Singapore View a Collection of the Finest Properties & Developments
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SINGAPORE VIEW A COLLECTION OF THE FINEST PROPERTIES & DEVELOPMENTS MAR 2018 - JUN 2018 MARCH 2018 - JUNE 2018 • 1 CONTENTS 04 15 WELCOME 06 MARKET RESEARCH 12 ADVISORY SERVICES 14 AUCTION & SALES 21 32 INDUSTRIAL 27 INVESTMENT & CAPITAL MARKETS 33 OFFICE 34 PROPERTY ASSET MANAGEMENT SINGAPORE VIEW • 2 37 36 RESIDENTIAL LOCAL PROJECTS 45 RESIDENTIAL INTERNATIONAL PROJECTS 63 51 RESIDENTIAL LEASING 64 RETAIL 31 61 MARCH 2018 - JUNE 2018 • 3 SINGAPORE VIEW MAR 2018 - JUN 2018 EDITOR Liew Lixia RESEARCH CONTENT Alice Tan COVER IMAGE PARK PLACE RESIDENCES AT PLQ MARKETING Phyllis Goh READ MORE ON PAGE 36 DESIGNER Regina Ang SINGAPORE VIEW • 4 WELCOME Fresh waves continue to flow through the Singapore The manufacturing sector remains a key engine residential market, following a year of record land bid of economic growth in the fourth quarter of 2017, prices and an upturn in recovery for the property market. particularly in the strongholds of electronics and precision In a surprise announcement, the recent Budget revealed engineering. The Singapore Purchasing Managers’ a hike in the Buyer's Stamp Duty (BSD) rate from 3 per Index expanded for the 16th consecutive month in cent to 4 per cent for residential properties worth more December 2017 to 52.8, a slight dip of 0.1 from its high than S$1 million, beginning end February. in November 2017. In the wake of the en bloc fever over the last year, construction demand is anticipated to rise, However, given positive market sentiments and with the construction sector possibly sourcing out more heightened interest in the residential market, the 1 per industrial production and warehousing spaces to meet cent increase in BSD is unlikely to deter buying demand, the growing demand from upcoming new residential supporting the upward trend witnessed by the Property projects. Price Index for all market segments, which climbed 1.1% year-on-year (y-o-y) in Q4 2017, which was the Moored by active leasing activity, prime grade office rents highest growth seen since Q4 2013. Over 10,600 new have persisted in its route to recovery, with landlords private homes are slated for completion in 2018, with the of Grade A+ office buildings gradually adjusting rents Outside Central Region contributing to more than half of upwards, in view of the limited new supply of prime the upcoming supply. offices projected to come on stream, till 2020. Grade A office space rents increased across several precincts, The retail market, on the other hand, continued to be with the Suntec / Marina Centre precinct witnessing the weighed down by rising business costs and manpower highest growth of 1.7% q-o-q in Q4 2017. The supply- shortages in 2017. Faced with further challenges wrought led demand for ‘flight to quality and efficiency’ for prime by rising competition from e-commerce services and office space is expected to carry through to 2018, as changing consumer expectations, demand for new retail tenants relocate to larger and more efficient floor plates spaces across the board has remained soft, as retailers to fulfil their evolving operational requirements, or right- take a measured approach towards expansion plans. size their spaces by adopting activity-based workplace Despite strong headwinds, prime rents for retail spaces solutions. along Orchard Road have remained resilient, inching up 0.8% y-o-y in Q4 2017. With the shopping belt’s enduring Looking ahead, demand for office space is expected to popularity amongst international retailers, Orchard Road be fuelled by growth drivers on the back of government continues to be a choice location for retailers looking to and private sector initiatives, as the economic prospects establish a brand presence in Singapore. for Singapore in 2018 grow brighter. Danny Yeo Chairman & Group Managing Director Knight Frank Pte Ltd MARCH 2018 - JUNE 2018 • 5 MARKET RESEARCH SYNOPSIS RESIDENTIAL The Property Price Index of all market segments climbed 1.1% year-on- “ year (y-o-y) in Q4 2017, the highest growth seen since Q4 2013. The total 52.7% increase in New Sale, Sub-sale and Resale residential transaction volume also hit 25,010 units for 2017, a 52.7% increase from 2016. The key reason behind the strengthened performance of the private residential market could be transaction volume alluded to the release of pent-up demand from prospective homebuyers amid market expectations that home prices will rise in 2018 following the record land bid prices seen in 2017. Average gross rental yields for the high-end and mass-market segments UPCOMING PRIVATE RESIDENTIAL SUPPLY, declined in Q4 2017 to 2.78% and 3.20% respectively. The decline was BY MARKET SEGMENT, AS AT Q4 2017 the largest for the high-end market segment, with a 0.10% q-o-q drop. Average gross rental yields for the mid-tier market held steady at 3.10% Source: URA, Knight Frank Research CCR RCR OCR in the same quarter. Approximately 10,634 private homes are slated for completion in 2018 12,000 according to Q4 2017 statistics from URA. The Outside Central Region (OCR) will contribute to more than half of this upcoming supply. NO.OF UNITS AVERAGE RESALE PRICES, RENTS AND GROSS YIELDS OF 10,000 PRIVATE RESIDENTIAL PROPERTY, BY MARKET SEGMENT Source: REALIS, (based on data as at 20 January 2018), URA (based on rental contract data as at 20 January 2018), Knight Frank Research AVERAGE RESALE PRICES Q4 Q4 Y-O-Y 8,000 (S$ PER SQ FT STRATA AREA) 2016 2017 CHANGE HIGH-END $1,969 $2,072 5.2% MID-TIER $1,485 $1,549 4.3% MASS-MARKET $ 972 $ 983 1.2% 6,000 AVERAGE RENTS (S$ PER SQ FT STRATA AREA PER MONTH) HIGH-END $4.96 $4.80 -3.2% MID-TIER $4.15 $4.00 -3.7% 4,000 MASS-MARKET $2.73 $2.62 -3.9% GROSS YIELDS (%) HIGH-END 3.03% 2.78% 2,000 MID-TIER 3.37% 3.10% MASS-MARKET 3.35% 3.20% 0 2018 2019 2020 2021 2022 >2022 SINGAPORE VIEW • 6 RETAIL MAJOR UPCOMING RETAIL SUPPLY IN The Singapore retail market continued to be weighed down by rising business KEY PRECINCTS (ABOVE 50,000 SQ FT NLA) costs and manpower shortage in 2017. As retailers face competition from e-commerce services and changing consumer expectations, demand for Source: Knight Frank Research new retail spaces remained soft. Moving forward, landlords and retailers FRINGE AREA DOWNTOWN CORE ORCHARD are expected to further integrate technology into their operations and physical stores to attract shoppers in 2018. REST OF CENTRAL AREA SUBURBAN Rents of prime spaces remained weaker than a year ago. On a y-o-y basis, island-wide prime rents compressed 0.8% from S$30.90 per square foot 1,400 per month (psf pm) in Q4 2016 to S$30.70 psf pm in Q4 2017; with the highest dip in rents experienced in the precinct of Marina Centre, City Hall and Bugis (-5.6% y-o-y) in the same period. Notwithstanding strong headwinds in the retail scene, prime rents for retail 1,200 spaces along Orchard Road remained stable and inched up by 0.8% y-o-y in Q4 2017. This could be attributed to the shopping belt’s maintained popularity, especially amongst international retailers, as the prime location to establish their brand’s presence. 1,000 About 2.7 million sq ft of net lettable retail space for major malls is slated for completion between 2018 and 2021 in Singapore, averaging 0.7 million NETT LETTABLE RETAIL SPACE (’000 SQ FT) sq ft of new retail space in major malls per year. Retail expected to remain challenging for both retailers and landlords in 800 2018. Average rents in the Central Region are envisaged to fall by 3.0% to 5.0% y-o-y, and Suburban region to decline by up to 3.0% y-o-y by Q4 2018. The more resilient island-wide prime rents are likely to see marginal decrease by up to 2.0% y-o-y in the same period. Island-wide occupancy performance is expected to moderate to between 91.0% and 93.0% by Q4 2018. With close to 2.1 million sq ft of nett lettable retail space scheduled 600 for completion in 2018, threats from e-commerce and changing consumer preferences, retailers are expected to still take a selective and measured approach towards expansion plans. Suburban malls that are located near major transport nodes, and supported by a strong captive residents’ market should maintain healthy occupancy. 400 2.1 million“ sq ft of 200 upcoming nett lettable 0 retail space in 2018 2018 2019 2020 2021 AVERAGE GROSS RENTS OF PRIME RETAIL SPACE FOR Q4 2017 Source: Knight Frank Research * Knight Frank revised its basket of prime retail spaces in Q1 2016. ** Prime spaces refer to rental-yielding units between 350 and 1,500 sq ft with the best frontage, connectivity, footfall and accessibility in a mall which are typically ground level of a retail mall and/or the basement level of a retail mall that is linked to a MRT or bus station LOCATION ISLAND-WIDE ORCHARD ROAD MARINA CENTRE, CITY FRINGE SUBURBAN CITY HALL, BUGIS $ PER SQ FT PER MONTH S$30.70 S$35.30 S$29.20 S$24.70 S$28.80 Q-O-Q CHANGE -0.4% NO CHANGE -1.9% NO CHANGE NO CHANGE Y-O-Y CHANGE -0.8% 0.8% -5.6% NO CHANGE -0.1% MARCH 2018 - JUNE 2018 • 7 OFFICE “ Tenants are relocating to larger & more efficient floor plates Generally, there has been a continued recovery of prime grade The ‘flight to quality and efficiency’ supply-led demand for prime office rents with active leasing activity gathering pace.