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28 June 2012

28th June, Thursday




Singapore's northeast at risk of housing oversupply, analysts say

Source: Today

While home prices in the northeast district are expected to be stable in the coming year, analysts say the area may potentially see an oversupply of homes in the future.

In the next few years, Punggol, Sengkang and Pasir Ris will continue to see intense construction activity, with market watchers expecting some 17,000 residential units to come onstream in the area over the next five to six years.

Later this year, developers are expected to bid for 4 sites in the northeast which are expected to yield some 2,000 executive condominium units. This will add to the 3,295 units from sites released in the area by the government in the first half of the year.

Some market watchers point out that Singapore's northeast precinct lacks economic activity, reducing its attractiveness in residential leasing and resale.

Analysts also say the lack of education and commercial activities to anchor the area could drive buyers to consider homes in other estates.


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Shadow office space increasing in Singapore

Source: Business Times

Shadow office space in Singapore is expected to rise amid global economic uncertainty that continues to plague occupier sentiment.

Data released Wednesday by a property consultancy showed that the stock of shadow office space islandwide was 285,000 sq ft in 2Q, up 32 per cent from 1Q. It is expected to grow by 73,000 sq ft to nearly 360,000 sq ft by year-end.

Of the 285,000 sq ft of shadow space in the second quarter, 48 per cent was in Raffles Place.

Shadow space refers to excess space that occupiers have leased but are looking to assign or sublet to ease the rental burden.

Rents in the CBD are expected to continue being pressured, despite a lower- than-average net increase in supply of 1.1 million sq ft of office space in 2012, after taking into account existing buildings that have been or will be removed from the stock.

UIC Building and Prime Centre, for example, were removed from the stock in the first half of 2012 for redevelopment. Marina Bayfront is also slated for termination later this year, as the developer has obtained planning permission to convert the office building to retail space.

Close to 610,000 sq ft of existing office space is estimated to become available in the second half of 2012 and 2013 as occupiers including DBS, Citibank, CISCO and Credit Suisse vacate their current premises to move to the new buildings which they have pre-committed to.


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For sale: Two 30-year industrial sites

Source: The Straits Times

Two 30-year industrial sites were launched for sale by public tender Wednesday - the first batch following a recent government move to slash the leases for such sites.

Property consultants expect cautious response to the two relatively small sites, with three to six bidders for the Bukit Batok site and up to seven bids for Yishun.

An analyst said developers would not be bullish, given the 30-year leases. He estimated that the sites could fetch 20 per cent to 30 per cent more if they had 60-year leases. He added: 'Demand won't be so strong because there's already a lot of supply at the two established industrial areas.

Another analyst said that the Yishun site is near several fairly new industrial developments that have 60-year leases. 'The new project could face some competition from the owners of the other developments when it is launched,' he said.

Bids are tipped to range from $40 million to $53 million for the 15,011 sq m land parcel at Bukit Batok Street 23. That works out to about $100 to $130 per sq ft per plot ratio (psf ppr).

The site at Yishun Avenue 9 is 20,075 sq m, with bids expected to be between $54 million and $76 million, or $100 and $140 psf ppr.

Both sites are zoned for Business 1 uses, which include light and clean industry, and utilities or telecommunications.

The tender for the Bukit Batok site closes on 22 Aug while that for the Yishun site will close on 30 Aug.


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International Markets


Prices of high-end London property likely to plateau

Source: The Straits Times

The red-hot high-end housing market in London is off the boil. Prices and rents are cooling under the impact of the British government's tough stamp duty measures and cuts in jobs and bonuses for the city's financial movers and shakers.

Prices for London's prime property - the top 5 per cent of the market by value - will plateau for the next 18 months, a property consultancy said. Prime property prices increased by 6 per cent in the year to the end of June, the lowest annual growth rate since 2009.

From 2009, prime property prices soared 51 per cent, driven higher by overseas investors pouring billions of pounds into buying homes in affluent pockets of central London such as Mayfair, Knightsbridge and Belgravia, said the FT. But anti-stamp duty avoidance measures introduced in March have curtailed much of that activity, said the paper.

The consultancy said the slowdown in wages for buyers working in the finance industry also weighed on demand for the British capital's most expensive homes. Prices in areas such as South Kensington, Notting Hill, Kensington and Holland Park fell 1.4 per cent during the past three months, it said.

Meanwhile, prices in Chelsea, Mayfair, Belgravia and Knightsbridge - traditionally the areas most coveted by foreign buyers - rose 1.2 per cent during the same period.

Average prime rents dropped by 0.4 per cent to £60 per sq ft for the best homes in the year to mid-June versus the same period last year and were likely to remain subdued for the rest of the year.


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