NEWS & VIEWS Friday, 4 July, 2014 RESIDENTIAL MARKET In a bind when new flats ready but old ones still unsold For Mr Balaji Lakshmanan, the four-year wait for his new Housing Board flat ended this week when he collected his keys. But another countdown began: to dispose of his existing flat, as required under HDB rules. I dont know if I can sell this house within six months, he said, referring to his three-room flat in Bukit Batok East. He is part of an emerging group of home buyers caught between their newly ready Build-to-Order (BTO) flats and their old ones - which lack buyers in a sluggish market. The 42-year-old manager has been trying to sell his old flat for half a year, with about 10 viewers but no offers so far. It was valued at $340,000 in January - down from $380,000 the year before - and he is willing to accept $10,000 below that. The wait itself will cost, given that he now has a new five-room BTO flat in Taman Jurong. Now I have to pay for both. Under HDB rules, he must dispose of the old flat within six months of getting his keys. But fewer and fewer flats are changing hands. There were just 3,781 resale deals in the first three months of this year, a record low. Some BTO buyers have turned to their Members of Parliament for help in getting deadline extensions from the HDB. Sembawang GRC MP Ellen Lee has seen five or six cases this year. Some have come up against the six-month deadline. Others would like more time before collecting their keys. People try to delay taking the (keys to their) BTO flats now, in case they cannot sell their old flats, she said. Thus far, the HDB has been very helpful in granting extensions, often for three months at a time, she added. Nee Soon GRC MP Lee Bee Wah started seeing such cases in the past two months. For some, it is not just about the deadline, but needing the proceeds for their new flats, she said. They have to have money in order to collect the keys. On Monday evening, she wrote a Facebook post about such requests, wondering if these were a sign of oversupply of flats. A few years ago, both new and resale flats were seen to be in short supply, with tempers running high over tough BTO competition and soaring resale prices. Since then, BTO supply has been boosted and the backlog cleared, while in the resale market, home loan curbs have cooled demand and lowered prices. Said Ms Lee Bee Wah: I would think that (the HDB) achieved the target of stabilising the price of property. That is a good outcome. But for those who want to sell their flats, they have to be more realistic now. The falling market is a factor, Pasir Ris-Punggol GRC MP Gan Thiam Poh agreed. But he does not think the situation is that bad. Of the two or three cases he has seen, one was affected by the HDBs ethnic quota and could sell only to someone of the same ethnicity. The unit was also on a low floor, so the case is not really representative, he said. Nor does the problem seem widespread, even in usually less popular non-mature estates. Some other MPs in Sembawang and Pasir Ris-Punggol GRCs have not seen such requests. But with over 28,000 BTO units to be completed this year and resale volumes still low, more buyers may find themselves struggling to sell in the coming months. Said Sembawang GRCs Ms Lee: Looking at reports on the resale market, it may get worse. But for its part, the HDB said that if buyers need more time due to special circumstances, it will assess each request based on the merits of each case. Source: The Straits Times – 4 July 2014 COMMERCIAL MARKET $22m asking price for five shophouses at Club Street Five adjoining shophouse properties at Club Street have been put on the market with an asking price of $22 million. They comprise Nos 1, 3 and 5 Club Street, which are three storeys high and have an attic, and Nos 7 and 9, which are two storeys high. All five have balance land tenure of about 80 years. The properties are being marketed jointly by JLL and Historical Land Pte Ltd. The latter is a boutique property agency specialising in shophouses. The five shophouses are being offered as a package. Nos 1, 3 and 5 are owned by Citystate Properties while Nos 7 and 9 are owned by Dr Ling Ai Ee, who is also one of the shareholders of Citystate Properties. The $22 million asking price translates to $3,230 per square foot on floor area of about 6,800 sq ft. The shophouses are currently leased, with insurance company EQ occupying the ground level. The upper levels are leased out as residences. A strong attraction of the properties is that they are part of a stretch of Club Street and Gemmill Lane that was recently rezoned to commercial use under Urban Redevelopment Authoritys Master Plan 2014. The stretch involved was previously zoned as residential with first-storey commercial. In a circular issued on June 10 this year, URA said the zoning change is consistent with the commercial zoning for the rest of the shophouses along Club Street. Foreigners require the approval of the Land Dealings (Approval) Unit of the Singapore Land Authority before they may purchase an entire shophouse on a site zoned for residential use, although they may buy a unit within a strata-subdivided shophouse building on residential-zoned land. Club Street was the last part of Chinatown to be developed, beginning in the early 1890s, according to architecture historian Julian Davison, who traced the provenance of the five properties for Historical Land. The five shophouses on offer comprise two separate developments: Nos 7 and 9, which were most likely built in the late 19th century, and Nos 1, 3 and 5, which were built by business magnate Ezekiel Saleh Manasseh in 1924-1925. A leading businessman and property developer in Singapore at the time, Mr Manasseh commissioned the architectural firm of Westerhout & Oman to build the shophouses that currently stand at Nos 1, 3 and 5 Club Street. The principal feature of the front facade is the central airwell. There is also a cantilevered balcony halfway up as well as a star-shaped pediment on top, intended to recall the Jewish Star of David, writes Dr Davison. During World War II, Mr Manasseh was interned by the Japanese and died in 1944. At a URA tender in August 1995, Citystate Management Consultants clinched Nos 1, 3 and 5 Club Street for $3.01 million while L&B Engineering picked up Nos 7 and 9 at $2.064 million. The properties were sold on 99-year leasehold tenure and with the requirement that successful tenderers had to restore them. While activity-generating uses such as food and beverage outlets, and shops are allowed on the street level, URA in its June 10 circular stated that the shophouse owners and tenants are encouraged to use the upper storeys for residential or institutional use. Office use will be the only commercial use allowed on upper levels, as this is less likely to cause disturbance to the residents of the nearby Emerald Gardens. Source: Business Times – 3 July 2014 Leasing commitment for 21% of CapitaGreen Capitagreen, the 40-storey Grade A office building in the central business district (CBD), has achieved aggregate leasing commitment for 21 per cent of its net lettable area (NLA). The building, jointly developed by CapitaLand, CapitaCommercial Trust and Mitsubishi Estate Asia, is on track to be completed by year-end. Its tenants include multinational firms such as Jardine Lloyd Thompson and Jones Day, said the partners during the buildings topping-out ceremony yesterday. Lim Ming Yan, president and group chief executive officer of CapitaLand, said: By adopting innovative technologies and design-and-build methodology, we shortened the construction timeline to 36 months from the industry average minimum of 40 months it would take to complete a building of this scale using conventional construction methods. National Development Minister Khaw Boon Wan was the guest of honour at yesterdays ceremony. In a symbolic topping-out gesture, Mr Khaw, with representatives from the joint venture, main contractor Takenaka Corporation and the design architect, Toyo Ito, planted nine saplings representing the plants to be grown in the building. Lynette Leong, chief executive officer of CapitaCommercial Trust Management Limited, said: Given that CapitaGreen is the only new Grade A office development in the CBD completing in the next two years, it is well-positioned to leverage on the limited office supply to progressively attract more tenants. Source: Business Times – 3 July 2014 INDUSTRIAL MARKET Demand in strata-titled industrial market slows Activity in the strata-titled industrial market has gone down significantly, with demand coming mostly from end-users. All in all, 224 strata-titled factory units changed hands in Q2. This brought total transactions in the first half of this year to 523 - 57 per cent fewer than in the corresponding period last year. Average capital values and rents for conventional industrial space (that is, traditional factories) held steady, based on a basket of private sector-owned properties. Conventional industrial average capital values for first-storey spaces in Q2 were flat at $627 per sq ft; those for upper-storey spaces were $470 per sq ft. While limited supply of freehold and longer-tenure properties kept prices for such spaces firm, prices of industrial properties with shorter tenures - those with 30 years or less left on the lease - started to decline. This was a result of the difficulty in moving units which have shorter lifespans and higher financing costs, making them generally less appealing. Second-quarter monthly rents for first-storey conventional industrial spaces held firm from the previous quarter at $2.20 per sq ft; Q2 monthly rents for upper-storey spaces were going at $1.80 per sq ft. Despite the large supply, take-up rates were slower in Q2. Rents in the business park and high-tech space, however, inched up, supported by leasing queries for newer and well-located developments. Landlords had some power to raise monthly rents. Rents for business parks in Q2 were $4.90 per sq ft, and those for high-tech spaces $3.20 per sq ft, up from $4.78 and $3.15 per sq ft respectively in Q1. Rising office rents have also driven cost-conscious office tenants to the business park and high-tech space, where rents can be 30 to 60 per cent lower than average office rents in the CBD (central business district) fringe and decentralised areas. Businesses making this shift are Roche Diagnostics and Intel. Source: Business Times – 3 July 2014
Posted on: Fri, 04 Jul 2014 03:05:18 +0000
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