Property Market Updates (9th November 2010)

Major revamp for town centre

Minister of State Lee Yi Shyan has his sights set on bringing new life to Kampong Chai Chee. Mr Lee, MP of the mature ward in East Coast GRC, believes its town centre needs to be rejuvenated. One immediate project is a new integrated public transport hub to provide a seamless connection between the Bedok bus interchange and MRT station. The bus interchange and a plot next to it will also be developed to house retail shops and condominium blocks with 500 homes. The project will be completed by 2015. Further in the pipeline is another integrated project: a sports complex. Still in the conceptual stage, it will bring together the new community centre and sports facilities such as a swimming pool, indoor courts for badminton and sepak takraw, and a gymnasium. By integrating these facilities, land will be freed up for new flats and condominiums, said Mr Lee. 'Bedok Town Centre really needs an injection of new facilities that are up to date,' he said yesterday, ahead of a ministerial visit next month by Mrs Lim Hwee Hua, Minister in the Prime Minister's Office and Second Minister for Finance and Transport.

- The Straits Times, B3

'Invest in Jiangsu's untapped north'
Jiangsu may be one of the top investment destinations in China for Singapore firms but a significant part of the province has been somewhat overlooked, said Health Minister Khaw Boon Wan. Just back from a trip to the province, Mr Khaw is urging firms here to seize market openings in the Chinese coastal province's largely untapped north. Mr Khaw, who co-chairs the Singapore-Jiangsu Cooperation Council (SJCC), said yesterday that he has high expectations for bilateral trade and cultural exchanges. 'Our relationship has always been strong and dates back two decades,' said Mr Khaw. 'Suzhou Industrial Park, our first flagship project with China, as well as... the Wuxi Industrial Park are both over 15 years old now.' Singapore's private and public sectors have enjoyed a good run since the Suzhou Industrial Park project between the two countries was established in the 1990s. But until recently, most of Singapore's focus in Jiangsu was around the southern part of the province near the mouth of the Yangtze River. Mr Khaw, however, believes that the time is ripe for businesses to venture over the river into northern Jiangsu, an area that is fasting catching up with the south. 'One-third of Singapore's investments in China go to Jiangsu, making it our top investment destination in China, with cumulative actual investments exceeding US$16 billion (S$21 billion),' he said. 'And our investments in Jiangsu have gone beyond Suzhou and Wuxi, where there are now good projects in Nanjing, Zhangjiagang, Yangzhou, and across the Yangtze River to the north, like Nantong and Lianyungang.'
Mr Khaw also pointed out that there are more than 3,400 investment projects in Jiangsu involving Singapore companies, most of which have been the efforts of small and medium-sized enterprises. And while investments through the SJCC have been broad-based, ranging from manufacturing and property development to water treatment and many other modern services, Mr Khaw also sees local health-care players gradually making inroads in the province. 'They have a lot of interest in the service sector because they are now already into more than two decades of industrialisation,' he said. 'The service sector will include all sorts of things and of course health care will be a major piece, especially with their ageing population.'
- The Straits Times, B18

Wheelock's Scotts Square snags Hermes as maiden tenant
Wheelock Properties (Singapore) has secured Hermes as the maiden tenant for its Scotts Square retail podium which is slated to open by Christmas next year. Hermes will occupy a 3,000 sq ft ground-floor corner unit. This will be Hermes' fourth outlet in Singapore - after Liat Towers, Takashimaya Department Store, and The Shoppes at Marina Bay Sands. The Liat Towers store will remain open even after Hermes opens its new Scotts Square boutique, said Hermes' managing director. Tenants in the retail and services trades will make up about 70-75 per cent of the high-end mall's net lettable area, with food and beverage outlets (restaurants but not a food court) accounting for the rest of the space. There will be about 60 shops (assuming units are not amalgamated). Unit sizes start from about 800 sq ft plus. The mall will have four levels (from Basement 1 to Level 3) and 80-plus carpark lots in Basement 2. About 70% of the 338 freehold apartments in the development have been sold at an average price of $3,992 psf. 'We just sold one unit last week for $4,360 psf,' Ms Tan said. A Singaporean buyer picked up the 624-sq ft, one-bedroom apartment on the 38th floor for $2.72 million. Of the remaining units, most of which are on the upper floors, the highest priced among them would be about $4,600 psf, for a one-bedder.
- The Business Times, P30

InterCon group to manage RB Capital hotel
RB Capital Hotels, led by Kishin RK, has appointed InterContinental Hotels Group (IHG) to operate the hotel it will develop at the corner of Clemenceau Avenue and Havelock Road. At between 460 and 500 rooms, the property will be the biggest Holiday Inn Express (by room count) in South-east Asia. It is scheduled to open in the second half of 2013; earlier in the same year, in June, another Holiday Inn Express will open in Singapore - a 220-room property being developed by Chee Swee Cheng Group of Companies on the Wellington Building site near The Heeren. IHG Asia Australasia managing director Jan Smits said there was enough room for Singapore to have even more Holiday Inn Express hotels. 'A brand like Holiday Inn Express for instance offers excellent value backed by an international brand and the benefits of a big hotel chain.' The names of the two hotels are being finalised and their locations will offer different demand drivers. The property at Clemenceau / Havelock Road will appeal to corporate and leisure travellers transiting in Singapore who wish to be close to the CBD as well as nearby waterfront entertainment hubs at Clarke Quay, Robertson Quay, and Boat Quay. The hotel on the Wellington Building site on the other hand is targeted more at leisure guests and retail shoppers given its location in the Orchard Road belt, added Mr Smits.
RB Capital Hotels paid about $101.1 million or $813 psf ppr - a record unit land price for a 99-year leasehold hotel site in Singapore - for the plot at Clemenceau Avenue and Havelock Road at a state tender that closed in August.
- The Business Times, P30

CMA to buy major stake in prime Shanghai project
CapitamallsAsia (CMA) said yesterday it has agreed to buy a two-thirds stake in a shopping mall and office development in Shanghai for about 1.45 billion yuan (S$281 million). The 3.86 billion yuan project in Shanghai's prime Luwan district will comprise a six-storey shopping mall and a 31-storey office tower, yielding a total gross floor area of 127,000 sq m to be split equally between retail and office space. Projected development costs, including land costs, work out to 30,400 yuan per sq m of gross floor area. CMA chief executive Lim Beng Chee said the project, in one of Shanghai's key commercial and residential areas, 'will be able to tap on a large catchment of about one million residents with high disposable incomes in the immediate vicinity'. He sees the investment as adding further value to CMA's portfolio and its pipeline of growth. The development will be built on 24,000 sq m site at the junction of Xujiahui and Madang roads. It will be connected to the interchange of subway Lines 9 and 13 and is close to the Xintiandi dining and entertainment area. The latest valuation of the property, commissioned by CMA and conducted by DTZ Debenham Tie Leung in September, was 2.28 billion yuan, based on the existing land condition.
- The Business Times, P9
- Also quoted in The Straits Times, B15: “CAN Buys into Shanghai property.”

Developers mind the gap in bids for land

Developers looking to build homes are no longer bidding with wild abandon at Government Land Sale tenders as the impact of the property cooling measures kicks in. This can be gauged from the fact that the gap between the top bidder and next highest bid for residential sites and sites with residential components has started to narrow. The gap peaked in August and early September before declining in recent weeks as the impact of the Aug 30 measures gradually took effect, according to an analysis by Jones Lang LaSalle. The gap (measured by the difference between the top two bids divided by the second highest bid) peaked at 31% for the condo plot at Miltonia Close next to Orchid Country Club in the Yishun area offered at a tender which closed in August. Another tender that closed on Sept 1, a residential-commercial plot next to Bedok MRT Station, also saw a relatively high winning margin of 21%. The trend persisted into early September, with a tender for a condo plot at Jalan Eunos/Foo Kim Lin Road drawing a 26% winning margin from top bidder Far East Organization when it closed on Sept 7. Since then, the margin has slipped to single-digit per cent levels, mostly between one and 4%. Between Jan 1 and July 31 this year, the winning margin ranged from one to 17%, with the 17% premium paid by a Far East Organization-Frasers Centrepoint tie-up for a private condo plot at Yishun Ave 2/Canberra Drive offered at a tender which closed in June. Market watchers suggest that the margin being at its widest in August and early September reflected the bullish sentiment prevailing in the property market at the time that led the government to rein in the market on Aug 30.
Close to 14,000 private homes (including executive condominiums) are estimated to be generated from sites sold and to be sold under the government land sale programme this year. This figure includes 9,790 units that can be built on sites sold so far this year, and 3,470 units on seven sites that are pending - either the tenders have yet to close or have yet to be awarded. In addition, a site in Punggol Walk/Central that can be developed into 685 homes will be launched later this month.
- The Business Times, P1

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