MCC Group announced that 220 units out of the total of 413 at Provence Residence executive condominium (EC) were taken up for its launch from May 13 to May 15. (See: Discover insightful data of any Singapore condominium with our condo directory)
E-applications for the 413-unit, French-style, EC had begun on April 24 and ended on May 10. Balloting was conducted on May 12, while bookings began on May 13, Hari Raya Puasa, which was a public holiday.
Of the units sold, about 82% are three-bedroom units, while three-bedroom (premium) and four-bedroom units made up 11% and 7% of the take-up rate respectively. The average selling price of the units was $1,142 psf.
Another reason for the strong sales at Provence Residence is the widening price gap between new ECs, which are hovering around $1,100 psf today, and brand new, fast-selling suburban condos in the Outside Central Region (OCR), Gafoor points out. “There’s very little unsold stock of new mass market condominiums compared to two to three years earlier, and it’s not possible to find something in the $1,100 psf price range,” he adds.
Located at Canberra Crescent in Sembawang, Provence Residence is adjacent to Parc Canberra, which was launched in February last year, and sold 64% of its units at its launch. The average selling price achieved then was $1,085 psf. Parc Canberra is 98% sold with only nine units still available, based on caveats lodged with URA Realis. Average price across all units sold has now inched up to $1,099 psf.
“Considering that there was an earlier launch in the same area a year ago, selling more than half of its units on the first day of launch is very good,” remarks Lee Sze Teck, director of research at Huttons Asia.
While Provence Residence’s launch which came on May 13 was not affected by the tighter safe management measures announced on May 14, it is likely to lengthen the decision making process for buyers as ECs are for owner occupation, and buyers will want to have a look before committing to a purchase, says Mark Yip, CEO of Huttons Asia. “Virtual tours of showflats will help to mitigate this,” he adds. (See: MCC Land to kick off previews of One Bernam, Provence Residence)
PropNex’s Gafoor expects developers to avoid launching any new projects in the next four weeks – from May 15 to June 13 – with the tighter measures in place and the cap of two visitors per group (including agent) at project sales galleries and showflats. “The projects that have already been launched will implement these measures,” he says. “But developers with projects in the pipeline for launch are likely to wait it out. This is because people would want to stay home as well, due to anxiety over the increasing number of [Covid-19] clusters.”
While there will be no launches for the next two weeks and the whole month of June due to the tighter measures, “We are unlikely to revisit the trough of 277 new home units sold in April 2020 as around 400 units are estimated to have already been sold in the first two weeks of May,” reckons Huttons’ Lee.
While the entire country went into recession in 2020, the private residential market in Singapore continued chugging right along, seemingly immune to the economic fallout of the Covid-19 pandemic.
In 2020, transaction volumes in both the primary and secondary sales market accounted for 9,982 units and 10,927 units respectively, edging out the new sales volume of 9,912 units and the resale total of 9,238 units in 2019. It is ironic that a year characterised by a pandemic-induced recession would perform better when compared against what would largely be considered as an ordinary one.
Nonetheless, while brisk sales were grabbing all the headlines, the uncertainties caused by the pandemic-led recession had developers watching and waiting on the sidelines in the land sales market for the most of 2020, reticent on committing to acquiring development land, especially when Covid-19 appeared to be out of control, ravaging economies in Singapore and all over the world. As a result, five private residential and two executive condominium (EC) sites were awarded under the Government Land Sales (GLS) Programme in 2020, making for a mere total of about 2,625 future units. Compared to the seven private residential sites and two EC sites that were awarded in 2019, the likely numbers of units that can be developed from GLS sites bought in 2020 is 37.4% less than the potential of 4,195 units from GLS sites sold in 2019.
Things were quieter on the collective sales market front. There were only three collective sales in 2020 from the smallish developments of Yuen Sing Mansion, Advance Apartment and Sophia Ville and Fairhaven (combined), accounting for a total of about $103.7 million. This was about 73.4% less than the total volume of collective sales in 2019 estimated at $390.5 million, even though the number of collective sales in 2019 was considered miniscule compared to the enbloc heydays of 2017 and 2018.
In essence, 2020 was a gap year for acquiring land sites for private residential development while home sales remained buoyant. The unsold inventory (taking into account all stages of development, from planned to completed units) at end-2020 totalled 27,437 units, about 3.9% lower than the 28,557 units registered as at end-2016 — just before the collective sales run of 2017 and 2018. The biggest culprit contributing to the diminished unsold inventory — the lowest in more than 10 years — was the number of units in the planning stage without prerequisites for sale. At 9,921 units by end-2020, these units are typically at the early stages of a project development and are 30.5% below the 14,285 units in the same category in 2016.
All of the above factors could possibly combine to create a compression point where developers will compete aggressively to secure limited available land parcels, whether it be from the public or the private sector, in the limited 728 sq km that encompasses Singapore. It is not helped by the fact that between the 2H2020 GLS list and the 1H2021 GLS, a conservative increase of an estimated 235 private residential units was observed on the Confirmed List, and an increase of 375 units in both the Confirmed and Reserve Lists combined. The modest supply could imply the authorities’ conservative stance in the near term and monitor the existing unsold inventory amidst the economic recession. Yet, should homebuying demand stay resilient or strengthen as the pandemic situation improves with the economy reopening at a faster clip by the end of first half 2021, the potentially quicker absorption of new sales could lead to fresh demand for land bank. More developers could then step up their search for opportunities from the GLS programme and collective sale sources.
So, a few things might possibly happen in 2021. Most likely, some of the sites on the 1H 2021 Reserve List will be triggered for tender. And it would not be a stretch of the imagination that developers will form partnerships to share in the slice of the available land sites, as well as the risk of escalating construction costs.
Additionally, it is possible for collective sales to be successful this year, especially for smaller quantum sites consisting of a project potential of about 200 units, priced within $200 million. For this to happen, however, existing homeowners and developers would have to find a reasonable middle ground where both parties could benefit in the prevailing uncertain economic conditions. And finding that middle ground will be hard to do. Construction costs have been on the increase in part due to the skilled workers unable to enter Singapore from across the Causeway and from elsewhere. Developers are mindful of this and would have to mitigate land costs against rising construction costs so as to keep the overall selling price within the means of homebuyers and not to risk prices from moving up too abruptly. This would not only price certain buyers out of the market but will likely lead to more measures by the government, who are already watching the market closely.
Of course, not all sellers of prospective collective sales projects will have exceedingly high price expectations. There will be some who might be willing to trade in their aging home and downgrade or right-size to a more manageable footprint and location, especially if they are retirees whose children have grown up and left home.
Regardless of what happens in 2021, the unique year of Covid-19 in 2020 will make for some interesting times in both the public and private residential land sales market in 2021. While the collective sales cycle might appear to occur every ten years or so, the advent of Covid-19 creating a gap year with a dearth of land sales suggests that the regular collective sales cycle might have been short-circuited. Assuming that the pace of developer sales and resale transactions stay the same course as in 2020, developers will be itching for land sooner rather than later.
Listed company The Place Holdings announced that it has entered into a shareholders’ agreement with MCC Land (developer for Provence Residence) to jointly develop a new freehold mixed development project at 15 Enggor Street, where Realty Centre currently stands.
The Place Holdings bought the 12-storey Realty Centre in a collective sale for $148 million in April 2019. The commercial building currently has a total site area of 11,000 sq ft and is zoned for commercial use with a plot ratio of 5.6. It can achieve a possible height of 35 stories.
Under the shareholders’ agreement, MCC Land will take up a 30% equity stake in the project company that will develop the project. The Place Holdings will continue to hold a 51% equity stake and the remaining stake of 19% will be held by Sun Card Limited.
A freehold residential redevelopment site in District 9 measuring 56,481 sq ft has been relaunched at a guide price of $376 million. Exclusively marketed by CBRE, the price remains the same as when it was launched for sale last year in September.
The guide price of $376 million works out to a land price of around $2,377 per square foot per plot ratio (psf ppr). Taking into consideration the 7% bonus gross floor area allowed for balconies, the land price will be $2,287 psf ppr.
Currently, the site holds dual addresses at 13 Devonshire Road and 49 Saint Thomas Walk. It accommodates a two-block condominium with 96 units, The Bayron, and has a total strata floor area of 112,300 sq ft. The development is on an elevated plot of land in a private residential enclave that enjoys 24m of frontage along Devonshire Road and 64m of frontage along Saint Thomas Walk. The property is in close proximity to Somerset MRT station and malls along the Orchard Road shopping belt.
Interested developers in The Bayron took a cautious approach when it was previously launched for sale via public tender last September, says Michael Tay, head of capital markets, Singapore at CBRE. As the residential market has demonstrated resilience and Covid-19 vaccinations are being rolled out progressively, he believes that “foreign buying is expected to gradually return”.
Under the Master Plan 2019, the site is zoned “residential” with a plot ratio of 2.8 and a height control of up to 36 storeys. The maximum allowable gross floor area for the site is around 159,893 sq ft, or 169,218 sq ft if including the 7% bonus gross floor area allowed for balconies.
Tay adds that since the site is located within the Central Area, the ‘85-sqm’ rule does not apply in the calculation of the maximum number of dwelling units per development. This provides developers the flexibility in configuring the new development to accommodate units of a smaller size, which will be attractive and affordable to buyers seeking to downsize, as well as millennials.
CBRE will conduct the sale via a public tender exercise that will close on April 6 at 3pm.
[SINGAPORE] Construction works for a 3.2-kilometre tunnel which will hold two Cross Island Line MRT tracks was awarded on Monday (March 8) to Taisei Corporation of Japan and the Singapore branch of the China State Construction Engineering Corporation.
The Land Transport Authority (LTA) said this is the first time a large-diameter tunnel boring machine will be used to construct a single tunnel with the two tracks in it.
The project involves the design and construction of the underground tunnel between Aviation Park station and Loyang station on phase one of the MRT line,which is slated to begin operations in 2030.
Boring works will begin in the second quarter of this year by the joint venture, which secured the contract at S$356 million.
LTA had previously already awarded contracts for the Cross Island Line. In 2019, works for Teck Ghee MRT station was awarded to Shanghai Tunnel Engineering as part of North-South Corridor tunnel works.
The North-South Corridor is an expressway with dedicated bus lanes and cycling paths. It is expected to be completed in 2026. Residents of Provence Residence will be able to access the North-South Corridor via a short drive along Sembawang Road and Sembawang Avenue. Check out the Provence Residence Location Map to find out more.
Taisei Corporation and China State Construction Engineering both have experience in rail stations and local tunnels, the LTA said.
Taisei Corporation is now involved in the construction of the Marina Bay station and tunnels for the Thomson-East Coast Line, while China State Construction Engineering Corporation is constructing Keppel and Cantonment stations on the Circle Line, as well as tunnels for the North-East Line extension.
When completed, the 50-kilometre Cross Island Line will pass through Loyang, Tampines, Hougang, Serangoon North and Ang Mo Kio, among other areas, and link major hubs such as Jurong Lake district, the Punggol Digital district and the Changi region.
Half of its stations will be interchanges with other train lines.
The LTA has projected that daily ridership should be at least 600,000 in the initial years, growing to one million in the longer term.
For potential buyers of Provence Residence, it may be worthwhile to go through some data on other Executive Condominium launches of the past.
To some Singaporeans, resale ECs are guaranteed money-makers: they’re halfway to full privatisation, there’s no Minimum Occupation Period (MOP), and no upfront Additional Buyers Stamp Duty (ABSD) if you’re upgrading.
What buyers should also consider, however, are the prices of regular condos in the same district. In some districts, the price gap may be narrow enough to justify getting a resale condo instead. In others, the gap is so wide it’s more sensible to get a resale EC.
So in this piece, we decide to take a look at ECs with units that are more than 1,000 square feet , with prices of less than $1 million.
Yes, it’s quite specific. But in light of the current situation, there’s definitely been a shift in buyer’s preferences of looking for bigger spaces in their homes. And needless to say, at a more affordable quantum. Here are some of the more notable cases:
Note: For the following, we focused on developments that are in the same district as the EC, and in the same lease start year where possible. We have also skipped developments with too few recorded transactions.
Location: Westwood Avenue (District 22)
Developer: Jurong West Land Pte. Ltd.
Lease: 99-years from 1997
Number of units: 754
Average price: $656.90 psf
Price difference from surrounding condos: $195.96 psf, or 23 per cent lower
The Floravale has huge units, as is typical of 20+ year-old condos. Most notably, its 3+1 room configurations go up to a whopping 2,303 sq.ft., and this development has 4-bedders reaching up to 2,746 sq. ft.
Yet at an average price of $656.90, one of the gigantic 2,746 sq.ft. units would only fall at around $1.8 million.
Along with its proximity to many schools, Floravale could be a value buy for larger families living in the west.
In terms of location, the Floravale is convenient to a specific group of buyers. If you make a lot of trips into Malaysia, for example, Floravale is one of the few properties close to Tuas Link MRT and the Tuas Checkpoint (about a 14-minute drive).
The other group of buyers will be parents, because there are six schools within a one-kilometre radius of this condo:
That said, this is a condo for those who drive. There are few immediate amenities, barring a 750-metre, 10-minute walk to Gek Poh Shopping Centre. Although it will be a short walk to the Gek Poh MRT station on the Jurong Region Line, which is slated to open from 2026.
For the case of this particular EC, there was only one “fair” comparison that we could draw to – The Mayfair, as it had the most comparable lease date.
It remains at a higher price point simply due to the smaller number of units (452) and it is in relative close walking distance to The Chinese Garden MRT station.
Location: Sengkang East Ave. (District 19)
Developer: Greatearth Construction Pte. Ltd.
Lease: 99-years from 2010
Number of units: 540
Average price: $875 psf
Price difference from surrounding condos: $231.93 psf, or 21 per cent lower
Like most ECs, Austville Residences is far from the MRT station. But unlike many ECs, Austville at least has an LRT station that’s just 350 metres away; the Kangkar LRT station is around a four-minute walk.
Austville is also close to Punggol Park, which is one of the main family recreation areas; it’s 750-metres away, or about a nine-minute walk.
Austville is also within 650 metres of Rivervale Plaza; it’s not a huge mall, but it’s got a decent range of food options, and has a few shops (it also has a wet market). Most of the retail therapy will have to come from Compass One, which is about a five-minute drive away.
If you specifically want to live in Punggol, the pricing for Austville Residences is going to be the main attraction: many three-bedder units, reaching 1,087 sq. ft., have a quantum of around $950,000. This is quite hard to match for a condo that’s less than 10 years old.
There is room for price movement here, given how Austville Residences is just around three years from full privatisation, and surrounding condos of the same size are rarely under $1 million.
In terms of comparison to condos of similar vintage, there were 3 that were available in the same district – Terrasse, Parc Vera, and The Scala.
To be fair, these are quite tough comparisons to be drawn against. While they are all in the same district, their actual locations are rather different to begin with. In short, it is arguable that Kovan and Hougang are in better locations – hence the price disparity.
As for The Scala, I doubt many would argue that it is in a much better location. Plus that close proximity to Lorong Chuan MRT station and you can easily see why there is such a big price gap between the two despite the same lease start date.
Location: Choa Chu Kang Street 64 (District 23)
Developer: CPL Choa Chu Kang Pte. Ltd.
Lease: 99-years from 2003
Number of units: 459
Average price: $741.73 psf
Price difference from surrounding condos: $184.65 psf, or 20 per cent lower
The Quintet is just 650 metres, or an eight-minute walk, to Yew Tee MRT station. This makes it one of the rare few ECs that has good MRT access.
Also, note that Yew Tee is just four train stops from Jurong East interchange, and one stop away from Choa Chu Kang station (Lot One, the largest mall in Choa Chu Kang, is located next to the Choa Chu Kang station).
The Quintet’s residents also got lucky recently: they’ll benefit from the revamp of Limbang Shopping Centre , which should be ready by 2022.
There’s already an NTUC here, and we understand the revamped mall will include several more shops and restaurants. This mall is only 230 metres, or a three-minute walk, from the Quintet.
If you work at Yew Tee Industrial Estate, it’s also worth noting that The Quintet is only 1.1 kilometres or about a three-minute drive away.
That downside is that The Quintet is in a densely-packed area, with a lot of HDB blocks nearby. So while it’s one of the more conveniently located ECs, it’s not for those who like wide open spaces or a lot of greenery.
For those looking for condo alternatives would have to contend with either The Warren or The Jade for ones in a similar era. In this case, there wasn’t any so we had to make do with these two despite the 2 year lease start date difference.
Nevertheless, even with The Quintet being newer, the price gap is quite evident for The Warren. Again, it is arguably in the better located Choa Chu Kang plus it is situated right next to the MRT station.
Location: Boon Lay Drive (District 22)
Developer: Boon Lay Executive Condominiums Pte. Ltd.
Lease: 99-years from 1997
Number of units: 432
Average price: $697.50 psf
Price difference from surrounding condos: $155.36 psf, or 18 per cent lower
Summerdale is one of the most popular Boon Lay-area condos, due to having three schools in short walking distance: Boon Lay Garden Primary is just down the road (175 metres away), while Dunearn Secondary is just 211 metres away. A little further away is River Valley High, which is still just 380 metres away, or about six minutes on foot.
The other reason for its popularity is proximity to Jurong Point Mall, which is just 800 metres away (about a 10-minute walk). This is currently the largest suburban mall in the west-end of Singapore. As unorthodox proof of its convenience, we’ll point out that someone once managed to live in it for four straight years. It has a 24-hour NTUC!
Summerdale is also around 900 metres from Boon Lay MRT station; not really a convenient walk at 12 minutes, but considered close for an EC.
For those looking for an equivalent condo comparison, you’d have to turn to The Mayfair again. Despite it being a year older (in terms of lease start date), it still commands a higher psf price difference of 22.2 per cent.
Location: Pasir Ris Drive 3 (District 18)
Developer: Pidemco Land Ltd.
Lease: 99-years from 1996
Number of units: 312
Average price: $696.60 psf
Price difference from surrounding condos: $136.68 psf, or 16 per cent lower
ECs are rarely near MRT stations, so Eastvale is a rare exception. It’s located just 650 metres, or about an eight-minute walk, from Pasir Ris MRT. Eastvale is also right next to Hai Sing Catholic School, and Casuarina primary school is about a 10-minute walk away.
Eastvale has seen a significant boost due to the development of Downtown East, which is right across the road. This is one of the largest family recreation hubs in Singapore, with retail, dining, and Singapore’s largest water park (Wild Wild Wet).
The reason Eastvale’s price hasn’t skyrocketed is the presence of Sea Horizon. This EC is just a 10-minute walk from Eastvale. but is much newer; it was completed in 2016.
Sea Horizon is just about to reach MOP sometime this year. While it’s a bit further from Downtown East than Eastvale, some buyers are likely waiting it out, and contemplating between the two.
If you are looking for a resale condo comparison, the two within a similar lease start year would be The Tropica and Eastpoint Green. Admittedly, they are both located in very different locations as well, so we can’t say that too much can be drawn here in terms of a conclusion.
Location: Tampines Street 73 (District 18)
Developer: Pinevale Condominium Pte. Ltd.
Lease: 99-years from 1997
Number of units: 322
Average price: $714.43 psf
Price difference from surrounding condos: $131.90 psf, or 16per cent lower
Pinevale is one of those condos which wins “close, but not quite” for a great location. On the one hand, it’s within 1.1 kilometres of Tampines Hub, with its desirable cluster of three malls, office spaces, etc.
On the other hand, the distance can’t be considered a convenient walk (around 18 minutes); and the immediate surroundings of Pinevale lack amenities. There is a FairPrice outlet at Tampines Street 83, about 400 metres away, but that’s about it.
(Ps. Because the question invariably comes up, Pinevale is a six-minute drive from Ikea Tampines.)
Irritatingly, the short distance to Tampines Hub may also not be worth driving or cabbing; not given the heavy traffic and parking issues at Tampines Hub. So perhaps those who cycle will find Pinevale’s location most appealing.
Besides its proximity to Tampines Hub, Pinevale is also next to United World College (East Campus). Poi Ching School is also very close, at 265 metres or around a four-minute walk; and Junyuan Secondary is 530 metres away, or around a six-minute walk.
Overall, if you want to live near Tampines Hub but don’t want to bust your budget, take a closer look at this EC.
Like Eastvale, the price gap here is in a similar vein – but again, it’s hard to put too much to it because of the differences in location between Tampines and Simei despite them being located in the same district. Plus, Modena and Tropical Spring are located at just a 3-minute and 4-minute walk respectively to Simei MRT station. This is a far cry from the 18-minute walk from Pinevale to Tampines MRT station.
Some of the ECs on the lists above are already privatised, whereas some – like Austville Residences – are more than halfway there. This is a good time to address the issue of prices and full privatisation.
If we go back to the early 2000’s, it was easy to predict that full privatisation would help to raise EC values. However, it’s become more debatable in today’s context.
Full privatisation would allow foreigners and companies to purchase an EC unit – but in 2021, the Additional Buyers Stamp Duty (ABSD) on foreigners is 20 per cent, and it’s 25 per cent on entities. This means that the two groups allowed to purchase ECs are also less inclined to do so, given the high tax rate. This has led to the argument that ultimately, it’s reaching the five-year MOP that boosts EC prices, with full privatisation contributing much less.
Property investment company Blue Sun Holdings is refurbishing a freehold industrial building in Tai Seng into the first smart-managed green building in the industrial area. The 11-storey building at 7 Harvey Road was sold to the investment firm for $27 million in January 2021, shortly after the property received its Temporary Occupation Permit (TOP) in October 2020.
According to Kenny Chai, managing director at Blue Sun Holdings, the investment firm came across the property on the market last year. The previous owner was looking to sell the building to raise cash for his business to tide over the Covid-19 pandemic.
This is the first major industrial acquisition and refurbishment exercise by Blue Sun Holdings since the investment firm entered the property market in 2016. It is also the first time the company is investing capital to incorporate smart technologies and sustainable features into one of its buildings.
The company’s portfolio in Singapore includes conservation shophouses in Balestier, freehold medical suites in Centrium Square, residential units at V on Shenton, and Delta House Industrial Complex at Lower Delta Road.
“We’ve had a presence in the Singapore property market since 2016 and have been looking to acquire and repurpose standalone industrial properties here. It has been our desire to invest in larger commercial and industrial buildings in Singapore, and repurpose them with new green features,” says Chai.
The freehold building at 7 Harvey Road is currently undergoing refurbishments that are expected to be completed by August 2021. The property sits on a 12,915 sq ft site and has a built-up area of 32,069 sq ft. The site is zoned “Business 1” under the 2019 Master Plan.
According to the investment company, the building will have a bistro-style dining area on the first floor, with car park facilities from the second to fifth floors. The property will have 18 units for rent that are spread across the seventh to 10th floors. A sky garden will occupy the sixth floor, which will also accommodate a fitness area and a communal farm.
Blue Sun Holdings has contracted local design firm Pomeroy Studio to design sustainable features for the building. Pomeroy Studio was behind the design of business park Alice @ Mediapolis by Boustead Projects. Blue Sun Holdings says that Pomeroy Studio will “apply their green research into creating an alternative industrial workspace” at 7 Harvey Road.
One of the green features being installed at 7 Harvey Road is a rooftop solar farm that is expected to reduce the overall energy consumption of the building by about 10–15% compared to a typical building of this size and usage.
“In addition to the solar panels, there will be the added effect of smart air-conditioners and smart lighting systems integrated in the building. These will all be centrally controlled by a smart building management system,” says Chai.
The importance of contributing to, and being part of, the growing green movement in the built environment is a rising priority for some international businesses in Singapore and a growing number of local companies, says Chai.
“The government has been promoting sustainability in the built environment for the past few years, but it only really caught on as more building owners, developers, and asset managers tapped solar panels to offset their overall utility consumption. Now more companies want to be a part of the broader sustainability movement,” he says.
Encouraging the widespread adoption of green features and sustainable technologies in the built environment has been a top-down push by the government over the past few years. The most recent effort was the announcement of a nationwide movement to advance sustainable development and the unveiling of the Singapore Green Plan 2030.
AI-led building management
According to Chai, the firm has been on the lookout for suitable properties in the Ubi and Tai Seng areas to invest in for the past two years. But only a handful of available buildings were on the market and most were B1 factory ramp-up buildings that would be too costly to redevelop.
“We decided to focus on the Tai Seng and Ubi areas because we believe they are underserved in terms of the supply of new buildings with energy-efficient green features. Most of the available green buildings in Singapore tend to be in the CBD,” says Chai.
The company is banking on a decade-long trend that could see strong growth in the demand for new industrial buildings with sustainable features in city-fringe districts like Tai Seng. Prominent businesses which already have their headquarters in the area include homegrown F&B multinational corporation BreadTalk as well as Sakae Holdings which owns the sushi brand Sakae Sushi.
“These areas have huge potential to grow as new technology industries such as software developers move their offices into these city-fringe locations. This is because most properties here are more spacious and cost less to rent compared to CBD spaces,” says Chai.
He adds that demand for newer buildings has also received a boost from the growth of direct-to-consumer businesses and the booming e-commerce market in Singapore. “Traditionally prestigious CBD addresses are no longer the priority for such businesses; even the larger-sized ones like Shopee are headquartered in [the city-fringe area of] Buona Vista,” he says.
According to the investment firm, the average rent for a non-green building in the Tai Seng area is about $2.50 psf to $3.50 psf. The higher rate is typically for serviced offices in the area. The investment firm hopes to charge an average rent of about $3 psf to $4.20 psf at 7 Harvey Road, subject to future reviews.
The company says that about 30% of the office spaces at 7 Harvey Road have already been taken up, and the firm is in active discussions to lease the remaining workspaces.
Upcoming disposals and acquisitions
Looking ahead, the investment firm says that it will be focusing its efforts on acquiring and repurposing other industrial buildings and incorporating green features.
Land tenure is an important factor as it takes 5–10 years for the company to see a return on its investment in a green redevelopment project. Thus, this excludes buildings with a 30- or 60-year leasehold, and the company prefers 99-year or freehold properties.
The firm will also start to gradually divest its current portfolio of shophouses and medical suites as it redirects capital into acquiring industrial buildings. “Some of the potential areas we are looking at are older buildings in the CBD that are due for en bloc. We are also looking at the Kallang area for potential buildings to acquire,” says Chai.
Prime residential locations and prices
Property investment trends