SGHOUSING.COM 新加坡房地产网

HO Bee Group yesterday snapped up a freehold factory building at Genting Lane near the junction with MacPherson Road for $9.7 million.

The auction, conducted by Colliers International, also saw three other properties knocked down - an office unit at High Street Centre that was hotly contested, an apartment at The Bayshore and an executive condominium (EC) unit at Woodsvale in Woodlands. All four properties were mortgagee sales.

The factory that Ho Bee bought is said to have been put up for sale by United Overseas Bank. The building has a land area of around 37,000 sq ft and a net lettable area of about 57,000 sq ft. It is partly three storeys and partly six storeys.

Over at High Street Centre along North Bridge Road, Colliers auctioned a 17th floor office unit for $740,000 after a round of highly competitive bidding that started at $580,000.

A 29th floor unit at The Bayshore changed hands for $520,000 or $514 per square foot. The Woodsvale EC unit sold at yesterday’s auction fetched $350,000 or $266 psf.

Source : Business Times - 12 Oct 2006

Group paid $151m 2 years ago for 78 Shenton Way, sells it now for $290m

THE Riady family’s Lippo Group is selling its flagship Singapore office building at 78 Shenton Way for about $290 million, or almost double the $151 million it paid for the building slightly over two years ago, sources say.

The buyer is a property fund, said to be linked to Australia’s Macquarie Bank.

Lippo renamed the building Lippo Centre, after it bought a substantial interest in the property in August 2004. But market watchers expect the group to move its Singapore headquarters soon to OUB Centre, which boasts the more prestigious address of 1 Raffles Place.

Earlier this year, a Lippo-Ananda Krishnan consortium took control of Overseas Union Enterprise and other entities, giving it a majority stake in OUB Centre.

Having an office at this location will place the Ria dys and Lippo closer to other big corporate tycoons in Singapore - like Wee Cho Yaw at UOB Plaza and Kwek Leng Beng at Republic Plaza.

The current Lippo Centre at 78 Shenton Way which has just been sold is on a site with a remaining lease of about 76 years and which has about 298,000 sq ft of net lettable space. Lippo’s purchase price of $151 million in August 2004 reflected about $505 psf of net lettable area.

Lippo is proving to be a savvy investor in the Singapore property market. In March this year, Lippo’s Singapore-listed unit Auric Pacific bought One Phillip Street, a 16-storey office block, from Kewalram group for $37.6 million - or about half the $76.8 million price at which Lippo sold the property to Kewalram in early 1996 near the market peak.

Source : Business Times - 11 Oct 2006

RENTS for retail space would have risen by as much as 9 per cent by the year-end despite new properties coming on the market, says Knight Frank.

Booming retail sales are behind the recent increases in rents, particularly in the Orchard Road area, the property consultancy said in a report yesterday.

Average monthly rentals of prime shop space in Orchard Road malls have reached $38.80 per sq ft (psf), up 1.8 per cent from about three months ago.

Average prime rent in the Marina Centre, City Hall and Bugis area rose 2.5 per cent to $27.80 psf over the same period.

Malls including VivoCity in HarbourFront Centre and the extension at Velocity@Novena Square on the city fringes registered the highest rise of 5.9 per cent to $21.90 psf for the third quarter.

One sign of the recent rental boom can be seen in the new wing of Centrepoint Shopping Centre, developed by Frasers Centrepoint.

More than 90 per cent of space in the wing has been leased with rents reaching a high of just over $70 psf compared with a high of $50 psf in the old wing.

Indeed, rents for prime space in the wing are now at $45 psf to $70 psf, compared with $45 psf to $55 psf in July when the building was 50 per cent leased.

Retailer Robinson, is the anchor tenant, taking up the top three floors. Restaurant chain Crystal Jade will not be taking up the top floor as planned.

The general manager of investment properties of Frasers Centrepoint, Mr Tong Kok Wing, said rents at the old wing have also risen, though he did not give the actual numbers.

‘This is reflective of the strong market demand and demonstrates our existing and new tenants’ confidence in Centrepoint especially given its extension and refurbishment,’ he said.

New space in prime malls is clearly in short supply, said Knight Frank, even though more is coming onstream.

VivoCity, Singapore’s largest mall opened on Saturday and there are new shops coming up at Square 2, The Central, the extension to Velocity@Novena Square and Icon Village at the Icon condominium.

The retail market will see more competition as new malls in Orchard Road come up.

It is likely to continue to attract more foreign retailers, particularly those which are interested in using Singapore to expand regionally, said another consultancy DTZ Debenham Tie Leung in an earlier report.

In the third quarter, when no new malls were completed, average occupancy of malls remained high at more than 90 per cent.

Knight Frank also forecast that overall capital values of retail space could go up by 4 per cent to 8 per cent.

It said the wave of collective-sale fever in residential property has begun to spread to the retail sector.

The owners of Ming Arcade in Cuscaden Road and Upper Serangoon Shopping Centre located near Upper Serangoon Road are preparing for such a sale.

But there is unlikely to be a large number of collective sales of retail malls with strata titles, said Knight Frank.

Not only is the number of such malls limited, it is also difficult to get the individual shop owners to agree to a sale.

Source : Straits Times - 10 Oct 2006

Supply crunch as fresh data shows Grade A space is 99.3% taken up

OCCUPANCY rates for premium office buildings in the city have hit a historic high as the supply crunch for such prime space worsens.

New figures from property consultancy CB Richard Ellis (CBRE) show that the most-coveted ‘Grade A’ office space is now 99.3 per cent taken up, surpassing the previous high of 98.8 per cent in 2000.

The supply squeeze, coupled with persistently strong demand, will mean that companies looking to expand here will find it problematic to do so, said property consultants yesterday.

The current recovery in office rents will also quicken and there will be an accelerated spillover to lower-grade and suburban offices, which are seeing strong take-up.

Grade A refers to the most premium office space, which tends to be located in districts such as Orchard Road, Raffles Place, Tanjong Pagar and Marina Centre.

They are in severe shortage because developers have been reluctant to build new offices in recent years as a result of the ‘unspectacular’ performance of offices from 1996 to 2002, said Mr Moray Armstrong, executive director of office services at CBRE, the leader in the office leasing market.

The already tight supply situation is set to get worse with almost no new premium office space coming onstream until the Marina Bay Financial Centre (MBFC) is completed in 2010.

Even then, the MBFC will offer about 1.6 million sq ft of Grade A offices, taking the total new supply of office space over the next three years to about 2.4 million sq ft, said Mr Armstrong. This will meet only half the projected demand in that period, which is expected to be at least 1.5 million sq ft a year, or almost five million sq ft by end-2009.

The space crunch has already forced expanding firms to explore new options.

‘Some firms may ‘decouple’ their operations,’ said Mrs Ong Choon Fah, DTZ Debenham Tie Leung’s executive director. This means moving backroom operations like call centres that do not need prime front-office space to suburban areas.

Mrs Ong raised the example of Merrill Lynch, which recently took up offices at ‘less prime’ HarbourFront for its operational support services.

At least one other financial services client at CBRE is also looking to grow its front-office ‘client-facing operations’ in its Central Business District (CBD) space by moving back-office operations to business parks perhaps, said Mr Armstrong. The spillover into less premium offices has seen take-up rates rise.

In the CBD, which also includes lower-grade offices, occupancy rates as a whole rose to hit 95.5 per cent in the third quarter, up from 92.9 per cent in the previous three months.

And in the suburban areas, offices were 98.5 per cent occupied by the end of last month, a sharp rise from the 94 per cent take-up in the second quarter.

Yet such space is running out quickly too, said Mr Chris Archibold, regional director and head of markets at Jones Lang LaSalle. ‘The reality is, for Singapore at the moment, there isn’t much back-office space either,’ he said. This may result in firms choosing to expand in the region rather than in Singapore, he added.

‘Most of the clients we work with are regional businesses, and if there is no space available here, some of them will look at moving business units or expanding business units in other countries. It’s not the case to date but it will definitely be the case over the next 12 to 18 months.’

In the meantime, rents have also started to soar.

In the third quarter this year, average monthly prime rents climbed by 15 per cent over the previous quarter to $6.90 per sq ft (psf), said CBRE in a report yesterday.

Average Grade A rents rose 11.8 per cent to $7.60 psf per month over the same time, hitting $10 psf at the brand-new One Raffles Quay.

CBRE estimates that by year-end, monthly prime rents will reach $7.30 psf while Grade A rents will hit $8.30 psf on average.

Source : Straits Times - 10 Oct 2006

Group will pocket gains of $79m from the sale

AGAINST the backdrop of a buoyant office property market in Singapore, UOL Group yesterday announced that a wholly owned subsidiary is selling Central Plaza at 298 Tiong Bahru Road for $175 million.

UOL said the sale will result in a gain of about $79 million or 9.96 cents per share for the group. It said completion of the transaction is scheduled for January 2007 and the gain will thus be reflected in the results for the financial year ending Dec 31, 2007.

The subsidiary, UOL Tiong Bahru Plaza Pte Ltd, yesterday inked a conditional sale and purchase agreement with Bakersfield Pte Ltd, a unit of Asian Retail Mall, to sell all its interest in Central Plaza, which comprises a 20-storey office block with a net lettable area of 190,792 square feet.

In early 2002, Asian Retail Mall bought the adjacent Tiong Bahru Plaza, which is a retail mall, from UOL for $195 million. Market watchers say there is asset enhancement potential from converting the common areas between the Tiong Bahru Plaza and Central Plaza to shops or kiosks or using the common areas in other ways to generate revenue.

UOL had built both the the mall and the office tower above Tiong Bahru MRT Station as a single development. Asian Retail Mall is a property fund managed by Pramercia Real Estate Investors (Asia), formerly known as GRA Singapore.

UOL said the sale will enable the group to ‘reduce its borrowings and position itself to take advantage of investment opportunities as and when they arise’.

For illustrative purposes, if the transaction had been effected at the end of 2005, UOL’s net tangible assets per share as at Dec 31, 2005, would have increased from $2.96 to $3.01.

UOL said the consideration for the sale was arrived at based on negotiations on a willing-buyer, willing-seller basis, and it believes the gain from the sale will likely not be subject to tax as the said property has been held as a long-term investment.

Last week, UOL’s listed subsidiary Hotel Plaza announced the sale of the company which owns Parkroyal on Coleman Street, a 10-storey hotel building with 330 rooms and an adjacent shopping arcade, for a total net cash consideration, excluding shareholder’s loan to be assigned, of about $141.2 million.

UOL’s share price closed at $3.70 yesterday, which is up 47 per cent in the year to date. The group’s market capitalisation is around $2.9 billion.

Source : Business Times - 10 Oct 2006