Complete Property Market Updates of Singapore

August 7, 2008

JTC launches tender to develop hotel, retail shops

Filed under: Commercial,General,Hotel,Regulators — Propertymarketupdates @ 4:00 am

This will add vibrancy to Changi Business Park, offer business travellers options

IN A Singapore first, the fast-growing Changi Business Park (CBP) is set to boast a hotel and retail outlets alongside the hubbub of enterprise.

A move yesterday by industrial landlord JTC Corp to invite developers to inject vibrancy into CBP with the novel development was warmly welcomed by the property market.


 
The 4.7ha site on offer, next to Singapore Expo, will include a business park’s regular features, such as an industrial space for high-tech and research and development firms.

JTC, however, yesterday asked that the proposals – which are to cover price and concept – should also include plans to develop a hotel and retail outlets. This is the first such project for a business park in Singapore.

It means business travellers attending exhibitions and conventions in the east will soon be able to rest and relax at CBP rather than heading elsewhere in town.

JTC said it expected CBP’s population of 6,000 to surge to 20,000 by 2011.

Mr Dominic Peters, the director of industrial services at property advisory firm Savills Singapore, said: ‘There is currently no retail component in and around CBP; just mere amenities like F&B outlets. A hotel and retail mixture will create some vibrancy in the evenings in and around the Changi area… The response for tenders should be overwhelming.’

The site will yield a gross floor area of 117,515 sq m, 40 per cent of which has been designated for commercial activities. About 45 per cent to 60 per cent of the area designated for commercial activities can be used for retail, leaving a floor area of 18,800 sq m to 25,900 sq m for a hotel.

Bids for the site could be in the region of a few hundred million dollars, some consultants said.

JTC has said it is catering to the rising demand for business park space and amenities in CBP.

CBP, launched in July 1997 and covering 66ha, houses a mix of high-tech, data and software enterprises, and R&D and knowledge-intensive outfits like IBM and Honeywell. It is also fast-becoming a hub for financial backroom operations, with Citibank, Credit Suisse, DBS Group Holdings and OCBC Bank poised to set up there.

Said a JTC spokesman: ‘The hotel component is a must and should be at least a three-star one catering to the business traveller.’

This is good news for CBP’s neighbour, Singapore Expo, just across Changi South Avenue 1.

A spokesman for Singex Venues said all 10 halls and 100,000 sq m of the Singapore Expo had been sold out through this month, citing the burgeoning meetings, incentive trips, conventions and exhibitions (Mice) industry.

A business hotel over the road could help meet this demand, as the country’s hotels have estimated that over 20 per cent of room revenue last year was from Mice visitors.

Said Mr Keith Oliver, the general manager of Singapore Expo: ‘The hotels will be good for our overseas exhibitors and visitors, who will find the proximity a great convenience.’

Interested developers have up to Aug 19 this year to submit their proposals for the tender.

LIVELIER MIX

‘A hotel and retail mixture will create some vibrancy in the evenings in and around the Changi area… The response for tenders should be overwhelming.’ – MR PETERS, of Savills Singapore, on the likely impact of developing a hotel and retail outlets in CBP

Source : Straits Times – 12 Jun 2008

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Chinatown Complex: Make it accessible to all

Filed under: Commercial,General — Propertymarketupdates @ 3:40 am

I REFER to the reply, ‘NEA working to improve ventilation in hawker centre’ (June 2). I am heartened to learn that the National Environment Agency (NEA) is taking steps to improve the poor air quality in that section of the upgraded wet market in Chinatown Complex.

I understand the NEA, the manager of this project, can begin construction work only when the proposed building plans have been approved by the authorities, especially the Singapore Civil Defence Force fire-safety department.

After incorporating any requirements into the plans and once they are finally cleared, NEA starts construction. I understand the constraints NEA faces, for example, working within the budget and meeting the completion deadline.

May I offer my humble suggestions to avoid problems like those in the wet market? It costs much more to retrofit a completed job than do it from scratch. It is a waste of taxpayers’ money and resources, and causes inconvenience to occupants.

After the building plans are cleared, the project team should do a final evaluation of whether requirements imposed by other authorities will affect the environment (especially air quality), accessibility and so on. If the answer is yes, take pre-emptive measures at the planning stage to solve the problem.

I live in Chinatown Complex and my mother is wheelchair-bound. There are many elderly and infirm folk in my block. Some are also wheelchair-bound.

I urge the planning committee and our MPs to take a personal interest in this upgrading so that accessibility for the physically challenged is not compromised.

I salute NEA for an excellent job incorporating numerous accessibility features in the upgraded Chinatown Complex. Going around in a wheelchair is now a breeze.

However, the old folk in my block await with trepidation the completion of the enclosed lift lobby on the ground floor. For more than 20 years, we have enjoyed an open-concept lift lobby. Old folk, some with weak limbs or in wheelchairs, can reach the lifts effortlessly.

To follow fire-safety rules, walls have been built around the lift lobby on the ground floor of the two apartment blocks and heavy doors are fixed at all staircases. Access to the lifts is now via two heavy fire doors – supposedly to be kept closed at all times.

Many old folk fear such imposing features will curtail their independence. Not to mention the wheelchair-bound who need someone to wheel them. If there is no one to hold the door open, they will be stranded.

Source : Straits Times – 12 Jun 2008

18th floor of Peninsula Plaza sold for $15m

Filed under: Commercial,General,Land Sale — Propertymarketupdates @ 3:23 am

THE 18th floor of Peninsula Plaza near City Hall has been sold to a Taiwanese trading company for $14.9 million.

The price works out to $1,750 per sq ft (psf) of strata area. This is just below the last sale in the 999-year leasehold building – a single 1,485 sq ft office unit that went for $1,800 psf in January.

It is also well below what the seller Novelty Department Store, part of the Novelty Group, wanted – $17.5 million or $2,050 psf of strata area.

The six units have a total floor of about 8,500 sq ft and were put on the market in early March through an expression of interest exercise.

Rising rents here prompted the buyer, which has not been named, to buy the floor, said marketing agent Shaun Poh, a senior director at DTZ.

The firm will occupy two or three of the units when the tenancies expire in a few months.

The six units are tenanted at about $4 psf, but rents in the building have risen to as much as $8 psf so the firm can look forward to a better return when the time comes to renew the other leases.

The market for strata-office units has remained fairly active, considering how quiet the residential market has become.

While office rent increases have started to moderate, rents in general are still supported by demand from expanding firms and tight supply.

Source : Straits Times – 11 Jun 2008

July 24, 2008

Abterra exercises option to buy office units

Filed under: Auction,Commercial,General — Propertymarketupdates @ 2:28 am

MINING and logistics company Abterra exercised an option from Park Central Investments to buy six office units in Suntec Tower One for $31.6 million on Friday last week.

The proposed acquisition of the 14,380 sq ft of space is scheduled for completion on Aug 28.

The property has 99-year leasehold tenure that expires in February 2088.

The price paid, which equates to $2,200 per sq ft (psf), took into account the current market value of Suntec Tower office units and the rental potential for portions Abterra may not use.

According to caveats filed on Suntec City office space, three offices have changed hands so far this year at $2,300 psf and one at $2,115 psf.

Abterra plans to move from its current premises in Shenton Way to the Suntec Tower units when the acquisition is complete.

‘As a result of the proposed move, the company will be able to stabilise its operating expenses and buffer against possible rental hikes incurred from an extension of the use of its current premises,’ it said yesterday.

‘Furthermore, the property has separate strata titles for the entire building … There are very few offices available for sale on a strata basis. Hence the company decided to acquire the property when the opportunity arose.’

The company has paid Park Central a deposit of 10 per cent of the purchase price. The balance will be funded externally and/or internally.

Abterra does not expect the proposed acquisition to have a material impact on the group’s financial performance in the current financial year.

Abterra shares closed half a cent lower at 8.5 cents yesterday.

Source : Business Times – 10 Jun 2008

Makeover to turn Paya Lebar into commercial node

Filed under: Commercial,General — Propertymarketupdates @ 2:06 am

Traditional Malay character to add unique flavour to area’s development

Paya Lebar was one of Singapore’s earliest commercial hubs, but it now stands neglected and underdeveloped, with the Singapore Post Centre building its sole marker of modernisation.

Within the next 15 years, however, all that will change.


The Paya Lebar Station Plaza, seen here as an artist’s impression, is part of the Government’s draft masterplan to position the area into a fringe hub along the lines of Novena and Buona Vista. — PHOTO: URA

The neighbourhood around the Paya Lebar MRT station is slated for a major makeover as part of the Government’s recently unveiled draft masterplan.

It will be transformed into Paya Lebar Central, a suburban commercial node nestled between the city centre and the bustling Tampines commercial hub.

About 12ha of land around Sims Avenue and Geylang Road will be put up for development, yielding some 5.4 million sq ft of commercial space.

More than half of this space has been earmarked for offices. The rest will be for shops and hotels with about 1,400 rooms.

While Paya Lebar will be positioned as a fringe hub along the lines of Novena and Buona Vista, the area’s traditional local Malay character will add a unique flavour.

Apart from the new commercial buildings, some upcoming developments include landscaped public spaces around the cleaned-up Geylang River, a pedestrian mall along Geylang Road, and a new plaza square and civic centre next to the rebuilt Geylang Serai Market.

All these exciting plans make Paya Lebar an ‘interesting sub-regional centre’, said Mr Chia Ngiang Hong, the group general manager of property developer City Developments.

‘It has the potential to become as successful as Novena,’ he said at the masterplan’s launch last month.

But what does this all mean for potential investors and current owners of Paya Lebar properties?

Property consultants say it is a bit premature to predict any trend in property values right now or even in the next few years.

Over time, however, starting from about five years from now, properties in the area will almost definitely become more valuable, they add.

Office buildings and shopping centres are the most obvious beneficiaries, said Dr Chua Yang Liang, the head of South-east Asia research at property consultancy Jones Lang LaSalle.

‘The plans to improve Paya Lebar will have a long-term impact on the properties around the area,’ he said. ‘The first thing that comes to mind is that the commercial assets will benefit from the increased activity once things start to take shape.’

There are limited avenues for small-time investors to take advantage of, though, as there are not that many strata-titled commercial properties in the immediate area. The few that exist include City Plaza.

Dr Chua said, however, some properties in the nearby Geylang area might enjoy a spillover effect. Prices and rents of office and shop units there, such as coffee shops, have been on the rise recently.

Mr Li Hiaw Ho, executive director of CB Richard Ellis (CBRE) Research, also said hi-tech industrial buildings in the vicinity of Paya Lebar Central were likely to rise in value over time.

As for residential developments, there are currently no plans for new housing sites in Paya Lebar. This, however, may prove a boon to existing homes in the area.

Their prices and rentals are expected to rise, as the critical mass of workers that will flow into the commercial hub look for homes nearby to buy or rent, consultants say.

Currently, there are few major projects in the vicinity. Most apartment blocks are boutique developments around Guillemard Road, Guillemard Crescent, Sims Avenue, Haig Road and Geylang.

Prices differ widely, depending on the area, according to CBRE, citing data from the Urban Redevelopment Authority.

CBRE’s analysis show some recent launches, such as Esta Ruby in Guillemard Road and Cosmo in Guillemard Crescent, have commanded prices well above $1,000 per sq ft (psf).

Latest transactions for nearby developments along Haig Road, such as Butterworth 8 and Haig Garden, have fetched prices hovering around $1,000 psf.

Others, such as Sunflower Regency in Lorong 20 Geylang, are hovering at between $500 psf and $600 psf.

The same trends can be seen for completed projects. Homes in Geylang proper – including those in Sims Green, The Sunny Spring, Wing Fong Mansions, The Waterina and Aston Mansions – have been transacted recently at well below $600 psf.

On the other hand, homes in Geylang East, in projects such as Simsville and Central Grove, have been sold for $600 to $900 psf.

Le Crescendo, one of the rare condominiums along Paya Lebar Road, is fetching between $800 psf and $1,000 psf for its newly completed units.

As for public housing, prices for a three-room flat in the Geylang town range from $170,000 to $300,000, according to sales in the last three months. Prices are lower in estates along Paya Lebar Way, Eunos Crescent, Balam Road and Circuit Road, and higher in Haig Road and Aljunied Crescent.

Five-room flat prices range from below $300,000 in the Ubi area to well above $400,000 in Eunos Crescent.

Development plan

Within the next 15 years, about 12ha of land in Paya Lebar will be put up for development around Sims Avenue and Geylang Road, which will yield some 5.4 million sq ft of commercial space.

Source : Sunday Times – 8 Jun 2008

July 10, 2008

PM Lee highlights JTC’s new focus and priority

Filed under: Commercial,General,Regulators — Propertymarketupdates @ 4:15 am

Into its 40th year, JTC Corporation will be shifting its focus to industrial master-planning and strategic projects by selling assets in the flatted factories and business park segments, said Prime Minister Lee Hsien Loong at its anniversary dinner yesterday.

PM Lee highlighted the organisation’s evolving role as competition from rapidly emerging economies intensifies. From building and managing industrial facilities, JTC will now turn its attention to master-planning industrial estates, allocating land for industries and preparing land with the right configuration of facilities.

‘JTC’s priority is to meet the industrial land and infrastructure needs of existing and emerging industry clusters, be it the chemical companies at Jurong Island, the pharmaceutical players at Tuas Biomedical Park, or the new aerospace hub at Seletar,’ he said.

To take on these tasks, JTC will divest its flatted factory and business park assets substantially – it is selling its ready-built industrial facilities to Mapletree at the end of this month.

The private sector will play a greater part in developing these market segments instead. ‘Private developers like Boustead, Mapletree, Soilbuild and United Engineers have built up considerable expertise in flatted factories and business parks, and are well able to meet industry demands,’ said PM Lee.

Just last Monday, Soilbuild Group Holdings clinched a JTC award to build, own and operate a business facility at Tanjong Kling.

In turn, JTC will focus on filling market gaps. It is already involved in special projects which the private sector may find too large, risky or complex to handle, although they may foster future economic growth. The one-north development for the media, life sciences and infocomm industries is one such example.

Another challenge for JTC is to create more usable space to maximise the country’s economic potential. ‘Land will always be scarce in Singapore, but with human creativity and ingenuity, we can find new ways to do more with the limited amount of land we have,’ PM Lee said.

Such plans are already in the works. JTC is studying the use of very large floating structures out at sea for the storage of petrochemicals and oil products. It is also exploring the feasibility of increasing water depths around Tuas View to create more usable industrial waterfront land.

According to PM Lee, manufacturing remains an important growth engine for Singapore. Having done well in shaping the industrial landscape, JTC will have to remain dynamic to sustain the sector’s competitiveness.

JTC chairman Cedric Foo said the organisation will conduct a strategic review exercise to meet the new challenges.

Around 600 of JTC’s clients, partners and former management attended the dinner yesterday. Long-time customer Natsteel Asia, which leases about 38ha of land, appreciates the agency’s support over the years.

Natsteel’s senior vice-president of systems operations Eng Poh Tzan also hopes that JTC will keep land rentals affordable to help businesses.

Source : Business Times – 7 Jun 2008

July 8, 2008

Jurong Island underground caverns run into delays

Filed under: Commercial,General,Regulators — Propertymarketupdates @ 4:33 am

The $700 million first phase of the project to store oil in underground caverns beneath Jurong Island has been held up, with full-blown construction now expected to start at the end of this year or early 2009.

The hold-up surfaced when JTC Corporation called this week for tenders for an insurer to cover the design and construction of the first phase, comprising five caverns to hold 1.485 million cubic metres of crude oil, naphtha, condensate and gas oil.

Government agencies here usually appoint insurers ahead of construction of major underground projects – especially one this big that involves several parties. So far, construction is under way on two 130-metre vertical shafts to allow surface access to build and operate the caverns.

Tenders for construction proper – called last November – are still being evaluated, a JTC spokesman said yesterday. And the indications are that an award may be made only at year-end.

Sources suggest JTC needs more time to evaluate the tenders, given the demanding design and engineering requirements.

Still, the delay is a surprise, given that JTC indicated in a pre-qualifying tender in April last year that it expected the first two of the Phase 1 caverns to be operating by December 2010. Sources say despite the hold-up, JTC still wants to meet this target date, though it will be difficult to do so.

The market for oil storage is clearly not a reason for the delay. There is no lack of demand or excess capacity here, despite new players like Emirates National Oil Company and Hin Leong’s Universal Terminal starting up recently.

‘Demand for oil storage in Singapore is still strong,’ an industry official told BT. ‘Everyone is running full, including the new tank farms.’

JTC said last year there was strong interest in the underground storage caverns. An official said in October that Jurong Aromatics Corporation, which plans a US$2 billion complex here, will be one of the first customers.

Industry observers feel the initial delay may be due more to technical or construction issues – like competition for engineering/construction expertise amid the local building boom, including the construction of two big petrochemical complexes on Jurong Island and the two integrated resorts (IRs).

Four of the five Phase 1 rock caverns will store 330,000 cu m each, and the fifth 165,000 cu m.

The caverns and associated tunnels will be constructed by drilling and blasting sedimentary rock, JTC has said.

In all, Phase 1 involves ‘about 7km galleries and tunnels for an excavated volume of about 2.5 million cu m beneath Banyan Basin’, it said.

A planned Phase 2, adding another 1.3 million cu m of storage, would double the project’s capacity.

Source : Business Times – 5 Jun 2008

July 2, 2008

CWT in for $85.7m gain from warehouse deal

Filed under: Commercial,General,Property Deal — Propertymarketupdates @ 4:24 am

LOGISTICS group CWT Ltd stands to realise a gain of $85.7 million from the sale of one of its biggest warehouse facilities in Singapore.

The company yesterday said it has entered into a conditional agreement with a buyer to sell and lease back its newly-completed Logistics Hub 2 in Tanjong Penjuru.

CWT did not disclose the name of the purchaser but said it is a ‘property fund’ focusing on the Asia-Pacific region. The sale price for the proposed transaction is $115.2 million.

Upon completing the sale, CWT will lease back the building for five years with an option for an additional three-year period.

The firm said in a statement it expects to realise a gain of about $85.7 million from the transaction, based on the aggregate net book value of $28.1 million.

Of the gain, $55.5 million will be recognised as a one-time gain and the balance of $30.2 million will be accounted as a deferred gain to match off against the leaseback commitment.

To illustrate the financial impact, CWT said profit attributable to shareholders in FY2007 after the sale and leaseback would be $90.29 million, compared with $34.79 million before the transaction.

CWT said it plans to use the proceeds to reduce its bank borrowings, to fund its local and regional expansion, and for working capital.

The deal is subject to the approval of JTC and company shareholders. In addition, due to the nature of the warehouse, CWT must complete an environmental baseline study and submit the results to JTC and other relevant parties before the sale can go through.

The company currently owns two integrated logistics hubs in Tanjong Penjuru, which combine to provide nearly 850,000 sq ft of warehouse space for handling hazardous materials and chemical goods.

Both facilities were launched in March this year following an investment of more than $80 million.

Source : Business Times – 4 Jun 2008

July 1, 2008

Soilbuild clinches JTC award to build stack-up factory

Filed under: Commercial,General,Regulators — Propertymarketupdates @ 4:00 am

TO encourage private sector participation and promote an active industrial property market, JTC Corporation yesterday awarded the development of its stack-up factory to Singapore Exchange-listed Soilbuild Group Holdings.

This is the first time JTC has awarded such a project to a private developer.

Soilbuild has won the tender to build, own and operate a business facility on a site at Tanjong Kling, with a land area of 565,800 sq ft and a maximum gross floor area of 1.41 million sq ft. The site is on a 30-year lease, with an option to renew for a further 30 years.

A five-storey development is slated for completion by early 2010. It will comprise 45 modular and regular-shaped units, with sizes ranging from 23,700 to 60,300 sq ft. Total development cost is likely to be around $208 million.

Soilbuild expects the development, which is near Jurong Island, to cater to large corporations or MNCs in the marine engineering, oil and gas exploration and petrochemical-related industries.

Another two bidders took part in the concept and fixed-price tender. According to JTC, Soilbuild’s proposal stood out because of enhanced features in the concept, such as a layout that facilitates heavy vehicular movement within the building.

Soilbuild’s win complements the emergence of its business space portfolio as a significant new growth engine. ‘The expanding portfolio of business properties will enable us to tap on the robust demand from investors and grow our recurrent income stream in the coming years to support a progressive dividend policy,’ said executive director Low Soon Sim.

Soilbuild now has almost 3.3 million sq ft of business space projects in the pipeline. Shares of the developer closed unchanged at 95 cents yesterday.

In its statement yesterday, JTC noted an increase in demand for industrial space in the past three years due to robust growth in the manufacturing sector.

‘This momentum is expected to continue as more investment projects are anchored in Singapore, creating downstream opportunities for supporting industries,’ it said.

To optimise land use, JTC has been exploring ways to improve the design of its stack-up factory development to better meet the needs of various industries.

Source : Business Times – 3 Jun 2008

Tuan Sing seeks stake in Katong Mall

Filed under: Collective Sale,Commercial,General — Propertymarketupdates @ 3:51 am

TUAN Sing Holdings, which is looking to divest its hotel assets, is seeking a stake in Katong Mall, which was put up for collective sale last week.

In a statement released over the weekend, Tuan Sing said that it is looking to dispose of $107 million in loans it had extended to its associate Gul Technologies Singapore (Gul Tech) through an asset swap with the controlling shareholders of Tuan Sing for certain strata units in Katong Mall.

The asset swap will involve 129 strata shop units at Katong Mall with an aggregate purchase consideration of about $63.1 million. This was arrived at based on the aggregate value of the properties of $130.1 million, representing 70 per cent of the open market value of Katong Mall, but less outstanding borrowings of $66 million and rental deposits and advance rental of about $1 million, which will be retained by the vendors.

The purchase consideration will be satisfied by Tuan Sing and certain of its subsidiaries novating the Gul Tech loans in favour of the vendors of the Katong Mall units, which are companies under the controlling shareholders of Tuan Sing. This is subject to a $44 million loan waiver by the controlling shareholders.

Tuan Sing said that the proposed assets swap would be beneficial as it allows the company to secure a ‘realistic and tangible recovery of the loans, albeit that Tuan Sing would have to recognise a partial write-down of the loans’.

It will also transform Gul Tech’s equity from a negative to a positive net asset position with the controlling shareholders waiving about $44 million of the loans.

Tuan Sing said that it had already made provisions for the loans in prior years, and estimated that the net effect of the partial writedown on equity is about $0.7 million.

The company also said that it planned to dispose of its 50 per cent held hotel assets worth about A$615 million (S$799 million) to third parties as and when opportunities arise.

Tuan Sing will hold two separate extraordinary general meetings on June 16, 2008, to seek shareholders’ mandate for the two transactions.

Source : Business Times – 2 Jun 2008

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