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27 March 2013

27th March, Wednesday




URA sets minimum average size for retail units

Source: Business Times

The government is moving to prevent a proliferation of small units at malls that may not serve their intended purpose and can cause disamenities, but said that this should not be read as an attempt to cool the strata retail market.

The Urban Redevelopment Authority (URA) Tuesday introduced a minimum average size for retail units of 50 sq m (538 sq ft) that takes effect today. This is comparable to a typical Housing and Development Board shop unit.

Also introduced were guidelines that retail developments should have minimum corridor widths of two to 2.4 m for single loaded corridors, and 2.4 to three m for double-loaded corridors. Single-loaded corridors serve retail shops on one side while double-loaded ones serve retail units on both. "They are not intended to be a cooling measure for strata retail market," a URA spokesman said last night.

The new guidelines, which apply to all new developments (commercial or mixed use) with retail floor area are meant to ensure a good shopping environment, the spokesman said.

This follows National Development Minister Khaw Boon Wan's comments on his blog that flagged "a couple of developers" who have submitted applications for malls that feature mainly shops as small as nine sq m (97 sq ft).

Mr Khaw said that small shops have a place in the retail landscape as they support entrepreneurs and are suitable for trades such as moneychangers and florists, but is concerned if they are the predominant shop type.

URA said that developments with many small shops and narrow corridors can cause a lack of car park space and traffic congestion, and may not meet the varied needs of shoppers or be able to handle pedestrian traffic during busy hours.

After consulting industry players, such as the Real Estate Developers' Association of Singapore and the Singapore Institute of Architects, who share the authorities' concern, URA introduced the latest measures.

Market watchers welcomed the latest measures.

An analyst said smaller units usually cater to small and new retailers with limited financial capacity, which may not be sustainable. A large new supply means buyers may not see their investments pan out.

Another analyst suggested that loan-to-value ratios be tightened, since it is possible to offset smaller unit space with one big outlet.

Rentals are likely to come down with the new guidelines, especially for small malls or mixed use projects, where retail space is more limited, said one analyst. This is because smaller units fetch higher rents per sq ft in general. "Naturally that translates to lesser returns," he said. A knock-on effect is that land bids for mixed-use developments could come down as well.


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Investment Sales


Chip Eng Seng to buy San Centre for $113m

Source: Business Times

Chip Eng Seng Corporation, through wholly owned CEL Property Investment, has agreed to buy San Centre - an office building along Chin Swee Road - for $113 million under a collective purchase.

Chip Eng Seng said that the purchase is subject to the approval of the Strata Titles Board.

If successful, CEL will own the 12-storey office building at 171 Chin Swee Road, a 28,719 sq ft plot with gross floor area of 131,895 sq ft. The leasehold property has a remaining term of 55 years.


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