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Property Times

Singapore

Investors, owners, occupiers and developers 1Q 2002 | Issue no 2/2002

A quarterly report on the Singapore property market

Executive Chairman Chief Executive Officer Specialist Services Valuation

Edmund N S Tie PBM Prof DipVal (S'pore Poly) FSISV Ho Tian Lam FRICS FSISV

Yam Kah Heng BSc (Est Man) FSISV Executive Director Philip Leow BSc (Est Man) MSISV Executive Director Poh Kwee Eng BSc (Est Man) MSISV Executive Director Nicholas Cheng BSc (Est Man) MSISV Executive Director Kevin Lee BSc (Land Man) Hons MRICS Associate Director Rosa Wong BSc (Est Man) MSISV Associate Director Yam Kah Heng BSc (Est Man) FSISV Executive Director Ng Poh Chue BSc (Est Man) MSISV Executive Director Heng Hua Thong MSc (TP) BA Hons MSIP RTPI Executive Director Goh Kian Huat DipMech Eng Director Yong Kok Fong MSc (Bldg Sc) B Eng (Civil) P Eng (S) MIES Associate Director All Directors All Directors Heng Hua Thong MSc (TP) BA Hons MSIP RTPI

Executive Director

Statutory Valuation

Project, Facilities & Property Management

Expert Witness Due Diligence Hospitality

Advisory Services Research and Consultancy

Ong Choon Fah MA (Bus Ad) BSc (Est Man) Hons MSISV Ng Poh Chue BSc (Est Man) MSISV Executive Director Ho Tian Lam FRICS FSISV

Chief Executive Officer

Executive Director

Investment Advisory Asset and Portfolio Management

Low Fatt Onn BSc (Est Man) FSISV Executive Director Yusof Amir Wahid MRICS Executive Director Low Fatt Onn BSc (Est Man) FSISV Executive Director Yusof Amir Wahid MRICS Executive Director Angela Tan BSc (Est Man) Hons Executive Director Chua Wei Lin BBA (Int Bus) Executive Director

Structured Financing

Occupier Services

Development and Marketing Consultancy - Business Space (Commercial) - Business Space (Industrial) - Retail - Residential Property Tax Advice

Cheng Siow Ying BSc (Est Man) Hons DipM (UK) Executive Director Ho Tian Lam FRICS FSISV Chief Executive Officer Wang Look Tsui MRICS MSISV AMD Executive Director Margaret Thean Executive Director Yam Kah Heng BSc (Est Man) FSISV Executive Director Ng Poh Chue BSc (Est Man) MSISV Executive Director

Agency Services Investment

Lee Hon Kiun MPhil MCD MRICS MRTPI MSISV Executive Director Tang Wei Leng BSc (Est Man) Hons Associate Director

Business Space - Commercial - Industrial

Cheng Siow Ying BSc (Est Man) Hons DipM (UK) Ho Tian Lam FRICS FSISV Chief Executive Officer Shaun Poh BSc (Est Man) Hons Associate Director

Executive Director

Retail

Wang Look Tsui MRICS MSISV AMD Executive Director Linda Kwan BSc (Est Man) Executive Director Stephanie Ho BA Associate Director Tan Mui Neo DipBldg Man Dip (IMUK) Associate Director Ho Tian Lam FRICS FSISV Chief Executive Officer Margaret Thean Executive Director Ho Tian Lam FRICS FSISV Chief Executive Officer Shaun Poh BSc (Est Man) Hons Associate Director Yusof Amir Wahid MRICS

Executive Director

Residential

Auction

International Project Marketing

CONTENTS Executive summary Investment sales Business space (commercial) Business space (industrial) Retail Residential Diary of major property & related events Explanatory notes 2 4 6 8 10 12 15 19

1

Executive summary

INVESTMENT SALES

Total investment sales for

declining occupancy levels. Leasing activity was dominated mainly by relocations and consolidations.

although market activity warmed up slightly with more leasing economy teetered between growth and contraction. Market dynamics remained largely unchanged from end2001 as space occupiers remained cost conscious while the supply overhang continued the disadvantage of landlords and sellers, who were more amenable to negotiation. to favour tenants and buyers to enquiries and transactions as the

1Q2002 amounted to $425 mil, marking a rise of 11% over the previous quarter but a 65% fall same period last year. Commitments in commercial properties contributed 58% of total investment sales. Private en bloc sales showed a significant improvement from $60 mil in

from the $1.2 bil achieved in the

Office rents weakened further in 1Q2002 and average monthly gross rents in Raffles Place

declined 12% to $5.75 psf, which during the Asian financial crisis. Some companies are taking advantage of the soft rental market conditions to relocate to overheads.

is below the previous trough level

4Q2001 to $362 mil this quarter with the commercial market as the main driving force. Activity in the industrial and hotel markets also helped boost en bloc sales. Development site sales plunged 50% QOQ and 40% YOY to $62

2

lower-cost alternatives to save on

As at end-1Q2002, average monthly rents for first- and upper-storey conventional industrial space declined

With subdued sentiments in the office investment sales market, average capital values of office space continued to slide in 1Q2002 with freehold office space in Raffles Place averaging $1,300 psf. The quarter closed with the sale of DBS Finance Building at Bee Group.

mil due to the absence of GLS suspension of the GLS

marginally by an average 4% over the previous quarter to $1.55 psf and $1.15 psf respectively, hi-tech space fell 9% to $2.55 psf. Mirroring the trend in rents, capital values for freehold industrial space declined slightly by 3% to $470 psf for firststorey space and $290 psf for 60-year leasehold space was

awarded in 1Q2002 following the programme in 4Q2001. Private mainly smaller residential development sites. Total investment sales for the rest of 2002 is likely to be supported by the renewed interest in GLS sites from developers as well as

while average monthly rents for

land sales in 1Q2002 comprised

Robinson Road for $38 mil to Ho

Cautious sentiments are likely to year with the market bottoming out only in early 2003 and occupancy and rental rates are expected to firm thereafter, buoyed by anticipated economic recovery and limited new office

continue to prevail throughout the

upper-storey space. Demand for geared towards developments

opportunities arising from financial institutions' and corporations' divestment of their non-core assets. However, income-generating properties will continue to remain the focus of institutional and foreign investors.

that will be completing in 2002. The ongoing economic

supply. Applications by interested developers to URA to tender out the two white sites in Marina Boulevard and Sinaran Drive term optimism of the office market.

restructuring is likely to alter the structure of the industrial market as forward-looking

reflect developers' mid- to long-

public sector projects such as

one-north heighten competition for private landlords and owners of conventional industrial space. In addition, the trend towards the leasing market is likely to become pronounced as

BUSINESS SPACE (COMMERCIAL)

Sentiments in the office market supply overhang coupled with

remained cautious with massive

BUSINESS SPACE (INDUSTRIAL)

Demand for industrial space remained weak in 1Q2002

industrialists continue to move away from capital intensive real estate ownership.

between 2002 and 2005 will have less impact on prime rentals and capital values which continue to sustain due to the limited

prime areas while those in the non-prime areas remained stable. Average prices for landed 4%. Although activity in the residential leasing market picked up slightly with the more stable economic conditions,

houses eased by an average 2% -

RETAIL

availability of prime space in the market. However, the effects of competition are evident with prime space quickly taken up.

The retail market remains highly competitive where prime spaces are quickly leased by more forward-looking retailers who are paving the way for recovery by Average occupancy for the Orchard/Scotts Road area committing on better locations.

Nonetheless, until there are some clear signs of a recovery in terms retailers are likely to tread plans. of employment and consumption, cautiously with their expansion

procurement and enquiries were rents averaged $3,000 - $5,000 prime areas ranged between during the quarter.

mainly lateral movements. Prime while achieved rents in the non$1,270 and $3,500 per month

stabilised during the quarter at a high 98.7% due to the relatively while new developments committed. Prime rents remained relatively resilient while non-prime rents eased as retailers sourced for prime rentals remained strategic locations. In 1Q2002, unchanged for the Orchard/ healthy demand for prime space completing in 2002 are 79% pre-

RESIDENTIAL

The renewed flurry of activity in the last quarter filtered on to 1Q2002 with interests limited to year leasehold suburban

As the mid- to high-end projects have yet to achieve the same commendable take-up as the mixed performances are expected for the private residential market.

selected projects, particularly 99developments. Deferred payment schemes particularly on part downpayment provided the added stimulus for buying market.

lower-end suburban projects,

3

Scotts Road and suburban areas except for other city areas, which saw average rentals easing by 2% ­ 3%.

activity in the private residential

Right pricing and affordability continued to be important determinants in the private

Developers resumed new

residential markets. Prospective a cautious stance, favouring

launches in 1Q2002 with a total of 3,845 new residential units launched, some 85% more than last year. Take up for new

homebuyers are likely to assume projects with attractive pricing of deferred payment schemes. Much also depends on the Economic Review Committee's recommendation on the use of

Likewise, the limited availability space for sale in the Orchard/ Scotts Road area helped to sustain capital values for the area. Average capital values for first storey retail space stayed by 1% for upper storeys.

of good quality strata-titled shop

that launched in the same period projects remained uneven with highest in the last two years, end projects remained low. Average prices declined

and sales incentives in the likes

average take-up rate at 61%, the although those of mid- to high-

firm in 1Q2002 although they fell

CPF monies for property purchase as it affects affordability directly. Meanwhile, activity is likely to be muted until the outcome is announced.

Potential supply of some 2.9 mil sf of retail space scheduled

marginally by an average 1% for apartments/condominiums in the

Investment sales

COMMERCIAL MARKET CONTINUES TO BE THE DRIVING FORCE

OVERVIEW

Despite the subdued economic

conditions and property market, both the industrial and hotel markets also saw several transactions concluded in 1Q2002, accounting for 18% and 15% of total en bloc sales respectively. A four-storey industrial building at

waterfront site at Fullerton Road for tender in 1Q2002. The land parcel comprised the Waterboat House part of the site's development. the reserve list prompted the building which is to be restored as Developers' applications for sites in Government to accept and launch These land parcels include a

Total investment sales for 1Q2002

amounted to $425 mil, marking a rise of 11% over the previous quarter but a 65% fall from the $1.2 bil achieved in the same period last year. The sharp YOY decline in investment sales was mainly attributed to the absence of Government Land Sales (GLS) awarded in 1Q2002 following the suspension of the GLS programme in 4Q2001. Nonetheless, private investment sales performed well in 1Q2002 and enjoyed a rise of 131% QOQ and an increase of 6% YOY. Private en bloc sales showed a

Changi North Street 2 was sold by USbased infotech hardware company Trivec Singapore, for $20 mil ($71 psf). The US company downsized 3Com Corp to a local logistics firm,

four land parcels for public tender. condominium site at Ang Mo Kio, an executive condominium site at Pasir Ris and two `white' sites at Marina Boulevard and Sinaran Drive. Private land sales in 1Q2002 comprised mainly smaller residential development sites. The former Yardley Court site located at Upper Serangoon Road was purchased by $18.15 mil ($249 psf ppr). The MCL Land from Guan Qian Realty for freehold site slated is for a 12-storey apartment block. Other development sites were sold for between $1.6 mil and $9.5 mil.

PROSPECTS

partly due to the global slowdown in electronics demand since last year. Another major industrial sale was

Ghim Lim Building at Kampong Kayu which was sold for $18.9 mil ($269 psf).

significant improvement from $60 mil in 4Q2001 to $362 mil this quarter

4

In the hotel market, the freehold

Robinson International Hotel was sold by the receivers for $35 mil, reflecting a price of $149,000 per room. With arrivals and stiff competition, five each were sold in 1Q2002. These the economic downturn, falling visitor budget hotels with less than 60 rooms include The Chancellor ($107,500 per room) at Joo Chiat Road, Regal Inn ($89,474 per room) at Keong Siak Road, as well as Four Chain Hotel ($94,706 per room), Hotel 22 ($84,375 per room) and the Royal Hibiscus ($60,730 per room) located in Geylang, which were sold for between $2.7 mil and $4.8 mil.

with the commercial market as the en bloc deals concluded were the

main driving force. Among the major disposals of DBS Finance Building and Tiong Bahru Plaza. The former was purchased by Ho Bee Group from DBS Bank for $38 mil ($579 psf) while the latter was sold by United Overseas Land (UOL) to GRA Singapore for $195 mil ($1,048 psf). One office floor at The Arcade and a block of eight retail shops at Far East Plaza and $4.2 mil ($1,368 psf)

Total investment sales for the rest of 2002 is likely to be supported by the renewed interest in GLS sites from developers as well as opportunities arising from financial institutions' and corporations' divestment of their are likely to continue bidding non-core assets. However, developers cautiously and selectively. Income-

were also sold for $7.4 mil ($922 psf) respectively. Commercial properties sold this quarter amounted to $245 mil, representing 58% of total investment sales.

Development site sales plunged 50% of sites originally in the confirmed

QOQ and 40% YOY to $62 mil as sale GLS list was suspended. However, the Government launched a commercial

generating properties will continue to remain the focus of institutional and market is also likely to persist as budget hotels become more affordable. foreign investors. Activity in the hotel

Major investment sales 1Q2002

BUILDINGS SOLD ENBLOC Property BUSINESS SPACE (COMMERCIAL) The Arcade (#09-00), 11 Collyer Quay DBS Finance Building, 112 Robinson Road BUSINESS SPACE (INDUSTRIAL) 14 & 16 Jalan Kilang Timor 8 Sungei Kadut Crescent 41 Changi South Avenue Ghim Lim Building, 7 Kampong Kayu Road 5 Benoi Crescent 3Com, 3 Changi North Street 2 RETAIL Tiong Bahru Plaza, 302 Tiong Bahru Road Far East Plaza (#03-43 to 50), 14 Scotts Road HOTEL Four Chain Hotel, 424 Geylang Road The Chancellor, 181 Joo Chiat Road Royal Hibiscus, 44 Geylang Lor 6 Regal Inn, 50 Keong Siak Road Robinson International Hotel, 201 Balestier Road Hotel 22, 22 Lor Geylang 15 FH FH FH FH FH FH Jan 02 Feb 02 Feb 02 Feb 02 Mar 02 Mar 02 51 rooms 40 rooms 56 rooms 38 rooms 235 rooms 32 rooms 4.83 4.30 3.40 3.40 35.00 2.70 94,706 (per room) 107,500 (per room) 60,730 (per room) 89,474 (per room) 148,936 (per room) 84,375 (per room) 99 FH Jan 02 Feb 02 186,000 3,034 195.00 4.15 1,048 1,368 99 30 30+30 60 30+30 60 Jan 02 Feb 02 Feb 02 Feb 02 Feb 02 Mar 02 26,972 (Site area) 97,493 82,529 70,160 (Site area) 125,440 280,000 6.30 5.68 6.79 18.88 6.45 20.00 234 (On site area) 58 82 269 (On site area) 51 71 99 FH Jan 02 Feb 02 8,030 65,614 7.40 38.00 922 579 Tenure (yrs) Date sold Floor area (sf) Price ($ mil) Price ($psf)

5

SALE OF SITES Property RESIDENTIAL Jalan Tari Payong Butterworth Lane Springleaf Avenue 2 Rebecca Road 16B Chatsworth Road 35 Ford Avenue Springleaf Avenue 779 Moutbatten Road 561 Upper Serangoon Road

Source: DTZ Research April 2002

Tenure (yrs)

Date sold

Site area (sf)

Price ($ mil)

Price ($psf)

Plot ratio

Accom# value ($psf ppr)

999 FH FH 999 FH FH FH FH FH

Jan 02 Jan 02 Jan 02 Jan 02 Jan 02 Feb 02 Mar 02 Mar 02 Mar 02

61,944 9,592 (est) 7,196 12,998 12,261 19,586 10,204 21,337 26,065

9.50 4.70 1.60 7.80 6.50 7.10 2.00 5.00 18.15

153 490 222 600 530 363 196 234 696

2.8 2.8

175 249

# Accommodation Value est: estimated

Business space (commercial)

COMPETITIVE MARKET WITH SUPPLY OVERHANG

OVERVIEW

Narrowing gap between prime and island-wide rents

12.00

electronics coupled with positive economic indicators from the US augurs well for the Singapore

Average monthly gross rents ($psf)

The improved global demand for

10.00

8.00

economy. However, sentiments in

6.00

the office market remained cautious as improvements were uneven and broad base economic growth is growth. New office supply in 1Q2002 was massive at an estimated 1.53 mil sf and purpose-built office space increased by 3% to 53.2 mil sf. New completions include the HDB Centre at Toa Payoh, AIA Tampines and 18 Cross Street. The HDB Centre

6

4.00

necessary to sustained economic

2.00 RAFFLES PLACE 0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1Q2002 ISLAND-WIDE

Source: DTZ Research April 2002

the result of relocations and

cases. Indeed, in the current market, there is a trend towards MNCs looking to relocate to lower-cost The economics are now in their

consolidations, with tenants moving from one property to another and taking about the same amount of space or marginal increase. For

alternatives to save on overheads. favour, as a wide selection of prime office space is available for them to choose at attractive and competitive spate of shadow space from preterminated leases as well as

accounts for 77% of the new supply, space to the decentralised microowner-occupied by HDB, those

contributing some 1.2 mil sf of office market. While 90% of the space will be vacated at Bukit Merah Central of about 620,000 sf will be available for lease.

example, William M Mercer, Marsh & Guy Carpenter secured 50,000 sf of 18 Cross Street as part of its colocation exercise. office space in the newly completed

rents. This is particularly so with the

Office rents weakened further in Average monthly gross rents in

secondary space coming on stream as a result of mergers and acquisitions in the financial services sector. Average capital values of office space continued to slide in 1Q2002 with subdued market activity to levels 1Q1999. As at 1Q2002, freehold office space in Raffles Place commanded an average $1,300 psf. Activity in the office investment close to that of the previous trough in

Island-wide occupancy eased by a marginal 1% during the quarter to 89%, its fifth consecutive decline

1Q2002, particularly within the CBD. Raffles Place declined by 12% to

since 4Q2000. Average occupancies

average $5.75 psf. This is below the previous trough level during the Asian financial crisis when rents averaged $6.15 psf. Within the Orchard Road micro-market, rents were more resistant declining by a month. marginal 3% to average $5.60 psf per

within the CBD area declined to 87% by a marginal rate of 1% to 89%.

while those for the fringe areas eased Within the Tampines Finance Park, the completion of AIA Tampines

average occupancy fell to 92% with which is 40% owner-occupied and has about 84,000 sf available for lease. The business and professional services group underpinned new

Sanguine about the prospects of an economic recovery, some landlords have remained steadfast in their

market is characterised by divestment of buildings and non-core assets by financial institutions as required by and major building owners who sheets. Notwithstanding, office the Monetary Authority of Singapore focussed on lightening their balance

demand for office space in 1Q2002, with some interest from the banks and financial services sector. However, leases signed were mainly

asking rents while others with large vacancy factors have reduced their reducing it by up to 15% in some asking rents to more realistic levels,

investment sales during the quarter

Projected new office supply

4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2002

Source: DTZ Research April 2002

were piecemeal with only one en bloc building transacted, which is the sale of DBS Finance Building at Robinson Road for $38 mil to Ho Bee Group.

were put up for tender towards the

end of 1Q2002 following applications to URA by interested developers. The two sites are located in Marina Boulevard, Singapore Downtown and Sinaran Drive, Novena Place. While the Singapore Downtown is a continuing expansion of the CBD, Novena Place is a sub-regional centre comprising offices, shopping, F&B outlets and residential developments. Developers have the flexibility to decide on the best mix of commercial, residential Boulevard and Sinaran Drive which have maximum permissible gross sf respectively.

PROSPECTS

'000 sf

Two "white" sites on the reserve list

2003

2004

2005

Office projects completed in 1Q2002 Development 18 Cross Street HDB Centre AIA Tampines Location Cross Street Lorong 2/6 Toa Payoh Tampines Grande Developer Straits Development Housing & Development Board AIA Co Ltd Total

Source: DTZ Research April 2002

and hotel uses on the sites at Marina

NLA (sf) 215,200 1,172,500 144,800 1,532,500

7

floor areas of 1.3 mil sf and 354,000

Despite the large new completion in 1Q2002, another 2 mil sf is anticipated for the rest of the year, bringing this year's total to a significant 3.5 mil sf. New projects

redevelopment, refurbishment and upgrading works to improve the building specifications and/or needs to modern office users. The release of shadow space by pretermination of leases coupled with the release of secondary space by corporate mergers and acquisition will undoubtedly accentuate the current oversupply situation in the office market. Most of the new supply increase floor space to cater to the

cost accommodation alternatives. We expect the office market to continue to slide this year with further rental decline. Cautious sentiments are likely to continue to prevail

include major developments such as Parkview Square, Springleaf Tower, The Atrium @ Orchard as well as Keppel Bay Tower and ExxonMobil Nonetheless, new supply between

throughout the year. The market is anticipated economic recovery and limited new office supply.

likely to firm up in 2003, buoyed by

House at HarbourFront office park. 2003 and 2005 will moderate to less than 4.5 mil sf or an average 1.5 mil sf per annum compared with this

Applications by interested developers to URA to tender out the two white sites reflect developers' mid- to market. long-term optimism of the office

year's phenomenal supply. Apart from these new developments, various landlords are also undertaking

completing or coming on stream in

2002 remained uncommitted as they face competition from these lower-

Business space (industrial)

LOWER RENTS AND PRICE INITIATE A SLIGHT STIR IN DEMAND

OVERVIEW

Projected new supply of private industrial space

12

FLATTED & CUSTOM-BUILT FACTORY

10

FLATTED & LOGISTIC WAREHOUSE

TERRACE FACTORY

Signs of an impending economic turnaround were evident in 1Q2002 when the first positive Purchasing Managers' Index reading in 13

mil sf

8

months indicated an expansion in the key manufacturing sector in March 2002. However, with the economy and contraction, more optimistic signs are needed in the coming

6

4

treading the thin line between growth

2

0

months for a firm economic recovery. Nevertheless, the Government is confident of a return to economic growth in the order of 1% - 3% for 2002.

2002

2003

2004

2005

Source: DTZ Research April 2002

Industrial rental values

3.50

Demand for industrial space

8

activity warmed up slightly with more leasing enquiries and transactions. Lower rents and capital values attracted some

Average monthly gross rents ($psf)

remained weak although market

3.00 2.50 2.00 1.50 1.00 0.50 FIRST STOREY 0.00 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02

Source: DTZ Research April 2002

industrialists, but market dynamics remained largely unchanged from end-2001. Space occupiers

remained cost conscious while the supply overhang continued to favour tenants and buyers to the disadvantage of landlords and negotiation. sellers, who were more amenable to

UPPER STOREYS

HI-TECH

Although the halt of Government Land Sales in 2002 will help support the space already in 2002's pipeline market, supply of private industrial remains sizeable at 10.4 mil sf, of which most (5.3 mil sf) will be located in the Western region. Moreover, URA estimates the amount of completed, vacant private industrial space at a hefty 23.8 mil sf as at end-2001. Relaxed JTC subletting policies have also introduced more competition in the secondary market.

As at end-1Q2002, average monthly rents for first- and upper-storey conventional industrial space declined marginally by an average 4% over the previous quarter to $1.55 psf and $1.15 psf respectively. Average monthly rents for hi-tech space took a cue from additional rent cuts by to $2.55 psf. major landlord Ascendas and fell 9%

space in 1Q2002, demand fell by 25% on a QOQ basis and by 8% on a YOY basis. Caveats for 60-year leasehold lodged and showed a 23% decline from 4Q2001, but a 19% increase from a year ago. Demand for 60-year leasehold space was geared towards in 2002, such as Ubi Techpark, Toh Guan Centre and Unity Centre. The Toh Guan Centre and Unity Centre average transacted price of units at developments that will be completing

properties made up 67% of all caveats

Based on a preliminary estimate of 144 caveats lodged for industrial

Selected industrial strata sales transactions in 1Q2002 Development FREEHOLD Biztech Centre Roche Building Cititech Ind Building Mactech Ind Building Henderson Building 60-YEAR LEASEHOLD Toh Guan Centre E-Centre @ Redhill Unity Centre Ubi Techpark Techniques Centre Toh Guan Road East Jalan Bukit Merah Bt Batok Crescent Ubi Crescent Ubi Crescent 1,700 1,000 2,400 1,400 1,300 1 2 2 2 2 317 290 271 220 235 Aljunied Road Shaw Road Aljunied Road Kallang Pudding Road Henderson Road 1,100 1,500 1,400 1,200 1,900 6 5 8 7 5 510 375 410 460 443 Location Unit size (sf) Storey Price ($psf)

Source: DTZ Research April 2002

was 5% lower compared with 4Q2001 and Unity Centre alone accounted for a considerable 42% of all 60-year trend in rents, capital values for leasehold transactions. Mirroring the freehold industrial space declined

one-north, as the economy progresses up the value chain with a greater proportion of high value-added activities such as biotechnology and life sciences. Biopolis, a cluster of companies in one-north, will be An estimated 290,000 sf will be allocated to private biomedical business support companies. seven buildings for biomedical science completed progressively from 2Q2003.

9

slightly by 3% to $470 psf for firststorey space and $290 psf for upperstorey space while the average price of upper-storey space in 60-year 1Q2002. leasehold buildings was $210 psf in

companies and 170,000 sf for IT and

PROSPECTS

In addition, the trend towards the

Even as the economy returns to

leasing market is likely to become

growth in 2002, the industrial market is likely to lag in performance as it awaits a sustained expansion in overall manufacturing activity. When market activity does return, ongoing surely alter the structure of the industrial market. Private landlords and owners of conventional industrial space may find themselves losing out to forwardlooking public sector projects such as economic restructuring will slowly but

pronounced as industrialists continue to move away from capital intensive real estate ownership and towards leasing, which allows for a lighter facilitate the Government's

balance sheet. Asset securitisation will restructuring intention of reducing the concentration of wealth in real estate, but yields are not attractive as yet for its development. Nevertheless, major public sector landlords JTC and viability of industrial REITs. Ascendas are already studying the

Retail

RETAILERS PAVING THE WAY FOR RECOVERY

OVERVIEW

Retail projects completed in 1Q2002

Development China Square Central HDB Centre

Location Cross Street Lorong 2/6 Toa Payoh

Developer Straits Development Housing & Development Board Total

NLA (sf) 73,600 187,000 260,600

Despite retail sales reflecting five consecutive months of decline since September 2001and visitor arrivals falling by 4.5% YOY in the first two months of 2002, retailers remain than-expected economic growth forecast for 2002. The market

Source: DTZ Research April 2002

cautiously optimistic with the better-

Prime rental values for Orchard/Scotts Road area

50

remains highly competitive where

Average monthly gross rents ($psf)

prime spaces are quickly leased by more forward-looking retailers who are paving the way for recovery by committing on better locations.

40

30

Except for China Square Central sf), there were no other major

10

(73,600 sf) and HDB Centre (187,000 completions in 1Q2002. Island-wide retail space maintained at 24 mil sf, shrinking marginally due to the revamp of World Trade Centre and quarter. Unlike the modest supply

20

10 PRIME FIRST STOREY 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 1Q02 PRIME SECOND STOREY

termination of The Promenade this experienced last year, some 857,000 2002, 71% more than the previous space is found in suburban areas Major developments completing

Source: DTZ Research April 2002

outlet at the former Marine Parade Community Library.

Prime rents remained relatively

sf is anticipated to come on stream in year. Slightly more of this new retail (56%) than in other city areas (42%). include Compass Point (Sengkang) in 2002 and Tekka Mall (Sungei Road) in 2003.

resilient while non-prime rents eased as retailers sourced for strategic locations. In 1Q2002, prime rentals Scotts Road and suburban areas

Average occupancy for the Orchard/ quarter at a high 98.7% due to the

Scotts Road area stabilised during the relatively healthy demand for prime

remained unchanged for the Orchard/ except for other city areas, which saw average rentals easing by 2% ­ 3%. Prime first storey retail space in the to command an average rental of with $29.40 psf in suburban

space. New developments completing in 2002 are 79% pre-committed. This includes three developments along year - Compass Point (290,000 sf), The Majestic (40,000 sf) and The Atrium @ Orchard (16,000 sf) at Dhoby Ghaut MRT interchange. the North-east line completing this

Orchard/Scotts Road area continues $35.50 psf, a premium compared shopping centres and $23.70 psf in other city areas. A first storey unit at the very prime Orchard/Scotts Road junction achieved $50 psf this space available.

Between 2003 and 2005, 2.1 mil sf of retail space are scheduled for completion, including an unnamed development at the proposed Ang Mo Kio bus interchange contributing 280,000 sf to this future supply. This new mall will house NTUC Fairprice's flagship hypermarket of 60,000 sf when completed in mid 2005. NTUC Fairprice will also open a 40,000 sf

Metro's new store at Compass Point is timely as it closes its 50,000 sf outlet in Far East Plaza when the lease expires next quarter. Its move to the

quarter, reflecting the limited prime

suburbs is not mirrored by Seiyu who will be vacating its 55,000 sf space in Parkway Parade by April.

Likewise, the limited availability of

good quality strata-titled shop space

Proje cte d ne w s upply of re tail spa ce

2,000 SUBURBAN AREAS 1,500 OTHER CITY AREAS ORCHARD/SCOTTS ROAD AREA

'000 sf

1,000

500

0 2002

Source: DTZ Research April 2002

2003

2004

2005

for sale in the Orchard/Scotts Road for the area. Average capital values for first storey retail space stayed

area helped to sustain capital values

continue to sustain due to their

limited availability in the market.

However, the effects of competition are evident with prime space quickly taken up.

firm in 1Q2002 although they fell by suburban areas, between 2% and 3% space now commands $3,900 psf in the Orchard/Scotts Road area, $2,200 psf for other city and suburban areas respectively. compared with $2,550 psf and

1% for upper storeys. In other city and declines were registered. First storey

More changes are underway as

landlords work to raise the overall standard of malls in Singapore. Realising the possibility of being edged out by competition, many older shopping malls are now being revamped, including a change in tenant mix as in United Square and The Concourse. This quarter alone saw some 300,000 sf of reconfigured space due to the redevelopment of World Trade Centre and The

11

Eight shop units on the third storey of Far East Plaza were sold for $4.15 mil or $1,368 psf while a second storey transacted for $1,666 psf. In other to GRA Singapore this quarter for $195 mil, including $3 mil for unit in Tanglin Shopping Centre was city areas, Tiong Bahru Plaza was sold

Promenade. Nonetheless, spanking

new malls alone may not be sufficient clear signs of a recovery in terms of employment and consumption, retailers are likely to be locationspecific and tread cautiously with their expansion plans.

to draw retailers. Until there are some

upgrading works, which works out to $1,048 psf of net lettable area for a is comparable with the sale of tenure with 89-years remaining. This Orchard Point ($1,088 psf) last March.

PROSPECTS

Potential supply of nearly 3 mil sf of retail space scheduled between 2002 and 2005 will have less impact on prime rentals and capital values which

Residential

MIXED PERFORMANCES EXPECTED FOR THE RESIDENTIAL MARKET

OVERVIEW

Capital values of freehold condominiums in prime areas

1,800

A new cautious optimism evolved in early 2002 with the Government's improved economic conditions. The renewed flurry of activity in the last quarter also filtered on to 1Q2002, although interest remained limited to selected projects with 99-year leasehold suburban developments payment and deferred progress payment schemes provided the added stimulus for buying activity, highlighting homebuyers' sensitivity to affordability, which was still the sale. Fueled by the preceding quarter's improved take-up, which revived

Average $psf

Average $psf

1,500

revised GDP forecast and news of

1,200

900

600

300

taking the lead. Part deferred down

2-BEDROOM

0 1Q99 2Q99 3Q99 4Q99 1Q00

3-BEDROOM

2Q00 3Q00 4Q00

4-BEDROOM

1Q01 2Q01

LUXURIOUS

3Q01 4Q01 1Q02

Source: DTZ Research April 2002

Capital values of leasehold condominiums in suburban areas

800 700

most decisive factor for making the

12

600 500 400 300 200 100 0 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 2-BEDROOM 1Q01 2Q01 3Q01 3-BEDROOM 4Q01 1Q02

optimism in the private residential sales market, developers resumed of 3,845 new residential units launched. Although this was marginally 3% less than that new launches in 1Q2002 with a total

launched in the previous quarter, it the same period last year. Apartment/condominium projects

was 85% more than that launched in

Source: DTZ Research April 2002

continued to dominate launches with limited new supply of landed houses launched. New apartment/ condominium projects launched such as Chiselhurst Green, The Greenwood Phase 2 and Trussville. Take up for new projects remained uneven with sales confined to new suburban condominiums, which launches of mass 99-year leasehold accounted for some 60% of the total new launches during the quarter. Average take-up for new launches

Developments such as The Jade

condominium relished a sell-out with its aggressive pricing and competitive sales incentives of deferred payment scheme as well as tie-up with insurance giant AIA to offer free

include 18 Newton, Amaryllis Ville, The Springs, Legenda, Malvern joined in the rage with price

Derbyshire Heights, The Armadale, Springs and The Jade. Relaunches also reduction and/or deferred payment scheme in place. Examples include Queens, Rio Vista and Goldenhill Park. Only 73 landed houses were launched in 1Q2002, which include projects

condominium protection plan for two years. The successful sell-out of The Jade condominium exhibited homebuyers' basic preference for projects with close proximity to MRT station. The residential property market saw

was 61%, the highest in the last two years, although take-up of mid- to high-end projects remained low.

average prices declined marginally for

apartments/condominiums in the prime areas. As at 1Q2002, luxurious developments in the prime areas those of two- three- and fourbedroom apartments averaged between $830 psf and $905 psf. Supported by improved take-up in apartments/condominiums in the previous quarter's level. Average the primary market, average prices of non-prime areas remained stable at prices are in the order of $515 psf $605 psf for non-prime freehold projects and between $465 psf and $515 psf for non-prime leasehold apartments. For landed properties, 4% during the quarter. Leasehold terrace houses in the non-prime achieved an average $1,400 psf while

Selected residential projects launched in 1Q2002

Development APARTMENTS/CONDOMINIUMS Rio Vista Ph. 2 Amaryllis Ville Changi Rise Ph. 3 The Jade Butterworth 8 Costa Del Sol (balanced units) Queens Ph. 2 Blue Horizon Ph. 2 Hillview Regency Country Park Ph.1 & 2 Goldenhill Park Condo Ph. 3 The Madeira Ph. 3 Legenda Grosvenor View Ph.1 & 2 18 Newton Malvern Springs The Belleforte Deparadiso LANDED HOUSING The Greenwood Ph. 2A & 2B Chiselhurst Green Trussville Chuan Link

Source: DTZ Research April 2002

Location

Developer

Units

Upp Serangoon View Newton Road Simei Rise Bukit Batok Central Link Butterworth Lane Bayshore Road Stirling Road West Coast Cres Bukit Batok East Ave 2 Bedok Rd Mei Hwan Dr Bukit Batok St 31 Joo Chiat Lane Lengkong Empat Newton Rd Onan Rd Ah Hood Rd Martaban Rd

MCL Land & Ho Bee Group Wing Tai City Developments Ltd Sim Lian Land Keppel Land Property Enterprises Devt Allgreen Properties Ltd Far East Organisation Far East Organisation UOL Development City Developments Ltd Janiton Pte Ltd Straits Construction Co. SB Developments Wing Tai OUB Centre Union Commodities Citiraya Development

456 311 304 280 216 193 186 184 172 120 118 114 100 93 81 75 74 54

13

average prices fell by an average 2% -

areas can now be purchased at prices from $825,000 while prices of prime freehold landed houses ranged from $1.5 mil - $3.1 mil.

Affected by improved affordability in the private residential market amongst others, HDB was left with a supply overhang of 17,500 unsold flats, which it will offer to the public from 2Q2002 through the walk-inselection process. In a like fashion, dived with competition from

Greenwood Ave Chuan Dr/Link Paya Lebar Cres Chuan Link

Far East Organisation Act-Nobel Homes Tiong Aik Group Yong Da Properties

37 16 11 9

activity in the HDB resale market also affordably-priced 99-year leasehold coupled with disparate buyers and

developments in the suburban areas sellers expectation which created a volume.

premises, where rentals have become more attractive and competitive. Notwithstanding, luxurious developments like Ardmore Park attracted more activity as well as achieved higher rates ranging from $10,000 per month to as high as $13,000 for some units. As at

located in the suburban areas, competition in the suburban leasing market remains high with the large available supply. Achieved rents for two- to four-bedroom apartments in the non-prime areas ranged between the quarter.

PROSPECTS

standoff leading to lower transaction

Activity in the residential leasing

market picked up slightly with the improved economic conditions. Both although most were lateral procurement and enquiries increased movements from developments in the suburban and fringe areas to the prime areas or from older to newer

$1,270 and $3,500 per month during

1Q2002, apartments in the prime gross rents of $3,000 - $5,000

areas commanded average monthly respectively. With 84% of the total

Although latent demand is still

new apartments completed in 2001

present as evidenced by the recent

improved take-up as well as sell-out

responses of selected projects, mixed performances are expected for the to high-end projects have yet to private residential market. The midachieve the same commendable takeup as the mass suburban projects. end developments have remained completion or have received their temporary occupation permits. Units in some of these mid- to highunsold even though some are close to

suburban areas for sale. Although the Singapore economy is expected to do better this year with the Government's positive GDP forecast

of 1% - 3%, sentiments in the private influenced by external factors and global events. Right pricing and affordability are also important

residential market are also very much

determinants as they affect first appetite for private residential properties.

timers' as well as HDB upgraders'

Looking ahead, the impending supply of new residential units will continue to be of concern. Some 23,400 units of the economic conditions and this are currently in the pipeline. Mindful supply overhang, the Government has restricted the sale of residential land to applications via the reserve list. However, with demand geared towards suburban projects, the

14

Prospective homebuyers are likely to assume a cautious stance, favouring projects with attractive pricing and sales incentives in the likes of deferred payment schemes. Much

also depends on the Economic Review Committee's recommendation on the use of CPF monies for property

market is likely to see developer

interest in 99-year leasehold sites and applications to the Government to release strategic sites in the

purchase. Meanwhile, activity is likely to be muted until the outcome is announced.

Diary of major property & related events

GENERAL

will inject its entire property

Singapore Press Holdings (SPH)

perceptions about their bureaucracy while Japan has fallen from third to fifth position. a worsening trend. BT 22 Feb Potong Pasir MRT station will be opened as the Land Transport Authority has established it to be economically viable based on the projected ridership levels for the new line. operational when the $5 bil 20km North-East line opens by early Dec 2002. ST 28 Feb It is expected to be

portfolio with an aggregate net book value of $1.1 bil into a new Ltd (TP). The restructuring was entity called Times Properties Pte for SPH and TP to focus on their property assets include Times House in Kim Seng Road and Times Industrial Building in Thomson Road which may be redeveloped into residential units. ST 12 Jan

Indonesia and Philippines showed

be the third air-conditioned bus interchange to be constructed and completed by 2006. The interchange will be part of a new storey condominium and a 21-

Ang Mo Kio bus interchange will

mega-complex comprising a 31storey office building. ST 25 Mar The Ministry for National

respective core businesses. SPH's

Development (MND) has unveiled its plans and initiatives for the next few years. A site in the New Downtown area is to be launched and developed into an integrated business and financial centre while land-reclamation

Amid increasing signs of a an upturn in the critical

strengthening US economy and electronics industry, the

development charge (DC) rates for residential land has been reduced by an average 13% for developments. For commercial

With effect from 1 Mar 2002,

programme will continue to cater to increasing demand. MND also aims to keep public housing variety of housing designs.

15

growth forecast for 2002 previous official growth 2%. BT 11 Feb Sentosa Development Sentosa under a 10-year

government has revised its upwards to 1% - 3% from the projection of between -2% and

non-landed and 9.2% for landed and industrial land, average DC 15.6% respectively. BT 1 Mar Construction of the 34-km

affordable while providing wider Concurrently, new land-use

rates were reduced by 10.2% and

zonings and greater variety in be explored. To allow greater MND is looking to simplify

lease tenures for land sales will flexibility in building designs, development rules and controls while promoting distinctive streetscape greenery. The

Corporation (SDC) is revitalizing masterplan to make it a worldclass resort island. It hopes to attract eight million visitors annually. SDC will bear one-third of the estimated $3 bil cost with the rest to come from private investors. New developments on the island will include a peoplemover system, more hotels, and theme parks. ST 17 Feb According to the Political & Economical Risk Consultancy's Singapore has replaced Hong annual survey of businessmen, Kong as Asia's least bureaucratic economy in 2002. Vietnam and South Korea saw improving waterfront entertainment outlets

underground Circle Line will

commence in stages and is due for completion by 2010. It will loop round the city so that commuters heading to outer

areas such as Bishan, Paya Lebar and Buona Vista can bypass the city stations. The first phase linking Dhoby Ghaut with in 2006. ST 6 & 14 Mar A new biomedical institute for inStadium Boulevard will be ready

structure of the Housing Board

and public housing policies will also be reviewed to ensure that their respective objectives are met. ST 27 Mar

COMMERCIAL

depth research will be set up in Singapore. Funded and supervised by the Agency for Science, Technology and

Centre by CapitaLand and its $190 mil, inclusive of

The redevelopment of Pidemco German partner Ergo will cost development charges to upgrade new building, to be part of the Eureka Office Fund, will have a net lettable area of 440,000 ­ 450,000 sf. Eureka also plans to

Research (A*Star), the institution will house about 250 research scientists and engineers. ST 8 Mar

the site's tenure to 99 years. The

sell strata-titled office and shop space in The Adelphi which is being refurbuished. BT 11 Jan CapitaLand wants to revive

industrial areas such as Tuas and Loyang, with six sites zoned for general industries, one for food industries and one for warehousing. BT 3 Jan

JTC is exploring the possibility of investment trusts (REITs) while setting up industrial real estate corporatised JTC unit Ascendas

has started studying a property trust of its own since late 2001.

BT 14 Mar

The Singapore Mall Property mil of shares last year. The

Singapore's first property trust,

Trust, Trust after its failure to sell $740 property trust would buy and manage three malls for a yield of 5.75% in 2002 and 6.05% next year. ST 17 Jan

Net allocation of JTC's flatted factories fell 73% to 285,181 sf in 2001, the lowest level since 1998. Standard factory space

US-based infotech hardware

recorded zero demand in 2001 with net allocation declining to years while the industrial land segment fared better with net minus 7,976 sf after two positive

3Com Corp has sold its 340,000

North Street 2 for $20 mil or $60 psf. The site hhas a remaining ground lease of 54 years. The purchaser, Trivec Singapore is

sf manufacturing plant at Changi

Hongkong Land will be awarding New Downtown site at Marina the construction contract for its

allocation increasing from 12.8 ha in 2000 to 49.1 ha in 2001.

BT 25 Jan

leasing back 60,000 sf to 3Com for lease. BT 22 Mar

with the balance space available

South in 2Q2002. Expected to be completed by 2005, the `white' site will yield over 1.6 mil sf of gross high-grade commercial space housed in an 18-storey

JTC is easing the plant and machinery (P&M) investment

RETAIL

requirements for firms applying applications will be evaluated

16

and a 42-storey office tower with net floor plates of 31,000 sf and 18,000 sf respectively. BT 27 Feb

for industrial land sites. New land based on companies' business value-added components and

The $30 mil revamp of World Trade Centre has been timed for April 2003 in conjunction with HarbourFront MRT Station nearby. About 52% of the

completion in October 2002 and the completion of the proposed

proposals, proposed plot ratio, firms' declared P&M investment. For renewal cases, firms are required to declare a P&M business development.

INDUSTRIAL

posted prices and rents of most of its ready-built industrial facilities by up to 17% as at 1 Jan 2002. Posted rents for industrial land will be maintained except for rates in Jurong Island which

JTC Corporation (JTC) has cut

200,000 sf of net lettable space increase. ST 3 Jan United Overseas Land sold its

has been leased despite a rental

investment figure optimal for Applications will be reviewed by an allocation working committee though JTC will make the final decision. ST 7 Feb

Tiong Bahru Plaza shopping mall to GRA Singapore for $195 mil, inclusive of an estimated $3 mil for upgrading works. The mall is located above the Tiong Bahru of its 99-year tenure. ST 5 Jan Suntec City plans to create a wired environment where shoppers and conference to the Internet within the MRT station and has 89 years left

will be cut by 5%. For ready-built facilities, net allocation in 2001 dropped 81% from the previous industrial land increased five times to 45.8 ha from 2000.

BT 2 Jan

JTC will put up for tender another six parcels of industrial land totalling 7.6 ha with tenures

year to 417,643 sf while that of

ranging from 10 - 23 years under its Short Tenure Land Launch Launch. 0.95 are located in Kranji Three of the sites with plot ratio Industrial Estate and the rest with an average proposed plot ratio of 0.54 are in Jurong Industrial Estate. ST 19 Feb

JTC has released eight industrial land sites totalling 9 ha under its open application scheme for the second half of financial year year leases, are located in 2001. The sites, mostly on 30-

participants will be able to log on complex using a laptop and a

special wireless card. ST 18 Jan

Former Scotts Walk at Scotts Road is being redeveloped by Brunei Investment Agency into a new five-storey building where retailer DFS will occupy about 100,000 sf when completed by end 2002. DFS has not decided existing 113,000 sf outlet at March 2003. BT 23 Jan

for over $200 mil. The deal will either be a commercial mortgage-backed security or a

BT 24 Jan

the junction of Choa Chu Kang Road and Woodlands Road for tender applications. The site comes with Ten Mile Junction,

security back by future cash flow.

which is a 2-storey commercial podium, and a Light Rail Transit depot. The buyer will take over this existing component and build some 190 flats/serviced apartments units on top of it.

BT 1 Mar

whether to renew the lease for its Millenia Walk when it expires in

Le Meridien, a Nomura International-owned hotel chain, their management contract at Le requested an early termination of Meridien Changi with Far East

Far East Organization will

Organization. The latter will take over management of the 280room hotel from 2Q2002 and

BT 6 Feb

reposition 50,000 sf of retail leased to Metro department store, into a hip and trendy

space at Far East Plaza, currently

National Trades Union Congress (NTUC) Centre has commenced and is due for completion in Raffles Quay and Marina

Construction of the 32-storey

rename it Changi Village Hotel.

2004. Located at the junction of Boulevard, the building will be an will house the NTUC

version of Tokyo's Shinjuku area. Refitting costs to subdivide into 40-50 individual retail outlets will be around $6 mil and is 2002. ST 25 Jan

The Beaufort and Shangri-La Rasa Sentosa are planning to build spa facilities on their premises in Sentosa. The Beaufort will spend outdoor Spa Botanica set in a

icon of the labour movement as it headquarters as well as provide a one-stop customer service centre, retail and medical facilities to trade-union members. ST 1 Mar

targeted for completion by end

$9 mil on a 1,800 sm indoor and 5,000 sm compound. Shangri-La Rasa Sentosa intends to spend $900,000 to develop a unique name by October 2002.

ST 17 Feb

Takashimaya Singapore saw 3.1% mil in 2001. However, net profits fell from $8 mil to $380,000 due to store renovations, higher with renovations in 2000, depreciation charges associated disposal costs for old fixtures

17

increase in sales to a record $366

spa concept under its own brand

for the 98,000 sf `white' site at Marina Boulevard following successful application by a

URA has launched a public tender

Three budget hotels were sold

and fittings as well as physical and manpower investments made in 2001. BT 6 Mar

recently. The 40-room Chancellor at Joo Chiat was sold for $4.3 mil ($107,500 per room) while the 56-room Royal Hibiscus in

developer at the reserve price of $280 mil or $220 psf ppr. The site with a permissible maximum gross floor area of 1.3 mil sf can be developed for commercial, residential or hotel use.

BT 2-3 Mar

Robinson & Co will open a 9,000 sf John Little outlet at Compass Point in Sengkang. It will also take over a 19,000 sf ground

Geylang was bought by Fragrance per room). The 38-room Regal Inn at Keong Saik Road was purchased by Katong Medical Centre for $3.4 mil ($89,473 per room). BT 21 Feb

Land Group for $3.4 mil ($60,730

floor space at Parkway Parade for another John Little outlet.

BT 28 Mar

mall from Japanese retailer Seiyu

for a 99-year leasehold `white' site at Sinaran Drive at a reserve price of $77.8 mil or $220 psf ppr. The 84,203 sf reserve site

URA has launched a public tender

MIXED HOSPITALITY

with gross plot ratio of 4.2, can be developed for commercial, residential, hotel, civic & community institution use or a mix of these uses. ST 18 Mar

Urban Redevelopment Authority reserve list a 1.5 ha integrated residential/commercial plot at (URA) has released from the

Prince Hotel is being securitised

The 311-room freehold Crown

URA has launched a public tender residential site at Lengkong Empat at a reserve price of $9 mil or $136 psf ppr. With a site area of 0.29 ha and a maximum gross designated for apartment for a 99-year leasehold

have take-up rates ranging from 50% - 85%. ST 21 Jan

of $540 psf, compared with $550 psf in July 2000. BT 29 Jan Sim Lian Group sold all 280 units of The Jade condominium at an average price of $483 psf.

Hin Leong Group ­ Changi

Three residential projects by Ban Heights in Upper Changi Road, Smart House in Ewe Boon Road and Twins at Balmoral Road ­ have been placed under Bank. BT 23 Jan

floor area of 66,737 sf, the site is development. ST 18 & 28 Mar

Located opposite Bukit Batok MRT station, the 99-year leasehold condominium offers partial deferred downpayment where buyers pay only 10% cash upfront with the balance 10% and 2Q2003. BT 2-3 & 12 Mar The Government will launch residential sites on the reserve list for public tender. The two sites comprise a 185,456 sf another two 99-year leasehold progress payments payable from

receivership by United Overseas

RESIDENTIAL

Board will not be building new flats under its Registration for

The Housing and Development

Tiong Aik Group bought a 40,154 sf site at 1 Leonie Hill Road (the former Wilmer Court) from Wilmer & Sons for $47 mil including an estimated development charge of $8 mil. The Group will develop a 2980 luxury apartments in June storey development and launch 2002 at an average $1,200 psf. Wilmer & Sons will buy about 20 of the new units and one penthouse. BT 24 Jan

Flats System as demand for new flats in non-mature estates has shrunk by 50% to about 11,000 applicants. Applicants will be offered the unsold 17,500 new

flats in 1Q2002 with remaining units offered to the public on a

18

walk-in basis from 2Q2002. In

Pasir Ris with a reserve price of $105 psf ppr and a 215,278 sf

executive condominium parcel in

addition, 1,900 new flats in eight mature estates will be balloted this quarter. ST, BT 10 Jan Wing Tai Holdings may launch

private condominium site in Ang Mo Kio with a reserve price of $180 psf ppr. BT 7 Mar

4Q2001 and declined almost 8% between 5% - 7% across the board in 2001. Prices and

HDB resale flat prices fell 1.4% in

prime projects such as Amaryllis Cairnhill as well as relaunch

YOY while average valuations fell

MCL Land is offering the deferred its completed Balmoral Residences. Buyers are allowed to move in after paying the 10% downpayment with the remaining amount payable in eight months' time. Investors may also buy and they will receive eight payment scheme on the sale of

Ville, Tomlinson, and The Light at Tessarina this year. Its 81-unit Newton 18 saw 30 units sold since the soft launch at around $1,000 psf - $1,200 psf while Square has been sold when psf - $820 psf. BT 18 Jan 81% of the 179-unit Burlington relaunched at an average $730

valuations of larger five-room a larger drop than other flat types. The number of transactions also slipped by

and executive units experienced

11.8% in 4Q2001 but increased 5.2% YOY to 41,839 units due to first nine months of 2001.

ST 26 Jan

tenanted units on the same terms months' worth of rent upon the final 90% payment. ST 13 Mar

the higher volume of sales in the

The 75-unit freehold Malvern Springs in Katong developed by an average price of $630 psf. Belleforte (United Industrial

OUB Centre achieved 96% sales at Other freehold projects such as Corp), Adam Park (Tuan Sing Group), The Armadale (Sime Darby), Gisborne Light (Hor Kew) and The Ansley (Kheng Leong)

Allgreen Properties has sold 150 units in its relaunch of the 99year leasehold Queens at Stirling psf, bringing total sales to 300 out of a total 722 units. Units relaunched are on higher floors, and thus a higher average price

Yardley Court site along Upper

MCL land bought the freehold

Serangoon Road for $18.15 mil. The 26,000 sf site was previously sold to Guan Qian Realty in an en bloc deal in 1996 at $23.6 mil. Zoned for residential use with a built up to 72,982 sf of gross floor area. BT 25 Mar

Road at an average price of $570

plot ratio of 2.8, the site may be

Explanatory notes

AREA TAXANOMY Areas commonly referred to in the report are defined as follows: STOCK Business space (commercial) Refers to purpose-built office or mixeduse premises with net lettable areas of 20,000 sf or more. It includes buildings developed by statutory boards or government-related organisations. RENTS Average gross rents are computed based on a basket of properties, inclusive of service or maintenance charges under standard 3-year lease terms for commercial/industrial properties and two years for residential properties. Where actual transaction is not available, an imputed rent is used.

Business space (commercial) The office market is sub-divided into nine sub-markets: Raffles Place; Shenton Way/ Robinson Road/Cecil Street; Marina Centre; Beach Road/North Bridge Road; Bras Basah/Selegie Road; Anson Road/ Tanjong Pagar; Orchard Road; River Valley/Singapore River and Decentralised areas. Business space (industrial) The industrial market is sub-divided into the following four regions:

Region Central East North West Mk Nos. MK 1-4, 15-18 & 22-25 (eg. Macpherson) MK 21 & 26-31 (eg. Changi South) MK 11-14, 19 & 20 (eg. Woodlands) MK 5-10 (eg. Jurong)

Business space (industrial) Stock comprises purpose-built industrial premises which are sub-categorised into three sub-markets: factory (flatted & hitech); warehouse (flatted & logistic) and terrace & semi-detached industrial space. Retail Stock includes purpose-built shopping centres or retrofitted shop-houses managed and positioned as a shopping centre with net lettable areas of at least 10,000 sf; and shop space within hotels with a minimum lettable area of 5,000 sf excluding shops operating as a service related business. Serviced apartments Refers to purpose-built apartments which are leased with housekeeping, maid and laundry services. Residential Stock comprises both apartments and condominiums, conventional landed properties and cluster housing. Only developments with six or more units are included in the report. Apartments/ condominiums are divided into the following categories:

Category 2-bedroom 3-bedroom 4-bedroom Luxurious Floor Area 900 - 1,100 sf 1,101 - 1,500 sf 1,501 - 1,900 sf 2,500 sf or more

Business space (commercial) Average rents are based on contracted rents and do not reflect any incentives such as rent-free period and landlord's contribution to fitting-out costs. Typical unit sizes adopted are between 2,000 sf and 5,000 sf. Business space (industrial ) For high-tech industrial buildings, rents exclude air-conditioning charges. Retail Only rents of prime specialty retail shops, for example those with good frontage or pedestrian footage, are included in the report.

CAPITAL VALUES Business space (commercial) Average capital values are based on properties with sizes ranging from 2,000 sf to 10,000 sf.

Retail The "Orchard/Scotts Road" area begins from Tanglin Road, stretching all the way to the Dhoby Ghaut MRT station and includes part of Scotts Road up to Thong Teck Building.

The term "other city areas" refers to the area outside the Orchard/Scotts Road corridor but within the city-limits as defined by the Novena MRT station to the north, Kallang MRT station to the east and Redhill MRT station to the west. Areas outside of the above two areas are defined as "suburban".

19

Business space (industrial ) Average capital values are based on a basket of freehold properties which are 10 years or less in age. Where sales evidence are not available, valuation estimates are used as proxies. Retail Average capital values are computed based on a basket of freehold properties. Where sales evidence are not available, valuation estimates are used as proxies. Residential Average capital values of residential properties are based on a basket of properties which are 10 years or less in age. Where sales evidence are not available, valuation estimates are used as proxies.

Capital values of conventional landed properties are based on the following land areas: Category Terrace Semi-detached Bungalows/detached Land Area 1,650 sf 2,300 sf 4,500 sf

Hotel The hotel market is sub-divided into gazetted and non-gazetted hotels. Gazetted hotels cover the following areas: Orchard/Scotts Road; Marina Centre; City Hall; Bras Basah/Bencoolen Street/Beach Road; Havelock Road/Chinatown/River Valley; Serangoon; East Coast and other areas.

Non-gazetted hotels cover the following areas: Orchard/Scotts Road; Bras Basah/ Bencoolen Street/Beach Road; Havelock/ Chinatown/River Valley; Serangoon/Jalan Besar; Joo Chiat/Geylang; East Coast and other areas.

NEW SUPPLY Refers to the supply of new properties which are confirmed i.e. projects for which planning approval has been given and there are definite plans to proceed with the development. With the exception of residential properties, the year for new supply refers to the year in which the project is expected to receive its Temporary Occupation Permit (TOP). For residential properties, the year for new supply refers to the year in which the property is expected to be marketed. OCCUPANCY RATE Refers to the percentage of total net lettable area occupied compared with available stock. ABSORPTION Refers to the total number of residential units in new projects which are sold. Resales are excluded.

Serviced apartments The serviced apartment market is subdivided into five areas: Orchard/Scotts Road; Bras Basah/Bencoolen Street/Beach Road; Havelock Road/Chinatown/River Valley; East Coast and other areas. Residential Prime districts refer to those in sectors 22 to 30, commonly known as districts 9, 10 and 11.

EN BLOC SALES Refers to the sale of the entire building. It also includes strata floors as well as the collective purchase of several units within the same development by a single or joint entity.

Property Perspective

Property Perspective is a comprehensive research report on the Singapore property market available on subscription to organisations with property interests. The quarterly publication will cover all the market viz office, retail, industrial, residential and hospitality. The report provides analyses relating to supply, demand, occupancy, rents, capital values and investments which are necessary for an in-depth understanding of the market. It is presented in four key sections: The Economy This section gives a sectorial review of the economy and the outlook. The Property Market This section provides a detailed update and outlook of each sector of the market including the following: Major issues affecting the property market and their impact · Major investment transactions · Business Space (Commercial & Industrial) · Retail · Residential · Hospitality Specical Feature This section incorporates, on a rotational basis, insight into the property markets in Indonesia, Malaysia, Thailand, Hong Kong and China or other features of topical interest. Diary of Major Property and Related Events This section provides a quick reference of the major property and related events that took place during the period. In addition to receiving Property Perspective, subscribers will receive the following complimentary publications: Property Times Property Focus Research Alert Asia Pacific Property Market Overview Global Office Occupancy Costs Asia Pacific Property Obligations of Occupation A quarterly review of the Singapore property market Newsletter of DTZ Debenham Tie Leung (SEA) Pte Ltd A topical research publication covering specific areas of interest A yearly overview of the property markets in Asia Pacific An annual survey on office occupancy costs A guide to key costs and obligations associated with the purchase and lease of commercial property

The annual subscription fees for Property Perspective is S$3,090 (inclusive of GST). Please detach & return to: .................................................................................................................................................................................................................... Mrs Ong Choon Fah Executive Director DTZ Debenham Tie Leung (SEA) Pte Ltd 100 Beach Road #35-00 Shaw Tower Singapore 189702 Telephone +65 6293 3228 Fax +65 6298 9328 E-mail [email protected] Dear Mrs Ong PROPERTY PERSPECTIVE We would like to subscribe to Property Perspective for one year with effect from ......................... Enclosed is our cheque (Bank/No.) .......................................... for S$3,090 (inclusive of 3% GST). Name Designation Company Address Telephone Email : ................................................................................................................... : ................................................................................................................... : ................................................................................................................... : ................................................................................................................... : ............................................... Facsimile : ............................................... Date : .............................................. : ..............................................

Notes

Notes

Our mission

To provide the highest quality in property consultancy that adds value to the assets of our clients in a manner that exceeds their expectations. We achieve this through a unique insight that springs from our Asian identity; a global contact base; a multi-disciplined range of expertise founded on depth of experience; standards that are international and a professional practice that adheres to the highest ethical principles.

Principal contacts

Executive Chairman Edmund Tie ....................................................................................................................................................... Chief Executive Officer Ho Tian Lam Residential, Business Space (Industrial), Auction ............................................................................ Executive Director Low Fatt Onn Investment .................................................................................................................................. Yam Kah Heng Valuation, Statutory Valuation, Property Tax Advice ................................................................... Heng Hua Thong Project, Facilities & Property Management, Hospitality ............................................................. Wang Look Tsui Retail ...................................................................................................................................... 6393 2388 6393 2338 6393 2328 6393 2368 6393 2398 6393 2378 6393 2333 6393 2308 6393 2393 6393 2318 6393 2363 6393 2323 6393 2383 6393 2312 6393 2515 6393 2317 6393 2348 6393 2326 6393 2307 6393 2507 6393 2319 6393 2315 6393 2384 6393 2389 6393 2399 6393 2335

Angela Tan Occupier Services ............................................................................................................................ Philip Leow Valuation ....................................................................................................................................... Lee Hon Kiun Investment ................................................................................................................................... Ong Choon Fah Research & Consultancy ........................................................................................................... Yusof Amir Wahid Investment ............................................................................................................................ Cheng Siow Ying Business Space (Commercial) ................................................................................................

Margaret Thean Residential .............................................................................................................................. Poh Kwee Eng Valuation ................................................................................................................................... Ng Poh Chue Statutory Valuation, Research & Consultancy, Property Tax Advice ............................................... Nicholas Cheng Valuation ................................................................................................................................. Linda Kwan Retail .............................................................................................................................................

Chua Wei Lin Occupier Services ......................................................................................................................... Goh Kian Huat Property Management ................................................................................................................ Yong Kok Fong Project and Facilities Management ............................................................................................ Kevin Lee Valuation .......................................................................................................................................... Rosa Wong Valuation ........................................................................................................................................ Shaun Poh Business Space (Industrial), Auction ................................................................................................. Tang Wei Leng Investment ................................................................................................................................ Stephanie Ho Retail .......................................................................................................................................... Tan Mui Neo Retail ...........................................................................................................................................

DTZ Research & Consultancy

Singapore Ong Choon Fah Tina Wong Lim Sue Anne Josephine Yip Jesline Koh Ng Poh Chue Wang Mei Yen Darren J W Tan

MA (Bus Ad) BSc (Est Man) Hons MSISV Executive Director BSc (Est Man) Hons Manager (Special Projects) BSc (Real Estate) Hons Research Analyst

Research Analyst

+65 6393 2318 +65 6393 2329 +65 6393 2331 +65 6393 2340 +65 6393 2332 +65 6393 2357 +65 6393 2515 +65 6393 2321 +65 6393 2324

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

MSc (Real Estate) BSc (Est Man) Hons Manager

Amanah Loh BSc (Real Estate) Hons

Research Coordinator

BSc (Est Man) MSISV Executive Director BSc (Est Man) Hons Consultancy Executive B Bus (Property) Consultancy Executive

Australia Lester Martin

FRICS AAPI LREA Chief Executive

+612 9233 5100

[email protected]

Chinese Mainland & Hong Kong Alva To

ARICS AHKIS RPS Director

+852 2507 0507

[email protected]

Indonesia Ir. Kenastiti Dwiambarwari Malaysia Jimmy Foo

BSc (Urban Land Econ) Hons

Associate Director Manager

+62 21 576 3838

[email protected]

+603 2161 7228

[email protected]

New Zealand Ian Mitchell Taiwan Wendy Hsueh Thailand Kawee Siribhadra

MIM (Int Mgt) Managing Director MA (Land Econ) BA (Land Econ) Director MBs (Property Studies) DipBusAdmin BAgSci

Principal/Research Manager

+64 4 382 0503

[email protected]

+8862 8788 3288

[email protected]

+662 257 0499

[email protected]

Worldwide offices

DTZ Debenham Tie Leung DTZ Staubach Tie Leung (joint venture with US-based The Staubach Company) Curzon Global Partners (joint venture with US-based AEW Capital Management) Argentina, Australia, Austria, Belgium, Brazil, Chile, China, Colombia, Costa Rica, Czech Republic, Denmark, France, Germany, Greece, Hungary, Indonesia, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Panama, Poland, Portugal, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, Ukraine, UK, USA, Venezuela.

Note: All currencies are in Singapore dollars unless otherwise stated. This report should not be used as a basis for entering into transactions without seeking further qualified professional advice. Whilst facts have been rigorously checked, DTZ Debenham Tie Leung can take no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy or incorrectness within the report. © DTZ Debenham Tie Leung (SEA) Pte Ltd April 2002. No part of this report may be reproduced or transmitted in any form or means by any person or persons without the express written permission of DTZ Debenham Tie Leung (SEA) Pte Ltd. MITA (P) No 076/10/2001

DTZ offers a comprehensive range of services and fully integrated property advice throughout the world. In Asia Pacific, our professionals provide the same full range of real estate services.

Singapore

100 Beach Road #35-00 Shaw Tower Singapore 189702 Tel: (65) 6293 3228 Fax: (65) 6298 9328/6292 1633 E-mial: [email protected] Contact: Ong Choon Fah 41-43 Tarbert Street P O Box 27 Alexandra New Zealand Tel : (64) 3 448 6935 Fax : (64) 3 448 9099 E-mail : [email protected] Contact : Ken Taylor Level 16 Auckland Club Tower 34 Shortland Street P O Box 3490 Auckland New Zealand Tel : (64) 93 09 30 40 Fax : (64) 93 09 90 20 E-mail : [email protected] Contact : Mark Parlane 8th Floor Tonson Tower 900 Ploenchit Road Lumpini Pathumwan Bangkok 10330 Thailand Tel: (662) 257 0499 Fax: (662) 257 0501 E-mail [email protected] Contact: Kawee Siribhadra Suites 1622-1626 Bright China Chang An Building No 7 Jianguomennei Avenue Dondcheng District Beijing 100005 China Tel: (8610) 6510 1388 Fax: (8610) 6510 1368 E-mail: [email protected] Contact: Lydia Wang Level 11 400 Queen Street Brisbane QLD 4001 Australia Tel : (61) 7 3839 6444 Fax : (61) 7 3839 6455 E-mail : [email protected] Contact : Brett McCracken Level 4 140 Bundall Road Bundall QLD 4217 Australia Tel : (61) 7 5574 2333 Fax : (61) 7 5574 2288 E-mail : [email protected] Contact : Brett McCracken Unit 8 13th Floor Metropolitan Tower 68 Zou Rong Road Central District Chongqing 400010 China Tel: (8623) 6383 8405 Fax: (8623) 6383 8342 E-mail: [email protected] Contact: Sabrina Ou Yang 76 Cashel Street P O Box 142 Christchurch New Zealand Tel : (64) 33 79 9787 Fax : (64) 33 79 8440 E-mail : [email protected] Contact : Murray Ellis

Dalian

Alexandra

Room 2803 Dalian Goldname Commercial Building 68 Renmin Road Zhongshan District Dalian 116001 China Tel: (84411) 270 8800 Fax: (86411) 270 7799 E-mail: [email protected] Contact: Betty Zhao 248 Cumberland Street P O Box 5744 Dunedin New Zealand Tel : (64) 34 74 0571 Fax : (64) 34 77 5162 E-mail : [email protected] Contact : Stephen Cairns Rooms 1905-1906 CITIC Plaza Office Tower 233 Tianhe Bei Road Guangzhou 510613 China Tel: (8620) 3877 0878 Fax: (8620) 3877 0887 E-mail: [email protected] Contact: Sharron Chan 219 Collingwood Street P O Box 1442 Hamilton New Zealand Tel : (64) 7 957 8683 Fax : (64) 7 957 3320 E-mail : [email protected] Contact : Adrian Van der Hulst Room 1003 Wai Mao Liang You Building 229 Ti Yu Chang Road Hangzhou 310003 China Tel: (86571) 8577 9946 Fax: (86571) 8577 9945 E-mail: [email protected] Contact: Alan Lai 10th floor Jardine House Central Hong Kong Tel: (852) 2507 0507 Fax: (852) 2530 1441 E-mail: [email protected] Contact: Alva To Menara Rajawali 25th Floor Jl.Mega Kuningan Lot # 5.1 Kawasan Mega Kuningan Jakarta 12950 Indonesia Tel: (6221) 576 3838 Fax: (6221) 576 3388 E-mail: [email protected] Contact: Ir. Kenastiti Dwiambarwari Suite 32.03 Level 32 Menara Citibank 165 Jalan Ampang 50450 Kuala Lumpur Malaysia Tel: (603) 2161 7228 (7 lines) Fax: (603) 2161 1633 E-mail: [email protected] Contact: Jimmy Foo Level 6 35 Spring Street Melbourne Vic 3000 Australia Tel : (61) 3 9654 3388 Fax : (61) 3 9654 3322 E-mail : [email protected] Contact : Marc Pallisco

Perth

Level 8 International House 26 St George's Terrace Perth WA6000 Australia Tel : (61) 8 9325 5880 Fax : (61) 8 9325 5881 E-mail : [email protected] Contact : Chris Geers 27th Floor South Tower Hong Kong Plaza 283 Huaihai Zhong Road Shanghai 200021 China Tel: (8621) 5306 1383 Fax: (8621) 6384 0301 Email: [email protected] Contact: Jerry Geng Rooms 2809 - 2811 Shun Hing Square Di Wang Commercial Centre 5002 Shennan Road East Shenzhen 518008 China Tel: (86755) 212 5111 Fax: (86755) 246 0001 Email: [email protected] Contact: Du Ying Level 8 5 Elizabeth Street Sydney NSW 2000 Australia Tel : (61) 2 9233 5100 Fax: (61) 2 9235 1978 E-mail : [email protected] Contact : Kim Hoang 9th Floor Capital Square 97 Sung Jen Road Taipei 110 Taiwan Tel: (8862) 8788 3288 Fax: (8862) 8780 5188 Email: [email protected] Contact: Wendy Hsueh Units 1305-6 Level 13 Tianjin International Building 75 Nanjing Road Tianjing 300050 China Tel: (8622) 2313 9751 Fax: (8622) 2313 9750 Email: [email protected] Contact: Singer Wang 1st Floor Public Trust Building Cnr Church & Sophia Streets P O Box 564 Timaru New Zealand Tel : (64) 3 684 8340 or (64) 3 684 8339 Fax : (64) 3 688 0407 or (64) 3 684 6371 E-mail : [email protected] Contact : Ray Ward-Smith 11/F Yurakucho Building 1-10-1 Yurakocho Chiyoda-Ku Tokyo 100-0006 Japan Tel: (813) 5219 2090 Fax: (813) 5219 2021 Email: [email protected] Contact: Risa Furutsuki 291 Willis Street P O Box 27-133 Wellington New Zealand Tel: (64) 4 384 5747 Fax: (64) 4 384 2446 E-mail : [email protected] Contact : Ian Mitchell

Dunedin

Shanghai

Auckland

Guangzhou

Shenzhen

Bangkok

Hamilton

Sydney

Beijing

Hangzhou

Taipei

Brisbane

Hong Kong

Tianjin

Jakarta

Gold Coast

Timaru

Chongqing

Kuala Lumpur

Tokyo

Christchurch

Melbourne

Wellington

DTZ has 6,500 staff operating from 125 offices in 33 countries. Our internet adress is www.dtz.com.sg ©DTZ April 2002

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