SGHOUSING.COM 新加坡房地产网

In move to provide more transparency, govt agency releases office rental data by location
 
The Government has released office rental figures by location for the first time, confirming what the industry already knows - prime office rents have shot up by much more than the rest of the market.

Picking Up

Tighter Supply

Yesterday, it revealed median rents for two categories of offices: prime office buildings, which are highly sought-after and command high rents, and all other offices on the island.

The Government’s prime office category consists of 22 top-end buildings downtown and in Orchard Road, which are fairly new in appearance and have large floor plates. While it did not give any examples, the list is likely to include top-grade buildings like Republic Plaza in Raffles Place.

In these offices, median rents of new leases rose by 13.9 per cent to $10.33 per sq ft (psf) per month in the April to June period.

For the rest of the office market - comprising more than 2,000 buildings that make up 80 per cent of Singapore’s office space - median monthly rentals went up by 8.9 per cent to reach a much more modest $4.90 psf.

These lower rents are ‘more reflective of the typical rental paid by office tenants in Singapore’, the Urban Redevelopment Authority (URA) was quick to note in its statement.

As Singapore undergoes an acute shortage of prime office buildings and growing demand from expanding businesses, office rents have jumped to a level that some fear may threaten the Republic’s competitiveness.

And this is why the URA has been anxious to provide more transparency as to exactly how much typical businesses are paying for office space.

Property experts said the URA’s rental breakdown more accurately reflects Singapore’s tiered office market and makes official data easier to compare with figures published by property firms, who use similar categories.

Yesterday’s data also showed that while office rents may be climbing, as a whole they are still nowhere near the top asking rents recently reported in some buildings. At 6 Battery Road, for instance, asking rentals have reached $18.50 psf per month.

‘The pace of rental increases has been maintained but may not be as high as the landlords wish us to believe,’ said Mr Colin Tan, associate director at Chesterton International. ‘But it cannot be denied that rents are increasing…We should be more worried about the future.’

Indeed, the rise in rents is still gaining speed. Across the island, rents were up 11 per cent in the second quarter, on top of the 10.4 per cent increase in the previous three months.

Similarly, prices of offices that are bought, as opposed to rented, are going up. They rose 8.9 per cent in the second quarter, more than double the 4.3 per cent rise in the first quarter.

As office rents and values climbed, vacancy rates dropped across the board. They have now shrunk to 8 per cent, a level not seen since 1996, said property firm Knight Frank.

By office type, vacancies fell to 5 per cent in the prime category, and to 8.7 per cent for the rest of the market.

Market experts expect the office shortage to continue into next year and boost rents and prices further.

The office squeeze has boosted industrial property, which some companies have turned to for cheaper offices. This pushed up prices of multiple-user factory space by 8 per cent in the second quarter, double the 4 per cent rise previously. Rents rose 6.1 per cent, from 4.6 per cent.

As for shops, rents rose by 7.1 per cent in the second quarter, compared to only 1.4 per cent in the first quarter. Prices went up 4.6 per cent, from 1.7 per cent in the first three months.

The URA also gave median monthly rents of shops by location.

Source : Straits Times - 28 Jul 2007

The Housing and Development Board (HDB) is taking steps to increase the supply of flats amid growing demand.

It said yesterday it plans to offer 3,000 new flats under the ‘built-to-order’ (BTO) system in the second half of this year. This means it builds flats only when there is sufficient demand.

The HDB is also working on a pilot project to lease vacated flats under the Selective En-bloc Redevelopment Scheme (Sers) to the public in the short term.

Next month, the HDB will call a tender for a managing agent to lease out 120 vacated Sers flats in Blocks 1, 3, 5, 7 and 9 at Tiong Bahru Road.

Depending on the response, the HDB will decide whether to expand the scheme. It has a potential supply of about 4,000 to 5,000 such units for rental over the next three years, it said.

Regular updates will also be given on the number of upcoming flats under the BTO system for six-month periods. This is to help buyers in the planning stages gauge the level of supply in the market.

The information will be updated on a quarterly basis. The HDB said it might adjust its building programme to meet demand if the need arises.

For the first time, new data on the number of approved flats available for rent according to different flat types was released.

The number of approved flats jumped 50 per cent to 3,600 in the second quarter from 2,400 in the first.

There are currently 14,600 approved flats for rent in the market.

Since the HDB relaxed its subletting policy in March, the number of eligible flats for rent in the market has reached 645,000.

FINALLY, A DOSE OF REALISM

‘This will help everyone be more realistic, and has definitely come at the right time.’
TENANT S.T. LENG, 41, whose landlord recently hiked the rent of his three-room flat from $900 to $1,500 due to ‘market rates’, saying the new information will give tenants and buyers more negotiating power

THE MORE WE KNOW, THE BETTER

‘Consumers will increasingly want such fine-tuned data and transparency will become more crucial in the market.’  PROPNEX CHIEF EXECUTIVE MOHAMED ISMAIL

Source : Straits Times - 28 Jul 2007

Clearer details in Q2 property picture

2007Q2 Property Picture

Had you been out looking for a place to rent or buy in the second quarter of this year, you would have found a number of good deals — the hot property market notwithstanding.

For instance — going by figures from the Urban Redevelopment Authority (URA) — one lucky owner snapped up a unit at The Raintree in Bukit Timah for $489 per square foot (psf). Units at Mariam Way’s Ballota Park were rented out for as low as $1.29 psf a month.

Or, according to the Housing and Development Board (HDB), you could have bought a 5-room flat in Yishun for $273,800, or rented a four-room flat for anywhere between $1,000 and $1,400.

On the other hand, were you a landlord, you would have profited from the 18.7-per-cent surge in private home rents in the first six months of the year.

Apartment and condominium owners made 8.4 per cent more selling their units between April and June. Landed home sellers, who saw prices go up just 2.9 per cent in the first quarter, enjoyed a 7.1-per-cent surge this time.

On Friday, the HDB and the URA released the most detailed results ever of the property landscape, to give the public a more complete picture of its highs and lows — offsetting recent media reports that have focussed on the extreme highs.

For first time, the URA published new rental sub-indices for non-landed private housing across the three regional groupings, to reflect trends in different segments of the market. The HDB also took the unprecedented step of breaking down, by town and flat type, the median subletting rents as well as differences between resale price and market value.

THE PRIVATE HOME SCENE

While overall prices of private homes went up 8.3 per cent, the URA stressed that the boom was not uniform.

Many uncompleted private residential projects in the suburban areas with “more affordable” prices were on tap, it pointed out. A “significant number” of units — 1,658 in all — languish unsold in many launched projects.

The number of new homes sold set a quarterly record of 12,897 units. But what seems significant is that speculators were not a big segment.

Sales of uncompleted homes, or sub-sales, are often used to measure speculative activity in the private home market.

Across the island, these accounted for 9.7 per cent of total sales — which pales in comparison to the 28-per-cent mark when speculation was rife in 1996 over the same period.

The bulk of the sales, or 42.4 per cent, were in suburban areas — a signal that the mass market has recovered, said a CB Richard Ellis report.

For the first time since 2005, too, price growth was led by non-landed homes in areas such as Marine Parade, Queenstown and Toa Payoh.

The en bloc frenzy, meanwhile, helped drive up private home rents by 10.4 per cent — the highest since the URA made such data publicly available, said a Knight Frank report.

But the windfall, again, was not even across the board. While the overall median monthly rental in Singapore rose to $2.17 psf, a number of properties were rented out at less than $1.50 psf.

Meanwhile, prospective homebuyers can look forward to a fat pipeline of supply over the next three years. There are 56,182 uncompleted units due to hit the market. Another 9,100 new units are expected from sites made available under the Government land sales programme and the three residential sites at Bishan, Dakota Crescent and Woodsville Close sold earlier this year.

THE HDB MARKET

HDB flat resale prices grew by 3 per cent on the whole, up from just 1.4 per cent the previous quarter.

While record-setting prices made the headlines, overall, the median amount by which actual resale prices exceeded market value was a modest $7,000.

In fact, 30 per cent of all resale transactions were priced at or below valuation — although in some instances, such as in Clementi where executive flats were sold at a median $65,000 above valuation, prices were grossly inflated.

Overall, activity was high in the resale market, with 8,708 deals being struck — a 38-per-cent increase over the first quarter.

Rentals also remained “affordable”, despite a recent newspaper report that HDB rents had hit a 10-year high. The URA said these “very high” rents were limited to “very few” cases and were “confined to flats with special attributes”.

There was a 50-per-cent jump in the number of sublet approvals issued by HDB, after it eased up on its subletting policy in March. In all, about 14,600 HDB flat owners have approval to sublet their flats.

WHAT’S AHEAD?

Given the rapid heating up of private home prices, property analysts are projecting that these could go up by as much as 30 per cent by the year’s end.

CB Richard Ellis expects a total increase of 20 to 25 per cent for the year, with the number of new home sales hitting 16,000 to 18,000.

The forecast at Knight Frank was 23 to 30 per cent, but it is rentals that are expected to boom — growing by 30 to 40 per cent year-on-year, especially in prime districts. This, said the Knight Frank report, is due to a shrinking pool of housing as a result of recent collective sales.

ERA Singapore, which specialises in the HDB market, expects flat resale prices to rise by 8 to 10 per cent over the whole year, and the number of transactions to hit over 30,000.

“Home-buyers priced out of the private property market will be looking at larger flat types … They in turn will push those that are priced out of buying larger flats to buy smaller, four-room types,” said ERA vice-president Eugene Lim.

But, he added, “to enjoy a premium above market valuation, the property must have the X-factor”: A combination of a central location, being relatively new and “nicely renovated”, having an MRT station nearby, and being on “a high floor with unblocked panoramic views”.

For more data, go to: www.ura.gov.sg/real_estate/main.jsp for private property, and www.hdb.gov.sg for public housing.

Source : Weekend Today - 28 Jul 2007

Businessmen have more to think about, following the rise in rentals for office, retail and industrial space. In the second quarter of the year, office space rentals climbed 11 per cent, up from the previous quarter’s 10.4 per cent.

For the first time, the Urban Redevelopment Authority (URA) released two sets of figures to reflect the two-tiered office market.

Category 1 includes office spaces in the downtown core and Orchard Planning area, while Category 2, comprising 80 per cent of all office space, accounts for the rest of Singapore.

The median rental for Category 1 was $9.50 psf monthly, up from $8.48 psf in the first quarter. In Category 2, the rates climbed from $4.23 psf to $4.48 psf.

“The pace of rental increase is maintained but maybe not as high as landlords wish us to believe,” said Mr Colin Tan, Chesterton International’s head of consultancy and research.

The vacancy rate continued to fall, from 9.1 per cent to 8 per cent by the end of the second quarter.

While an extra 641,000 sq m of office space will be available by 2010, Mr Tan said: “The supply is not much because historically, we have been able to absorb up to 4 million sq ft of space in good years,” he said.

In the retail sector, overall rentals increased by 7.1 per cent, a sharp rise from the 1.4-per-cent increase in the first three months of the year.

Median monthly rentals for shop space in Orchard were $9.24 psf. Rentals in city areas outside Orchard reached $6.21 psf and beyond the city area, $4.88 psf.

Although 221,100 sq m of factory space were granted temporary occupation permits in the second quarter, the industrial sector experienced cost spikes too. Rentals for multiple-user factory space increased by 6.1 per cent.

As for the seven-fold increase in demand for business park space, Knight Frank said this was “a spillover effect from the tight office market and an rise in the relocation of value-added manufacturing facilities from other countries”.

Mr Tan said: “The performance numbers show that the market is still moving forward, but that also means Singapore is slowly losing its competitiveness if these rises are not checked.”

Up to 515,000 sq m of gross floor area for shop space is expected to be completed by 2010. Similarly by then, 280,000 sq m of industrial space is expected to be introduced.

For now, the rise will not lead to businesses packing their bags for cheaper pastures. “Business costs does not consist of only rental costs. There is labour, material, utilities, transport, and so on,” explained Knight Frank’s Mr Nicholas Mak.

Source : Weekend Today - 28 Jul 2007

120 Sers units open for rent, while JTC to lease 300 units to foreigners

Those looking to rent HDB flats can now choose from 420 more units newly released by two government agencies.

The Housing and Development Board (HDB) will lease 120 flats meant to be demolished under its en bloc scheme for public housing. HDB said the vacated flats in Tiong Bahru Road, part of the Selective En Bloc Redevelopment Scheme (Sers) scheme, will be rented out to the public on a short-term basis.

If successful, this pilot project may be expanded to other Sers areas. The agency said it could supply between 4,000 and 5,000 such units over the next three years.

But tenancy details such as rental prices will only be revealed when HDB calls for the tender next month.

Under Sers, introduced in August 1995, old flats are demolished to make way for new ones. There have been 71 sites identified, including four this year.

In a separate release on Friday, the Jurong Town Corporation (JTC) said it would release 300 units in mature estates — targeting foreigners.

These units were initially earmarked for sale but will now be diverted for use as rental flats — another first such measure. It is an addition to its Scheme for Housing of Foreign Talents, under which JTC flats are available only to employment pass holders, with some 3,500 units rented out so far.

The 300 new units will be available over the next few months, averaging about 100 units per month, through appointed managing agents, JTC said.

Located in mature housing estates such as Aljunied, Bedok and Bukit Batok, they include three- to five-room and executive-type flats.

JTC said it would peg rental rates to prevailing market prices. This information is available on www.jtc.gov.sg. As of Friday, the minimum monthly rental rates for JTC units start at $940 for a three-room unit and $1,470 for an executive flat.

While property analysts felt the market would respond favourably, Propnex CEO Mohd Ismail said much depends on the rental rates set by HDB and JTC.

Mr Eugene Lim, assistant vice-president at ERA Singapore, agreed price is crucial in the take-up, but he is optimistic that even the old Sers flats will get good responses.

He said: “The first batch is in Tiong Bahru Road. The location is quite central and would appeal to those looking for locations near the city. The Sers flats are in serviceable condition. As a short-term solution, it will work.”

Source : Weekend Today - 28 Jul 2007