SINGAPORE VIEW A COLLECTION OF THE FINEST PROPERTIES & DEVELOPMENTS JUL - OCT 2019 JULY 2019 - OCTOBER 2019 • 1 Contents 05 30 WELCOME 06 MARKET RESEARCH 10 ADVISORY SERVICES 12 57 AUCTION & SALES 44 29 68 38 INDUSTRIAL RESIDENTIAL LOCAL DEVELOPMENTS 30 47 INVESTMENT & CAPITAL MARKETS RESIDENTIAL INTERNATIONAL DEVELOPMENTS 35 70 OFFICE 68 ADVISORY RESIDENTIAL PRIME SALES 36 PROPERTY ASSET MANAGEMENT 70 RETAIL SINGAPORE VIEW • 2 JULY 2019 - OCTOBER 2019 • 3 Welcome The outlook for Singapore’s economic growth abroad are also likely to boost Singapore’s moderated in the first quarter of 2019, amid appeal to investors, coupled with a good uncertainties from escalating trade tensions understanding of the micro market to between China and United States, and the identify market gaps and stay ahead of the slowing demand of electronics due to the curve. It may be a good time for institutional lack of new product lines. The Ministry of investors to restructure their portfolio and Trade and Industry revised its 2019 forecast keep a lookout for rare assets which present for Gross Domestic Product downwards to good value, as sellers are more flexible. range between 1.5 per cent to 2.5 per cent, against its earlier estimate of 1.5 per cent to The uncertainty further compounds the 3.5 per cent as at end last year. challenges faced in the private residential market after cooling measures were Notwithstanding, taking uncertainties in implemented with higher Additional Buyers the external environment may present new Stamp Duties payable since July 2018. We’re opportunities. Trade tensions may benefit seeing a slowdown in sales as it takes longer regional hubs like Singapore, as firms to sell a property and prospective buyers hedge against changes in the geopolitical have become more cautious. Fresh supply environment and look to relocate their coming into the primary market are also regional offices. The ongoing Brexit providing buyers with more options. negotiations and the demonstrations in Hong Kong further divert capital investments I trust you will enjoy our publication. We to Singapore. Backed by political stability welcome your views of the market and are and transparency in business, uncertainties always pleased to share ours. Danny Yeo Executive Chairman Knight Frank Singapore SINGAPORE VIEW JUL - OCT 2019 EDITOR Liew Lixia RESEARCH CONTENT Lee Nai Jia COVER IMAGE The Woodleigh Residence MARKETING Phyllis Goh READ MORE ON PAGE 43 DESIGNER Regina Ang SINGAPORE VIEW • 4 JULY 2019 - OCTOBER 2019 • 5 Market Research Synopsis Landlords and“ retailers are Residential focusing on placemaking and curating social destinations, to The URA Private Property Price Index declined in Q1 2019, with the sellers in the secondary market under Retail attract and engage shoppers. greater pressure to lower their asking prices due to slowing sales. Prices of new projects held up in Q1, and Prime retail rents remained flat q-o-q in Q1 2019, the decline in URA price indices were more reflective despite the increase in tourist spending in 2018 of prices of completed properties transacted in the and the uptick in retail sales in January 2019. secondary market over the same period. Secondary Downside risks remained, as projections of sale transactions in Q1 2019 dropped to 1,623 units economic growth for Singapore were moderated. from 2,165 units in Q4 2018. In contrast, the number of Singapore remained vulnerable to trade disputes new sales declined more moderately than secondary and the slowing global economy. To stay ahead of sales, retreating by 7.4% quarter-on-quarter (q-o-q) to the curve, landlords and retailers are focusing on 1,681 units in Q1 2019. placemaking and curating social destinations, to attract and engage shoppers. We project sales to remain moderate for the rest of 2019 due to the growing mismatch in price expectations Island-wide prime retail rents remained flat between buyers and sellers. Notwithstanding, the q-o-q in Q1 2019. Whilst retail sales improved recent announcement of the Draft Master Plan 2019 OUTLOOK FOR PRIVATE HOME PRICES in January, it is still premature to conclude that may encourage more sales in areas that are earmarked Source: URA, Knight Frank Research the retail sector has turned the corner. Retailers for future development. Additionally, the property price were largely cautious and likely to refrain from index for non-landed properties in the Core Central MARKET ACTUAL PROJECTED overcommitting on higher rents. Prime rents in Region (CCR) is likely to improve or stabilise after the SEGMENT (AS AT Q1 2019) the Orchard Road precinct stood at S$34.50 per announcement of initiatives to rejuvenate the CBD and Q-O-Q Y-O-Y BY END 2019 sq ft per month (psf pm) in Q1 2019, remaining Orchard Road, and the development of the Greater CHANGE CHANGE (Y-O-Y CHANGE) unchanged q-o-q. The lack of new supply within Southern Waterfront. the Orchard precinct helped support prime rents in Orchard Road. Notwithstanding, the uncertain NON-LANDED external environment curbed rents from ISLAND-WIDE -1.0% 2.6% -1.0% TO 3.0% increasing further. Prime rents in the suburban NON-LANDED precinct remained flat q-o-q, in Q1 2019. While -1.8% “ CCR -2.9% -1.0% TO 1.0% prime spaces in the suburban precinct remained The recent announcement of the in high demand, retailers were unwillingly to NON-LANDED -0.2% 5.9% -1.0% TO 4.0% commit higher rents due to the challenging Draft Master Plan 2019 may RCR landscape. The uncertain outlook of the global NON-LANDED economy is likely to weigh on retail sales. Knight encourage more sales in areas - 3.6% -1.0% TO 3.0% OCR Frank maintains its forecast and envisages that are earmarked for future average rents in the Central region to change by LANDED 5.5% development. HOMES 1.1% -1.0% TO 1.0% 0.0% to -3.0 % year-on-year (y-o-y) in 2019. TOTAL SUPPLY OF PRIVATE HOMES, TOTAL SALES, AND URA PRIVATE RESIDENTIAL PROPERTY PRICE INDEX AVERAGE GROSS RENTS OF PRIME RETAIL SPACES*, Q1 2019 Source: URA, REALIS, Knight Frank Research Note: Transaction volume based on caveats lodged as at 1 April 2019. Source: Knight Frank Research * 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 TOTAL UNITS SOLD IN SECONDARY MARKET (LHS) TOTAL UNITS SOLD IN PRIMARY MARKET (INCLUDE EC)(LHS) ALL PRIVATE RESIDENTIAL PROPERTY PRICE INDEX (INCLUDE EC)(RHS) LOCATION ISLAND-WIDE ORCHARD ROAD MARINA CENTRE, CITY FRINGE SUBURBAN CITY HALL, BUGIS 9,000 155 8,000 150 7,000 URA Price Index 6,000 145 5,000 $ PER SQ FT PER MONTH S$30.50 S$34.50 S$29.40 S$25.60 S$28.60 4,000 140 3,000 Number of Units Sold 2,000 135 1,000 0 130 Q-O-Q CHANGE NO CHANGE NO CHANGE NO CHANGE NO CHANGE NO CHANGE Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Y-O-Y CHANGE 0.1% NO CHANGE NO CHANGE NO CHANGE 0.5% SINGAPORE VIEW • 6 JULY 2019 - OCTOBER 2019 • 7 MARKET RESEARCH SYNOPSIS UPCOMING OFFICE SUPPLY (‘000 SQ FT GROSS), AS AT Q1 2019 Office Source: URA (as at Q1 2019), Knight Frank Research 2019 2020 2021 2022 BEYOND 2022 Office rents continued to trend upwards in Q1 2019, on increase in rents, by 3.1% and 2.5% q-o-q respectively, led MARINA BAY / RAFFLES PLACE 180 368 755 1,527 the back of higher net absorption in 2018. For the whole by the higher rents achieved at newer buildings. of 2018, net absorption for the Downtown Core Planning SHENTON WAY/ ROBINSON ROAD / 185 939 437 Area was 1.7 million sq ft, or 63.5% higher than the whole Besides coworking office operators, Singapore continues “ TANJONG PAGAR of 2017. The strong net absorption was led mainly by the to attract multinational companies (MNCs) and overseas Net new co-working, information and communication, and banking start-ups as a base for the set up of regional offices. MARINA and finance sectors. For instance, Lime, a California-headquartered mobility absorption is solutions start-up, recently set up its Asia-Pacific expected to BEACH ROAD / MIDDLE ROAD 273 696 In Q1 2019, the occupancy rates for all precincts in the headquarters in Singapore’s CBD. Central Business District (CBD) decreased marginally continue being ORCHARD 443 by 0.7 percentage-points q-o-q to 97.5%. However, Net new absorption is expected to continue being led by landlords held out for higher rents on remaining or coworking space operators, who are already in advanced led by coworking upcoming available space, due to high market occupancy negotiations for approximately 83,000 sq ft of office space space operators. FRINGE (EAST) 3 130 and limited new supply. As a result, prime Grade office in the CBD in Q1 2019. Notwithstanding, secondary space rents in the Raffles Place/Marina Bay precinct increased from firms relocating to newer buildings will moderate the FRINGE (WEST) 139 312 by 1.5% q-o-q to S$11.15 psf pm in Q1 2019. The Beach increase in rents. Barring any acute economic shocks, Road/Middle Road and Marina precincts saw the largest office rents are expected to increase by 8% to 10%, given the low vacancy levels.