21st July, Saturday
Residential
Modest sales for Reflections condo units Source: The Straits Times It might be a glittery new condominium dotting the skyline of Keppel Bay, but some buyers of Reflections are not looking at a particularly shiny picture. Property consultants said the 1,129-unit Reflections at Keppel Bay has turned in a 'modest performance' over the five years since its launch in 2007. Residents started moving into the completed condo early this year. As of last month, the high-end project by Keppel Land had sold 853 units out of 950 launched, going by the Urban Redevelopment Authority's data. Another 154 units have been kept by the developer as corporate residences. Prices appear to have softened. An analyst said average prices there in the first half of this year were $1,870 psf, down from $1,937 psf in the same period last year. Primary sales have also slowed to less than 15 units for the last three quarters, said another analyst. But the 50 subsales in the last six months reveals ongoing buyer interest in the project, which was completed last year. Still, prices have not appreciated significantly, partly because market conditions and prices for the high-end residential sector have softened since 2007. Also the large size of the development and the plethora of suburban condo launches could have diverted interest from Reflections, he said. Experts say rental yields for both Reflections and Caribbean should hover around 3 per cent. Rents at Reflections are in the $4.50 to $5 psf per month range, while Caribbean is priced below that, possibly boosting the latter's rental demand. Reflections is the second condo in the area developed by Keppel Land. The fully sold Caribbean at Keppel Bay, finished in 2004, was its first project there. The developer is monitoring the market to launch Plot 3.
Link to the story: http://www.straitstimes.com/print/Money/Story/STIStory_824561.html
Commercial
Strata retail units show healthy gains Source: The Straits Times Most investors who have bought strata-titled shops in mixed developments in recent years have made money, at least on paper, property consultants say. Such properties are gaining traction among investors given their healthy rental yields and capital appreciation. They are also unaffected by recent market cooling measures. The limited supply of strata retail units here has also helped prices to stay resilient. Only a handful of mixed projects with strata shops have been built in the last five years, including Alexis and Southbank. At least another eight, such as East Village at Tanah Merah, Millage at Geylang and The Promenade@Pelikat achieved good take-up rates and are due to be ready in the next five years. In all, at least 600 strata shops will be added to the market here. While strata shops can also be found in malls such as Sim Lim Square, investors like those in mixed developments as they are mostly well located, cheaper and have a ready pool of traffic from residents, experts said. An analyst said: 'In the past, there were fewer good shops available for retailers (or) investors to purchase as most malls were held by developers for investment and not for sale.' She said it has been only in the last two years that more strata shops have been put up for sale. 'As the newer shops are smaller with lower absolute price quantum, they become more affordable as alternative investments.' Experts say rental yields for strata shops could range from 3.5 to 6 per cent, which is fairly attractive. But returns could be lower for those who bought units through a costlier subsale. Another analyst said the capital appreciation of such units depends on the project and the time of purchase. 'Generally those who held the units long enough, for at least three years, may be able to expect at least 15 per cent capital appreciation,' he said, noting, however, that new supply coming onstream could moderate that. Upcoming mixed developments have a larger number of strata shops, which require a bigger catchment of consumers beyond residents there, he said. Their success is also dependent on the tenant mix at the development. But retailers in strata malls benefit from not having to go through 'long channels of mall management approval', which can lead to more innovative offerings, he said.
Link to the story: http://www.straitstimes.com/print/Money/Story/STIStory_824564.html
Investment Sales
Property investment transactions up on low interest rate Source: The Straits Times Low interest rates helped send investment spending on property rocketing in the second quarter, with the residential and commercial segments thriving. Investors stumped up $7.4 billion during the three months to June 30, 52.4 per cent over the $4.9 billion laid out in the first quarter, according to a property consultancy. The public sector accounted for $3.1 billion in the second quarter. This includes private developers buying land through the Government Land Sales (GLS) programme. There were 15 sites - 11 residential, three industrial and one hotel - sold through the GLS, reaping about $2.9 billion. Private sales volume swelled nearly 60 per cent in the second quarter from the first, reaching $4.3 billion. Divided by segments, residential took the lead with $4 billion, or 54 per cent, of overall investment sales. The collective sale market stayed 'lukewarm', with six deals amounting to $392.5 million in the quarter. Softening prices lured investors back to high-end flats with 11 transactions above $10 million in the period. Commercial investment sales amounted to $2.3 billion, a two-fold increase from the first quarter's $1 billion. But industrial investment dropped 15.7 per cent to $951.8 million from the previous quarter. 'The market in (this half of the year) may still be dominated by the public sector, and we expect investment sales to reach a full-year total of $21 billion to $25 billion,' the consultancy said.
Link to the story: http://www.straitstimes.com/print/Money/Story/STIStory_824563.html
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