Paragon Market Place wins FAPRA award for best retail concept

Paragon Market Place wins FAPRA award for best retail concept

By Wong Siew Ying

Paragon Market Place is located in the basement of Paragon Shopping Centre, on Orchard Road.

SINGAPORE: Singapore’s Paragon Market Place has won the “Best Retail Concept Award” conferred by the Federation of Asia-Pacific Retailers Association (FAPRA).

It is the first Singapore brand to win the title at one of the retail industry’s biggest events.

This is not the only accolade Paragon Market Place has received. Since its S$3 million revamp in 2008, the grocer has won awards within the retail industry in Singapore and Asia - including the “2008 Best Retail Concept of the Year” by the Singapore Retailers Association.

Paragon Market Place is a 17,000 sq ft flagship store, located at the heart of Singapore’s prime shopping belt - Orchard Road.

The store features up-market and contemporary designs, offering premium and gourmet products from around the world.

- CNA/sc

Source : Channel NewsAsia - 23 October 2009

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The Parisian site at Angullia Park sold for S$283m

The Parisian site at Angullia Park sold for S$283m

By Wong Siew Ying

SINGAPORE: The freehold site at Angullia Park that The Parisian sits on has been sold for S$283 million.

The buyer is China Sonangol Land, part of the China Sonangol international holding company headquartered in Hong Kong.

According to real estate consultancy CB Richard Ellis, which brokered the deal, this is the biggest private residential land sale in two years.

The site, located near Orchard Road, can accommodate a 36-storey development comprising 52 three- and four-bedroom units and two penthouses.

The Parisian was bought by developer Overseas Union Enterprise (OUE) in a collective sale for S$228.1 million in December 2006.

In a filing with the Singapore Exchange, OUE said the transaction presents the group with an opportunity to review its financing strategy for its property development business segment.

By selling the Parisian, OUE said it can focus its resources on its other project, The Grangeford.

The sale will result in a profit for the group of about S$19.1 million as at 30 June 2009. It will also result in a rise in net tangible assets per share from S$10.84 to S$10.94, based on OUE’s group results for Financial Year 2008.

Earnings per share will increase from S$0.21 to S$0.31 after the transaction.

CBRE said the purchase price of S$283 million will translate to about S$2,058 per square foot per plot ratio, with breakeven price estimated at S$2,500 to S$2,600 psf.

It added that depending on the launch date the selling price could be around S$3,500 psf. - CNA/vm

Source : Channel NewsAsia - 23 October 2009

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Second Chance to acquire 22 prime retail units at Sim Lim Square

Second Chance to acquire 22 prime retail units at Sim Lim Square

By Wong Siew Ying

SINGAPORE: Second Chance Properties has bought 22 prime units of retail space at Sim Lim Square for S$35 million, as valued by real estate consultancy Jones Lang LaSalle.

The 22 units cover 9,604 square feet on the fifth floor of Sim Lim Square, which is located at Rochor Canal Road.

Second Chance Properties said the units are fully tenanted to 27 retailers and the gross rental per annum stands at S$2.634 million, with a return of 7.3 per cent.

It added that the acquisition is immediately profitable given the present low interest rate.

With this deal, its total property portfolio will comprise 76 retail units with a total area of 49,532 square feet, now valued at S$145 million.

Second Chance Properties said that the group will receive a total rental income of S$10.234 million per annum, after the completion of the purchase.

The deal has been approved by its Board of Directors and is subject to shareholders’ approval at an extraordinary general meeting to be held in December.

The acquisition will be funded through bank loans.

- CNA/sc

Source : Channel NewsAsia - 23 October 2009

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22 Sim Lim Square units bought from single seller for $35 million

22 Sim Lim Square units bought from single seller for $35 million

Deal a sign of recovery in investment sales

By Jessica Cheam

The net rental yield of the shop units purchased by Second Chance Properties works out to 6.46 per cent, an attractive figure compared with that of other property segments — .

A LISTED property company has snapped up 22 shop units in computer products mall Sim Lim Square for $35 million.

Second Chance Properties (SCP) said yesterday that it had bought the units, all on the fifth floor, from a single seller. They comprise a total of 9,604 sq ft of retail space.

Industry observers say the deal reflects the pace of investment sales, which has picked up recently on the back of a recovering economy and a booming property market.

Small strata-titled shops in thriving malls are proving to be resilient investments despite the downturn.

SCP chief executive Mohamed Salleh said the firm had stopped expanding its property and retail arm last year due to the crisis, but ‘now that we see the recovery happening, we are confident enough and have started to expand again’.

The 22 units are tenanted to 27 retailers and command a gross annual rental income of $2.634 million - which works out to a rental yield of 7.3 per cent.

After tax and other costs, net yield from the shops is 6.46 per cent, said Mr Salleh.

‘This is very attractive, considering that for other property types, you don’t see rental yields this high,’ he added.

Mr Salleh was not concerned about the units being on the fifth floor as ’shopper traffic is still high on these levels’.

A back-of-the-envelope calculation showed that the monthly rent that SCP is getting out of its Sim Lim Square shops is $22.85 per sq ft.

This is comparable to the average rent for prime upper-storey retail space in Orchard Road.

In malls, first-floor shops typically command the highest rents due to their exposure to shopper traffic.

Credo Real Estate managing director Karamjit Singh said that from a rental point of view, retail and industrial properties usually give the best yield out of all property segments.

‘This is especially so for malls where business is thriving, such as Sim Lim Square. It’s quite an attractive proposition, especially given the current low interest rates environment,’ he said.

Rental yields from office or residential properties are typically lower. Also, the retail market is not as erratic.

‘Values and rent are more stable and can hold even during a downturn, especially when retailers are doing reasonably good business,’ said Mr Singh.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the SCP sale also indicated that ‘developers and investors are now starting to acquire to position themselves for the expected upturn next year’.

SCP’s property portfolio will now comprise 76 retail units with a total area of 49,532 sq ft valued at $145 million.

Once the Sim Lim sale is completed - it is being financed through bank borrowings - total rental income will be $10.2 million a year, said SCP.

SCP reported a 95.4 per cent plunge in net profit to $628,000 for the fourth quarter ended June 30, down from the $13.5 million a year ago.

But for the year, SCP’s earnings before interest, depreciation, taxation and amortisation rose 5.8 per cent to $14.6 million.

Mr Salleh said the sale was approved by the board on Wednesday and will be subject to shareholder approval at an extraordinary general meeting in December. SCP shares closed half a cent down at 33.5 cents yesterday.

Source : Straits Times - 23 October 2009

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OUE resells freehold plot for tidy profit

OUE resells freehold plot for tidy profit

The Parisian fetches $283m in the third-costliest private housing land sale in terms of psf pricing

By Fiona Chan

LESS than three years after The Parisian condominium at Angullia Park was sold en bloc, the site has changed hands again - this time at a much higher price.

Overseas Union Enterprise (OUE), which bought the freehold site for $228.1 million in December 2006, has resold the parcel for $283 million, it said in a statement yesterday. The site has been valued at $261.1 million.

The sale price works out to $2,058 per sq ft (psf) of potential gross floor area, making it the third most expensive private residential land sale ever. Only Westwood Apartments in Orchard Boulevard, at $2,525 psf, and The Ardmore at Ardmore Park, at $2,337 psf, were pricier.

The buyer is China Sonangol Land, the property arm of China Sonangol International Holding, an oil and gas company that is also involved in reconstruction and infrastructure projects.

The break-even price works out to about $2,500 to $2,600 psf, said property consultancy CB Richard Ellis (CBRE), which brokered the deal. Depending on the launch date, the finished units could sell in the region of $3,500 psf, it said.

This is the Chinese company’s first purchase in Singapore but it may not be its last, said CBRE’s executive director for investment properties, Mr Jeremy Lake. ‘We believe they are still interested in Singapore, and once this project has proven successful, they may look for other sites here.’

Industry watchers said the sale may reignite interest in Singapore’s luxury home market, which has been subdued amid the financial crisis and the global recession as foreign buyers stayed away.

The completion of the two integrated resorts next year could attract more well-heeled foreign buyers in 2010 and 2011, and overseas developers such as China Sonangol Land may be posi-tioning themselves for a potential rally in the high-end market, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak. ‘It looks as though it is still foreigners who are willing to pay high prices currently,’ he said.

In a segment of the market that has not seen many land sales recently, the transaction of The Parisian is a ‘fresh reference point’ for prime land prices, said Mr Lake. It will give a boost to developers still holding on to expensive land in the Orchard area, waiting for the right time to launch their projects.

But while the sale may demonstrate that developers’ appetite for high prices is back, Mr Lake does not expect many similar deals to occur after this. Most developers buy their land from the Government or through collective sales, simply because there are few developers who resell sites they have bought.

A sale like that of The Parisian is particularly rare because OUE had already demolished the condo and started piling works on the site.

In a statement yesterday, OUE said the sale of The Parisian will allow it to focus its resources on its larger development property, The Grangeford. It said it is still committed to the property development business and intends to launch The Grangeford in due course.

OUE incurred a net loss of $47.8 million for the second quarter ended June 30, largely due to impairment losses for The Parisian and The Grangeford, as luxury property values slumped in the recession.

Source : Straits Times - 23 October 2009

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Hiring to pick up, but can local talent step up?

Hiring to pick up, but can local talent step up?

Employers unsure of filling top posts with local talent: report

By CHUANG PECK MING

(SINGAPORE) With hiring picking up sharply, the shortage-of-local-talent issue has again come to the fore.

The latest quarterly report by United States-based recruitment firm Hudson says while even more bosses in Singapore plan to increase their headcount in the next three months, just over a third of them are ‘very confident’ or ‘confident’ of finding local talent to fill positions in top management. At the other end of the scale, 84 per cent of the more than 600 executives polled here are very confident or confident of filling support-staff vacancies with local staff.

‘The responses clearly show that the higher the level, the harder it is for employers to find local candidates with the skills and experience they need,’ says the report which was released yesterday.

The problem is especially acute in the banking & financial services, and the media, public relations and advertising sectors.

Only 20 per cent of those polled in the banking & financial services sector are very confident or confident of hiring local talent for top management posts and 32 per cent for senior management positions.

‘Overall, just 5% say they will shed staff this quarter, compared with 14% in Q3.’

- Hudson report

The numbers are 29 per cent and 35 per cent respectively for the media, public relations and advertising industry.

‘The banking sector has expanded very fast in Singapore, making it difficult to find locally developed talent for senior positions, while the media and marketing business has a relatively small talent pool from which to recruit,’ the report says.

The latest Hudson poll shows hiring intentions have picked up in Singapore, with 34 per cent of the bosses polled here planning to recruit in the final quarter of the year, up from 26 per cent in the third quarter.

This is still lower than it was a year ago, when the number of those intending to hire in Q4 2008 was 37 per cent. But the report points out that the poll for Q4 last year was taken before Lehman Brothers crashed.

‘Although expectations have not yet returned to their pre-crash level, they are clearly moving rapidly in the right direction,’ the report says.

And fittingly, the banking & financial services sector - where the credit squeeze that led to the recession started - has reported the biggest jump in hiring plans.

Some 43 per cent of those polled in the sector say they will grow headcount, up from 34 per cent a year ago.

The rise in hiring expectations for the next three months cut across all sectors, except for the consumer segment which shows a slight dip. The number of bosses planning to cut back on employees fell in every sector.

‘Overall, just 5 per cent say they will shed staff this quarter, compared with 14 per cent in Q3,’ the report says. ‘These figures confirm the strong uptrend in Singapore’s employment market.’

Over half of the bosses polled are prepared to employ people who are out of work for an extended period.

The report says bosses here are open to taking the long-term unemployed because of their experience and specialist skills.

‘Also, hiring expectations are rising quickly and employers do not wish to lose a potential source of new hires,’ the report adds.

Source : Business Times - 23 October 2009

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Leasing activity picks up in office projects

Leasing activity picks up in office projects

SP Services leases 100,000 sq ft at Mapletree Business City

By KALPANA RASHIWALA

THE flight to quality continues in the Singapore office market as occupiers move from older buildings to newer ones.

In demand: About 45 per cent of 20 Anson’s 204,000 sq ft net lettable area has been committed - up from zero just three months ago
More than 90,000 sq ft has been leased to six tenants at 20 Anson, a swanky 20-storey office tower that received Temporary Occupation Permit (TOP) earlier this month. As a result, 45 per cent of the building’s 204,000 sq ft net lettable area has been committed - up from zero just three months ago.

‘Given current negotiations with three other parties, we expect to be 70 per cent committed in six weeks,’ said Jones Lang LaSalle’s head of markets, Singapore, Chris Archibold. JLL is the marketing agent for 20 Anson, representing its owner, FirstOffice Pte Ltd, which is linked to La Salle Investment Management.

The neighbouring Mapletree Anson is also said to have clinched a tenant recently for the top floor (19th floor) - Noble Group, which will occupy about 21,000 sq ft. It will be relocating from PSA Building.

Over in the Alexandra Road area, Mapletree Business City has secured its latest office tenant - SP Services, which has leased about 100,000 sq ft and will be moving out of its existing location at TripleOne Somerset (formerly known as Singapore Power Building).

MBC is expected to be completed around the middle of next year.

Meanwhile, Drew & Napier is said to be in discussions to lease 90,000 sq ft at 50 Collyer Quay (which is on the former Overseas Union House site). The law firm is currently at Ocean Towers.

‘Leasing activity in the office market has picked up massively in the past three months. Unfortunately, however, what we’re seeing is mostly a game of musical chairs being played as occupiers consolidate or relocate. There’s not a lot of net take-up,’ Mr Archibold said.

DTZ’s head of occupational and development markets, SE Asia, Angela Tan notes that the stock of shadow office space - surplus space put up for subletting by tenants - has contracted.

‘Occupiers are expanding, but they’re still cautious. Often when they renew an existing lease or move into a new building, they lease for their immediate needs but negotiate for first rights to rent contiguous space - whether it’s on the same floor or the floors immediately above or below - to cater for potential expansion.’

Market watchers note that tenants are riding on a flight to quality as they can lease space in brand-new buildings, which are more efficient and designed to maximise space usage, in places like Anson Road at rents below their passing rents in older buildings at Raffles Place.

Average rents of new buildings like 20 Anson and the neighbouring Mapletree Anson, which was completed a few months ago, are said to be about $6 psf a month. Some of the tenants moving into these buildings would previously be paying monthly rents ranging from $10-$15 psf in Raffles Place, notes Mr Archibold.

As for 20 Anson, the biggest of the six tenants signed up so far is said to be Computer Sciences Corporation, which has taken two floors or a total of about 25,000 sq ft.

BT understands other tenants secured include SAS Institute (around 16,000 sq ft), the airline Emirates (about 7,000 sq ft) and Australian Securities Exchange-listed BlueScope Steel, which has leased about 5,000 sq ft.

Colliers International is said to have represented SAS Institute, while Corporate Locations represented Emirates and BlueScope Steel.

BlueScope Steel will be relocating from Singapore Land Tower, Emirates from Parkview Square, and SAS Institute from 77 Robinson Road (formerly known as SIA Building).

JLL’s Mr Archibold envisages a two-tier office market developing in about 12 months. ‘Vacancy rates in some older buildings will be higher than in newer buildings as the flight to quality continues.’

While there has been much concern about supply in the Singapore office market, most of what is being built is Grade A space. Singapore does not have a massive amount of Grade A stock, which is what banks want, Mr Archibold argues.

As of Q3 2009, only nine million sq ft of Singapore’s total office stock of 58 million sq ft was CBD Grade A space. Of this, only about four million sq ft is what JLL terms Grade A1 space, referring to premium office buildings with floor plates of at least 20,000 sq ft.

JLL forecasts that the Grade A1 office stock will increase to 10 million sq ft by end-2012 with the completion of new projects like Marina Bay Financial Centre, Ocean Financial Centre and 50 Collyer Quay. ‘That’s a good thing because at the end of the day, that’s exactly the kind of space we’ll need to offer to financial institutions if we’re going to be a global financial centre,’ Mr Archibold said.

Source : Business Times - 23 October 2009

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