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Revival of CBD Grade-A ofce market

Limited supply next year, an uptick in rents projected

Capital ows from Asia to the West

Asian investors pursuing real estate deals in Australia, the UK and US

Standout simplicity
Architect Ong Ker-Shing has designed a multi-generational family home with a personality of its own


| NOVEMBER 25, 2013



Koh Samui property to launch in Singapore

Jones Lang LaSalle is marketing Samui Beach Properties, a seaside resort development on the Southeast part of Koh Samui on Ban Ham Beach. It is about 25 minutes drive from Koh Samui International Airport. The beach is a quieter and more peaceful part of the island, and attracts mainly couples and families. The resort offers views of the Gulf of Thailand while being near the islands shopping, dining and entertainment districts. It offers 19 condominium units and eight Thai-inspired exclusive villas of about 7,000 sq ft each. Prices of the condos start from US$435,000 ($543,187) and five-bedroom villas are from US$1.5 million. Samui Beach Properties will manage the property throughout the year, with owners allowed to stay for 45 days in standard season. Owners will also enjoy full ownership of the property and a 6% appreciation per annum for 10 years. The property will be launched on the weekend of Nov 23 and is exhibited at The Capella.

Ritz-Carlton Residences, Bangkok makes debut

Thailands leading high-end developer, Pace Development Corp plc, will unveil The Ritz-Carlton Residences, Bangkok at Maha Nakhon in Singapore over the weekend of Nov 23 and 24. Located in the Silom/Sathorn central business area of Bangkok, The Ritz-Carlton Residences at MahaNakhon has 200 residences with prices starting from $1.4 million. Owners will also be able to enjoy the five-star amenities and services of The Ritz-Carlton. In addition to the apartments, the $785 million MahaNakhon mixeduse development also contains the 159-room luxury boutique hotel Edition, under Ritz-Carlton, as well as an upscale retail complex. The 77-storey skyscraper was designed by renowned architect, Ole Scheeren. Sales in the project have already exceeded 60%, with buyers said to be from across Asia. Singaporeans make up 15% of buyers at MahaNakhon so far. The project is marketed by CBRE in Singapore.

EDITOR Ben Paul SECTION EDITOR Cecilia Chow COPY-EDITING DESK Elaine Lim, Evelyn Tung, James Chong, Chew Ru Ju, Tan Gim Ean PHOTO EDITOR Samuel Isaac Chua PHOTOJOURNALIST Bryan Tay EDITORIAL COORDINATOR Rahayu Mohamad DESIGN DESK Tan Siew Ching, Christine Ong, Monica Lim, Nik Edra, Mohd Yusry, Ariff Hussin ADVERTISING + MARKETING HEAD | Edward Stanislaus GROUP SALES MANAGER | Cecilia Kay SENIOR MANAGERS | Adrian Kwek, Windy Tan MANAGERS | Charis Liang, Jack Lin INTEGRATED MARKETING - MANAGER | Jeffrey Wong DIGITAL MARKETING ASSISTANTS | Tim Jacobs, Althea Teng COORDINATOR | Nor Aisah Bte Asmain CIRCULATION MARKETING SENIOR MANAGER | Sivam Kumar EXECUTIVE | Judy Wang OPERATIONS ASSISTANT MANAGER | Cesar Banzuela De Jesus, Jr EXECUTIVES | Gerald Aw, Joey Ang CORPORATE | Edward Stanislaus CORPORATE AFFAIRS DIRECTOR | Ng Say Guan

Retro bungalow on Dyson Road up for sale for $24 mil

A bungalow sitting on a 13,400 sq ft freehold site along Dyson Road will be put up for auction sale by Jones Lang LaSalle on Nov 28. The two-storey bungalow was built in the late 1970s or early 1980s, and designed by the owners in collaboration with the architect. It is believed to be the family home of an Indonesian permanent resident. The house is vacant as the family has moved abroad. The property has a retro design, with an outdoor terrace overlooking a heart-shaped swimming pool, landscaped garden and water feature. The house contains a split level living room, family area, dining room and kitchen, a Japanese style room, as well as a guest bedroom with en suite bathroom on the first level. The second level contains four en suite bedrooms, including a master bedroom with en suite bathroom and walk-in wardrobe. The house has spacious rooms and bedrooms, and is located in an established landed housing estate which is accessible from Dunearn Road via Chancery Lane, Thomson Road via Jalan Merlimau and Whitley Road. It is within a short drive to Orchard Road and the CBD. The guide price for the house is $24 million.

Duos residential units 87% sold

Sales at Duo Residences, the first of two integrated developments by M+S Ltd, had reached 87% of its 660 units as at Nov 18. The preview, which started on Nov 13, attracted more than 2,000 prospective buyers. The 49-floor residential tower was selling at an average of $2,000 psf, with the highest price hitting $2,600 psf. Singaporeans accounted for about 70% of buyers, Malaysians at 14% and other nationalities making up the rest. Prices began at $902,000 for a studio apartment. M+S Ltd is 60%-owned by Khazanah Nasional Bhd and 40%-owned by Temasek Holdings. It was set up in June 2011 to develop four land parcels in Marina South and two land parcels in Ophir-Rochor as integrated developments Marina One and Duo respectively.

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The Venue Residences and Grandview Suites received slow or mixed response. In the central region, only two projects were launched: the Goodwood Grand, which saw one unit sold out of the 10 released; and the 81-unit Liv on Wilkie, which sold 24 out of the 40 units released. Sales volume improved by 65.3% m-o-m to 81 units. In November, developers are launching their projects aggressively to secure sales before the year-end festivities kick in. As such, Chia foresees new home sales to spike in November, only to ease in December. Despite the impact of the total debt servicing ratio, buying sentiment remains positive, judging from the strong response to Duo Residences and Alex Residences, she adds. Chia is projecting new home sales in November to ring in at about 1,300 units.

and is located on Choa Chu Kang Drive. With a maximum GFA of 574,389 sq ft, it can yield 535 units.

Luxury home prices in Asia continue to grow

CBRE found that luxury residential prices in 10 major markets in Asia grew by 1.4% y-o-y, according to its Asia Luxury Residential Market View for 3Q2013. In Beijing, prices grew by 8.6% quarter-on-quarter (q-o-q) owing to a prolonged approval process for high-end residential projects. This was despite repeated measures to curb property prices. Prices in Shanghai, Guangzhou and Shenzhen also recorded steady price growth owing to upgrading demand. Overall luxury residential rents slid 0.4% q-o-q. In Shanghai, the end of peak expatriate leasing season saw landlords revise their rents downwards. CBRE believes authorities will continue to monitor price movements in residential property markets where cooling measures are already in place. Compiled E by Jo-Ann Huang

New-home sales continue to soften

October saw new-home sales by developers decline by 19% month-on-month (m-o-m) to 1,009 units. This is amid a launch of 1,124 new private residential home units (excluding executive condos), which is down by 37.8% m-o-m. For the suburban areas, primary sales activity improved despite limited major launches. Sales improved 87.4% m-o-m to 716 units, supported by the performance of the 396-unit The Inflora (388 units sold last month), says Chia Siew Chuin, director of research and advisory at Colliers International. The launches of the 186-unit Nine Residences (96 units sold) and landed property Luxus Hills helped support sales. In the city fringe, only small andmid-scale projects such as Ritz@Farrer, Centren,

Four residential land sites to be launched for sale

HDB and URA will launch four residential sites in November as part of the 2H2013 government land sales programme. The four sites will yield a total of 2,350 residential units. The first site is located at Upper Paya Lebar Road, beside the upcoming Bartley Ridge and Bartley Residences condos. It has a maximum gross floor area (GFA) of 605,130 sq ft and can yield 670 units. The second site is an executive condo (EC) site located on Canberra Drive in Yishun, which can yield about 600 units. The third site is also an EC site and located on Anchorvale Crescent in Sengkang. With a GFA of 525,714 sq ft, the site can yield about 646 EC units. The fourth site, also an EC site, is sitting on the Reserve List,

In the story New Yorks Blackhouse to open office in Singapore (City & Country, Issue 601), it was said that Chan Soo Khian is the design architect for Soori High Line. Chan is principal design architect and his development company, Oriel, is the majority owner and co-developer of Soori High Line. The latter is the second development of the Soori brand, the first being Chans Alila Villas Soori in Bali.



| NOVEMBER 25, 2013


New wealth created in Asia drives purchases in the US, UK and Australia

t looks like the weight of capital has shifted, and for the first time since 2007, theres a net capital outflow from Asia. In 1H2013, capital inflows into Asia-Pacific totalled US$6.7 billion ($8.34 million), while capital outflows from the region were close to double at US$12.6 billion, according to Savills Research and Real Capital Analytics (RAC). The pendulum has swung, says Chris Marriott, Savills managing director for Singapore and CEO for South East Asia. Its definitely unprecedented, and its fair to say that theres a hunt for value. A lot of new wealth has been created in Asia, with high-net-worth individuals focusing on a blend of trophy assets in key global cities, notes Craig Ward, Savills senior director of regional capital markets. National pensions and insurance groups in Asia are chasing to secure core assets with long-term income at optimum yields. Meanwhile, developers are focused on key development sites in Asia-Pacific or joint-venture opportunities in the West, he adds. That has led to about US$4.865 billion from Asia making its way into the UK in 1H2013. Another US$6.95 billion of capital has flowed into the US, according to Savills Research and RAC. The three biggest Asian investors into the US and UK real estate segments were: mainland Chinese, which accounted for 29.4% of capital outflow; South Koreans (20.3%); and Singapore groups (17.5%). (See tables in CC5). While investment in the Singapore market has been strong in the last 12 months, the property cooling measures, strong Singapore currency coupled with low interest rates, have also resulted in the right fundamentals for investing abroad, adds Ward. Foremost on the shopping list for Singapore players are Australia, London, and key cities in the US, where deals have certainly accelerated in the last few months. And the pace is not expected to slow anytime soon, he adds.

ft office building on its behalf. Tenants in the tower include US Bank, as well as law firms Barger & Wolen LLP and White & Case LLP. Recently, Singapores sovereign wealth fund GIC was said to be part of a group thats buying New York Citys Time Warner Centre, the headquarters of global media group Time Warner Inc, located in front of Central Park. In October last year, GIC invested in the 30-year old San Francisco office tower, 101 California St, which was valued at US$900 million. Besides commercial buildings, Singapore groups have also been drawn to the luxury condo segment in New York. For instance, the Kwee family of privately-held property group Pontiac Land Group announced a US$300 million investment for a controlling stake in a prime development site adjacent to the Museum of Metropolitan Art in Manhattan, New York, jointly with Hines and Goldman Sachs Real Estate. The site will be developed into an ultra-luxurious 145-unit high-rise condo designed by renowned architect Jean Nouvel. Its the groups first acquisition outside Asia. A syndicate of Asian banks DBS, OCBC, Maybank and UOB is providing US$860 million in financing for the construction of the US$1.3 billion project. Focusing on distressed sales is Singapore Catalist-listed SingHaiyi Group, which announced on Nov 19 that it had acquired a partially completed commercial condo development called Vietnam Town, located in San Jose, Santa Clara County, California. The property was purchased at an auction for a total consideration of US$33 million. The project is a 256-unit development in nine buildings sitting on several parcels of freehold land totalling 853,502 sq ft. This acquisition was preceded by the US$45 million purchase of the Tri-County Mall, a double-storey shopping mall in Springdale, a northern suburb of Cincinnati, Ohio in September.

Suntec REIT made its first acquisition of a Grade A office block in the northern CBD of Sydney

London a hot spot

London has emerged as a popular investment destination not just for individual Singaporean investors, but among listed property groups as well. Early this month, property developer Oxley Holdings announced that it is investing 200 million ($400.9 million) to purchase Royal Wharf, in east Londons docklands. Its the citys largest development opportunity to come on the market this year, as well as the single largest investment by a SinHIAP HOE

California, New York beckon

Singapore-listed group OUE Ltd controlled by Indonesian tycoon Stephen Riady, started the ball rolling when it paid $459 million to purchase the 73-storey US Bank Tower in downtown Los Angeles, the tallest building in California. In July, OUE engaged Hines, an international real estate firm, to manage the 1.43 million sq

gapore group to date. It also marks Oxleys maiden foray into the UK. The plan is to develop the 40-acre site into a new mixed-use scheme with 3,400 homes, commercial, retail and education components. Sticking to prime Central London is listed property giant City Developments Ltd (CDL) controlled by property tycoon Kwek Leng Beng. CDL announced in September that it had purchased a freehold site in the prime Knightsbridge area, in Pavillion Road, near Harrods for 80 million. It was CDLs real estate groups first foray into the UK market, and it is planning to redevelop the site. Singapore-listed property developer Ho Bee Land is no stranger to London, having first ventured into the city in 1996. Since then, it has re-focused on the Singapore market, and forged a name for itself as a first mover in the upscale waterfront enclave of Sentosa Cove. However, starting from last year, Ho Bee began investing abroad again. The developer scooped up four sites in Australia, three of which are in the Gold Coast and one in Melbourne. This was followed by its latest purchase in London this year Rose Court, a 157,406 sq ft commercial building with office and ancillary accommodation located at 2 Southwark Bridge Road. Sitting on a freehold site, the property had been let to the Secretary of State for Communities and Local Government until Sept 28, 2018 and will be held as a long-term investment, according to Ho Bee in a statement. The company paid 67.2 million for the property. Savills is believed to have advised on the purchase.

Strong interest in Australia

A major retail and office complex, 206 Bourke Street is one of three assets in Melbourne acquired by listed Hiap Hoe Ltd

Among Singapore groups, interest in Australia, especially from a development perspective,

has been strong, notes Ward. Besides Ho Bee, other listed niche developers that have ventured into Australia for the first time include Hiap Hoe Ltd, which acquired three assets in Melbourne: 6-22 Pearl River Road, 380 Lonsdale Street and 206 Bourke Street in September. The group says it plans to either enhance or develop the assets into quality mixed-use developments. Meanwhile, listed construction group Chip Eng Sengs subsidiary, CEL Australia, is developing Tower Melbourne, a A$170 million ($199 million), 71-storey residential tower with 555 apartments and townhouses, and was recently crowned the tallest tower in the Melbourne CBD. This is CEL Australias second project in Melbourne. Its first was the 388-unit 33M, located on Mackenzie Street and completed in October 2012. Melbournes commercial property has been popular among Asian investors. Savills is said to have brokered the sale of 15 properties worth A$239 million in Melbourne over the past 10 weeks alone. Of these, 12 were sold to Asian investors, including those from Singapore, Hong Kong, mainland China and Taiwan. Sales to Asians include Victoria Universitys 300 Flinders Street campus to Singapores Hotel Grand Central for A$48.5 million; Hiap Hoes purchase of 380 Lonsdale Street for A$43.8 million; and the sale of 472 Bourke Street for A$15 million to a group of investors from Hubei Province in China. Even Singapore-listed Suntec REIT announced its first overseas acquisition, a 100% interest in a freehold land and property in the North Sydney CBD on Nov 15. The site will be developed into a 31-storey Grade-A commercial tower with a total net lettable area of 423,915 sq ft for a total of $413.19 million. The site is on a prominent junction of Pacific





ment towers and one office block. Part of the scheme includes the delivery of 2,250 affordable housing units. Making its mark in San Francisco is giant Chinese developer, China Vanke, which has tied up with Tishman Speyer to co-develop two luxury condo towers containing 655 units. Called LUMINA, the luxury condo scheme will be designed by award-winning architect Bernardo Fort-Brescia of Arquitectonica. In one of the most significant deals in London this year, Chinas leading life assurer, Ping An Insurance, purchased the Lloyds of Lon-

don Building for 260 million in July. Savills is said to have represented the seller, German fund Commerz Real, in the deal. In June, Chinese developer Advanced Business Park, announced it was investing 1 billion in the Royal Albert Dock to develop a 14 ha site into a mixed-use scheme containing offices and shops targeted at Asian companies. Not to be outdone, Dalian Wanda Group, controlled by Chinas richest man, Wang Jianlin, announced in July that the group will spend 700 million to build a luxury hotel at the Nine Elms regeneration site along the south bank of River Thames. The new project will

occupy a 20,000 sq m (215,280 sq ft) site and is part of a larger mixed-use site of 1.13 million sq ft in One Nine Elms at Vauxhall. Planning permission has been given for two towers of 45 and 60 storeys. Investments by Chinese groups have certainly been strong in the last six months, says Ward. And now, Asian investors including those from Singapore are looking beyond London, to other cities in Europe. And in the US, they are starting to look at other cities as well. From an institutional perspective, they need to diversify, as theres yield compression E in some of the key cities, says Ward.

Ward: Among Singapore players, Australia, London, and key cities in the US have been foremost on their shopping list so far

Highway and Berry Street. The property is already 100% pre-leased, with one of Australias largest building, construction and property development groups, Leighton Group, taking up 76% of the space for its corporate headquarters over a period of 10 years. Another property group which recently announced its first acquisition outside of Singapore and Malaysia is the city-states biggest privately held property developer Far East Organization. On Oct 31, Far East announced it had signed conditional contracts to purchase the Clocktower Square complex in Sydney for A$72 million and Harbour Tower Centre in Perth for A$205 million as part of its growth and diversification strategy. Singapore-listed Chinese resource company Bright Ruby has also been actively scouring for a commercial buildings since the start of 2013. It acquired 231 Elizabeth Street in Sydneys CDB for A$201 million in March. Savills was said to be the selling agent for the office building in Elizabeth Street.

Chinese investors in landmark deals

Chinese investors have been some of the biggest investors in the US and the UK, snapping up trophy office buildings, mixed-use development schemes and high-rise apartment projects. In October, JPMorgan & Co sold its 60-storey tower, 1 Chase Manhattan Plaza in Manhattan, to Shanghai-based Fosun International, controlled by billionaire Guo Guangchang, for US$725 million. That same month also saw Chinese developer, Shanghai-based Greenland Group, take a 70% stake in the US$5 billion mixed-use project Atlantic Yards, located in Prospect Heights, Brooklyn, New York. The new scheme on a 22-acre site is expected to have 14 to 15 high-rise apart-

Asias wealth goes to the West


US UK France Others

1H2013 6,951 4,865 469 296


1Q2013 3,395 3,606 395 69


China South Korea Singapore Australia Malaysia Hong Kong Others

1H2013 3,697 2,554 2,204 1,234 1,189 1,175 528

1Q2013 1,660 2,136 2,002 128 759 641 139

29.4 20.3 17.5 9.8 9.5 9.3 4.2



| NOVEMBER 25, 2013



View of the garden and 20m mineral water swimming pool from the attic level of the house at Belmont Road

Standout simplicity
Architect Ong Ker-Shing has designed a multi-generational family home with a personality of its own

ng Ker-Shings first project was to design a multi-generational home in the Good Class Bungalow (GCB) neighbourhood of Belmont Road. Her first client was her grandfather, businessman S P Tao, founder and chairman of the privately held Shing Kwan Group, as well as former chairman and major shareholder of listed property group, Singapore Land Ltd, from 1973 to 1990. Her grandfathers request was for a house with a modest and unassuming faade, especially when viewed from the street. This ran contrary to the aspirations of the young designer, who harboured ambitions of designing something that stood out, recounts Ong, 38, director of design consultancy Lekker Design, which she co-founded with her husband, Joshua Comaroff, in 2002. She stuck to her grandfathers brief and designed a simple double-storey faade with a sloping roof that is almost like a barn when viewed from

the front. As her grandparents loved the simplicity of their original bungalow sitting on a sprawling 26,455 sq ft freehold site, Ong decided to build the new house based on the memories of their former home. The new house sits on the footprint of her grandparents former home. And like the old house, the new one has a clear demarcation between public and private spaces. The first level has been designated the public area, with the main living room, dining room, and an adjacent sitting room that can be turned into a cigar room or mah-jong room, opening out to a courtyard, the swimming pool and garden. The first level also has a powder room, a gym, pantry and storage area, as well as the maids quarters. The main living, dining and adjacent sitting rooms on the first level were designed as big open spaces, which allow flexibility of use, and are ideal for those who like to entertain. We come from a very big family, and we used to have a lot of parties in the old house, recalls Ong. And this was the communal area where we used to gather.

The second level is like a self-contained house by itself. It has a giant master suite with a massive bedroom, a study, walk-in wardrobe, and two bathrooms (a larger master bathroom with a double sink vanity top, bathtub, shower and water closet; as well as a smaller one with a water closet and basin). Theres also a living room and home entertainment room on this level. On the topmost floor or attic level is a junior master suite and three bedrooms with en suite bathrooms. There is another family room on this floor, which can also be used as a childrens playroom. Even though the house has many levels, it has an open floor plan, which allows interaction even if family members are on different floors. Banks of windows on both sides of the house allow cross-ventilation and bring the outdoors in. The rooms that face the garden and swimming pool on the upper floors are all designed with bay windows and window seats of Chengal wood, so people can sit and enjoy the view.

The house was intentionally designed to look modest and unassuming from the street

Public and private areas

To demarcate the private family rooms from the public area, Ong played with different materials and textures. For instance, the second and attic levels have flooring of Burmese teak, which lends the rooms warmth, and clearly indicates that you are entering a zone reserved for members of the family. As for the public spaces on the

first level, the flooring is of textured concrete, with walls of polished concrete tiles from Australia. The materials used for the exterior spaces are a mix of concrete, granite and volcanic stone. Most of the walls of the house are at least 1m thick, and some are double walls with an air gap to keep the interior cool. Upon entering the house from the



Government unlocks more land for future growth


The main house has 12 rooms and together with the pavilion, has a built-up area of about 11,000 sq ft

The pavilion overlooking the garden is designed as a standalone house with a bedroom and en suite bathroom, a living room, pantry and separate maids quarters

The main house is designed with a broad staircase running right through the centre of the house, with a standing wash basin as a central feature

front entrance, one is greeted by a broad staircase running through the centre of the house, all the way to the swimming pool area. This is because the site has a 9m slope from the front to the rear garden. The concrete staircase is inlaid with timber, which adds a nice touch when people walk down as it leads them to the main area of the house, says Ong. The most memorable feature, however, is the free standing wash basin right in the centre of the house. Its inspired by the one at Villa Savoye, which is a symbol of ritual cleansing. The Villa Savoye, located in the outskirts of Paris, is one of the most celebrated modernist villas designed by Swiss architect Le Corbusier. The tap is ceremonial, explains Ong. When you walk in, you can wash your hands, and its almost like washing your cares away. The swimming pool is a 20m mineral water pool with a depth of 2.8m. Theres a shallow end of about 1.2m along the perimeter of the pool, which is ideal for sunbathing or for children to play on. Black grey mosaic tiles were chosen for the swimming pool. On a sunny day, the swimming pool looks almost dark green, which is more natural than a bright blue, says Ong. She also built a changing room with shower facility, water closet and wash basin next to the swimming pool.

Unassuming from the front, imposing from the rear

The house may have been designed to look humble from the front, but its an imposing house when viewed from the rear garden. In addition to the main house, theres a pavilion, which has been converted into a standalone single-storey guest house. The guest house contains a bedroom and en suite bathroom, a large living room with pantry, a laundry room, as well as a separate maids quarters (with two bedrooms and a bathroom). The property is sizeable with a total floor area of 11,000 sq ft, which includes the main house and guest house. The site is big, and the house is ideal for several families living under one roof, says Ong. Many of the briefs for Good Class Bungalows these days are for the design of a home suited for multi-generational living. Ong also designed the landscaping. The guest house has a green roof and the garden is a geometric lawn with trees all around for privacy. Its also a great place for children to run around and explore, she adds. The house was completed in 2009 but Ongs grandparents never moved in. Her grandfather was 93 at the time. They are quite elderly, she concedes. And when they realised that they couldnt quite manage the stairs, they never lived here. The property had been leased over

the last few years, and its now on the market for sale by private treaty. Samuel Eyo, director of Savills Prestige Homes and Phillip Ng, associate director of investment sales at Savills are the marketing agents for the property. The indicative price for the GCB in Belmont Road is $39.68 million, which translates into $1,500 psf. If one were to tear down the existing structure and build a brand new 10,000 sq ft house, the land together with construction cost would work out to at least $1,800 psf or $48 million, estimates Eyo. One street away at Leedon Park, a vacant GCB plot of 21,388 sq ft recently fetched $36.88 million ($1,724 psf), he points out. The property at Belmont Road at the current price presents value for money, he adds. The design of the house appeals to tycoons who value privacy, and want a home that is understated, adds Eyo. It also appeals to those who prefer a large GCB plot with the flexibility of building their own extended family home. It should be attractive to new ultra-high-net-worth Singapore citizens who want to set up their primary residence in the city-state. We remain positive on the GCB segment owing to the scarcity of large plots of at least 25,000 sq ft, says Ng. There arent many such sites on the E market today, he adds.

RA released its Draft Master Plan for 2013 on Nov 20. Through URAs urban planning efforts, the government aims to provide new housing areas in Bidadari, Tampines North and Punggol, while established towns such as Sembawang, Yishun, Hougang and Choa Chu Kang will be rejuvenated with new homes, providing options for those who prefer to live near their families. It will also set aside land to bring jobs closer to home, reducing commuting time and easing congestion during peak hours. It will continue to grow regional employment centres such as Jurong Lake District, Tampines Regional Centre and Paya Lebar Central, while establishing new growth areas such as Woodlands Regional Centre and the Punggol Learning Corridor. To top it off, the government intends to build more green spaces such as nature areas and parks to provide a lush living environment, as well as conserving more than 70 buildings to protect a piece of Singapores history. Holland Village, Jalan Kayu and Serangoon Garden will be enhanced to improve on their unique charm, with Holland Village given a new extension that includes new public spaces and mixed-use developments. The rail network will also be expanded, doubling from the current 178km to around 360km by 2030. Desmond Sim, associate director of CBRE Research, says the master plan has managed to identify new pockets of land across all parts of the island to meet commercial and residential demand. The projected 9,000 residential units reinforces the live, work and play concept that the planners have long envisioned for the

downtown CBD, says Sim. The government is also dedicating an area of the Woodlands Regional Centre to small and medium-sized enterprises (SMEs). This is a signal that the government has taken into consideration the needs of local entrepreneurs, says Sim. He adds that the government is attempting to defray operational costs for SMEs through decentralisation. Most importantly, this draft Master Plan is deemed to be less technical and more holistic. It is gratifying that the plan is not just about intensifying and maximising economic value of land, says Sim. Rather, it is geared towards the development of communities, and at the same time, concerned about preserving heritage and unique attributes of certain estates, he continues. Nicholas Mak, executive director of research and consultancy at SLP International, notes that owners of ageing condos who were hoping that the government would increase the plot ratios of their properties under the new Master Plan may be disappointed. Based on our sample of 22 private residential developments that were either launched or sold via en bloc sales in 2013, there is no increase in the plot ratio of these properties in MP 2013, he says. Interestingly, the plot ratios of two of these properties, Hillview House and Lam Soon Industrial Building, were reduced from 1.92 in the Master Plan in 2008 to 1.62 in the Master Plan in 2013. One possible reason that the government did not increase the plot ratios of many residential properties with en bloc sale potential is to prevent another round of en bloc sales, which could lead to another upward spiral of private home E prices, he adds.

The government intends to build more green spaces such as nature areas and parks to provide a lush living environment


| NOVEMBER 25, 2013


CBD Grade A office revival on the cards


eading online hotel and accommodation reservation company, Booking.com, recently took up 45,000 sq ft of office space in the crystalline blue 46-storey Marina Bay Financial Centre (MBFC) Tower 3. Its considered the largest office leasing deal in 4Q2013 to date, and the deal is said to be brokered by CBRE. With most pockets of space either under negotiation or leased, the 1.3 million sq ft building is almost full, says Moray Armstrong, CBREs executive director of office services. MBFC Tower 3 was completed sometime early last year, and it was the last of three office towers offering a total space of three million sq ft to come on stream within the mega mixed-use scheme, which includes two high-rise condominium towers and an underground shopping mall. The project is located in the heart of the Marina Bay downtown and is jointly developed by Cheung Kong (Holdings), Hongkong Land and Keppel Land. Asia Square Tower 2, the sole new Grade A office scheme in the Marina Bay and core CBD area to be completed this year, obtained its temporary occupation permit (TOP) in early September. The tower has 782,280 sq ft of office space, and the 305room, five-star Westin Hotel, which opened last week, according to Asia Squares project director, Mark Rada, in a statement on Nov 19. The tower is now 46% committed, with tenants such as Allianz, Swiss Re and National Australia Bank. Asia Square Tower 1, with close to 1.3 million sq ft of space, was completed two years ago, and is about 90% leased to date, with anchor tenants such as Citi, Google, Lloyds of London and Royal Bank of Canada. With MBFC Tower 3 now close to 100% leased, and Asia Square Tower 2 about half full, there is a greater focus in the CBD going into 2014. Grade A office rents, which stood at $9.55 psf per month at end-3Q2013, will likely increase by about 2% to round off the year at about $9.75 psf per month, according to CBRE. The needle is finally going to move, says Armstrong, and by the end of this year, were going to see an upward trend in Grade A rents. Despite the uptick, Grade A office rents are still hovering at 5% below the 10-year average, he adds. Over the next two years, the Grade A office segment is expected to be more vibrant, with a 4.7% increase in average rents to $10 psf per month by end-2014, and a 12.5% increase to $11.25 psf per month by end-2015.

The two towers of Asia Square (left) and Marina Bay Financial Centre office towers (right) make up the newest premium office space offerings in Marina Bay

And its not just new developments that are benefiting from a strengthening of demand. The second hand space has also seen vacancy rates falling off sharply. At the start of 2013, there was about 282,000 sq ft of vacant second hand space in the CBD following relocations by major tenants to the newly completed buildings in Marina Bay or in the decentralised areas of one-north and Changi Business Park. That figure has since dropped to about 92,000 sq ft as at end-3Q2013, according to CBRE. The overall vacancy rate at Raffles Place is now hovering around 5.1% as at end-3Q2013, while at Marina Centre, its less than 2%. In Shenton Way and Tanjong Pagar, vacancy rates are at 4.9% and 4.8% respectively. In Marina Bay, the vacancy rate was 12.4% as at end-3Q2013, which is a statistical anomaly, arising from the completion of Asia Square Tower 2, which at that point in time was only about 30% leased, points out Armstrong.

Inflection point
The Grade A office market is now at an inflection point, and poised for an upturn, pronounced CBREs Armstrong. In terms of new supply, only one Grade A office tower is set to come online by end-2014 in the core CBD area, and thats CapitaGreen, a redevelopment of the former Market Street Car Park located at the corner of Market Street. The project, which is said to have a total development cost of $1.4 billion, is jointly developed by CapitaLand (with a 50% stake), CapitaCommerCBRE RESEARCH

Grade A office space pipeline (sq ft)


2013 2014 2015 2016 2017 Total

0 700,000 0 2,385,280 1,073,480 3,085,280

37,000 527,450 70,650 1,420,000 0 2,055,100

1,131,090 736,400 195,755 0 500,000 2,063,245

1,168,090 1,963,850 266,405 3,805,280 1,573,480 8,777,105

cial Trust (40%) and Mitsubishi 92,570 sq ft at Nexus, and was Estate Asia (10%). 90% leased last quarter. Designed by renowned JapOne@Changi City, which conanese architect Toyo Ito, 55% tains 650,000 sq ft of business of CapitaGreens faade is dedspace catering to financial backicated to a vertical garden. The end operations, high-tech busi40-storey tower will have about nesses and data and software 700,000 sq ft of premium-grade companies, officially opened in office space, where average floor August, and over 90% leased. plates are about 22,000 sq ft. Anchor tenants in the nine-stoCapitaGreen is well-positioned rey building jointly developed to take advantage of the tightby Ascendas and Frasers Cenening supply and fewer array trepoint include Credit Suisse, of options, says Armstrong. I JP Morgan and EMC. think it [CapitaGreen] will be at Most of the excitement and the forefront for [the] majorianchor tenant deals had been foty of occupiers who are looking cused in out-of-town locations, for Grade A space over the next says Armstrong. In a way, it is couple of years. a supply-led phenomenon which In the fringe of the CBD is brought online quality decentralSouth Beach Tower along Beach ised commercial space which Road opposite Raffles Hotel, which had hitherto been very limited. is expected to contain 527,436 Armstrong: I think in the next cycle, there is likely The CBD, on the other hand, sq ft of office space. It is set to to be more representation from local and Asia-Pahas seen a dearth of large comcome online sometime towards cific conglomerates as well as financial institumitments by anchor tenants over the end of 2014 or early 2015. A tions. There are real grounds for optimism. the last 18 months. The main demixed-use scheme, South Beach mand driver of Grade A office is jointly developed by City Devel- when completed in 2017. Meanwhile, space in the CBD has traditionally opments and Malaysias IOI Corp. in the core CBD, Frasers Centrepoints been the financial services sector. It will also contain luxury residenc- redevelopment of the former Telok However, the banking sector has Ayer Performing Arts Centre at the been sidelined over the past year, es and a five-star hotel. Armstrong is quite optimistic corner of Cecil Street into a new pro- with demand driven by companies about the outlook of the Grade A of- ject with 720,000 sq ft of office space in the oil and gas sector, and profice market in the core CBD, as the is expected to be completed some- fessional services, law firms, insurnext influx of new supply will only time in 2017. ance groups, pharmaceuticals and The biggest core CBD completion information technology companies. come online sometime in 2016 to 2017. For instance, UICs V on Shen- is Marina One by M+S, which will Thats a testament to the growing ton mixed-use scheme with a 290,000 have two office towers yielding 1.88 maturity of the Singapore economy, sq ft office tower is scheduled to be million sq ft of premium office space explains Armstrong. Its not a one completed in 2016. Meanwhile, in in Marina Bay by 2017. Thats the trick pony, where the economy is the CBD fringe, DUO Tower, devel- big whale, says Armstrong. driven mainly by the financial seroped by M+S (a joint-venture bevices sector only, but by a range of tween Singapores Temasek Holdings Re-centralisation? growth sectors, and that in aggreand Malaysias Khazanah Nasional) The Grade A office supply this year gate, is very encouraging. and located in the Beach Road-Ro- was mainly concentrated in the deIt is still early days, but a number chor Road area, is scheduled to be centralised areas, such as Metropolis of Asia-Pacific financial institutions completed in 2017. It will have about Tower 1 (550,499 sq ft) at one-north are starting to look at new prem500,000 sq ft of office space. in Buona Vista by developer Ho Bee ises in the CBD, adds Armstrong. In Tanjong Pagar, the most an- Land, which was 95% leased upon Quite often in the previous cycles, ticipated large-scale development is completion at end-3Q2013. Mean- demand is driven by US and EuropeGuocoLands $3 billion mixed-use while, Ascendas REITs Nexus@ an banks. I think in the next cycle, scheme, Tanjong Pagar Centre. The one-north, which contains a mix of there is likely to be more representaoffice scheme within the project is business park and office space with tion from local and Asia-Pacific conthe 38-storey Guoco Tower, which a total net lettable area of 227,842 sq glomerates as well as financial instiwill inject 850,000 sq ft of Grade A ft, was also completed in September. tutions. There are real grounds for E office space into the neighbourhood The office component accounted for optimism.





Is Iskandar Malaysia overpriced?

Iskandar Malaysia a secular change
Secular bull property prices come about only after there has been a structural change in the economy and point to strong long-term directional moves while cyclical trends represent short-term movements around the primary trend. Iskandar Malaysia (IM) was identified as one of the key catalysts and high-impact developments under the Ninth Malaysia Plan in March 2006. Progress was relatively slow over the period of 2006-2010 but since end-3Q2011, we have seen accelerated progress in IM with closer ties and a better working relationship with Singapore. Our analysis of average land prices in Johor Baru versus the Johor House Price Index (HPI) from 2006 to 1Q2013 reveals that Johor HPI rose from 2Q2011 and average land prices started rising from 2Q2012. In the chart, the land prices of Nusajaya are grouped under Pulai district. Based on recent sale and purchase agreements signed, the latest transaction in Puteri Harbour was RM334 psf (April 2013) compared with RM180 psf in April 2010. In Medini, the latest land transaction was close to RM250 psf ($97 psf). Over in Singapore, the last residential transactions (URA land sales) recorded in Jurong East, Jurong West and Woodlands were $705 psf, $652 psf and $367 psf respectively.

Average Land Price and Johor House Price Index

250 RMpsf JB City Pulai Pelentong Tebrau Johor HPI
Price Index



Most conversations about Iskandar Malaysia (IM) revolve around three related topics. One, the launch price of residential properties and land prices have doubled in the past two years. Two, the huge supply of completed residential units that will come into the market in the next two to four years from projects launched in the past two years. And, lastly, what is the impact of the cooling measures announced in the recent budget and other specific measures contemplated by the Johor government. Although we have also seen a major push to create economic activities and jobs, these new developments cannot rely on domestic take-up alone. Can the current prices and demand for properties in IM be sustained? We believe it depends on the following questions: Is the IM growth story secular or cyclical? Can IM be an integral suburb of Singapore? Will workers in Singapore (Singaporeans or Malaysians) make IM their home? We believe IM is going through a structural change. Huge investments have poured in and major improvements, such as connectivity to Singapore, are either in place or being planned. More importantly, perception is very positive. In recent years, we have seen the Singapore governments decentralisation strategy creating business hubs outside the city. We believe it is in the interest of both Malaysia and Singapore to view IM and suburban Singapore as one integrated development in which to live, work and play. We take a look at property prices and rents in Jurong East, Jurong West and Woodlands due to their proximity to IM. The median rent psf/month for non-landed residential properties is $2.85, $3.54 and $2.87 respectively, while the average rental yield is slightly below 4%. At what price would those living in Singapore be willing to move to IM? Our hypothesis is that a 60% discount would be necessary. In other words, a Singapore dollar for ringgit equivalent is a fair base case assumption in terms of rent. As the buildings in IM will only be completed in two to four, we have also assumed a 4%-5% annual increase in IM rental rates until then. Using a 5%-6% discount rate, the implied valuation of residential properties in IM is RM700-1,000 psf for Medini and RM9001,300 psf for Puteri Harbour.

140 130 120 110



100 100 50 90 80

1Q 3Q 06

1Q 3Q 07

1Q 3Q 08

1Q 3Q 09

1Q 3Q 10

1Q 3Q 11

1Q 3Q 12

1Q 13

Rental Yield Non Landed Properties (excluding EC)

7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 0% Jurong East Jurong West Woodlands

1Q 3Q 00

1Q 3Q 02

1Q 3Q 04

1Q 3Q 06

1Q 3Q 08

1Q 3Q 10

1Q 3Q 12

1Q 13

Fundamentals have changed in IM

Cumulative committed investment in IM from 2006 to June 2013 amounted to RM118.93 billion, of which 45% has been deployed. With such huge investments, coupled with future connectivity via the rapid transit system by 2018 and high-speed rail link by 2020, the fundamentals have changed in IM. We are seeing a secular change in property prices and how much of this is sustainable depends largely on whether policies are in place and market forces are allowed to operate freely, and no new restrictive policies are introduced. The recently tabled Budget 2014 has affected property market sentiment, and in our view, secondary market asking prices (in Malaysia overall) could soften in the near term due to the property cooling measures. ty Gains Tax, removal of the developer interest-bearing scheme, increase in the minimum price of property that can be purchased by foreigners from RM500,000 to RM1 million and a Goods and Services Tax of 6% that takes effect on April 1, 2015, would temporarily be a brake on price increases and we think property prices in IM will be relatively flattish over the next two years. We understand that the Iskandar Regional Development Authority is in the process of obtaining written confirmation from the MoF for exemptions such as the RM1 million minimum price of property that can be purchased by foreigners. Similarly, UEM Sunrise is requesting exemptions for Puteri Harbour. If there are exemptions for Medini and Puteri Harbour, foreign buying will remain relatively strong in both these locations. Of all the states in Malaysia, Johor has the highest percentage of foreign ownership of residential properties. last few years came mainly from the non-residents. Johors population in 2012 was estimated at 3.4 million (preliminary figures from the Department of Statistics Malaysia). For comparison purposes, we looked at Jurong East and West and the Woodlands area. The population of Jurong East and West was 86,400 and 271,800 respectively, in 2012 while that of Woodlands was 247,700. IMs population is estimated at close to 1.6 million currently.

Average price psf in Jurong and Woodlands versus Puteri Harbour and Medini
Will those who work in Singapore be willing to live in IM? At what price differentials? And assuming the issues of security and connectivity are eventually addressed. In other words, can IM be an integral suburb of Singapore? And if that were possible, what is the outlook for property prices in IM? Our analysis reveals that average non-landed residential property prices in Jurong and Woodlands are 192% higher than Puteri Harbours and 303% higher than Medinis on a Singapore dollar comparison (based on an exchange rate of $1=RM2.57).

Average primary prices in Puteri Harbour up 107% in less than two years
The 688-acre Puteri Harbour is an urban waterfront development on Johors southern coastline at its closest point to Singapore. To recap, UEM Sunrise Bhd launched its project Imperia at an average price of RM725 psf in September 2011. Residential property prices hit a high of RM1,500 psf (average price) with the launch of Pinetree Residences by Tiong Nam in December 2012. The penthouse in Pinetree Residences was priced at RM1,800 psf. Projects in Puteri Harbour have recorded good take-up rates. Within Puteri Harbour, there is a Custom, Immigration and Quarantine (CIQ) centre where the plan is for commercial private ferries to connect the Puteri Harbour CIQ to a suitable CIQ in Singapore. When this materialises, one would be able to commute to work in Singapore via the sea route from Puteri Harbour. The ferry connection will be the third link to Singapore soon, to complement the existing Causeway and Tuas Second Link.

Medinis international appeal

This is a strategic 2,230-acre (2,008 acres on a net basis) development with no foreign ownership restrictions as it is specially designed as a global metropolis to attract an international population and tourists to live in a sustainable environment. It is intended for mixed-use developments and Iskandar Investment Bhd has planned and designed it as the central business district of Nusajaya. It is also the only site in Johor where foreigners are allowed to purchase properties priced below RM500,000 (prior to Budget 2014). There is also the Medini incentive support package for individuals, such as a 15% tax scheme for qualified and foreign knowledge workers. With the attractive plus points, some developers are able to sell properties without even having to put up a show unit.

Rents on the fringe of Singapore near Johor are close to $3 psf

Recent median rent psf/month for non-landed residential properties in Jurong East, West and Woodlands was $2.85, $3.54 and $2.87 respectively, while average rental yield was 3.7%, 3.9% and 3.9% respectively. On a dollar-to-dollar equivalent, a fair rent currently for high-end condominiums in Johor is RM3-3.50 psf, which translates into 40% of what a working professional would pay (in terms of rent) to stay in Johor while earning in Singapore dollars. The discount is justified, taking into account present inconveniences, especially long travelling time.

lands are between 4% and 5% while non-landed rental yields in Johor based on selected schemes were between 5.1% and 7.5% in 2Q2013 (source: KGV International Property Consultants). Our base case assumption is rents of RM33.50 psf for Medini and RM4-4.50 psf for Puteri Harbour. In our forecast, we assume rental increases of 4%-5% per annum, hence by 2017, rents are expected to be RM3.50-4.20 psf in Medini and RM4.60-5.50 psf in Puteri Harbour. From a cost perspective, this makes sense, especially with connectivity and relatively smooth customs and immigration, as it would lower the overall cost of living, mostly for families.

Budget 2014 could be a brake on price hikes

The property cooling measures announced in Budget 2014, such as higher Real Proper-

Singapores population versus Johors

Singapores total population was 5.31 million as at end-June 2012, with non-residents accounting for 28% of it. In fact, growth over the

Fair value for Medini and Puteri Harbour

After factoring in exchange-rate risk, we think a fair discount rate for projects in MedCONTINUES ON PAGE CC12

Projects in Medini and Puteri Harbour will be ready in three to four years
Long-term average yields in Jurong and Wood-


| NOVEMBER 25, 2013



Centrally located ageing condos see buyer interest


here was a smattering of activities at older apartment blocks, namely Chancery Court, Grange Heights and Pearl Bank Apartment, according to transactions in the first week of November. On Nov 4, a 926 sq ft, two-bedroom unit on the sixth floor of Chancery Court was sold for $1.22 million or $1,318 psf. A similar unit on the eighth floor was sold at the same price in October. Completed in 1981, the 99-year leasehold project was developed by the former Housing and Urban Development Co (HUDC) which was privatised in 2004. The development has a mix of 136 two-bedroom units and maisonettes ranging from 904 to 2,271 sq ft. It also has eight shop units. The condo is popular among families with school-going children given its location next to the Anglo-Chinese School (Barker Road), and its proximity to the Orchard Road shopping belt and the CBD. Meanwhile, a 3,025 sq ft, four-bedroom apartment on the 17th floor of Grange Heights changed hands for $4.1 million or $1,356 psf on Nov 4. The highest price psf was achieved in July for a 1,905 sq ft, 12th floor unit that fetched $3.1 million or $1,627 psf. The freehold project was completed in 1976, and was one of the first few residential highrise apartment blocks built by Hong Leong Holdings in the 1970s. The development located along St Thomas Walk contains 120 three- and four-bedroom apartments as well as penthouses with sizes ranging from 1,884 to 4,575 sq ft. Pearl Bank Apartment was one of the first all-residential public housing schemes to be completed under HDBs sale of sites programme. The 38-storey apartment block is still a landmark in the Chinatown-Outram neighbourhood today. In early November, a 1,324 sq ft, two-bedroom apartment on the sixth floor of Pearl Bank Apartment was sold for $1.12 million ($845 psf). The

On Nov 4, a 926 sq ft, two-bedroom unit on the sixth floor of Chancery Court was sold for $1.22 million, or $1,318 psf

same unit last traded for $397,000 ($283 psf) in 1999. Pearl Bank Apartment is considered the oldest 99-year leasehold condo in Singapore. When it was completed in 1976, the 280-unit development was also considered the tallest residential tower in the country. Its popularity has endured given its location next to the Outram Park MRT station and Pearls Hill City Park. What Chancery Court, Grange Heights and Pearl Bank Apartment have in common is that the three ageing private high-rise blocks have all attempted en bloc purchases in the past, but without success. For example, Chancery Court was put up for en bloc sale in late-2007 with a price tag of $468 million or $1,614

Singapore by postal district

LOCALITIES DISTRICTS City & Southwest 1 to 8 Orchard/Tanglin/Holland 9 and 10 Newton/Bukit Timah/Clementi 11 and 21 Balestier/MacPherson/Geylang 12 to 14 East Coast 15 and 16 Changi/Pasir Ris 17 and 18 Serangoon/Thomson 19 and 20 West 22 to 24 North 25 to 28

Residential transactions with contracts dated Nov 1 to 8



Condominium Apartment Condominium Condominium Condominium Condominium Condominium Condominium Condominium Condominium Condominium Condominium

99 years 99 years 99 years 99 years 99 years 99 years 99 years Freehold 99 years 999 years 99 years Freehold

Nov 1, 2013 Nov 4, 2013 Nov 8, 2013 Nov 7, 2013 Nov 7, 2013 Nov 6, 2013 Nov 4, 2013 Nov 6, 2013 Nov 5, 2013 Nov 5, 2013 Nov 1, 2013 Nov 1, 2013

1,593 1,324 4,930 1,227 1,206 1,335 904 840 1,302 1,367 969 926

3,500,000 1,118,780 12,200,000 1,950,000 1,880,000 2,130,000 2,130,000 1,366,000 1,240,000 1,645,000 1,210,000 1,150,000

2,197 845 2,475 1,589 1,559 1,596 2,356 1,627 952 1,203 1,249 1,242

2013 1976 Uncompleted 2004 2004 2004 Uncompleted Uncompleted 1985 2005 2000 2008

Sub Sale Resale New Sale Resale Resale Resale New Sale New Sale Resale Resale Resale Resale

Private Private Private Private Private Private Private Private Private HDB HDB HDB




psf per plot ratio (ppr). A development charge would also be incurred in order to maximise the plot ratio and top up the lease to a fresh 99 years. Grange Heights was put up for collective sale by tender with an indicative price of $845 million or $2,200 psf ppr in late-2007. The 136,678 sq ft freehold site has a plot ratio of 2.8 and can be redeveloped into a new 36-storey condo project. The development is accessible from both Killiney and River Valley Roads, and within a short distance from the Somerset-Orchard Road shopping belt. Pearl Bank Apartment is famous for making four attempts at a collective sale, the most recent in late2011. The price tag was $725 million, which works out to $1,314 psf ppr, including a development charge of $162 million to top up the lease and for a 10% balcony space allocation. With a land area of 82,379 sq ft and plot ratio of 7.2, it could be redeveloped into a brand new high-rise residential development with 500 units of about 1,200 sq ft each. Such old condos are likely to go through another attempt at en bloc sale in the future, says Nicholas Mak, executive director of SLPs research and consultancy. Ageing developments will definitely want to go en bloc because so far there has not been a 99year leasehold project that has been granted a lease extension by the government, he says. A case in point was the 164-unit The Arcadia located off Adam Road, where all the owners had appealed to the Singapore Land Authority to top-up the lease to a fresh 99 years in 2010. The appeal was rejected. The condo was completed in 1983, and the appeal of the estate is the distinctive terraced garden design, as well as the spacious apartments, with three-bedroom units of at least 3,466 sq ft, and four-bedroom units starting from 3,714 sq ft, and penthouses of more than 7,500 sq ft each. Prices at The Arcadia are still hovering above $1,000 psf. The most recent transaction was for a 3,810 sq ft, four-bedroom unit that changed hands in September for $4 million ($1,050 psf). The unit last traded for $1.47 million ($386 psf) in 2004. Most buyers of units at The Arcadia, Pearl Bank Apartment, Chancery Court and Grange Heights tend to be owner occupiers, who like the spaciousness of the units, something they cannot find in new condos today. You certainly wont find a 3,000 sq ft, three-bedroom apartment in a new condo these days,

A 3,025 sq ft, four-bedroom apartment on the 17th floor of Grange Heights was transacted at $4.1 million, or $1,356 psf, on Nov 4

and in the suburbs; most of the penthouses are only around 2,000 sq ft, notes a property agent who declines to be named. These older projects also tend to be centrally located, and are priced more attractively than new condos in the same neighbourhood. For now, the chances of a large condo being successful in a collective sale attempt are slim. The government is currently releasing on average at least one development site on the government land sales programme every month, so developers can purchase these 99-year leasehold sites, adds Mak. Purchasing a government land parcel is more straight forward compared to buying sites in en bloc deals, which could be derailed by disputes. The most recent example was the scuttled en bloc sale of Thomson View for $590 million. The total debt servicing ratio has affected demand for residential units, with new launches seeing a 19% drop in sales in October compared with the previous month. Resale transactions have also E dropped significantly.

Residential transactions with contracts dated Nov 1 to 8



Condominium Condominium Apartment Apartment Apartment Condominium Condominium Apartment Apartment Condominium Apartment Apartment Apartment Condominium Condominium Apartment Terrace House Terrace House Condominium Terrace House Apartment Apartment Terrace House Apartment Terrace House Condominium Condominium Apartment Apartment Condominium Condominium Condominium Apartment Condominium

Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold 99 years Freehold 99 years Freehold 99 years Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold 99 years

Nov 4, 2013 Nov 4, 2013 Nov 4, 2013 Nov 8, 2013 Nov 6, 2013 Nov 6, 2013 Nov 6, 2013 Nov 5, 2013 Nov 5, 2013 Nov 5, 2013 Nov 4, 2013 Nov 1, 2013 Nov 1, 2013 Nov 1, 2013 Nov 8, 2013 Nov 6, 2013 Nov 6, 2013 Nov 4, 2013 Nov 4, 2013 Nov 1, 2013 Nov 6, 2013 Nov 6, 2013 Nov 8, 2013 Nov 5, 2013 Nov 7, 2013 Nov 6, 2013 Nov 6, 2013 Nov 4, 2013 Nov 4, 2013 Nov 4, 2013 Nov 4, 2013 Nov 4, 2013 Nov 1, 2013 Nov 6, 2013

1,324 1,324 3,025 1,475 1,206 1,076 1,765 592 1,141 2,024 592 614 893 1,324 1,485 1,184 3,154 1,765 926 2,842 1,076 614 2,680 1,066 1,324 1,346 1,550 2,088 1,399 1,410 1,238 657 926 667

2,750,000 2,750,000 4,100,000 2,200,000 2,188,240 1,820,000 2,500,000 1,161,240 2,108,100 5,750,000 1,156,090 1,312,460 1,250,000 2,130,000 2,000,000 1,890,000 3,280,000 4,150,000 1,220,000 3,928,000 1,380,000 990,000 3,000,000 986,000 2,450,000 1,750,000 1,900,000 1,700,000 1,570,000 1,875,000 1,750,000 1,176,500 1,440,000 1,011,560

2,077 2,077 1,356 1,492 1,815 1,691 1,416 1,961 1,848 2,841 1,953 2,139 1,399 1,609 1,346 1,596 1,040 2,351 1,318 1,382 1,282 1,614 1,118 925 1,858 1,301 1,226 814 1,122 1,330 1,414 1,792 1,556 1,516

2008 2008 1975 2003 2002 2005 1988 2002 2002 2010 2002 2002 1997 2003 2011 2004 2009 Unknown 1981 2004 2011 2009 1980 2002 Unknown 1996 2004 2009 2002 1984 2008 Uncompleted 2006 Uncompleted

Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale Resale New Sale Resale New Sale

Private Private Private Private HDB Private Private Private Private Private Private HDB Private HDB Private Private Private Private HDB Private Private Private HDB HDB Private Private Private Private Private HDB Private Private Private HDB



| NOVEMBER 25, 2013


Market did not foresee severity of Budget 2014 measures


foresee margin compression for developers.

ini and Puteri Harbour would be between 5% and 6%. Based on our sensitivity analysis, the fair value for Medini would be between RM7001,000 psf and between RM900-1,300 psf for Puteri Harbour. Hence, in our view, most developers have priced their projects fairly.

Decentralisation with Jurong Lake District and Woodlands Regional Centre

Back in 2008, URA announced a blueprint for Jurong Lake District that was to transform it into a unique lakeside destination for business and leisure within 10 to 15 years. According to URA, Woodlands Regional Centre is one of the four regional centres identified under the recently announced Land Use Plan as part of the governments decentralisation strategy to provide jobs closer to homes and business hubs outside the city centre, thus reducing the need to travel towards E the city centre.

Property developers likely to see margin squeeze

The market did not foresee the severity of the measures imposed on the Malaysian property sector in Budget 2014. The measures have dented sentiments somewhat and it will be difficult for property developers to continue to raise prices over the short term. Hence, we

The 688-acre Puteri Harbour is an urban waterfront development on Johors southern coastline

Medini pricing

Puteri Harbour pricing


1 Medini Medini Signature Meridin @ Medini

450 (avg) Tower 1 650 (average) Tower 2 680 (average) Tower A 695 (average) Tower C 724 (average) and Tower B 798 (avg)

100% 80% 20% (launched in August 2013) Tower A & C - 82% (preview in May 2013), Retail 70% and Tower B - 30% (launched in July 2013) Soft launch in July Ofcial launch early next year Tower A - 90% booked Tower B - 75% booked Close to 60% booked 100%


Imperia Somerset Teega

Mah Sing Encorp Marina Pinetree Residences Distinctive Resources

725 (average) 900 (average) 750 (average) for first 2 towers and between 820-850 for Tower 3 1,300 (average) 1,500 (average)

98% 100% 91% based on SPA and close to 100% based on bookings 100% 80%

UEM Sunrise UEM Sunrise & United Malayan Land UEM Sunrise

Encorp Tiong Nam

Iskandar Residences

767 (average)

Areas near Iskandar Malaysia ($ psf)

MCT Pulau Indah Ventures (a 50:50 JV between Khazanah Nasional and Temasek Holdings) Zhuoyuan Iskandar (a JV company by Chinas Zhuoda Real Estate Group and Iskandar Investment Bhd)

DPristine Aniti Medini

650-900 850-1,000


Around 900

Targeting ground-breaking ceremony on Dec 5, 2013 Ofcial launch expected at the end of 4Q2013/1Q2014

Residential (non-landed, excluding EC) Residential (semi-detached) Residential (terraced) Commercial Industrial, warehouse Industrial, factory

599-1,774 NA NA NA 69-455 44-668

559-1,434 795-845 772-1,107 NA

594-1,359 NA 7981,084 1,000-3,964 NA 82-934


Residential transactions with contracts dated Nov 1 to 8



Condominium Apartment Apartment Condominium

Freehold Freehold 946 years 99 years

Nov 5, 2013 Nov 1, 2013 Nov 4, 2013 Nov 1, 2013 Nov 8, 2013 Nov 6, 2013 Nov 1, 2013 Nov 8, 2013 Nov 8, 2013 Nov 7, 2013 Nov 7, 2013 Nov 6, 2013 Nov 5, 2013 Nov 4, 2013 Nov 4, 2013 Nov 4, 2013 Nov 1, 2013 Nov 1, 2013 Nov 1, 2013 Nov 6, 2013 Nov 5, 2013 Nov 4, 2013 Nov 1, 2013 Nov 1, 2013 Nov 1, 2013 Nov 6, 2013 Nov 5, 2013 Nov 5, 2013

1,776 1,173 570 1,464 1,012 1,270 1,109 1,367 1,109 624 1,249 1,055 1,249 732 1,044 1,130 732 753 1,249 1,055 1,141 1,141 1,582 1,141 732 1,485 1,539 1,184

1,950,000 1,320,000 680,000 1,189,500 890,000 1,205,880 853,000 1,130,000 1,280,000 800,000 980,000 930,000 1,150,000 885,000 1,100,000 1,626,115 880,000 885,000 1,190,000 1,388,000 1,585,000 1,494,200 1,771,000 1,489,300 974,000 2,200,000 1,600,000 1,988,000

1,098 1,125 1,192 813 880 949 769 827 1,155 1,281 785 882 921 1,209 1,054 1,439 1,202 1,175 953 1,316 1,389 1,310 1,119 1,305 1,331 1,481 1,039 1,679

1997 2006 2010 Uncompleted 2003 Uncompleted Uncompleted 2002 Uncompleted Uncompleted 2000 2002 1995 Uncompleted 2009 Uncompleted Uncompleted Uncompleted 2004 Uncompleted Uncompleted Uncompleted Uncompleted Uncompleted Uncompleted 2006 1995 2010

Resale Resale Resale New Sale Resale New Sale New Sale Resale Sub Sale Sub Sale Resale Resale Resale New Sale Resale New Sale New Sale New Sale Resale New Sale New Sale New Sale New Sale New Sale New Sale Resale Resale Resale

Private Private Private Private HDB HDB HDB HDB Private HDB HDB HDB Private HDB HDB HDB Private Private HDB HDB Private Private Private HDB Private Private Private HDB

Executive Condominium 99 years Condominium 99 years Executive Condominium 99 years Apartment Condominium Condominium Executive Condominium Apartment Condominium Condominium Condominium Apartment Condominium Condominium Condominium Apartment Apartment Condominium Apartment Condominium Apartment Condominium Condominium Condominium 99 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years Freehold 99 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years Freehold Freehold Freehold


Condominium Condominium Condominium Condominium Condominium Executive Condominium Apartment Executive Condominium Condominium Condominium Executive Condominium Executive Condominium Executive Condominium Executive Condominium Executive Condominium Condominium Condominium

999 years 99 years 99 years 999 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years 99 years Freehold

Nov 1, 2013 Nov 6, 2013 Nov 1, 2013 Nov 7, 2013 Nov 6, 2013 Nov 5, 2013 Nov 4, 2013 Nov 1, 2013 Nov 1, 2013 Nov 7, 2013 Nov 4, 2013 Nov 4, 2013 Nov 1, 2013 Nov 1, 2013 Nov 1, 2013 Nov 1, 2013 Nov 6, 2013 Nov 8, 2013 Nov 5, 2013 Nov 4, 2013 Nov 5, 2013 Nov 1, 2013 Nov 1, 2013

1,076 1,378 1,055 1,658 1,173 1,270 872 1,410 1,528 1,173 1,335 1,141 1,249 1,259 1,281 1,173 1,259 3,046 1,206 947 1,055 1,636 1,615

1,230,000 1,400,000 988,000 1,532,000 1,010,000 1,020,000 1,038,000 1,060,000 1,380,000 1,050,000 983,650 895,000 986,060 950,225 930,000 980,000 1,270,000 1,850,000 880,000 695,112 796,000 1,188,000 1,088,800

1,143 1,016 937 924 861 803 1,191 752 903 895 737 784 790 755 726 835 1,008 607 730 734 755 726 674

1998 1994 1997 1984 2005 2006 Uncompleted 1999 2000 2003 Uncompleted 2008 Uncompleted Uncompleted 2000 2003 1993 2005 2001 Uncompleted Uncompleted Uncompleted Uncompleted

Resale Resale Resale Resale Resale Resale New Sale Resale Resale Resale New Sale Resale New Sale New Sale Resale Resale Resale Resale Resale New Sale New Sale New Sale New Sale

HDB Private Private HDB Private Private Private HDB Private Private Private HDB HDB HDB HDB HDB Private HDB HDB HDB HDB HDB HDB

Terrace House 99 years Condominium 99 years Executive Condominium 99 years Executive Condominium 99 years Executive Condominium 99 years Executive Condominium 99 years

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