Orchard retail space oversupply?

Orchard retail space oversupply?

by Ryan Huang Wenwu 04:47 AM May 28, 2011

SINGAPORE – A number of shopping malls opened in Orchard Road in the last two years, increasing the prime shopping belt’s retail space by about 30 per cent, but not everyone at these new spaces has been doing well.

Only last week, tenants at 313 Somerset reportedly petitioned for lower rentals, complaining of poor business, raising questions over whether there is an oversupply of retail space in the area.

Mr Colin Tan, head of research and consultancy at Suntec Chesterton International, said: “If you go down to Orchard Road and visit some of these places, you’ll see that there is a high turnover of tenants. Tenants, which may have signed three years ago, are now finding it very hard to cope, so you see a lot of empty shops or hoardings or signs.”

There were signs of sluggish demand creeping in during the first quarter this year. Vacancy rates for Orchard Road retail space inched up to 6 per cent from 5 per cent from the fourth quarter last year.

Mr Nicholas Mak, head of research and consultancy at SLP International, said: “In the last two quarters, demand has not been as fast. As a result, some of the malls may have to adjust their rentals to attract new tenants or retain some of the existing ones.”

Others say the situation may not be so straightforward.

Senior manager for research at Cushman & Wakefield Ong Kah Seng said: “There has been a long dearth of major malls in Orchard Road – for more than a decade. The new malls actually refresh the identity of Orchard Road but require some time to be adjusted by market participants as they arrived as a surge after a hiatus.”

Source : TODAYonline – MediaCorp Press Ltd’s copyright

More Government land sales »« New BTO projects offer variety and affordability

New BTO projects offer variety and affordability

New BTO projects offer variety and affordability

May 28, 2011

The six new BTO projects announced yesterday are spread out over four estates, namely Punggol, Pasir Ris, Tampines and Woodlands.

Offering almost 4,000 units in all, these projects – Costa Ris and Golden Lily in Pasir Ris, Punggol Parcvista, Tampines GreenLeaf, Tampines GreenWood and Woodlands Peak – comprise flats in various locations and sizes to meet the different needs of home-seekers.

Two of the projects will be in Pasir Ris: Costa Ris has 1,386 units comprise two-, three-, four- and five-room flats, while Golden Lily is a 12-storey block with 185 studio apartments.

For Costa Ris, prices range from S$120,000 to S$436,000. Prices for Golden Lily will be between S$76,000 and S$102,000.

Similarly, Tampines Greenleaf will have 960 flats comprising units of various specifications, while Tampines GreenWood’s 522 units comprises 144 studio apartments, 158 three-room flats and 220 four-room flats. Prices for both these projects range from S$81,000 to S$444,000.

Punggol Parcvista will have 682 flats, comprising three-, four- and five-room units. The units cost between S$166,000 and S$410,000 each.

Woodlands Peak will be a 33-storey block with 127 studio apartments and 95 three-room flats. Prices range from S$76,000 to S$221,000.

Said PropNex corporate communications manager Adam Tan: “The Government has certainly responded to the public’s demand for affordable housing, especially for first-time buyers.”

He noted that while cash-over-valuation (COV) prices are bottoming out at around S$21,000, “many first-time buyers will still be priced out of the resale market”.

Source : TODAYonline – MediaCorp Press Ltd’s copyright

Orchard retail space oversupply? »« HDB will build flats ‘ahead of demand’: Khaw

HDB will build flats ‘ahead of demand’: Khaw

HDB will build flats ‘ahead of demand’: Khaw

by Esther Ng and Jo-Ann Huang Limin 04:47 AM May 28, 2011

SINGAPORE – Just days into his new job as National Development Minister, Mr Khaw Boon Wan (picture) has instructed the Housing and Development Board (HDB) to build flats “ahead of demand” – a significant change in policy from the “Build To Order” (BTO) approach which has been in place for the past 10 years.

Mr Khaw’s announcement coincided with HDB’s launch of six BTO projects – the largest number launched at once. In addition, he confirmed that the number of BTO units this year would be increased from 22,000 to 25,000 units, by bringing forward projects scheduled for early next year.

Writing on his blog “Housing Matters”, Mr Khaw said: “Given robust demand, I told them proceed to build, knowing that the orders will definitely come.”

While his approach may appear to be one shunned by his predecessor Mah Bow Tan, Mr Khaw made it clear that the directive to “build ahead of demand” would only apply to “this period of demand backlog”.

Under the Registration for Flat System in the ’90s, the Government was building some 30,000 flats annually. But the system had its flaws, with Mr Mah saying on numerous occasions in Parliament that it was difficult to discern how much of the demand was genuine.

At one point, the Government was left with 31,000 unsold flats and it took the HDB five years to clear its stock of unsold flats.

Mr Khaw said the Government could return to the BTO approach “after we have stabilised the situation”.

The six BTOs would bring 4,000 flats into the market, in Tampines, Punggol, Pasir Ris and Woodlands.

Welcoming the news, Mountbatten Member of Parliament Lim Biow Chuan said it “shows that policies must adapt along the way”.

“While a number of MPs had suggested to Mr Mah to build a buffer stock of flats, Mr Mah had been ‘cautious’ as he had been questioned many times in Parliament over the excess supply of unsold flats,” Mr Lim said.

ERA Realty Network’s key executive officer Eugene Lim noted that the move would also allow Singaporeans to take possession of their flats faster.

Property firm Cushman and Wakefield’s vice-chairman Donald Han said HDB prices would be “affected if there is an oversupply” but demand would still remain in mature estates. “Market demand is very picky, people want good locations and good choices,” he said.

With the HDB planning to ease the S$8,000 income ceiling on flats -something hinted by Mr Mah during the General Election – Mr Khaw also pledged to “sustain the new pace of building” into next year in anticipation of strong demand.

He said: “One priority is to help young couples own their own homes as soon as possible, so that they can start their family and have babies. This is a national priority – promoting marriages and births – and MND must facilitate it to its best ability.”

There are some 15,000 first marriages among Singaporeans annually and 70 per cent of new couples get their first homes through the BTO system.

Source : TODAYonline – MediaCorp Press Ltd’s copyright

New BTO projects offer variety and affordability »« HDB launches sale of Punggol EC site

HDB launches sale of Punggol EC site

HDB launches sale of Punggol EC site

by Travis Teo 04:47 AM May 26, 2011

The Housing & Development Board (HDB) has put up an Executive Condominium (EC) housing site at Punggol Way for sale.

The land parcel was released for sale under the Confirmed List of the first half of the Government Land Sales programme.

The 99-year lease site can yield up to an estimated 720 housing units.

The HDB says the land parcel has a site area of about 25,000 sq m, with a maximum gross floor area of around 75,500 sq m.

It added that the site is located in Punggol Town, and is near the Punggol transport hub comprising the LRT, MRT and a bus interchange. Analysts agree that the site is well located.

Mr Nicholas Mak, executive director of SLP International Property Consultants, said: “This land parcel is located only about 700m from the Punggol MRT Station and the future EC development is likely to be popular with home buyers. Although there is another EC project in Punggol that could be launched in the next two months, this tender could still attract four to seven bidders due to its location and proximity to the future Punggol town centre.”

The HDB says the new development is expected to be completed in 48 months from the date when the tender is accepted.

Mr Li Hiaw Ho, executive director, CBRE Research, said: “Units in Prive EC, which is further down Punggol Field, were transacted at $660 psf – $715 psf in January-April 2011 period. Units in Austville Residences EC, in Sengkang, were sold at $620 psf – $740 psf over the same period. “We expect the subject site to fetch bids of between $227 million and $244 million with a view to sell the new units at around $700 psf.”

The tender will close at 12 noon on July 7.

Overall, the Government has placed 30 sites in this year’s first half land sales programme, which can potentially yield more than 14,300 private residential units.

These 30 sites include four Executive Condominium sites and two commercial and residential sites. Travis Teo

Source : TODAYonline – MediaCorp Press Ltd’s copyright

HDB will build flats ‘ahead of demand’: Khaw »« Foreign buyers set new record