Many new office buildings pre-leased

A sense of strength is coming back into the property market this year, with the bottom of the cycle possibly closing in. And consumer interest, in both the residential and commercial fronts, are on the rise too.

FraserTOwersWith news of Facebook pre-leasing space at Marina One, the upcoming Frasers Tower in the heart of the Central Business District (CBD) has also received leasing proposals for 30 per cent of its 38-storey office building from various interest tenants. Most were from multi-national conglomerates, legal services, technology firms and a serviced-office provider, The Executive Centre who expressed interest in taking up an entire 20,000 sq ft floor space.

New office buildings are gradually filling up even before they are completed or ready for occupancy. There is however some movement from other existing buildings as tenants take the opportunity to relocate or upgrade, as seen in the mix of tenancy in Marina One and Guoco Tower. Frasers Tower has a 663,000 sq ft of total net leasable area. More new office spaces are currently being developed in the CBD, including UIC Building and the new property which will sit on the site of the previous CPF building. Though office rents have been falling, it may be a good sign after all as the market would have picked up by the time these new buildings are

Singapore gains traction as property investment safe haven

A little red dot, almost invisible in the huge map of the world. But as political and economic turmoil rock the majority, Singapore is increasingly considered by many global investors as a safe haven for foreign funds.

Asia SquareThe strength of the SingDollar, coupled with a relatively stable political climate has provided foreign investors with the assurance that their monies are well-protected. Thus far, $8.85 billion has reportedly been spent by foreign investment on Singapore property, a 62 per cent increase from last year, the highest in 9 years and making up 41.7 per cent of total property spending in 2016. In 2015, the total foreign monies invested in the local property market was $5.46 million and in 2014, $4.67 million. Qatar Investment Authority was a major foreign player this year, putting in $3.4 billion for Asia Square Tower One. Also in the Marina Bay area, a white site in Central Boulevard has been bid on and won by Wealthy Link of IOI properties at $2.57 billion. Projected to be up for sale next year are Jurong Point Mall and Asia Square Tower Two.

Though the commercial property rental market has dulled slightly, the lack of new office spaces being developed within the next 3 to 4 years might help the rental market eventually gain traction. 2020 might be the watershed year when the market is projected to rebound significantly and most investors are willing and able to financially wait out the next few years ahead.

marina-bay-suitesIn the residential market, a number of en bloc sales were successfully tendered this year, with Qingjian Realty’s $638 million for Shunfu Ville taking the spotlight. The sharp increase in interest this year could be the fact that other markets in Asia have been on the upturn in the past decade, and although Singapore has been priced out in terms of capital gains due to an economic slowdown during this time, she has more than made up for lost time with this year’s results.

 

Economic slowdown affects industrial property market

2016 has seen quite a few political shakeups and the economy has been suffering the aftershocks. The  gas and oil market have been slightly flailing, with some companies stripping down to the minimum or moving out entirely hence the pickup for new industrial units or renewal of older leases have been lesser than optimal.

az-paya-lebar-industrial-propertyIn Singapore, industrial property prices and rental demand have declined in the third quarter, in particular sites or units with 30- and 60-year leases. Following the recent Trump win in the US elections, global uncertainty continues as countries question what future moves the newly elected US president in terms of trade agreements. With one of the most fast-moving industries of late begin e-commerce, which may not require as much space as manufacturing, storage and smaller boutique spaces could be the next wave.

Economic analysts say that global trade needs some rejuvenating or the industrial and warehousing sectors may continue to decline. Freehold industrial developments saw the smallest fall in prices of 1.4 per cent while 60-year leases fell 4.7 per cent and 30-year leases, 2.1 per cent. Rental demand is lower than supply and it continues to be a tenants’ market.

jtcinternationalbusinessparkThe only plus is the increase in interest in business park units, with rents expected to increase by 3 to 5 per cent next year. The International Business Park in Jurong East has seen a rise in average monthly rent of $0.10 psf with 25 leases signed in Q3 alone.

In the industrial sales market however, fewer industrial properties exchanged hands as most companies are holding back their expansion plans in lieu of the economic slowdown. Property analysts are expecting a further 5 per cent dip in industrial rents come end of 2016.