DPM says Govt has no plans yet for Kwong Wai Shiu land; lease ends in 2015

KWONG Wai Shiu Hospital will not be left in the lurch, even though the authorities are undecided about plans for the land it sits on when the lease expires in 2015.

The medical facility is Singapore’s longest-serving charity hospital, and its officials hope they can stay put at its premises in Serangoon Road.

Yesterday, it celebrated its centennial year with free health screenings for the public and a food and games carnival, among other events.

A 92-year-old donor even presented $100,000 to the hospital yesterday to mark the occasion.

Deputy Prime Minister Wong Kan Seng said on the sidelines of the celebrations that the Government has no plans to use the land for the next five years.

‘But after five years, the Ministry of National Development may have different plans. So it is only then that we can decide the hospital’s future,’ said DPM Wong in Mandarin.

But Mr Wong, who is also the Minister for Home Affairs, said the Government will look out for the hospital, if it cannot remain at its current address in the future.

‘Even if the hospital cannot remain here, the Government recognises and supports all community hospitals. So if one day, it cannot be here, the Government will continue to help it find a new place and give it other forms of assistance,’ he added.

Mr Wong, who has been the hospital’s patron for the past four years, noted that it has done a lot of good work for the community in the past 100 years.

It was founded in 1910 by a group of Cantonese merchants who wanted to provide free medical care for Cantonese immigrants from China.

A 2.5ha plot of land, with three colonial buildings, was parcelled off from Tan Tock Seng Hospital and given to Kwong Wai Shiu for 99 years.

The merchants also struck a deal with the British colonial authorities in the 99-year lease for the hospital to pay just $1 every year in rent.

That lease expired in February this year and the land was handed over to the Singapore Government, which extended it to 2015.

The hospital’s annual rental bill is now $1.7million.

Its annual overall operating cost of about $12million has so far been met mainly through public donations and patient fees.

This amount is projected to hit $16million this year, said chief operating officer Ling Bee Sian.

In September last year, the Ministry of Health agreed to increase its subsidy to Kwong Wai Shiu.

Madam Ling said that discussions on the subsidy – such as the amount and coverage – are still being finalised.

Currently, Kwong Wai Shiu runs a 50-bed community hospital and 350-bed nursing home.

It also has a rehabilitation and traditional Chinese medicine centre, as well as an outpatient clinic.

Over the years the hospital has adapted itself to meet the needs of the community, and it plans to stay relevant by adding another 200 beds to its community hospital and another 50 beds to its nursing home, said Mr Patrick Lee, vice-chairman of the hospital’s management committee.

He added that there are plans to start a home-care service, including training for caregivers to take care of their loved ones better.

Source: Straits Times, 5 Jul 2010

CapitaMalls Asia (CMA) is buying a Malaysian mall from an associate firm of Metro for S$91.5 million after the Metro unit exercised a put option.

The move by Metro’s Gurney Plaza requires CMA’s CapitaRetail Gurney to buy the property called Gurney Plaza Extension.

Located in Penang, Gurney Plaza Extension is a nine storey retail block.

It is part of the Gurney Park development and has about 12,500 square metres of net lettable area.

As at March 31, the mall enjoyed some 98.7 per cent occupancy.

Metro said it is divesting the property as Gurney Plaza Extension has since matured and now has a stable rental income.

Metro said net proceeds of the divestment will be added to the working capital of the group.

It will also be used to build on the Metro Group’s presence and investment in the region.

Under the terms of the deal, CMA is required to complete the acquisition by 15 April 2011.

CMA said it has designated CapitaMalls Malaysia Trust or CMMT as its listed vehicle to hold its stabilised Malaysian retail assets.

It will be granting CMMT a right of first refusal to acquire Gurney Plaza Extension after the finalisation of all the terms and conditions of the acquisition.

Source: Channel News Asia, 5 Jul 2010

Real estate consultancy firm CB Richard Ellis (CBRE) has launched Villa D’Este at Dalvey Road for collective sale.

Villa D’Este is a 12-unit apartment project which sits on an area approved by the urban planners for ‘Good Class Bungalows’.

‘Good Class Bungalows’ are the most exclusive housing form.

The freehold site has an area of 55,480 square feet and a gross floor area of 49,071 square feet.

CBRE said the guide price is S$115 million which equates to about $2,343 per plot ratio.

It added that there is no development charge payable.

Based on existing guidelines, CBRE said the land may be re-developed as apartments, provided there is no intensification of the existing approved gross floor area and storey height.

The developer can choose to build 13 to 14 exclusive apartments, assuming an average size of 3,500 square feet each.

CBRE added that the new development is expected to draw interest from foreign buyers, especially the Chinese and Indians, who would like to live within the most prestigious ‘Good Class Bungalow’ areas but are unable to own landed properties.

10 of the 12 owners have signed the Collective Sale Agreement.

The tender closes on August 4 at 3 pm.

Source: Channel News Asia, 5 Jul 2010

Property consultancy Jones Lang LaSalle said residential capital values in the resale market for the private condominiums continued to rise on the back of encouraging sales volume in the second quarter of this year.

The firm said estimates showed that the prime and central capital values led the way in the quarter’s growth by registering 8 per cent and 7.6 per cent on average.

The prime market saw average capital value for typical prime properties reaching $1,350 per square foot, surpassing the last peak for the first time.

Average capital value for luxury prime properties reached $2,500 per square foot, which is some 8.4 per cent below the last peak.

The growth has also been supported by an improvement in rental income.

Prime rentals have grown by 10.8 per cent on average, over the first half of this year.

Jones Lang LaSalle said this is supported by increased leasing demand from expatriates in the financial and petrochemical sectors.

In terms of sales volume, 3,127 caveats were lodged in the resale market in Q2 based on preliminary figures from the Urban Redevelopment Authority.

Jones Lang LaSalle noted that Chinese buyers are the most resilient amidst softening foreign demand due to uncertainties arising from the eurozone debt crisis.

It said Chinese buyers accounted for 18.5 per cent of caveats lodged by foreigners in the secondary market in the second quarter of 2010, up from 6.2 per cent in the first quarter of 2007.

It added that high net worth individuals from China may turn to Singapore as luxurious home prices are around 24 per cent below that of Hong Kong and 10 per cent below the last peak.

This makes Singapore properties comparatively more attractive.

But Jones Lang LaSalle’s head of Research for Southeast Asia, Dr Chua Yang Liang said the resale market is expected to see a further slowdown in both transactional volume and price growth in the next half of the year, following cues from the primary market, which has seen fewer project launches and lower sales volume in recent months.

Source: Channel News Asia, 5 Jul 2010

Property consultant DTZ Research said Singapore’s investment sales market is seeing an increase in larger deals sealed.

For the second quarter this year, there were 15 deals worth over S$100 million totalling some S$3.5 billion.

Such deals make up nearly three-quarters of the total investment value of S$4.71 billion in the second quarter.

The figure is much higher than the nine transactions of over S$100 million each that made up just 55.5 per cent of transactions in the first quarter this year.

DTZ said the bulk of investments were noticeably geared towards government sale of sites.

11 of the 15 deals above S$100 million were for sites released under the Government Land Sales programme.

The highest was for a white site in Jurong Gateway which was sold for S$748.9 million.

Overall investment sales for the second quarter posted a 64.1 per cent increase on-quarter to S$4.71 billion.

Of that amount, S$2.75 billion or 58.3 per cent were from residential transactions.

Investments in industrial properties, meanwhile, shrank over the same period, making up just 9.3 per cent or S$438.5 million of total transactions.

This was in contrast to the first quarter when transactions in industrial properties stole the limelight.

DTZ said the absence of any large scale acquisitions by Real Estate Investment Trusts over the period was the major factor contributing to a 59.4 per cent on-quarter drop in transacted values in the sector.

Also down were transactions in office properties as investment value fell 39.5 per cent from the preceding quarter to S$266.1 million.

Source: Channel News Asia, 5 Jul 2010

THERE are worries that CapitaLand’s huge exposure to the China property market will be its Achilles heel if the mainland economy suffers a hard landing.

Shanghai stocks tumbled 6.7 per cent last week, due to jitters over the Agricultural Bank of China’s coming initial public offering.

There are also concerns that a drop in China’s purchasing managers’ index last month might flag slowing growth in the country’s manufacturing sector.

But so far, CapitaLand seems to be riding high in China.

Swiss bank UBS, for example, noted in a report last week that the property giant ‘remains well positioned to deliver net asset value growth’, as the challenging China market is likely to favour well-capitalised and diversified groups with the ability to execute on large-scale opportunities.

The investment bank also believes that CapitaLand may benefit from any appreciation in the yuan, as ‘around 40 per cent of its revalued net asset value is exposed to China’.

Besides trading in CapitaLand shares, there are other means to gain exposure to the counter.

Macquarie Bank issues covered warrants on CapitaLand, which offers traders options to buy into the shares over a period of time.

The bank also has a call warrant where traders can exchange two warrants and pay an exercise price of $3.50 to get one CapitaLand share. It matures on Sept 1.

Bearish investors have the option to ‘short’ CapitaLand by trading Macquarie put warrants on the counter. One put derivative gives traders the option to sell CapitaLand at $3.50 by using two put warrants. It expires on Dec 2.

Source: Straits Times, 5 Jul 2010

JTC Corp seeks consultant to study sector involving over 3,000 companies

(SINGAPORE) Having already ventured underground, Singapore is looking at how it can further intensify the use of industrial land here. It will take a close look at the growing offshore and marine (O&M) sector, given the general shortage of sites, especially those with waterfront access.

JTC Corporation, which is seeking a consultant for this, says the study will cover a sector involving over 3,000 companies, broadly involved in two clusters: marine engineering (including shipbuilding, rigbuilding and ship or FPSO conversions) and offshore oil and gas exploration and production support services.

The feasibility study by the appointed consultant ‘will not just be restricted to existing oil and gas activities here, but also those that are currently carried out overseas and have the potential to be done in Singapore,’ the tender document said.

‘The purpose of the study is to establish the viability of intensifying land usage for these oil and gas activities,’ it added.

JTC’s land-intensification study – starting with the O&M industry and also for the aerospace industry – clearly marks a new phase in the corporation’s attempt to carve out more industrial space here.

It has already embarked on building underground projects, like for oil storage on Jurong Island, and possibly for science parks, and logistics and data processing centres later. JTC is also currently studying building very large floating structures for various industrial purposes.

Its latest study to intensify land usage for the O&M industry follows the planned development of a 13-hectare offshore marine support base at the new hockey-stick shaped Tuas View Extension area.

The support base, replacing an earlier one at Shipyard Road in Jurong, will cater to a strong pipeline of customers for waterfront land. All the earlier offshore suppliers there have since relocated to Loyang Offshore Supply Base in the east.

Construction of the Tuas View base is slated to start this month, with the multi-million dollar project expected to be operational by end-2011.

In line with its land intensification effort, the multi-user facility will provide common waterfront and berthing facilities for O&M companies involved in the manufacturing and fabrication of heavy equipment, components and structures, a JTC spokeswoman earlier told BT.

‘It is aimed at attracting new and quality types of manufacturing activities which will generate high economic value in terms of value-add and fixed asset investment,’ she added.

JTC said that while companies within the O&M sector have vastly different facility requirements, the sector nevertheless ‘shares certain common characteristics in terms of the space/land utilisation of its facilities, which is generally low’.

For instance, the sector commonly uses computer numerical controlled machines, which because of their weight and high-specifications require low-vibration and are usually located on ground-floor areas. Because most of their materials and products are heavy and bulky, these are also usually stored in the open or on the ground rather than stacked within warehouses.

The consultant will be required to study existing value-chain activities in O&M operations and come up with conceptual designs for each of the two industry clusters that can increase the plot ratio or reduce the land required. This includes the possibility of their having multi-tenanted buildings with shared facilities, among other solutions.

Source: Business Times, 5 Jul 2010

Such perks being offered by more high-end residential projects

CONCIERGE services used to be the preserve of posh hotels but an increasing number of high-end residential developments are including them as perks to attract buyers.

Developers and property experts say there is a growing demand for such personalised services, as increasingly sophisticated homebuyers look to redefine high-end living.

‘While good-class serviced apartments provided such services a while ago, it is a relatively new introduction for private condos and an increasing trend as buyers start to get more affluent,’ said Knight Frank group managing director Danny Yeo.

While locals might not demand a full range of concierge services, they appreciate having a touch of class that allows a development to differentiate itself, he said.

Mr Steven Tan, executive director of residential at property agency OrangeTee, said buyers had higher expectations of their quality of life and were willing to pay more for the convenience that concierge services offer.

It also enhances the possibility ‘of renting out your condo to high-budget expats, especially those who might have just moved here, are still unfamiliar with Singapore and would appreciate a concierge assisting them with information’, he said.

Some concierge services in residential projects include catering menus for privately held parties, managing restaurant reservations, dog walking and even preparing a family picnic basket.

The expenses are usually included in a condo’s monthly conservancy fee, although external services like spa treatments will cost more.

Overseas Union Enterprise (OUE) chief executive Thio Gim Hock said a full concierge service is not a must-have. However, if it does not bump up monthly maintenance fees too much, it is ‘good to have’ as residents of any development would appreciate it.

Mr Thio estimates monthly maintenance fees at OUE’s high-end Twin Peaks project at Leonie Hill to be $300 for a smaller flat and $500 for the biggest unit.

He describes them as ‘very reasonable’ when combined with the full range of lifestyle facilities, such as gourmet kitchens and sky gyms.

Twin Peaks, which has yet to be launched, will include a concierge desk serving as a collection and drop-off point for residents and a concierge manager to help with bookings of movie tickets, air tickets or taxis.

City Developments’ (CDL) St Regis Residences in Tanglin Road and the upcoming Residences at W in Sentosa Cove – expected to be completed by 2012 – will also offer those extra personal touches. CDL will offer the full suite of services such as housekeeping and laundry at the adjoining hotels that will operate under the same brand name next to each project.

There will also be in-house concierges who arrange for private chefs and butlers.

A CDL spokesman said residents have asked for a St Regis chef and butlers at their residences to prepare a banquet for friends and family, or butlers to prepare a basket for a picnic.

Ms Rena Dharmawan, 24, said the concierge services at St Regis Residences were a nice touch that allowed her to hold her engagement party conveniently at the function room below her apartment block.

‘They assisted us in directing our guests and helped out with manual tasks like lifting tables for the buffet… On regular days, they would even help with our luggage or shopping bags all the way up to our apartment,’ she added.

Two of Far East Organization’s developments – Orchard Scotts in Scotts Road and Vida in Peck Hay Road – field about 60 concierge requests a week, ranging from walking pets, grocery shopping to booking theatre tickets, its spokesman said.

One particularly unusual request: buying a specific serving of hot chocolate with marshmallows from a hotel for a resident with a craving.

Source: Straits Times, 5 Jul 2010

Upper levels in such malls already drawing higher rents than equivalent space in Orchard and Scotts area, says DTZ

(SINGAPORE) Rents at suburban malls in Singapore are fast catching up with those for prime Orchard Road retail space as neighbourhood malls draw increasing shopper numbers and more interest from tenants.

The difference between prime Orchard Road rents and suburban rents narrowed to just 9 per cent in Q2 2010 – from as much as 24 per cent at the start of 2009 and 21 per cent in Q1 2005 – according to CB Richard Ellis (CBRE).

In fact, upper-storey space at these suburban malls is already more expensive than upper-storey space in the Orchard Road and Scotts Road area, according to data from DTZ.

The rental gap tightened as Orchard Road rents fell for the seventh consecutive quarter while suburban rents continued to edge up in the second quarter of 2010, CBRE’s data shows.

Prime Orchard Road rents fell to $31.10 per square foot per month (psf pm), reflecting a 3.4 per cent decrease from $32.20 psf pm in Q1 2010.

Suburban malls, on the other hand, saw a 1.4 per cent quarter-on-quarter increase in prime rentals to $28.50 psf pm.

And when it comes to retail space on the upper floors, suburban malls are in fact fetching more than their Orchard Road and Scotts Road counterparts.

According to DTZ, upper-storey rents at suburban malls inched up 0.4 per cent quarter-on-quarter to $22.90 psf pm in Q2 2010, while upper-storey rents in the Orchard Road/Scotts Road area stayed flat at $20.50 psf pm.

Analysts said that rents in the Orchard Road area are depressed after a large amount of new supply – from malls such as Ion Orchard, 313@somerset and Orchard Central – came onstream over the past year.

‘Competition in the Orchard Road and Scotts Road and other city areas has intensified and the increased range of retail choices has rendered consumers to be more selective in their purchases,’ said Anna Lee, DTZ’s associate director for retail.

‘Retailers, particularly in the newer malls, are adjusting to the vagaries of consumer preferences and resulting in early termination of leases in some cases,’ she added.

In contrast, rents in the suburban areas continued to edge up in the second quarter of 2010. Suburban malls, with their built-in catchment of shoppers and mass market offerings, largely performed better than malls in the city during the financial crisis.

These malls, which draw more and more shoppers every year, are now able to command higher rents from tenants.

‘Generally, 2009 shopper traffic at our suburban malls is higher than that in 2008,’ said a spokesman for CapitaMall Trust (CMT). CMT has eight suburban malls in its portfolio.

Frasers Centrepoint Trust (FCT), which owns four suburban malls, also said that footfall across its portfolio rose 6 per cent from the 2008 financial year (October 2007 to September 2008) to the 2009 financial year (October 2008 to September 2009). The figures exclude Anchorpoint, where traffic counters were removed for asset enhancement works.

The increased visitor numbers have translated into higher rents for both retail trusts.

FCT said that in the first six months of its 2010 financial year (October 2009 to March 2010), its portfolio achieved average rental reversions of 4.5 per cent. And for the suburban malls in CMT’s portfolio, the rate of average rental growth per year ranged from 1.1 per cent to 2.3 per cent in Q1 2010.

Developers are extremely bullish on the potential of suburban retail space here.

Australian developer Lend Lease, which paid $749 million for a mixed-use land parcel in the Jurong Lake district, intends to build a suburban shopping mall on most of the site.

Lend Lease, which owns the 313@somerset and Parkway Parade shopping malls here, is required to set aside a mandatory 30 per cent of the gross floor area for office use. But the remaining 70 per cent will be used solely for retail space, said Ooi Eng Peng, executive officer for retail and investment management in Asia for Lend Lease.

‘The mall will be the Parkway Parade of the west,’ Mr Ooi said. Suburban malls offer good prospects for developers who can come up with the right tenant and product mix for the surrounding catchment population, he added.

Looking ahead, the gap between prime Orchard Road rents and prime suburban rents will narrow even more over the rest of this year as Orchard Road rents dip further.

‘We expect prime Orchard Road rents to dip 5 per cent to 10 per cent in 2010 due to the settling of business and trading patterns,’ said Letty Lee, CBRE’s director for retail services. ‘But prime suburban rents are likely to see a 3-5 per cent upside in the same period, underpinned by catchment demand.’

But it is not all doom and gloom for malls on Singapore’s best-known street; analysts expect that over the next two to three years, rents in the Orchard Road will rebound.

Source: Business Times, 5 Jul 2010