The asking price will be set at an indicative range of between S$32 million and S$36 million. This is S$291 to S$327 per square foot per plot ratio. The building currently sits on freehold land of about 44,000 square feet.

The District 20 Jalan Pemimpin area is located inside the Central Region of Singapore.

Sin Cheong Building is located near Marymount Circle Line MRT, and is well served by major expressways like the PIE and the CTE. It is zoned for Business 1 use with a Gross Plot Ratio of 2.5.

This means up to 40 per cent of the gross floor area can be used for permitted ancillary activities such as offices or showrooms.

Mr. Jeffrey Goh, Head of Investment Sales at HSR International, said: “Going forward into 2011 and in the light of rising prime office space rentals, such freehold industrial space located inside the Central Region presents an attractive alternative for companies to relocate their operations.”

He added that such freehold industrial land is a rarity in Singapore and “because of its freehold tenure, there are no land rent payments or lease top-ups needed in the future as compared to leasehold industrial land.”

HSR International is the sole marketing agent for the sale of Sin Cheong Building.

Source: Channel News Asia, 21 Dec 2010

But rentals will hold firm as medium-term prospects are strong

(SINGAPORE) Office vacancy rates in the Central Business District are expected to rise next year as space vacated in older office blocks returns to the market, with occupiers moving into new developments.

Any uncommitted space in the upcoming developments will also contribute to vacant office stock.

But at least two consultants expect the higher vacancy rates to be a passing phase.

Jones Lang LaSalle predicts that the vacancy rate for the Core CBD area – which includes Raffles Place, Marina Bay, Cecil Street, Shenton Way, Robinson Road and the Anson Road/Tanjong Pagar areas – will increase from an estimated 5.4 per cent at the end of this year to around 11-12 per cent by end-2011.

However, the firm’s head of markets Chris Archibold argues this will not lead to a decline in rentals, which will instead rise moderately in the next few quarters as the rising vacancy will be a short-lived phenomenon. ‘Assuming demand remains strong, this vacancy is likely to then fall especially given the more limited CBD supply in 2013 and 2014,’ he said.

CB Richard Ellis executive director (office services) Moray Armstrong’s modelling also points to an increase in Grade A office vacancy from 2.7 per cent at end-2010 to 8.8 per cent at end-2011 due to ‘the sheer volume of new supply completing next year which will likely outweigh take-up’.

He terms this a ‘statistical blip’, with the vacancy rate expected to ease to 4.5 per cent by end-2012.

‘None of this is likely to change the medium-term market direction which is expected to see tightening office space availability particularly post-2013,’ he said.

However, there may be a slight easing in the pace of rental increase. CBRE predicts a 16 per cent hike in average monthly Grade A office rental to $11.50 psf at end-2011, from $9.90 psf at end-2010. This year’s increase is 22 per cent.

JLL also forecasts a 3.5 per cent per quarter increase in CBD Prime Grade A rentals, totalling about 14 per cent for all of next year. This follows a nearly 20 per cent rise this year.

DTZ’s regional head, occupier services, Angela Tan observes that in most relocations, occupiers lease more space in their new premises than they vacate at their existing locations. ‘This will help mitigate the drop in overall office vacancy rates,’ she said.

According to Mr Archibold, ‘The take-up for new developments in 2010 and 2011 shows a very positive level of expansion at 29 per cent and 26 per cent respectively.’

JLL’s analysis shows that all the 1.7 million sq ft of new CBD offices completed this year, mostly at Marina Bay Financial Centre (MBFC) Phase 1, has been leased.

Of this, about 500,000 sq ft involves expansion (by the incoming tenants) while about one million sq ft will be vacated in existing buildings and returned to the market, with the balance vacated space of 200,000 sq ft slated for removal from the market for redevelopment or conversion to other uses.

Next year, JLL envisages completion of about 2.8 million sq ft of new CBD offices, of which 1.35 million sq ft has already been leased – comprising 350,000 sq ft for expansion, 800,000 sq ft to be vacated and returned to the market with the balance 200,000 sq ft removed for redevelopment.

New CBD office completions in 2011 will include Asia Square Tower 1, Ocean Financial Centre, OUE Bayfront and One Raffles Place Tower 2.

‘It’s difficult to get an accurate gauge on exactly how much of the space coming back to the market has already been re-let,’ says Mr Archibold.

At Capital Tower, where Australian mining giant BHP Billiton is not renewing its lease for about 40,000 sq ft expiring in mid-2011, landlord CapitaCommercial Trust (CCT) said other existing tenants in the building are seriously looking to take over the space. BHP is moving to MBFC.

Likewise, most of the 70,000 sq ft that Stanchart will vacate next year at another CCT property, Six Battery Road, to move to MBFC is under negotiation.

At One George Street, CCT has at least a year to market about 75,000 sq ft in total expected to be vacated by three tenants moving to Asia Square – Lloyd’s, Clifford Chance and Julius Baer.

‘Given a projected shortage of new office building completions in 2012 and 2013 and the international Grade A specifications of One George Street, we’re optimistic that our space will be available in an opportune time,’ said CCT.

DTZ’s Ms Tan predicts a two-tier office rental market may develop next year in the CBD.

‘While owners of new developments will have greater pricing power to command rental increases as their developments attain higher occupancy rates, landlords of older office buildings will need to focus on tenant retention by offering more competitive rents,’ she added.

Savills Singapore director (commercial) Agnes Tay reckons rents of AAA grade offices – new generation, international class buildings mostly in Marina Bay and Raffles Place – will rise 5-10 per cent in 2011 while rents for older Grade A office blocks are likely to hold steady in the first half of 2011 before facing easing pressure in the second half when occupiers start moving to new projects completing next year.

Source: Business Times, 21 Dec 2010

Unit land price is about $1,388 psf of potential gross floor area of 75,492 sq ft

TUAN Sing has made its second Singapore real estate property purchase this week. It yesterday inked a deal to buy Serene House, opposite the upcoming Botanic Gardens MRT Station, through a collective sale for $99.1 million.

The price for the freehold District 10 property, a short walk away from Botanic Gardens’ Eco-Lake, works out to a unit land price of about $1,388 per square foot of potential gross floor area of about 75,492 sq ft.

This takes into account an estimated $5.7 million payable to the state for the potential acquisition of a 9,192 sq ft driveway and 10 per cent additional gross floor area for balconies. No development charge is payable due to the high development baseline reflecting a 1.8 plot ratio on the site.

Under Master Plan 2008, the site is zoned for residential use with a 1.4 plot ratio. Serene House has a freehold land area of 39,828 sq ft. Assuming the site, at Cluny Park Road, can be amalgamated with the driveway, the total site area can be potentially enlarged to about 49,021 sq ft.

The enlarged plot can be built into a four-storey condo with 68 units averaging 1,000 sq ft nestled in a predominantly landed housing locale.

Analysts estimate the project could break even at about $2,000-2,100 psf. Units at Nassim Park Residences have sold at an average price of $3,659 psf in the second half of this year.

On Tuesday, Tuan Sing emerged as the top bidder for a 99-year leasehold low-rise private residential site at Seletar Road . Its bid of $123 million works out to $468 per square foot per plot ratio (psf ppr). Analysts have estimated the breakeven cost for a new condo on the site at $800-900 psf.

As for its latest purchase of Serene House, Tuan Sing said yesterday that it intends to develop ‘an ultra-luxurious project for this exclusive freehold site’.

In a statutory filing with Singapore Exchange, the group said its acquisition of Serene House is subject to Strata Titles Board’s approval and conditional upon Tuan Sing receiving an in-principle approval for the purchase of the adjoining state land from Singapore Land Authority.

Serene House is a four-storey walk-up residential block comprising 24 apartment units. Its owners will each receive about $4.1 million from the sale, said Colliers International, which brokered the sale.

The tender for the property closed on Dec 14, attracting seven bids. Tuan Sing’s offer was the highest.

‘The tender was well participated by significant property market players including major developers and contractors. The seven highly-competitive bids we received demonstrate the excellent development potential of Serene House in terms of location, convenience and exclusivity,’ said Colliers executive director (investment services) Tang Wei Leng.

Colliers is also marketing Serene Centre nearby. An expression of interest exercise for this property also closed on Dec 14 and is said to have drawn strong interest. Serene Centre has a plot ratio of 1.4 and is zoned for commercial/ residential use. It is owned by Lok Joo Pte Ltd, controlled by an Ng family that was also involved with developing Textile Centre.

Source: Business Times, 16 Dec 2010

ANOTHER day, another top bid from property group Tuan Sing Holdings in yet another crowded bidding war.

The firm has won a seven-way battle by lodging an offer of $99.1 million for the freehold Serene House residential site in Bukit Timah.

Its winning bid came a day after it led a field of 11 developers with a $123 million tender for a residential site in Seletar Road.

The Government has yet to declare who will get that land, but Tuan Sing has Serene House sewn up. Its winning bid topped the indicative price of $95 million to $98 million when the tender was launched last month.

The price works out to $1,388 per square foot per plot ratio, and that includes a 10 per cent balcony area and an estimated $5.7 million to buy an adjacent state land plot of 9,192 sq ft, which is subject to approval from the authorities.

Serene House is a four-storey walk-up block of 24 flats. Each owner is expected to reap about $4.1 million from the sale, said marketing agent Colliers International.

The residential site has a land area of 39,828 sq ft with a plot ratio of 1.4. There is no development charge payable, Colliers added.

Ms Tang Wei Leng, Colliers’ executive director of investment services, said significant property market players, including major developers, contested the tender.

Serene Centre, a commercial and residential development on sale through an expression of interest, also had its deadline for offers close on Tuesday. Colliers is also the marketing agent for the development.

Ms Tang said that while several offers were received, the owner, Lok Joo – a family-owned firm – is currently considering the offers and no decision has been made yet.

Serene Centre is a four-storey development on a 32,225 sq ft plot with shops on the first and second storeys and 10 flats on the upper two floors.

Both Serene Centre and Serene House are next to the upcoming Botanic Gardens MRT station on the Circle Line.

Source: Straits Times, 16 Dec 2010

CAPITALAND sold its stake in The Adelphi for $218.1 million, as it seeks to realise the value from non-core assets and re-invest the cash.

The firm has offloaded 163 strata-titled units – 86 office and 77 retail – in the 999-year leasehold mixed-use development to the Guthrie group.

This works out to $1,225 per sq ft for the units’ total area of 178,067 sq ft – representing 55.13 per cent of the total share value of The Adelphi.

Mrs Wong Jen Lai, CapitaLand senior vice-president of investment and asset management, said the sale of its units in the Coleman Street block was in line with its strategy to unlock the value of non-core assets and recycle capital.

‘The office sector remains a core business for CapitaLand and we are confident of the outlook of the office market in Singapore, underpinned by the economy’s robust growth,’ she said. ‘We will actively seek…new opportunities (here) that will enhance our core commercial portfolio.’

CapitaLand said that it expects a profit of about $15.7 million after tax from the deal, which should be completed by Jan 28. The 163 strata-titled units had a book value of $200 million as at last month.

Cushman & Wakefield Singapore vice-chairman Donald Han said the transaction was in line with recent market movements.

He added that with the stretch of colonial buildings on Stamford Road soon to be transformed, the further buzz in the City Hall area will provide more value to buildings there.

A new 15-storey building with shops, eateries and apartments will be built above the conserved heritage buildings of Stamford House, Capitol Building and Capitol Theatre. The project is part of a $700 million re-development – including land cost – after a tender for the site was awarded in October.

‘With the latest development, the area is an up and coming location…The buyer is likely to hold the asset for at least three years till the Stamford site is complete before considering any exit strategy,’ Mr Han said.

The Adelphi comprises a five-storey retail podium and a six-storey office block with four levels of basement parking.

Separately, a new office tower in the fast-growing Marina Bay area is nearing completion. Situated at 50, Collyer Quay, it was officially named OUE Bayfront yesterday. The tower, developed by Overseas Union Enterprise (OUE) on the site of the former Overseas Union House, will have 390,000 sq ft of lettable office space.

It is expected to be ready in the first quarter next year.

The initial line-up of tenants includes European bank Skandinaviska Enskilda Banken, law firm Allen & Overy and Merrill Lynch International Bank, which will anchor the building.

Almost 60 per cent of the office tower has been pre-committed, OUE said.

Source: Straits Times, 4 Dec 2010

Freehold plot may get bids of $300m for residential, commercial development
THE iconic Lion City Hotel and the adjoining Hollywood Theatre site have been put up for sale and could be in line for redevelopment into swanky new homes and shops.

The 147,909 sq ft freehold plot, which has been launched for tender with a closing date of Jan 6, is expected to attract bids topping $300 million from developers.

Once sold, it is likely that the land will host retail shops or offices and more than 200 new homes – the first time a large project of more than 100 units has been developed in the area since Sims Residences and Vistaya View were completed in 2003.

Such a project will further boost the rejuvenation of the area and is in line with the Government’s plans for Paya Lebar Central to be developed into a ‘lively, pedestrian-friendly commercial hub with a distinct cultural identity’.

Including an estimated development charge of $77.8 million payable for the re-zoning on top of the projected price of $300 million, developers can expect to foot $753 per sq ft (psf) per plot ratio.

The site, located within 350m of Paya Lebar MRT Station, is zoned for hotel and commercial use in the 2008 Masterplan.

But the Urban Redevelopment Authority has granted approval for it to be redeveloped into a mix of residential and commercial developments up to a gross plot ratio of 3.39, according to joint marketing agents Landmark Property Advisers and Knight Frank.

The plot consists of 243,805 sq ft of residential gross floor area (GFA) and 264,119 sq ft of commercial GFA, which will allow for a shopping centre similar to that of Katong Mall and some 240 apartments of an average size of 1,000 sq ft, the marketing agents said.

The GFA, however, includes a substation site of about 2,048 sq ft currently owned by SP PowerAssets.

Mr Colin Tan, research and consultancy director of property firm Chesterton Suntec International, said the residential segment is likely to perform well since it is close to the MRT station. The long-term potential of the Paya Lebar area might also appeal to buyers, he added.

Paya Lebar Central is one of the three commercial hubs selected to provide alternative locations for businesses and to bring jobs closer to homes as part of the Urban Redevelopment Authority’s decentralisation strategy. The other two are Jurong Lake District and Kallang Riverside.

The Lion City Hotel was built by the late property magnate Wee Thiam Siew some 40 years ago and the Wee family has been operating it ever since.

The old Hollywood Theatre used to be the location of City Harvest Church, but it has since been leased to Sheng Siong supermarket.

With the site now being allowed to switch to residential and commercial uses, the family has decided to divest this asset as property development is not their core business, the statement from the marketing agents said.

‘We expect keen interest from developers as it is seldom Singapore has a freehold site in single ownership suitable for large-scale development being offered for sale,’ the marketing agents added.

Source: Straits Times, 2 Dec 2010

Far East clinches freehold hotel, shopping centre site in largest collective sale this year

THE freehold site in the eastern part of Singapore occupied by Paramount Hotel and Paramount Shopping Centre has been sold for $214 million, in the biggest collective sale this year.

Far East Organization lodged the winning bid, which is 7 per cent above the $200 million asking price, sought when the tender opened last month.

The price works out to about $1,178 per sq ft per plot ratio (psf ppr). It also includes a development charge of $40.07 million if the site is used for residential purposes at a plot ratio of 2.1, said marketing agent Jones Lang LaSalle (JLL).

But if the site is retained for hotel and commercial use at a plot ratio of 3.0, the Far East bid works out to $736 psf ppr, including an estimated development charge of $12.8 million.

The land, if zoned for hotel use, could be redeveloped into a hotel and retail project with a gross floor area of up to 308,056 sq ft, and could accommodate up to 460 hotel rooms, said JLL.

If converted for residential use, it could take a high-rise tower of 205 flats, assuming per unit size of 1,000 sq ft.

The site has varied redevelopment options, including residential, hotel, commercial or a combination of those, but these are subject to planning approval, the company added.

Located near the popular Parkway Parade mall, the plot faces both Marine Parade Road and East Coast Road.

The ageing 229-room hotel and the 95 shops on the site are in a four-storey podium and an eight-storey tower block.

The Straits Times understands that Far East will keep the site as a hotel and retail development, with some addition and alteration works expected, to rejuvenate the property.

The hotel and shopping centre will be operated as part of Far East’s investment portfolio.

The 102,685 sq ft freehold property in District 15 was last put on the market in May 2007 at the same price, but did not find suitable takers.

JLL national director and head of commercial investments Quek Soh Hoon said there was a good level of interest for the collective sale tender, with about 10 submissions received. Ms Quek said the bidding was competitive, with only about 5 per cent separating the top three bidders.

‘The overwhelming response and competitive bids among the bidders signify a strong interest for the prime, rare, freehold redevelopment site.

‘The location of the site speaks for itself,’ she said. She cited its high accessibility and established amenities and added: ‘We are confident of the great potential that the site could possibly offer.’

The site is zoned for hotel use under the Urban Redevelopment Authority’s 2008 Master Plan, but in the past, it was designated for ‘local shopping’ use under the 1958 and 1980 master plans.

Singapore-based YTC Corporation owns Paramount Hotel as well as a few shop units, while the other shops are owned by different individuals.

Source: Straits Times, 27 Nov 2010

FAR East Organization has clinched Paramount Hotel and Shopping Centre along East Coast Road for $214 million.

BT understands that Far East plans to keep the freehold asset as an investment property for recurring income although refurbishment is likely to be on the cards.

The deal involves a collective sale and will be subject to approval from the Strata Titles Board.

Approval has been obtained from owners controlling over 90 per cent of share values and strata floor area in the asset.

Far East plans to manage the hotel. It is currently operated by YTC Corporation, which is selling the 229-room hotel. YTC also owns the Peninsula Excelsior Hotel at Coleman Street.

BT understands that YTC stands to receive about $167 million for the hotel, which translates to about $730,000 per room. The balance $47 million will be payable to the owners of the 95 strata shop units in the development. The ageing hotel and shops are housed in a four-storey podium and eight-storey tower block.

Far East was the highest of nearly 10 bidders that participated in the tender for the collective sale, which closed on Nov 23.

The property has a freehold land area of 102,685 square feet and is zoned for hotel use with a gross plot ratio of up to 3.0 under Master Plan 2008.

The location is familiar to Far East. It is developing Silver Sea and The Shore Residences condominium projects nearby.

The sale was brokered by Jones Lang LaSalle (JLL). The property consultant said that the site was formerly zoned for ‘local shopping’ use under the 1958 and 1980 Master Plans.

‘Subject to planning approval from the authorities, the site with a potential gross floor area of up to 308,056 sq ft has varied redevelopment options such as hotel, commercial, residential or a combination thereof,’ it said.

JLL added that the $214 million purchase price works out to about $1,178 per square foot per plot ratio (psf ppr) including development charge (DC) of $40.07 million for residential use at a plot ratio of 2.1 or $736 psf ppr including an estimated $12.8 million DC for a mix of hotel and commercial use at 3.0 plot ratio.

Source: Business Times, 27 Nov 2010

OFFICE types working near Raffles City MRT now have fresh retail therapy to soothe their stressed and rattled nerves.

‘About 92 per cent of Marina Bay Link Mall’s phase one has been leased,’ Raffles Quay Asset Management director of marketing (retail) Rose Tong said yesterday. The mall had a soft opening on Nov 3.

Phase one consists of several plots of land in Marina Bay Financial Centre (MBFC) Tower 1 and 2.

In Tower 1, the land that makes up phase one is below the Lawn@Marina Bay, which amounts to 93,800 square feet of subterranean retail space, plus the ground floor and Level 33.

As for Tower 2, the ground floor and the street level at the Ground Plaza make up phase one. These areas are now open to the public.

Tenants in the mall include Din Tai Fung, New York eatery Madison Deli, Japanese pasta house Yomenya Goemon and Ichiban Boshi.

There is also a supermarket that offers delivery services, called the Four Seasons Gourmet Market.

‘Shops will still be opening in the first two weeks of December,’ Ms Tong said.

Phase two of Marina Bay Link Mall will involve 82,200 sq ft, spread over three floors in Tower 3.

A temporary occupation permit for Tower 3 is expected in the first quarter of 2012.

To date, Marina Bay Financial Centre Tower 3 is 57 per cent leased, said Raffles Quay chief executive chief executive Wilson Kwong.

Asked if law firm Wong Partnership had leased space in Tower 3 – based on an earlier report that said that the firm ‘may be close to inking a lease for about 100,000 sq ft’ – Mr Kwong said yesterday that he could not comment on speculation.

He would only confirm that DBS would be the anchor tenant of Tower 3, taking up 700,000 sq ft, while McGraw-Hill and Clifford Chance will each lease one floor.

On further leases, Mr Kwong said: ‘Through our experience in managing One Raffles Quay, we understand our clients’ requirements, so when marketing MBFC, we know what they need.’

Source: Business Times, 25 Nov 2010

ART has first right to buy property, which could fetch around $250m

(SINGAPORE) The landmark Ascott Raffles Place is being marketed for sale discreetly under an expression of interest exercise.

The price tag for the 20-storey building, which has 146 serviced residences, is expected to be around $250 million, BT understands.

If a buyer emerges, the 999-year leasehold building’s owner – The Ascott Limited, the fully-owned serviced residence business of property giant CapitaLand – is expected to offer the asset to Ascott Residence Trust (ART), which has the right of first refusal to buy the property.

The Ascott Limited is the sponsor of ART.

The sale will come with a management contract, probably of about 10 years, for The Ascott Limited to continue to manage the property.

Ascott Raffles Place, at No 2 Finlayson Green, is the only serviced apartment development in the Raffles Place financial district, and may appeal to high net worth investors and other players in Singapore and the region keen on parking their money in a passive investment and leaving its management and operation to one of the world’s best serviced apartment groups.

Such players would have more leeway to bid higher for the asset than ART, which as a listed property trust, will be constrained from paying too high a price as that could render the potential acquisition of the property yield decretive instead of being yield accretive to the trust, say market watchers.

BT understands that Colliers International has been instructed by The Ascott Limited to seek offers.

The property comprises studio, one-bedroom and two-bedroom units housed in the former Asia Insurance Building.

Ascott bought the building in 2006 from insurer Asia General Holdings group for nearly $110 million and spent a further $60 million sprucing it up. The building was gazetted as a conservation building by the Urban Redevelopment Authority in April 2007.

It reopened its doors as Ascott Raffles Place in 2008.

The interiors of the suites were designed by Hirsch Bedner Associates. The suites are leased at around $400-$700 per night.

When the building was completed in 1954, it was the first modern highrise office tower to be built in Singapore after World War II. Today it remains one of the few ‘highrise’ buildings from the 1950s on the island. It was designed by the late Ng Keng Siang, the first Singaporean member of the Royal Institute of British Architects.

Among the features retained in the building is a 15-storey brass mail chute and guests can use it to get their letters mailed out, and the crown at the top of the building which was installed to mark the coronation of Queen Elizabeth II in 1953.

Source: Business Times, 25 Nov 2010