections averaging about 8 to 12 per cent over the next three quarters (from Q1 2009 levels) as more sellers in the secondary market as well as developers with unsold units from earlier launches can be expected to adjust the pricing of their properties to near-current levels.’

She predicts bigger average price declines of 10-15 per cent for the mid-tier and high-end/luxury segments over the same period.

URA’s private residential rental indices show that the sharpest contraction in Q1 was for non-landed homes in the Core Central Region, which shrank 10.3 per cent quarter on quarter. The overall private residential rental index slipped 8.5 per cent in Q1, bigger than the 5.3 per cent drop in Q4. ‘The decline in rents could be attributed to supply outstripping demand as more expats left the country and to more new projects being completed,’ CBRE executive director Li Hiaw Ho said.

Developers sold a total 2,596 private homes in Q1, about six times the 419 units in Q4 2008.

The latest Q1 number was 64 units lower than the 2,660-unit figure collated from monthly developer sales stats (for January to March 2009). The decline reflects lapsing of options on units sold earlier in the quarter, URA’s spokeswoman said.

Market watchers also observed a slight easing in residential supply.

Some 27,423 private homes are expected to be completed between Q2 2009 and 2011, lower than the 31,004 units projected for completion between 2009 and 2011 in URA’s Q4 2008 data.

The smaller pipeline supply partly reflects the completion of 2,230 units in Q1 2009.

Developers may also have postponed redevelopment of some of the sites they had bought through en bloc sales and delayed construction, said URA’s spokeswoman.

URA’s shop rental index eased 3.3 per cent quarter on quarter in Q1, after dipping 0.6 per cent in Q4. The all industrial rental index slid 5.6 per cent in Q1, also worse than the 3.7 per cent fall in Q4.

Summing up prospects for Singapore’s property markets, Knight Frank managing director Tan Tiong Cheng said: ‘For the private residential sector, there’s evidence of a pick-up in activity - not just in the primary market but also subsales and resales. For office and industrial, there are going to be more rental declines because of the economic slowdown. Retail will be difficult. New malls opening this year may drum up business, but it will be at the expense of existing malls, given that tourism numbers are weak.’

Source : Business Times - 25 April 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Property market ’still weak’

Property market ’still weak’

HO CHI MINH CITY: Singapore’s property market is still ‘pretty weak’ and the Government will not lift its suspension on land sales to developers until at least June, National Development Minister Mah Bow Tan said yesterday.
The city-state said last October that it will suspend its land sales, putting on hold sites for residential, office and hotel developmentsas the economy deteriorated.

The city’s Private home prices fell 14 per cent in the first quarter, the Government said yesterdayy. Rents of offices, retail and industrial properties also retreated.

‘At the moment, things are still pretty slow,’ Mah said in an interview .’Property really depends on the economy, and the economy around the world and in Singapore still looks pretty weak,’ Mr Mah said.

Singapore’s economy may contract by as much as 9 per cent this year as the global recession saps demand for the island’s exports, the Ministry of Trade and Industry has predicted. The slowdown has pushed residential prices lower for three straight quarters, halting a four-year rally.

‘The Government will continue to invest in infrastructure, but the land sales programme will be suspended for the time being,’ Mr Mah said. The existingsuspension will last till June and the Government will evaluate and make a decision ’some time in the next month’. he added.

CapitaLand Ltd, Southeast Asia’s biggest developer, said first-quarter income slumped 83 percent due to lower sales from development projects and a drop in rents from commercial properties and serviced residences.

Net profit for the three months ended March 31 fell to S$42.9 million ($28.6 million) from S$247.5 million in the same period last year, the Singapore-based company said in a statement to the local exchange today.

Keppel Land Ltd., a developer building Singapore’s largest office complex, said today it plans to sell S$712.3 million of stock to existing shareholders to bolster its balance sheet and fund acquisitions.

BLOOMBERG

Source : Straits Times - 25 April 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

HDB resale flat buyers pay less cash upfront

HDB resale flat buyers pay less cash upfront

BUYERS of resale HDB flats now tend to need much less cash upfront to secure a home - and those looking at bigger flats may need none at all.
Data released yesterday by the HDB showed first-quarter median cash-over-valuation levels fell substantially to $4,000 in the first quarter, from $15,000 in the previous quarter.

This refers to the sum that flat buyers pay above a valuation set by HDB-appointed private valuers. Buyers can use Central Provident Fund money for any sum up to this level but need cash for any more.

The significant fall is attributable to twin factors - falling resale flat prices in a deteriorating economy and higher valuation levels, after a run-up in prices over the past year or so before recent falls.

HDB resale flats fell 0.8 per cent in the first quarter, just over the initial estimate of 0.6 per cent, after prices peaked late last year. However, resale prices are still at healthy levels, about 2 per cent above the 1996 peak, said Knight Frank’s director of consultancy and research Nicholas Mak.

Higher HDB valuations are why resale HDB prices dipped only slightly despite a far lower cash portion, said PropNex chief executive Mohamed Ismail. ‘It is evident that public housing remains resilient in this gloomy economy, thanks to continued strong demand for resale flats. The alternatives, Build-To-Order and Design, Build and Sell Scheme projects, are still years away from completion.’

But things may change. ‘Generally, though valuations are still high, banks are becoming more conservative and there have been cases where buyers are offered only 70 per cent loans instead of the usual 80 per cent,’ said ERA Asia Pacific’s associate director, Mr Eugene Lim. That means more higher-value HDB resale flats are now being sold below valuation - in some cases, perhaps, up to $30,000 to $50,000 below, he said.

‘For larger flats, the days of transactions with cash-over-valuation are over,’ adds Mr Lim.

ERA’s first-quarter resale HDB deals show 21 per cent of flats sold below valuation, 19 per cent at valuation. Of the rest, most fetched no more than $15,000 cash, said Mr Lim.

First-quarter median sublet rents were unchanged for the smaller flats, and down $100 to $200 for the four-room and larger flats.

In the first quarter, more people bought smaller three- to four-room flats. Their prices fell a little.

The larger flats saw a slightly bigger price fall of up to 2.8 per cent for executive flats, said Mr Mak. These larger flats will continue to face stronger downward price pressure, property experts said.

They expect increased demand for smaller flats as home buyers exercise prudence. ‘In the coming quarters, we are likely to see more and more larger flats sold at or below valuation as the harsh economic conditions hit home,’ said Mr Lim.

The good news is that the fall in HDB resale prices is not expected to dent upgrader demand for private homes as the rate at which HDB resale flat prices are falling is still less than that of private homes, Mr Mak said.

Source : Straits Times - 25 April 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Private home prices spiral further downward

Private home prices spiral further downward

The first quarter sees a 14.1% fall; rents continue to slide as well, and at a faster rate

By Joyce Teo, Property Correspondent

PRICES of private homes fell off a cliff in the first quarter, continuing a dramatic slide that has now wiped out the gains owners have made since 2007.
Values dived 14.1 per cent in the first three months this year - the biggest fall on record - and followed a 6.1 per cent slide in the last quarter of last year.

Figures from the Urban Redevelopment Authority (URA) yesterday also point to pain in the residential rent market and in the office sector.

But the plight of the private home sector caught most attention. The first-quarter fall was worse than an initial URA estimate of 13.8 per cent, indicating the slide accelerated towards the end of the quarter.

The souring of the market has been fast and furious. Prices had been rising for four years and were still going north until as late as September of last year but then the rot set in.

Price declines have been registered in three consecutive quarters with the fall in the first three months of this year the worst since the URA began keeping data in 1975. Private homes on the city fringes suffered the most, with prices down 17 per cent, compared with 16.2 per cent in the city centre and 7.3 per cent for suburban residences.

The hefty gains over the past two years have been erased, so owners who bought after the first quarter of 2007 could see their home’s valuation fall below the purchase price, said Colliers International’s director for research and advisory, Ms Tay Huey Ying.

Rents for private homes also kept falling and at a faster rate. They plunged 8.5 per cent in the first quarter compared with a 5.3 per cent decline in the last three months of 2008. Rents of non-landed prime homes fell the most, at 10.3 per cent.

HDB resale flats showed more resilience with prices inching lower by just 0.8 per cent in the first quarter - the first fall since the third quarter of 2006.

But there was a sliver of good news. Sales of new homes in the first quarter were a robust 2,596 units, driven by pent-up demand, price cuts and innovative product packaging, experts said.

The mass market sector was most active with upgraders picking up many units to help lessen the rate of price fall in suburban areas, said Knight Frank consultancy and research director Nicholas Mak. Developer sales in suburban areas reached 1,637 units in the first quarter, almost as many as were sold last year, he said.

But the prime market accounted for only a meagre 9.5 per cent of all developer sales. And sales in the resale and sub-sale markets remained weak.

‘Property really depends on the economy, and the economy around the world and in Singapore still looks pretty weak.’ National Development Minister Mah Bow Tan told Bloomberg in Vietnam yesterday.

Mr Mak expects private home prices and rents to contract sharply in the first half of the year but the rate of decline will decelerate.

Singapore’s office market also took a beating in the first quarter. Rents slid 10.7 per cent, the biggest fall since the first quarter of 1992, while prices fell 12 per cent. Take-up contracted for the second consecutive quarter and for the first time since late 2006, the islandwide vacancy rate hit 10 per cent.

Source : Straits Times - 25 April 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com