Site of former Beach Road police station up for sale

There might be an office or shop space standing in what used to be a police station on a 2 hectare site on Beach road soon.

Duo ResidencesThe 99-year leasehold reserved list commercial site was put up for sale by the Urban Redevelopment Authority (URA) recently and one of the conditions of the sale is that the former police station has to be conserved. It has come up for sale because the minimum bid of $1.138 million has been triggered by a developer-offer.

The conservation status of the former Beach road police station may be a plus rather than a setback despite the conservation and construction costs which may be considerable due to the underground linkway.  The popularity of heritage sites and indie enclaves may mean this site can leverage on its heritage status to market a unique concept. With the current development of DUO in Bugis and South Beach, there is also hope that activity from the upcoming Kampong Bugis area will trickle into market opportunities at the Beach road site.

NLB photo Beach Road POlice Station

Photo credit: National Library Board

The Beach road site has a maximum permissible floor area of 950,592 sq ft and at least 70 per cent of it will be office space, with the rest being retail spaces. In the neighbouring South Beach development, rents stand at $9 psf while those at Marina Bay are at $9.48 psf. With these references, the winning bid is likely to be between $1,400 to $1,700 psf per plot ratio. An estimated 10 bids is expected for the site and tender closes on the 28th of September.

Office occupancy rates increase in major global cities

Work in an office space at the top of skyscraper in New York or in the centre of the Hong Kong Central Business District? Both might cost you an arm and a leg, and perhaps a few more body parts as 4 office spaces in these 2 cosmopolitan cities across the globe from each other have come up as some of the costliest commercial properties amongst 121 markets worldwide. Overall, office space costs have increased 1.9 per cent year on year.

NewYork1NewYork3An office space in Hong Kong West Kowloon topped the list at US$303 (S$420) psf per year. London and New York came next with a unit in London’s West End costing US$214 psf and one in New York’s Midtown at US$203 psf.

While many investors are going for residential properties as they have the potential of doubling up as a home in future, some savvier ones and perhaps those with more cash to spare are also buying up commercial properties. As companies expand globally, capital cities in many countries have found office occupancy rates rising.

The highest rise occupancy cost globally is Durban (South Africa) while Stockholm, Palma de Malloca, Belfast and Amsterdam followed closely. In the Americas alone, Buenos Aires, New York Midtown, Houston and Denver registered the biggest occupancy cost increase. And in the Asia-Pacific, Shanghai, Guangzhou, Bangalore were the biggest winners in terms of office occupancy.

And where is Singapore on the list of the top 100? Number 27 at US$85.02 psf.

Asia-pacific investors offer high bids for London properties

Investors from Asia have shown renewed interest in London properties as they continue to seek out alternatives to stocks and bonds.

The_Leadenhall_BuildingPhoto credit: The Leadenhall Building

2016 saw Britain’s vote for Brexit resulting in just that, and property sales in Central London were at a 5-year low as uncertainty shrouded the country with effects that trickled down somewhat to the rest of the world. Property owners were wary about selling amidst fear that the Brexit might vote might lower property values. Chinese and Hong Kong investors have however been eager to put their bet on commercial properties in London, spending $2.9 billion on central London offices last year alone. It is not surprising since the weaker pound has lost almost 16 per cent against the Hong Kong since Brexit.

The recent sale of the Leadenhall Building, nicknamed the Cheesegrater Tower, by British Land and Oxford Properties to Chinese developer CC Land, run by the Chinese property magnate Cheung Chung-Kiu, for $1.5 billion has spurred on sales of other properties. Office buildings such as Walkie Talkie and 20 Canada Square in the Canary Wharf financial district have since been put up for sale.

20CanadaSquare

Photo credit: Brookfield Properties

Yields in London have continued to hold its own despite the negative atmosphere surrounding  Brexit and landlords of well-leased commercial buildings in prime locations can still look forward to offers from Asia-Pacific investors on the hunt for long-term investments.

 

Strata offices available for sale in centre of town

Rarely do office spaces right in the middle of town come up for sale. Retail spaces possibly. Though mostly for rent. But 15 units on the 7th floor of TripleOne Somerset have just become available for sale in the premium Orchard Road area and response is expected to be keen.

111SomersetPhoto credit: 111Somerset.com.sg

Situated near the Somerset MRT station, the development consists of 2 towers of premium office spaces and a retail podium. It is currently undergoing a $120 million renovation to boost the development’s retail offerings, including future medical suites. Recently put up for sale at $41.56 million as an expression of interest, the indicative price for the 15,683 sq ft space stands at $2,650 psf. The floor on sale is also undergoing refurbishment and will be ready by May this year.

Property analysts are expecting investors to jump on this rare opportunity as properties such as these in a prime location are hard to come by. This could be the first time a space with such calibre in terms of potential is made available in the last 30 years. The space can be used as strata office units or medical suites. Most resale units with similar characteristics are in older, ageing buildings, and even then cost a fortune due to its scarcity.

111SomersetOfficePhoto credit: 111Somerset.com.sg

TripleOne Somerset is a 99-year leasehold building with its lease beginning from Feb 19, 1975, and it calls Gucci, Bottega Venetta, Samsonite and Bell & Ross as some of its many tenants. The rental potential of the space is also tremendous, with monthly office rents at around $8 to $8.50 psf and a gross rental yield of 4 per cent.

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

Positive 2017 outlook for retail and office property sector

Despite falling rents for retail and office spaces, analysts are hopeful for a positive performance from this market segment in 2017.

MarinaOneOfficePhoto credit: www.marinaone.com.sg

The last quarter of 2016 saw office rents falling 1.8 per cent, bringing last year’s decline of rental prices to 8.2 per cent. Rents for retail spaces fell 1.2 per cent in Q4, bringing the total year’s decline to 8.3 per cent. Surprisingly, despite a weakening economy and competition from e-commerce, the demand for retail spaces have picked up. Analysts put the easing of pressure on the retail property market to the development of many flagship stores, large food and beverage clusters and gyms. New retail brands and concepts entering the market meant there were tenants willing to take up larger floor areas in prime spots. That said, almost 169,000 sq metres of retail space will become available this year, and there may still be challenges ahead for this sector.

DuoTower

Photo credit: www.duosingapore.com

In the office property front, following announcements of major tenancy deals such as Facebook taking up prime office spaces in Marina One and similarly Distrii, a co-working operator, at Republic Plaza, the market is beginning to stabilise. New and massive working spaces will however add to the inventory soon, taking Duo Tower in Bugis as an example. It was completed last month and has pushed office vacancy rates to 11.1 per cent. Moving ahead,  property players are expecting office rents to continue softening at least for the first half of the year, though newer buildings such as Guoco Tower and Marina One have enjoyed positive take-up rates last year.

Long-term potential of Commercial property in Singapore

Commercial properties in Singapore still hold a special place in the hearts of investors, if the activity in the market last year was anything to go by.

straitstradingbuildingThere were some massive bulk purchases of prime sites from foreign entities in 2016 and developers were actively buying up land sites. Investors are obviously seeing huge potentials of the commercial property market here. The 43-storey Asia Square Tower 1 for example was sold at $3.38 billion to Qatar Investment Authority’s sovereign fund in June 2016. This record sale by investment firm BlackRock was the largest single-asset and office transaction in the Asia-Pacific region. On a smaller but not any less worthy scale, is the sale of the Straits Trading Building to Indonesia’s Mayapada Group for $560 million. At $3,250 psf, it set a record for psf prices in the district.

Investors from all over the world are spotting the potential for long-term positive growth in this region and in extending their reach in Singapore. Large assets here are of particular interest and 2017 may see more such transactions taking place.

sbf-centerNot only are they investing in completed commercial properties, but also in land with developmental potential, such as a white site in Central Boulevard which was purchased by Malaysian plantation and real estate tycoon, Lee Shin Cheng. This Marina Bay mixed-use site was released under the Government Land Sales (GLS) programme. Though the office rental market has not been in its best form last year, there is hope that it will bounce back up by 2021.

 

Prime Marina Bay site expected to lure aggressive bids

The Urban Redevelopment Authority (URA) has recently released a 1.1 ha prime site at Marina Bay in Central Boulevard. Coupled with news that Asian banks are expected to strengthen their presence in Singapore, this could be an office development site developers hanker after.

Asia Square

Photo credit: www.thehumanbuilding.com

The last time a site at Marina Bay was put up for tender was in 2007 – Asia Square now stands on this site. With the Central Business District location and size of the site taken into consideration, it will no doubt yield a number of plum Grade A offices. Bids are expected to come from mid- to large-sized developers as well as real estate investment funds, at aggressively too, as the site holds the potential for an impressive building with a huge number of units.

Despite the softening commercial sales and rental market, the successful bidder will be likely to have the project completed by 2020, which allows sufficient time for a market upturn. The bid closes on 8 November and investment entities from China and the Middle East may show particular interest. In fact, China’s Nanshan Group is said to be the ones triggering the release of the site as it was originally on the Government’s reserve list and was said to have been released after a developer committed to bidding at least $1.536 billion. But as more buildings are seeing increased levels of commitment from companies looking to stake a presence in Southeast-Asia, developers may have more confidence taking on commercial projects.