April 2, 2008
Property market may stay quiet for up to a year
Home prices, sales could remain weak as US sub-prime concerns linger
By Fiona Chan
A MONTH ago, property consultants were predicting that the cooling market would pick up after June. That optimism has fast drained away.
Consultants now expect home prices and sales to remain weak for up to a year from now, after official estimates yesterday confirmed that price growth was tapering off.
'We can expect residential prices to continue weakening over the next 12 months', in the light of the United States sub-prime debacle and an expected US recession, said Jones Lang LaSalle (JLL).
Other consultancies, such as CB Richard Ellis Research, believe price growth will slow further in the second quarter, to '1 per cent or 2 per cent'.
Home sales are also plunging as buyers retreat - and they are expected to stay low as sellers dig in their heels to wait out the slowdown.
New home sales were likely to have dropped in the first quarter to one of the lowest levels ever, second only to those recorded during the Sars period.
In the secondary market, sales have fallen to 2005 levels, according to estimates from Savills Singapore.
Mid-tier private properties on the city fringe, such as in Novena, Toa Payoh, Marine Parade and Queenstown, are likely to be hardest hit by falling buyer demand.
These areas saw the biggest slowdown in price growth in the first 10 weeks of the year, suggesting that prices in these regions may be peaking, said JLL.
Buyers in these areas have shallower pockets and are more sensitive to market sentiment, it added.
In the HDB segment, prices have stabilised at about $50,000 cash over valuation or less, said Mr Eugene Lim, assistant vice-president at ERA Realty Network.
'Resale flats priced higher than that take much longer to sell or may not sell at all.'
Phillip Securities Research, meanwhile, aired concerns over the 'huge supply' of homes due to be completed in the next two years.
Supply is 'expected to exceed the demand from buyers and result in a slide in local property prices from 2010', it said.
HDB plans to release another 5,000 new build-to-order flats in the next six months. There are also 64,900 private homes in the pipeline, of which 90 per cent will be completed by 2011, while 60 per cent have yet to be sold.
Most experts believe, however, that confidence and demand will return by year-end - as long as the Singapore economy stays robust.
'Sellers now take a while to sell their homes, but there are still buyers,' said Mr Eric Cheng, the executive director of HSR property group.
'Last year, it took maybe a month to sell a home. Now, it takes two months. But in 2000 or 2002, it took a year,' he said.
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Wednesday, April 2, 2008
Less office space for release in H1
Business Times - 02 Apr 2008
Less office space for release in H1
SLA expects to offer only 34,200 sq m in GFA, down 20% from H1 last year
By ARTHUR SIM
THE Singapore Land Authority (SLA) expects to release 34,200 square metres (368,125 square feet) in gross floor area (GFA) for office use in the first half of 2008. This is about 20 per cent less than the 43,000 sq m (462,847 sq ft) that was offered in H1 2007.
SLA director (land operations - private) Teo Cher Hian said that while the tenders for this office space has been 'well-received with strong bids submitted', SLA will continue to monitor market take-up and identify more sites with office use, 'if demand is prevalent'.
Just launched is the former Monk's Hill Secondary School at 10 Winstedt Road in the Newton vicinity which has a GFA of 7,700 sq m (82,882 sq ft) and a guide rent of $147,300 a month.
This works out to about $1.80 psf per month.
Cushman and Wakefield managing director Donald Han believes that this site is likely to see competitive bidding because of its location.
Already, Ascott Group has moved its Ascott Centre of Excellence to the nearby former Anthony Road Girls' School and Anglo-Chinese Primary School is understood to have leased a state-owned property at 12 Winstedt Road.
And Mr Han says that 10 Winstedt Road is 'one of the better sites released in the last 12 months'.
Based on the guide rent of $147,300 per month or about $1.80 psf per month, Mr Han believes that the breakeven rent for the potential developer would be about $2.10 psf per month after factoring construction costs for retro-fitting the property at around $100 psf.
'The developer could ask for a monthly rent of about $5 psf,' he added.
However, as Mr Han noted, the general office rental market has begun to show signs of 'moderation' of late with landlords 'reducing their rental expectations'.
And this could affect the demand for retro-fitted state-owned offices.
'If you price these (retro-fitted state-owned) properties in the $5-$6 psf per month range, you may not see demand coming from users looking to move out of the CBD fringe, where landlords are already trying to retain their tenants,' said Mr Han.
And as for prime office space, he notes that the financial sector also appears to have 'stabilised in terms of growth'.
'People looking at these state-owned buildings are usually those that have low budgets for rent.'
Those still looking for a bargain can turn to Jerry Tan, who tendered and was awarded the 145,431 sq ft (GFA) site at 195 Pearl's Hill Terrace with a bid of $53,501 per month or about 40 cents psf per month last year.
Mr Tan revealed that while units have already been leased out for over $4 psf per month, he intends to start offering units at $3.50 psf per month.
To date, Mr Tan said, he has about five tenants but he hopes to attract more with the lower rents. One of the drawbacks is that the lease for the building is only for three years but Mr Tan said: 'Start-ups don't usually intend to sign long leases.'
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EastLiving - Singapore Property and Real Estate DB
Less office space for release in H1
SLA expects to offer only 34,200 sq m in GFA, down 20% from H1 last year
By ARTHUR SIM
THE Singapore Land Authority (SLA) expects to release 34,200 square metres (368,125 square feet) in gross floor area (GFA) for office use in the first half of 2008. This is about 20 per cent less than the 43,000 sq m (462,847 sq ft) that was offered in H1 2007.
SLA director (land operations - private) Teo Cher Hian said that while the tenders for this office space has been 'well-received with strong bids submitted', SLA will continue to monitor market take-up and identify more sites with office use, 'if demand is prevalent'.
Just launched is the former Monk's Hill Secondary School at 10 Winstedt Road in the Newton vicinity which has a GFA of 7,700 sq m (82,882 sq ft) and a guide rent of $147,300 a month.
This works out to about $1.80 psf per month.
Cushman and Wakefield managing director Donald Han believes that this site is likely to see competitive bidding because of its location.
Already, Ascott Group has moved its Ascott Centre of Excellence to the nearby former Anthony Road Girls' School and Anglo-Chinese Primary School is understood to have leased a state-owned property at 12 Winstedt Road.
And Mr Han says that 10 Winstedt Road is 'one of the better sites released in the last 12 months'.
Based on the guide rent of $147,300 per month or about $1.80 psf per month, Mr Han believes that the breakeven rent for the potential developer would be about $2.10 psf per month after factoring construction costs for retro-fitting the property at around $100 psf.
'The developer could ask for a monthly rent of about $5 psf,' he added.
However, as Mr Han noted, the general office rental market has begun to show signs of 'moderation' of late with landlords 'reducing their rental expectations'.
And this could affect the demand for retro-fitted state-owned offices.
'If you price these (retro-fitted state-owned) properties in the $5-$6 psf per month range, you may not see demand coming from users looking to move out of the CBD fringe, where landlords are already trying to retain their tenants,' said Mr Han.
And as for prime office space, he notes that the financial sector also appears to have 'stabilised in terms of growth'.
'People looking at these state-owned buildings are usually those that have low budgets for rent.'
Those still looking for a bargain can turn to Jerry Tan, who tendered and was awarded the 145,431 sq ft (GFA) site at 195 Pearl's Hill Terrace with a bid of $53,501 per month or about 40 cents psf per month last year.
Mr Tan revealed that while units have already been leased out for over $4 psf per month, he intends to start offering units at $3.50 psf per month.
To date, Mr Tan said, he has about five tenants but he hopes to attract more with the lower rents. One of the drawbacks is that the lease for the building is only for three years but Mr Tan said: 'Start-ups don't usually intend to sign long leases.'
Singapore Real Estate and Property updates
EastLiving.com.sg
Contact
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stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
South Asia struggles to control inflation
Business Times - 02 Apr 2008
South Asia struggles to control inflation
Countries in the region are using various methods to check rising prices - well aware of the consequences if they fail
By M SHAHIDUL ISLAM
AFTER enjoying low inflation for more than one-and-a-half decades, many countries are now faced with exorbitant price hikes in fuel and non-fuel commodities. Since early 2007, oil and many agricultural commodities have been witnessing abrupt price increases.
In much of South Asia, the hikes have exposed the vulnerability of the low- and middle-income groups as well as government exchequers. Inflation has surged in many of the South Asian countries due to low per capita domestic production; the central bank's lax monetary policies or lagged effects of earlier monetary expansion; undervalued exchange rate policies (in economies other than India); and internal political instability. According to the Economist Intelligence Unit (EIU), the consumer price index (CPI) inflation in Sri Lanka was 17.5 per cent in 2007, followed by Bangladesh (9.1 per cent), Pakistan (7.6 per cent) and India (6.4 per cent).
For the South Asian countries, the challenges of inflation are two- pronged.
Firstly, galloping inflation could significantly destabilise key macro- economic variables, including GDP growth. Higher oil import bills that most economies in the region absorb through subsidies could further swell their fiscal deficits.
Regressive tax
Secondly, price volatility poses political dangers. South Asia has the largest number of poor people in the world and the poor spend a relatively high proportion of their income - up to 80 per cent - on food.
Rising food prices are thus effectively a regressive tax. If the past is any guide, price volatilities of South Asian staples like rice and wheat could result in political instability in the region.
India is relatively less vulnerable to the current inflationary shock, thanks largely to its higher domestic agricultural production capacity and the recent appreciation in its currency. Nevertheless, in his 2007-08 Union Budget speech, Finance Minister P Chidambaram acknowledged pressure on domestic prices of food articles in India. He contended that, 'managing the supply side of food articles will be the most crucial task in the ensuing year and keeping inflation under check is one of the cornerstones of our policy'. In India, inflation based on the wholesale price index soared to a 12-month high of 5.92 per cent on March 8, which is above the 5 per cent limit set by the Reserve Bank of India (RBI) for this fiscal year.
The other major economies in the region (Pakistan, Bangladesh and Sri Lanka) - which are largely dependent on international markets for fuel and, to a lesser extent, non-fuel commodities - have been facing much more daunting challenges than India to contain inflation. The point-to-point inflation in these three countries is now double-digit. According to the Central Bank of Sri Lanka, the New Colombo CPI reached 21.6 per cent in February. In Bangladesh, the central Bangladesh Bank reported that inflation was 11.43 per cent on a point-to- point basis in January whereas food inflation hit 14.2 per cent in the same period. In Pakistan, the year-on-year consumer price inflation reached 11.3 per cent in February while food inflation was 18.3 per cent - the fifth consecutive month of double-digit increase, according to the EIU.
Furthermore, inflation in India, Pakistan, Bangladesh and, to some extent, Sri Lanka could have been far worse had their exchequers not absorbed a substantial portion of the oil import bills via subsidies. Only Sri Lanka has revised its administered energy prices upwards in several stages since 2000. As a result, the oil price hike has had a direct impact on the economy's CPI inflation. Fiscal deficits in Pakistan and Bangladesh are swelling due to oil subsidies. In India, however, the petroleum subsidy is an off-budget item and it does not affect the government's fiscal book.
The price hike of fuel and non-fuel commodities in international markets is widely blamed for the current inflation in South Asia. Secondly, the monetary expansion or the lagged effects of higher-than-programmed money and credit growth during the fiscal year 2007 and excess liquidity have also played a part in raising prices in the region. Thirdly, imported inflation in Sri Lanka, Pakistan and Bangladesh has soared as their domestic currencies have weakened in recent years.
The nominal effective exchange rate (NEER) and the real effective exchange rate (REER), except for the Indian rupee, have been moving in opposite directions. Generally, NEER and REER move quite closely together, except in high inflationary environments. If the nominal exchange rate does not sufficiently appreciate, real exchange rate adjustment only happens through the increase in the price level over time, relative to trading partners. The Chinese economy also experienced a similar situation recently until the yuan was allowed to appreciate.
Furthermore, the supply side of the commodity market has been disrupted by internal political unrest and emergency rule in Bangladesh and Pakistan. The former also faced two major natural disasters in 2007 which damaged standing crops, among others. In Sri Lanka, ethnic conflict exacerbated inflation. To compound these problems, the growth of the agriculture sector in many parts of South Asia in recent years has been sluggish.
If the US dollar continues to slide, oil prices remain high, strong demand for commodities persists and more and more oil-seeds and staples channel towards bio-fuel production, the South Asian economies may witness even higher inflation in the coming months.
India's inflation is still at a tolerable level. Moreover, the country is expecting a record harvest in 2008. To avoid food inflation, the authorities have banned exports of several commodities and fixed higher prices for exportable agriculture produce. Nevertheless, the potential risk of price hikes in the economy may arise from three avenues.
First, foreign portfolio investors' increasing appetite for the Indian market will continue to put upward pressure on the rupee. If capital inflows are not fully sterilised, the economy will have excess liquidity that can induce inflation. The cuts by the US Federal Reserve to deal with the sub-prime crisis have put pressure on the RBI to revise its key interest rates downward. However, the dilemma for the RBI is that lowering interest rates will fuel inflation.
Secondly, roughly 10 million public sector employees in India are likely to get a 50 per cent pay rise this year. If wages go up, prices are also set to increase.
Thirdly, the country is preparing for a parliamentary election early next year. Government expenditures tend to increase in election years, adding to inflation.
If all these issues are left unchecked, India's inflation may surpass the RBI's expectations in the coming months.
Currency appreciation
Most emerging market economies are now fighting inflation either by appreciating their currencies or hiking policy rates or both, depending on the macro-economic conditions. In India, currency appreciation continues to be used as a major instrument to contain imported inflation, though a widening current account deficit is a concern for the policy makers. Nevertheless, as most of India's competitors, including China, are now appreciating their currencies to contain inflation, competitiveness concerns for India are less pressing.
Despite the latest Fed rate cut, the RBI may increase its key policy rates slightly. In an election year, the current United Progressive Alliance government may prefer to check inflation even if this would slow down India's economic growth slightly, by containing credit and money supply growth.
Bangladesh can afford to keep its currency slightly stronger, thanks to its favourable current account position. The Bangladesh Bank has already tightened the broad money supply and credit growth. The monetary policy should be more contractionary even if it affects the country's economic growth. Sri Lanka and Pakistan have to rely on interest rate hikes, as the current account deficits in these economies have been widening.
Fiscal policy tools, including reductions in import and excise duties, could be applied to contain imported inflation. Indeed, such tools have been applied in Bangladesh. Lately, import duties on a number of essential commodities (in particular, edible oil) have been reduced in India. Sri Lanka had earlier reduced import duties but later re-imposed them because the revenues generated were too important to forgo, even temporarily.
Apart from fiscal and monetary measures, it is important for the South Asian countries to address domestic supply-side bottlenecks to enable international prices to converge with domestic prices.
The writer is a research associate at the Institute of South Asian Studies, an autonomous research institute within the National University of Singapore.
Singapore Real Estate and Property updates
EastLiving.com.sg
Contact
Stuart Chng: (65) 9691 9907
stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
South Asia struggles to control inflation
Countries in the region are using various methods to check rising prices - well aware of the consequences if they fail
By M SHAHIDUL ISLAM
AFTER enjoying low inflation for more than one-and-a-half decades, many countries are now faced with exorbitant price hikes in fuel and non-fuel commodities. Since early 2007, oil and many agricultural commodities have been witnessing abrupt price increases.
In much of South Asia, the hikes have exposed the vulnerability of the low- and middle-income groups as well as government exchequers. Inflation has surged in many of the South Asian countries due to low per capita domestic production; the central bank's lax monetary policies or lagged effects of earlier monetary expansion; undervalued exchange rate policies (in economies other than India); and internal political instability. According to the Economist Intelligence Unit (EIU), the consumer price index (CPI) inflation in Sri Lanka was 17.5 per cent in 2007, followed by Bangladesh (9.1 per cent), Pakistan (7.6 per cent) and India (6.4 per cent).
For the South Asian countries, the challenges of inflation are two- pronged.
Firstly, galloping inflation could significantly destabilise key macro- economic variables, including GDP growth. Higher oil import bills that most economies in the region absorb through subsidies could further swell their fiscal deficits.
Regressive tax
Secondly, price volatility poses political dangers. South Asia has the largest number of poor people in the world and the poor spend a relatively high proportion of their income - up to 80 per cent - on food.
Rising food prices are thus effectively a regressive tax. If the past is any guide, price volatilities of South Asian staples like rice and wheat could result in political instability in the region.
India is relatively less vulnerable to the current inflationary shock, thanks largely to its higher domestic agricultural production capacity and the recent appreciation in its currency. Nevertheless, in his 2007-08 Union Budget speech, Finance Minister P Chidambaram acknowledged pressure on domestic prices of food articles in India. He contended that, 'managing the supply side of food articles will be the most crucial task in the ensuing year and keeping inflation under check is one of the cornerstones of our policy'. In India, inflation based on the wholesale price index soared to a 12-month high of 5.92 per cent on March 8, which is above the 5 per cent limit set by the Reserve Bank of India (RBI) for this fiscal year.
The other major economies in the region (Pakistan, Bangladesh and Sri Lanka) - which are largely dependent on international markets for fuel and, to a lesser extent, non-fuel commodities - have been facing much more daunting challenges than India to contain inflation. The point-to-point inflation in these three countries is now double-digit. According to the Central Bank of Sri Lanka, the New Colombo CPI reached 21.6 per cent in February. In Bangladesh, the central Bangladesh Bank reported that inflation was 11.43 per cent on a point-to- point basis in January whereas food inflation hit 14.2 per cent in the same period. In Pakistan, the year-on-year consumer price inflation reached 11.3 per cent in February while food inflation was 18.3 per cent - the fifth consecutive month of double-digit increase, according to the EIU.
Furthermore, inflation in India, Pakistan, Bangladesh and, to some extent, Sri Lanka could have been far worse had their exchequers not absorbed a substantial portion of the oil import bills via subsidies. Only Sri Lanka has revised its administered energy prices upwards in several stages since 2000. As a result, the oil price hike has had a direct impact on the economy's CPI inflation. Fiscal deficits in Pakistan and Bangladesh are swelling due to oil subsidies. In India, however, the petroleum subsidy is an off-budget item and it does not affect the government's fiscal book.
The price hike of fuel and non-fuel commodities in international markets is widely blamed for the current inflation in South Asia. Secondly, the monetary expansion or the lagged effects of higher-than-programmed money and credit growth during the fiscal year 2007 and excess liquidity have also played a part in raising prices in the region. Thirdly, imported inflation in Sri Lanka, Pakistan and Bangladesh has soared as their domestic currencies have weakened in recent years.
The nominal effective exchange rate (NEER) and the real effective exchange rate (REER), except for the Indian rupee, have been moving in opposite directions. Generally, NEER and REER move quite closely together, except in high inflationary environments. If the nominal exchange rate does not sufficiently appreciate, real exchange rate adjustment only happens through the increase in the price level over time, relative to trading partners. The Chinese economy also experienced a similar situation recently until the yuan was allowed to appreciate.
Furthermore, the supply side of the commodity market has been disrupted by internal political unrest and emergency rule in Bangladesh and Pakistan. The former also faced two major natural disasters in 2007 which damaged standing crops, among others. In Sri Lanka, ethnic conflict exacerbated inflation. To compound these problems, the growth of the agriculture sector in many parts of South Asia in recent years has been sluggish.
If the US dollar continues to slide, oil prices remain high, strong demand for commodities persists and more and more oil-seeds and staples channel towards bio-fuel production, the South Asian economies may witness even higher inflation in the coming months.
India's inflation is still at a tolerable level. Moreover, the country is expecting a record harvest in 2008. To avoid food inflation, the authorities have banned exports of several commodities and fixed higher prices for exportable agriculture produce. Nevertheless, the potential risk of price hikes in the economy may arise from three avenues.
First, foreign portfolio investors' increasing appetite for the Indian market will continue to put upward pressure on the rupee. If capital inflows are not fully sterilised, the economy will have excess liquidity that can induce inflation. The cuts by the US Federal Reserve to deal with the sub-prime crisis have put pressure on the RBI to revise its key interest rates downward. However, the dilemma for the RBI is that lowering interest rates will fuel inflation.
Secondly, roughly 10 million public sector employees in India are likely to get a 50 per cent pay rise this year. If wages go up, prices are also set to increase.
Thirdly, the country is preparing for a parliamentary election early next year. Government expenditures tend to increase in election years, adding to inflation.
If all these issues are left unchecked, India's inflation may surpass the RBI's expectations in the coming months.
Currency appreciation
Most emerging market economies are now fighting inflation either by appreciating their currencies or hiking policy rates or both, depending on the macro-economic conditions. In India, currency appreciation continues to be used as a major instrument to contain imported inflation, though a widening current account deficit is a concern for the policy makers. Nevertheless, as most of India's competitors, including China, are now appreciating their currencies to contain inflation, competitiveness concerns for India are less pressing.
Despite the latest Fed rate cut, the RBI may increase its key policy rates slightly. In an election year, the current United Progressive Alliance government may prefer to check inflation even if this would slow down India's economic growth slightly, by containing credit and money supply growth.
Bangladesh can afford to keep its currency slightly stronger, thanks to its favourable current account position. The Bangladesh Bank has already tightened the broad money supply and credit growth. The monetary policy should be more contractionary even if it affects the country's economic growth. Sri Lanka and Pakistan have to rely on interest rate hikes, as the current account deficits in these economies have been widening.
Fiscal policy tools, including reductions in import and excise duties, could be applied to contain imported inflation. Indeed, such tools have been applied in Bangladesh. Lately, import duties on a number of essential commodities (in particular, edible oil) have been reduced in India. Sri Lanka had earlier reduced import duties but later re-imposed them because the revenues generated were too important to forgo, even temporarily.
Apart from fiscal and monetary measures, it is important for the South Asian countries to address domestic supply-side bottlenecks to enable international prices to converge with domestic prices.
The writer is a research associate at the Institute of South Asian Studies, an autonomous research institute within the National University of Singapore.
Singapore Real Estate and Property updates
EastLiving.com.sg
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Stuart Chng: (65) 9691 9907
stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
Inflation cited as region's No 1 threat
Inflation cited as region's No 1 threat
Wednesday • April 2, 2008
THE World Bank has sliced 1.2 percentage points off its Singapore growth forecast and warned inflation will be the region's No 1 threat this year. It believes dealing with high food and fuel prices will be an even greater challenge to East Asian governments than US financial turmoil and a slowing global economy.
Singapore's inflation rate hit 6.5 per cent in February, slightly off January's 26-year high.
The World Bank cut its GDP forecast for Singapore from 6.4 per cent to 5.2 per cent, within the Government's revised official growth range.
"For all commodity prices, this is not a short-term problem," said Mr Vikram Nehru, World Bank chief economist for East Asia and the Pacific. "There may be volatility. They may come down for a while, but eventually we are expecting a relatively long period of elevated prices in metals, food and oil."
It's not just a Singapore problem. In China, inflation has surged to its fastest pace in 11 years, while consumer prices in Sri Lanka and Vietnam are hovering around 20 per cent. The World Bank believes East Asian governments should consider solutions like targeted subsidies to help the poor. — Esther Fung
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EastLiving - Singapore Property and Real Estate DB
Wednesday • April 2, 2008
THE World Bank has sliced 1.2 percentage points off its Singapore growth forecast and warned inflation will be the region's No 1 threat this year. It believes dealing with high food and fuel prices will be an even greater challenge to East Asian governments than US financial turmoil and a slowing global economy.
Singapore's inflation rate hit 6.5 per cent in February, slightly off January's 26-year high.
The World Bank cut its GDP forecast for Singapore from 6.4 per cent to 5.2 per cent, within the Government's revised official growth range.
"For all commodity prices, this is not a short-term problem," said Mr Vikram Nehru, World Bank chief economist for East Asia and the Pacific. "There may be volatility. They may come down for a while, but eventually we are expecting a relatively long period of elevated prices in metals, food and oil."
It's not just a Singapore problem. In China, inflation has surged to its fastest pace in 11 years, while consumer prices in Sri Lanka and Vietnam are hovering around 20 per cent. The World Bank believes East Asian governments should consider solutions like targeted subsidies to help the poor. — Esther Fung
Singapore Real Estate and Property updates
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stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
More temp office space on offer soon
More temp office space on offer soon
More than 360,000 sq ft at Badminton Hall area in Guillemard to be released
Wednesday • April 2, 2008
Cheow Xin Yi
cheowxinyi@...
IN A bid to help alleviate an office space crunch, the Singapore Land Authority (SLA) hopes to release another 368,000 square feet in gross floor area for temporary conversion by the middle of the year. But that is still 20 per cent less than what was released in the same period last year.
Mr Teo Cher Hian, director of private land operations at SLA, said this shortfall is due to there being fewer state properties left to convert.
The latest site to be offered this month will be the Singapore Badminton Hall and Association's premises at Guillemard Road.
The state land agent has already released two properties for tender this year — the former Monk's Hill Secondary School and Siglap-Changi Community Centre.
Mr Teo said the SLA will monitor market take-up and identify more sites if demand merited.
Average office rents shot up over 50 per cent last year. However, Urban Redevelopment Authority statistics show potential new office supply of around 10 million square feet over the next five years when some major new developments are complete.
Mr Colin Tan, research head at Chesterton International, believes SLA is probably being cautious. "It's probably to relieve the current squeeze. But have they done studies to see if releasing now will affect supply, say, two years down the road?"
A Colliers International report shows rental growth for prime office space moderating in the past three months, rising a more modest 3.2 to 6.9 per cent quarter-on-quarter.
Instead, it said industrial rents are rising faster — some 16 per cent in the past quarter. That's because more companies had turned to high-specification industrial space as an alternative amid rising office rents.
Citibank, DBS Bank and Standard Chartered Bank have announced they will relocate some of their operations to built-to-suit office complexes in Changi Business Park.
Mr Tan Boon Leng, Colliers' director for industrial sales and leasing, said: "It is expected that more banks are likely to jump on this bandwagon soon."
Colliers expects rental for high specification industrial space to rise 20 per cent for the rest of the year.
But industrial rents are coming from a low base. Knight Frank's research head, Nicholas Mak, said: "Rentals in the industrial sector are still single digits, $3 to $4 per square foot per month, compared to $10 to $18 per square foot in the office sector. So, there is obviously more upside for growth in percentage terms."
Copyright MediaCorp Press Ltd. All rights reserved.
Singapore Real Estate and Property updates
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EastLiving - Singapore Property and Real Estate DB
More than 360,000 sq ft at Badminton Hall area in Guillemard to be released
Wednesday • April 2, 2008
Cheow Xin Yi
cheowxinyi@...
IN A bid to help alleviate an office space crunch, the Singapore Land Authority (SLA) hopes to release another 368,000 square feet in gross floor area for temporary conversion by the middle of the year. But that is still 20 per cent less than what was released in the same period last year.
Mr Teo Cher Hian, director of private land operations at SLA, said this shortfall is due to there being fewer state properties left to convert.
The latest site to be offered this month will be the Singapore Badminton Hall and Association's premises at Guillemard Road.
The state land agent has already released two properties for tender this year — the former Monk's Hill Secondary School and Siglap-Changi Community Centre.
Mr Teo said the SLA will monitor market take-up and identify more sites if demand merited.
Average office rents shot up over 50 per cent last year. However, Urban Redevelopment Authority statistics show potential new office supply of around 10 million square feet over the next five years when some major new developments are complete.
Mr Colin Tan, research head at Chesterton International, believes SLA is probably being cautious. "It's probably to relieve the current squeeze. But have they done studies to see if releasing now will affect supply, say, two years down the road?"
A Colliers International report shows rental growth for prime office space moderating in the past three months, rising a more modest 3.2 to 6.9 per cent quarter-on-quarter.
Instead, it said industrial rents are rising faster — some 16 per cent in the past quarter. That's because more companies had turned to high-specification industrial space as an alternative amid rising office rents.
Citibank, DBS Bank and Standard Chartered Bank have announced they will relocate some of their operations to built-to-suit office complexes in Changi Business Park.
Mr Tan Boon Leng, Colliers' director for industrial sales and leasing, said: "It is expected that more banks are likely to jump on this bandwagon soon."
Colliers expects rental for high specification industrial space to rise 20 per cent for the rest of the year.
But industrial rents are coming from a low base. Knight Frank's research head, Nicholas Mak, said: "Rentals in the industrial sector are still single digits, $3 to $4 per square foot per month, compared to $10 to $18 per square foot in the office sector. So, there is obviously more upside for growth in percentage terms."
Copyright MediaCorp Press Ltd. All rights reserved.
Singapore Real Estate and Property updates
EastLiving.com.sg
Contact
Stuart Chng: (65) 9691 9907
stuart.chng@eastliving.com.sg
EastLiving - Singapore Property and Real Estate DB
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