News Update

Marina Bay taking on residential tone

The appeal of living near the Central Business District (CBD) will get a major test next weekend with the launch of the 1,042-unit Marina One Residences.

The area, best known as a fast-growing office centre, is shaping up as a significant residential precinct as well.

And while rents in the vicinity have fallen over the past year, investors may find the area a good buy now that cooling measures have restrained overly high prices, consultants say.

Marina One Residences – with one-, two-, three- and four-bedders – is part of the larger Marina One development, also including Marina One offices and The Heart, a retail podium set around a 65,000 sq ft park.

Developer M+S said it is looking to price Marina One at an average of $2,600 per sq ft (psf).

“We believe that there will always be discerning buyers who will seize a good investment opportunity as long as a development offers quality attributes – even through the peaks and troughs of the market,” said M+S chief operating officer Kemmy Tan.

Said OrangeTee senior research analyst Wong Xian Yang: “Given current market conditions, its initial selling price may crowd out a considerable group of potential buyers… (But) in the longer term, Marina One will likely see more active deals due to its advantageous location and good designs, which are highly valued by busy owners and tenants.”

Nearby project V on Shenton, launched in August 2012, sold 354 of 510 units as at the end of July.

In the past year, average resale prices in the area ranged from $1,945 psf at three-year-old One Shenton to $2,694 psf at one-year-old Marina Bay Suites.

On average, resale prices fell by about 8 per cent in the past year, said R’ST Research director Ong Kah Seng. A major reason for the fall is weakening leasing demand by expatriates, he said. “(They) have more or less decentralised to the city fringes to save on accommodation costs, as most companies have been strict in their housing allowances.”

However, he said, investors, especially those owning small units in the area, can expect keen leasing interest from mid- to senior-level expats who may still want a conveniently located property.

With cooling measures such as the total debt servicing ratio (TDSR) framework, buyers may now find properties here at attractive prices, which could “allow them to have a share of future price appreciation or recovery”, Mr Ong added.

“Prior to the TDSR, however, most locality upsides and rejuvenation plans were quickly priced in by owners and developers.”

In the past year, average rents in the area ranged from $4.40 psf a month at Marina Bay Suites to $8.10 psf a month at three-year-old The Clift.

While rents have fallen by an average of 6 per cent over the past year, this is in line with weakening leasing conditions islandwide, especially rents of high-end residential properties, said Mr Ong.

But the investment outlook is promising beyond the short term, said Mr Wong.

Better infrastructure is expected in the next few years, such as the Thomson-East Coast Line which will be linked to Marina Bay MRT station.

“The precinct’s unique setting and high accessibility will appeal to people working in the CBD who have tight daily schedules. Barring any major deterioration in the global economy, the rental market should also see good support in tandem with the maturation of adjacent office properties,” said Mr Wong.

wrennie@sph.com.sg

This article was published on Sept 6 in The Straits Times.

Forecast for CBD office rents clipped

SENTIMENT in the Singapore office market, hailed as the bright spot of the local property market for the most part of last year, has taken a hit.

Weaker-than-anticipated leasing demand for office space in the Central Business District (CBD) since late last year was mirrored in weak rental growth in the first quarter; with no significant pick-up in demand expected in the near term amid tepid economic growth and some foreign banks tipped to shed office space, several property consultants are clipping their forecasts for CBD Grade A office rent growth this year.

The trend is being exacerbated by a diversion of CBD office demand to suburban business parks by qualifying users, and a step-up in office completions from next year.

But it is not all doom and gloom, as downward pressure on office rents presents good opportunities for tenants to lock in leases at attractive rents. A few big leasing transactions expected later this year or next year could quickly uplift sentiment, say market watchers.

Last November, CBRE had predicted a 10 to 15 per cent increase in full-year 2015 average gross effective monthly rental value for its Grade A (CBD Core) office basket to between S$12.32 and S$12.88 per square foot (psf).

Following a 1.8 per cent quarter-on-quarter rise in the rental level to S$11.40 psf in the first three months of this year, CBRE now expects the figure to stay flat for the rest of this year.

Its executive director for office leasing Moray Armstrong said: “Office demand in the CBD has been disappointing in Q1. That said, we have observed strong leasing interest in decentralised and fringe locations.”

He also noted that the CBD office market may be entering a new phase after a rental rise of nearly 20 per cent over the past 18 months: “I think that overall leasing activity looks set to remain sluggish through the next couple of quarters. That said, we don’t foresee any significant impact on the market in the short term as occupancy levels will remain high.

Rents are expected to face some pressure next year, off the back of the high level of supply expected in H2 2016.”

Savills Singapore’s overall CBD Grade A basket reflects a marginal 0.4 per cent quarter-on-quarter increase in the average rental value to S$9.92 psf in the first quarter. Last year, the group had predicted that rents may rise to S$11.16 psf by end-2015 from S$9.88 psf in Q4 2014; but it is now revising its forecast to a full-year decline of around 3 per cent to S$9.60 psf.

Its research head Alan Cheong said: “What is creating a spanner in the works for CBD office space demand is that the void left by banks is not being filled by tech companies, which are being drawn to business parks.

The partial substitution effect by business parks has diverted a vast growth driver for office demand from tech companies and upset the eco-system governing Grade A office dynamics.”

He said that, beyond lower rents, tech companies seem to favour suburban business parks for their campus-like environments, which are conducive for the flow of creative juices and for collaboration. “As a result, the demand curve for office space could be shifting down,” he suggested.

Figures from another major property consulting group show that the average monthly rental value for prime Grade A CBD offices managed to inch up less than half per cent quarter-on-quarter to just over S$12 psf in Q1 this year.

However, the company now expects the rental level to slip to around S$11.90 psf by year-end; this translates to a full-year drop of around 1.6 per cent. The group’s latest rental forecast for Q4 2015 is significantly below the S$13.30 psf it had predicted last November. A further drop is expected next year.

Mr Armstrong blamed disappointing Q1 CBD office demand to moderating economic growth, resulting in a greater air of caution, and occupiers in the financial industry not being in expansion mode. “Sectors such as e-commerce, insurance, pharmaceuticals … are doing well, but the absence of (new demand from) banks remains the principal headwind for CBD office demand.”

Marcus Loo, executive director for commercial at Savills Singapore, said: “The global economy is still trudging along. Banks and other occupiers we are speaking to are looking to give up space in the next 12 to 18 months. Tenants who do not need to be in the CBD will decentralise, potentially leaving a vacuum in the Core CBD.

The problem will be exacerbated as new completions start to kick in from next year. Our CBD office market may be heading towards a perfect storm in favour of tenants – unless there is a turnaround in the global economy in the foreseeable future.”

However, he cited a few bright sparks for office demand from industries in a growth phase, such as trading houses and construction and engineering firms.

Besides the wave of new office completions to kick in from next year, market watchers are also tracking secondary space and shadow space. Secondary space is space vacated on the expiry of a lease by a tenant which is moving to another building, as well as space returned to a landlord when a tenant reduces its leased area upon a lease renewal.

Shadow space is that excess space that a tenant with an ongoing lease is looking to dispose of by finding sub-tenants or replacement tenants.

Savills estimates that a total of 796,000 sq ft of secondary and shadow space in its basket of CBD Grade A buildings will be released this year and the next.

This, combined with an estimated 1.18 million sq ft vacant stock in existing CBD Grade A office buildings and some 3.4 million sq ft of uncommitted space in projects in the pipeline – including that in Guoco Tower, Duo Tower, V on Shenton and Marina One – will result in around 5.37 million sq ft CBD Grade A office supply for leasing between Q2 2015 and end-2017, said Savills.

This supply quantum is more than the 3.2 million sq ft that could be absorbed over a three-year period based on the historical average annual net take-up of CBD Grade A offices from 2005 to 2014.

CBRE’s Mr Armstrong said the issue is a bunching of office project completions around the same time in late-2016. “Once the wave of completion passes, there is very limited new construction that will offer larger tenants opportunity for 2018 and beyond.”

He predicts that within the next six to 12 months, two or three large occupiers will take advantage of soft market conditions to secure anchor tenant leases on favourable terms. “In past cycles, this tends to act as a good sign that confidence is being restored and with it, the likelihood of a return to growth may be at hand.”

kalpana@sph.com.sg


This article was first published on May 7, 2015.

 

 

Work begins on last 5 stations on TEL’s northern stretch

Work begins on last 5 stations on TEL’s northern stretch

PUBLISHED: 4:16 AM, APRIL 27, 2015

SINGAPORE — Construction work for the last five MRT stations on the northern stretch of the Thomson-East Coast Line (TEL) has begun, with a groundbreaking ceremony held yesterday for the Maxwell, Shenton Way, Marina Bay, Marina South and Gardens by the Bay stations.

Tanjong Pagar Member of Parliament Lily Neo was the guest of honour at the ceremony. Residents, including the elderly, will benefit from better connectivity when the stations are ready, she said. “It will only take one MRT station, from Maxwell or Havelock, to Outram MRT Station to visit Singapore General Hospital — so definitely for medical purposes, it will be very convenient as well.”

The construction may also give rise to temporary inconveniences, and effort has been made to minimise the impact on residents. For example, a noise blanket will help muffle the noise. “We will tell them, if there are any problems, to contact us directly, then we will investigate them straight away,” said Mr Daniel Tay, director of Hock Lian Seng Infrastructure, the contractor for Maxwell Station.

The 43km TEL will add 31 new stations to the existing rail network, with seven interchange stations. The entire northern stretch will be ready in 2021.

Clipped office rents may herald structural change in demand

THE Business Times reported last week that several property consultants are lowering their forecasts for CBD Grade A office rental growth this year.

This was triggered by weaker-than-expected leasing demand for office space in the central business district since late last year, resulting in weak rental growth in the first quarter of this year.

No significant improvement in demand is expected in the short term. Given slow economic growth, most financial institutions are taking a conservative stand on their office space commitments.

In fact, several multinational banks could shed office space in Singapore – either by returning some space to landlords when their leases come up for renewal, or by disposing of excess space on an ongoing lease by finding sub-tenants or replacement tenants.

Since the end of last year, real estate investment trusts (Reits) with substantial Singapore CBD office stock have been sold down. CapitaLand Commercial Trust (CCT) and Suntec Reit have eased 7.4 per cent and 11.7 per cent respectively from the end of last year to last Friday.

Although the Keppel Reit price has been weak for some time, it has still dipped 1.6 per cent year to date.

In contrast, Reits with strong exposure to retail property – such as CapitaLand Mall Trust, Frasers Centrepoint Trust and Mapletree Commercial Trust – posted price gains of 4.4 per cent, 8.7 per cent and 7.8 per cent respectively over the same period.

Office Reits have also underperformed because of concerns about a potential oversupply from the upcoming completion of Guoco Tower, Duo Tower, V on Shenton and Marina One.

Now, with fresh concerns about weak CBD office demand, could this spark a new wave of selling of Singapore office Reits?

To put things in perspective, even if office rents were to flatline this year and decline next year, Reits may still be able to lock in positive rent reversion on lease expiries/re- newals next year. CBRE’s Grade A (CBD Core) average gross effective monthly rental value rose almost 15 per cent last year to S$11.20 per square foot (psf).

In the first quarter of 2015, the rental level managed a 1.8 per cent quarter-on-quarter increase, and CBRE now expects the figure to remain flat for the rest of this year.

Supposing the rent were to ease 5 per cent next year to S$10.83 psf, it would still be higher than the S$9.55-9.75 psf in Q1-Q4 2013 (the previous rental, assuming a three-year lease).

Another point to note is that Singapore’s prime office rents are already pretty low today. The Q1 2015 rental level is about 40 per cent lower than the all-time peak of S$18.80 psf in Q2 and Q3 2008, before Lehman’s collapse. More importantly, Singapore office rents are competitive vis-a-vis other cities such as London, Hong Kong, Beijing, Shanghai and Tokyo.

Singapore was ranked 14th in the CBRE’s Global 50 Index of the most expensive cities in terms of occupancy cost for prime office space for the 12 months to Q3 2014. It was once in the top 10; the Republic was in ninth position in the Q3 2008 ranking. Global occupiers including financial institutions should find Singapore’s office rents relatively competitive.

On the supply front, by some counts, the overall volume of new office supply completion in Singapore on a 3-4-year horizon is manageable.

The problem, however, is the bunching up of completions around the same period in late 2016/early 2017. Unless the spike in completions is accompanied by a matching jump in net take-up of offices, a rise in vacancy can be expected.

A flight to quality by occupiers moving to newer projects, riding on soft market conditions to seal leases on favourable terms, could send landlords (including Reits) of existing office buildings scrambling to find replacement tenants.

The problem would be exacerbated if what some market watchers believe is true: that Singapore’s CBD office market could be on the cusp of a structural change in demand.

Some occupiers are being drawn to suburban offices and business parks. Last week, BT reported that Daimler (which owns the Mercedes- Benz brand) is moving from Centennial Tower (a stylish office building owned by Pontiac Land Group) to Westgate Tower, next to Jurong East MRT Station. The rental saving has been estimated at around 30 per cent.

Internet search engine giant Google is widely expected to move from its funky offices at Asia Square Tower 1 in the financial district to Mapletree Business City II (MBC II), a business park development in Pasir Panjang.

Cost may not be the only reason Google is planning the move to suburbia; the campus-like setting of the space Google is expected to lease at MBC II – it will enjoy an expansive floor plate spanning three blocks, and plenty of roof space – is said to be a major draw.

Microsoft too has been reported to be mulling over a move from One Marina Boulevard in the CBD to MBC II.

Previously, office landlords could rely on tech companies to make up for the slack in Grade A office demand from financial institutions in the CBD. This may no longer be the case.

These are factors that Singapore’s planners will have to take into account when deciding how much land to sell for new office developments in future, and where. These factors will have a bearing on the playing field in which the likes of Suntec Reit, CCT and Keppel Reit operate.

kalpana@sph.com.sg


This article was first published on May 13, 2015.

How is Marina One Pricing Compare to Others

Marina One Residences is part of the Marina South integrated project developed by M+S Pte Ltd, a joint venture between Temasek Holdings and Malaysian sovereign wealth fund Khazanah Nasional. This is following a historic land swop between the two countries involving KTM railway land.

Marina One – Only one out of the two 34-storey residential blocks in the 1,042-unit condo will be released for sale. The launch date is yet to be fixed but the sales gallery will be open from September 13 to October 12 2014.

Marina One is targeted to launch at an average asking price of S$2,600 psf which is deem to be challenging by market watchers given the current market under tight TDSR (Total Debt Servicing Ratio) and ABSD (Additional Buyer Stamp Duty) measures that prevented many from getting housing loans mainly for investments.

Comparing with another Marina Bay project, V on Shenton, the average asking price is at S$2,118.5 psf by United Industrial Corporation. V on Shenton has 158 unsold units since its launch in August 2012.

The resale units at Marina Bay Suites were transacted at a higher average asking price of S$2,753.5 psf this year. As at end-June 2014, there are still some 19 unsold units though the project was first launched in December 2009.

Four agency namely ERA, CBRE, Knight Frank and DTZ have been appointed to market the residential units at Marina One, while commercial leasing for the office and retail spaces will be handled by CBRE and Cushman & Wakefield.

The pricing for Marina One is aggressive. Let’s wait and see what will happen in mid-September 2014.

CBD premium office rents surge amid tight supply

PUBLISHED: 7:05 PM, OCTOBER 13, 2014

SINGAPORE — Rents of premium grade office space in the Raffles Place and New Downtown area surged the most in three years at 6.1 per cent in the third quarter from the second to S$11.67 per sq ft amid high occupancy rates in the central business district, real estate consultancy Colliers International said today (Oct 13).

In comparison, Grade A office rents in the same area rose by a milder 2.9 per cent to S$10.25 during the period, while the same category in the Shenton Way and Tanjong Pagar area also gained 2.9 per cent to S$8.83.

Colliers noted that occupancy in most office areas has surpassed the technical full occupancy rate of at 95 per cent, with Grade A space in Shenton Way and Tanjong Pagar reaching 99.4 per cent and while that in Raffles Place and New Downtown was at 97.2 per cent. The occupancy rate for premium office space in Raffles Place and New Downtown was 94.1 per cent.

The tight office market, Colliers said, has given landlords greater pricing power over tenants.

“With office rents being on a consistent uptrend….there is a growing divide between the type of space tenants desire and the amount of rent they can afford to pay for that space, as well as landlords’ rental expectations,” Colliers said in a statement.

While the Singapore economy is facing headwinds from slower growth in major developed economies and political uncertainties in various regions, Colliers said these challenges are not expected to derail the growth of the office property market here in the near term. Office space demand is expected to be more diversified, supported by industries such as the technology and info-communications, pharmaceuticals, banking and financial services, energy and others.

On the market’s near-term outlook, Colliers said it could see temporary moderation in occupancy when some 1.7 million sq ft of new supply comes on stream with the completion of developments such as CapitaGreen in the Raffles and New Downtown area and the South Beach Tower in the Marina and City Hall area. But rents are expected to continue growing for the rest of the year.

Districts 1, 2 popular despite high prices

Saturday, 25 May 2013 

 

BUYERS have their clear favourites when searching for homes and high prices do not get in their way.
The swanky offices of Raffles Place and the bright lights of Boat Quay and Chinatown give District1 a strong appeal.
The top five projects in District1 (see table) by page views on STProperty in the May 13-19 period were all 99-year leaseholds.
The top ranked by searches was The Sail @ Marina Bay, which has one-, two- and three-bedders with an average asking price of $2,573 per sq ft (psf).
Urban Redevelopment Authority (URA) data showed that the average transacted price per unit between Nov 1 and April 30 this year for the project was $2,247 psf.
The Clift and One Shenton, which have been completed, were the next two popular searches, followed by the upcoming Marina Bay Suites and V on Shenton developments.
Marina Bay Suites, which expects its temporary occupation permit (TOP) next year, had the highest average asking price of the top five, with two- and three-bedder units, at about $2,748 psf.
One Shenton had the lowest average asking price among the top five at $2,245 psf.
District 2 covers another part of the Central Business District, spanning Anson Road, Neil Road and Tanjong Pagar.
Both freehold and 99-year leasehold projects attracted attention with the top five projects all consisting of only one- and two-bedder units.
The Icon led the way with the most searches, yet the project had the lowest average asking price in the top five at $2,017 psf.
Its average transacted price per unit between last November and April 30 was $1,870, according to URA data.
The 68-unit Dorsett Residences, which ranked fourth in page views, had the highest average asking price of $2,446 psf. The smallish complex is near Outram MRT station.

 

Source: The Straits Times

UNStudio Unveils V on Shenton Singapore Skyscraper With a Hive-Inspired Facade

by , 08/04/12

V on Shenton, UNStudio, UIC Redevelopment, mixed-use tower, eco tower, high performance facade, sky gardens, singapore

The V on Shenton (pronounced Five on Shenton) is part of a larger redevelopment of the CBD and will provide modern office and residential space in two towers. The 23-story office tower matches the scale of the surrounding buildings, while the 53-story residential tower distinguishes itself from the rest of the city. On the ground floor, a large lobby connects the towers with the streetscape and provides space for a lively reception area and a large cafe. The entire 8th floor is occupied by the first sky garden, which offers 360 views of the Singapore skyline and acts as a lush oasis for entertaining, recreation or rest. Two more sky gardens in the residential tower act as private parks for the residents and work to clean the air.

The hexagon forms the basic modular shape of the facade and is repeated to create a hive-like pattern. The highly specialized design is integral to the performance of the building and relies on angles of the glass and shading devices. Shelves formed from the intersection of hexagons at the top and the bottom work to shade the interior and also to bounce light back into rooms. Angled and fritted glass panels optimize daylighting but not at the cost of solar heat gain. The overall effect provides for a highly efficient facade that transforms the towers into fascinating sculptures.

Ben van Berkel said of the building, “The pattern of the façade comprises four to five different textures, each varying depending on the programme. At times the glass of the façade creates texture through the relief effect and the coloured side lighting, whilst the volumetric balconies of the residences create a deep texture in the total volume of the building.“ The project is expected to reach completion in 2016.

Five on Shenton sold over 150 units in just four days

RESIDENTIAL PROPERTY | Krisana Gallezo, Singapore  Published: 03 Aug 12

Brisk sales however could be abated with the recent collapse at a construction site leaving one worker injured.

Sources from Savills said that over 150 units were sold four days after this 99-year-leasehold project was launched on July 30. This accounts for nearly 80% of the 190 total units released so far.

Market obsers said that the property launching was actually delayed in two weeks before it materialized.

Although, agents said that UIC actually started selling the project 10 days before launch.

The 510 residential unit property at Shenton was sold at $2,200 per square foot (psf) on the averahe.

Absolute prices, meanwhile, start from $1M for a city-facing studio unit of 441 sq ft on the 17th floor. Prices range from $2000 to $2800 psf depending on size and floor and facing.

This project has an office tower with 23 floors and a residential tower with 54 flrs.  But for now , only the residential tower is for sale, the office block is not released for sale yet.

So far, the developer has released 15 floors out of the 54 floors in the residential block for sale.

Market observers however cautioned that strong sales might slow in the coming days following the collapse at the property’s construction site.

“TOP maybe delated especially if there’s casualty. A work oder for at least 2 weeks could be issued to developer UIC. Also, work can only commence after the investigation and that safety at the worksite is reinstated. That may take atleast 2-3 mos,” he said.

Another observer said that buying momentum maybe restrained by superstition.

V ON SHENTON

INFO

Singapore, 2010-2016

The UIC building has been part of the Singapore skyline since 1973 and, for a time, held the title of the tallest building in Singapore. Located along Shenton Way in the heart of Singapore’s Central Business District, the new UIC redevelopment, V on Shenton, will remain as a signifier of the business and architectural strength of Singapore. The dual programming of office and residential is a unique situation in this area and the massing of the towers is designed to reflect this. The office tower corresponds to the scale of the area opposite the residential tower, which rises up to distinguish itself from the surrounding buildings. The office and residential facades originate from the same family of patterns. The basic shape of the hexagon is used to create patterns which increase the performance of the facades, with angles and shading devices that are responsive to the climatic conditions of Singapore.
Each tower is framed by “chamfers”, forming a line that brings together the composition of the residential tower, the office tower and the plinth. During the day the chamfers appear smooth, in contrast to the textured surfaces of the facades. At night the chamfers are lit as a continuous line. Along with the facades, a series of sky gardens play an integral part in developing the sustainable lifestyle of the ‘V on Shenton‘.  These lush green spaces provide a refuge from the city and the climate and vegetation naturally provide fresher, cleaner air.

Leave a Reply

Your email address will not be published. Required fields are marked *