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10 July 2012

10th July, Tuesday




Change paves way for last HUDC estate to go private

Source: The Straits Times

The legal route was opened Monday for Singapore's last Housing and Urban Development Company (HUDC) estate to take its first step down the privatisation path.

The sprawling Braddell View estate had been built in two stages, in 1977 and 1980. As a result of the different land leases, it was difficult for the estate to privatise because the HUDC Housing Estates Act requires the cost of doing so to be borne equally by all 918 households.

But, following Parliament's nod to a change in the Act, the residents can 'decide how best to apportion the cost among themselves, taking into account the potential benefits of privatisation', said Minister of State (National Development) Lee Yi Shyan during the debate on the change.

He said having the shorter lease brought up to par with the longer one, by way of a top-up premium, is the most feasible option out of three the Housing Board considered.

The exact amount, however, would be decided by the Government's Chief Valuer, who will take into account the state of the property and recently transacted prices, added Mr Lee.


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Investment Sales


Asia Gardens back on market at lower price

Source: Business Times

Freehold condominium development Asia Gardens is up for sale again, and owners are setting their sights a little lower by asking for between $273.2 million and $300.3 million, compared with the $302.6 million to $307.7 million they wanted in January.

The property, located at Everton Road, has an allowable gross floor area of 201,765 sq ft based on a plot ratio of 2.8, which works out to a cost of about $1,354 to $1,488 per sq ft per plot ratio (psf ppr). The previous indicative price works out to $1,500 to $1,525 psf ppr.

The 84-unit Asia Gardens, zoned for residential use, lies within an area which is undergoing major rejuvenation, with the proposed transformation of the former Tanjong Pagar KTM Station, Tanjong Pagar Container Terminal and the redevelopment of several high-rise apartments.

The marketing agent said that no development charge is payable for the site. The tender for Asia Gardens will close at 3pm on 31 July.


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S'pore office demand surprisingly resilient in Q2

Source: Business Times

Demand in Singapore's office market has been a lot more resilient than earlier thought, with positive net office absorption of about 473,200 sq ft in the second quarter, taking the first-half tally to about 1.06 million sq ft, says a consultancy.

Vacancy rates also dropped across all submarkets and building grades in 2Q from the preceding quarter. Looking ahead, however, it expects the central locations (both Core CBD and Fringe CBD) to experience rising vacancy rates as a high volume of second-hand space will come onto the market as occupiers move to newer buildings. An example will be DBS, which will move from DBS Building on Shenton Way to Marina Bay Financial Centre Tower 3.

So far, Grade A rents have fallen more from the 3Q 2011 peak compared with Grade B rents, which has reduced their gap. However, the picture could change. Grade B offices are likely to be under greater rental pressure towards year-end and next year, due to more secondary supply - an additional 1.2 million sq ft of second-hand space is expected to be released in the next 18 months - as well as some shadow space, which refers to excess space made available for subletting or reassignment by existing tenants. Grade A rental declines, on the other hand, are expected to ease.

The average gross monthly rental value for Grade A office spaces - which covers best-in-class buildings in Raffles Place, Marina Bay, Marina Centre and Shenton Way - slipped 4.7 per cent quarter-on-quarter to $10.10 per sq ft in 2Q. The consultancy expects the average rental to slide by year-end to $9.30/9.40 psf, which would translate to a roughly 15 per cent full-year drop.

The average monthly rental rate for Grade B offices - which are in places such as Raffles Place, Shenton Way, Tanjong Pagar, City Hall, Orchard Road, Alexandra and HarbourFront - stood at $7.21 psf, down 0.6 per cent from 1Q. The relatively stable Grade B rent is largely due to higher occupancy levels. By contrast, the Grade A segment has had to absorb a high volume of vacant space in newly completed developments, which has created a highly competitive leasing market and pressurised rents.

Some 1.37 million sq ft of office space is slated for completion this year, most of it from Marina Bay Financial Centre Tower 3, which was completed in March. Next year, new supply completion is slated to rise to 2.8 million sq ft (major projects include Asia Square Tower 2 and Ho Bee's The Metropolis in Buona Vista) before easing to 1.7 million sq ft in 2014, when CapitaGreen (on the former Market Street Car Park site) and 5 Shenton Way (on the former UIC Building location) are completed.

Vacancy rate for Grade A offices fell from 12.9 per cent at the end-Q1 to 12.2 per cent at end-Q2, but this was still much higher than the 8.5 per cent at end-Q2 2011. The property consultancy estimates islandwide office vacancy at 6.4 per cent at end-Q2, down from 7.3 per cent at end-Q1 but higher than Q2 2011's 6 per cent.


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Soho? No, Woho

Source: The Straits Times

Those workaholics who want to devote all their waking hours to getting a business up and running might find a new concept being tried by business park giant Ascendas right up their street.

The idea is a twist on the small office home office (Soho) concept, where a home can double as an office.

Ascendas has plans to turn the idea around to come up with the 'work office home office' (Woho) at its new project at Fusionopolis.

Essentially, the project is a business park with added flexibility in that it allows offices to double as homes. Each 'module' can accommodate two people.

The 'work office home office' is still in the design stage so it is not known if all modules will come equipped with bathrooms, for example. But there will be some flexibility for the tenants to customise their space.

For example, an entrepreneur who has set up a company would rent a module where he could also live. As the business expands and staff are taken on, neighbouring modules can be rented.

The tender for this project for Phase Five of Fusionopolis closed in March. JTC announced Monday that it has awarded the tender to Ascendas at the tendered price of $172.8 million. The facility will cater to multiple tenants operating in the media, electronics and engineering sectors.


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