Business Times - 03 Jul 2008
Rentals making gentle waves at Sentosa Cove
They could hold firm despite gloom elsewhere and offer decent yields
By ARTHUR SIM
(SINGAPORE) Close to 300 homes at Sentosa Cove, including 200 condominium units, have received Temporary Occupation Permit (TOP) and the exclusive enclave is starting to bustle.
DTZ Debenham Tie Leung, which is the property manager of the 200-unit The Berth by the Cove says that the development is now about 70 per cent tenanted.
It added that the remaining units of the fully-sold development are owner-occupied, some of which are weekend homes or holiday homes for foreigners.
Other developments that have received TOP include The Berthside, Ocean 8, The Villas @ Sentosa Cove, Coral Island and North Cove.
Expected to come onto the leasing market next is the 116-unit The Azure, which is also fully sold.
And the popularity of The Berth by the Cove with the leasing market bodes well for the remaining 2,200 homes that are still being constructed.
DTZ senior director (research) Chua Chor Hoon said that the supply of new homes in Sentosa Cove is still 'limited' compared to the rest of Singapore and the units have 'the unique feature of close proximity to the sea'.
Saying that the limited supply of units in Sentosa Cove will limit any downward pressure on rentals, Ms Chua added: 'Rental prospects are likely to be better.'
This upbeat outlook for Sentosa Cove is particularly pertinent at a time when new housing supply is expected to flood the rental market by next year.
In a recent report, DTZ noted that in general, rentals would come under pressure between 2009 and 2011, not just from new supply but from the sub-sale market as well as it is unlikely that speculators will want to hold units for low rental income.
DTZ said that based on its basket of non-landed properties in the prime district (excluding luxury properties) average monthly rents are currently still holding steady at $4.90 psf per month.
While DTZ did not reveal rentals at The Berth by the Cove, a check with SISV-Realink shows that the rental for a unit there contracted for $19,500 per month in May.
Colliers International also said it believes median rentals could be around $6 psf per month.
Colliers director (research and advisory) Tay Huey Ying added that based on the average launch price of The Berth by the Cove of about $860 psf in 2004/2005, investors who bought units at this price could now be enjoying a net rental yield of about 5.5 per cent.
Those that bought units from the secondary market later when the price rose to about $1,500 psf will be looking at a net rental yield of 3.5 per cent.
'Nevertheless, these investors would still be enjoying a higher net rental return compared to those who invested in a freehold luxury apartment on the main island of Singapore in recent times since the latter are generating average net rental returns estimated to be in the region of 2.3 per cent,' added Ms Tay.
In time over 1,700 condominiums will be completed. Savills Singapore director (marketing and business development) Ku Swee Yong believes that buyers for most of these units will be investors, suggesting that a majority will be put up for lease.
Still, he said that there is a niche market for this type of waterfront home. 'We had an expat client who was looking to rent and after showing him a few options, he chose The Berth because he already has a yacht,' reveals Mr Ku.
Interestingly, Mr Ku says the advent of the integrated resort on Sentosa may not necessarily guarantee a pool of tenants. 'Not everyone will want to live so close to work,' he added.
What he does believe is crucial to the success of Sentosa Cove as an exclusive enclave is the provision of high end amenities. He added: 'Once these are completed, we believe Sentosa Cove rents could demand a premium over Orchard Road.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Thursday, July 3, 2008
Construction not putting tenants off
Sentosa rents soar
Construction not putting tenants off
Thursday • July 3, 2008
BARRY PORTER
barry@mediacorp.com.sg
SENTOSA Cove is slowly, but surely, attracting high-end tenants with the completion of an estimated 300 homes, including the 200-unit The Berth by the Cove condominium.
Despite ugly construction sites dotting many parts of Sentosa, the first luxury condo units and landed properties have drawn rents comparable to, if not higher than those in prime districts on the mainland, including Nassim Park and Grange Residences.
Colliers International has just completed its first rental survey of Sentosa Cove and says two-bedroom condos are fetching an average $5,350 a month, or $4.61 per square foot (psf).
Larger, four-bedroom units have rented for an average $10,625, which also equates to $4.61psf. However, one rented for $12,250.
As for landed homes, terrace houses ranging in size from 2,600 to 3,600 square feet have let for an average $15,333, or $5.19psf, while the first luxury bungalows ranging in size from 2,530 to 4,983 sq ft have been let for an average $24,000. The highest rental to date is $30,000.
“This is encouraging, given that so much construction is going on,” said Tay Huey Ying, Colliers director of research and advisory. “When fully-developed, it should be even more appealing to potential tenants.”
The idea of developing the 117-hectare cove into a waterfront enclave was first mooted in the ’80s. However, the first land parcel was only sold to the private sector in end-2003. Five years on, temporary occupation permits have been granted to just the first five small developments completed, with Ho Bee Group’ 200-unit The Berth being by far the largest.
More is to come, with land already sold capable of accommodating over 2,000 condo units and 400 bungalows or terrace homes.
Colliers said investors who bought units in The Berth at the end of 2004 or early 2005 and have held onto them are today enjoying attractive net rental yields of 5.5 per cent. Purchase prices have since surged. As such, Colliers said those who entered the market later in 2007 now have to contend with lower yields averaging at 3.5 per cent.
Prices of non-landed homes have shot up from an initial launch price of $785 per sq ft in November 2004 for The Berth to current $2,800psf for Lippo Group’s The Marina Collection.
Copyright MediaCorp Press Ltd. All rights reserved.
Construction not putting tenants off
Thursday • July 3, 2008
BARRY PORTER
barry@mediacorp.com.sg
SENTOSA Cove is slowly, but surely, attracting high-end tenants with the completion of an estimated 300 homes, including the 200-unit The Berth by the Cove condominium.
Despite ugly construction sites dotting many parts of Sentosa, the first luxury condo units and landed properties have drawn rents comparable to, if not higher than those in prime districts on the mainland, including Nassim Park and Grange Residences.
Colliers International has just completed its first rental survey of Sentosa Cove and says two-bedroom condos are fetching an average $5,350 a month, or $4.61 per square foot (psf).
Larger, four-bedroom units have rented for an average $10,625, which also equates to $4.61psf. However, one rented for $12,250.
As for landed homes, terrace houses ranging in size from 2,600 to 3,600 square feet have let for an average $15,333, or $5.19psf, while the first luxury bungalows ranging in size from 2,530 to 4,983 sq ft have been let for an average $24,000. The highest rental to date is $30,000.
“This is encouraging, given that so much construction is going on,” said Tay Huey Ying, Colliers director of research and advisory. “When fully-developed, it should be even more appealing to potential tenants.”
The idea of developing the 117-hectare cove into a waterfront enclave was first mooted in the ’80s. However, the first land parcel was only sold to the private sector in end-2003. Five years on, temporary occupation permits have been granted to just the first five small developments completed, with Ho Bee Group’ 200-unit The Berth being by far the largest.
More is to come, with land already sold capable of accommodating over 2,000 condo units and 400 bungalows or terrace homes.
Colliers said investors who bought units in The Berth at the end of 2004 or early 2005 and have held onto them are today enjoying attractive net rental yields of 5.5 per cent. Purchase prices have since surged. As such, Colliers said those who entered the market later in 2007 now have to contend with lower yields averaging at 3.5 per cent.
Prices of non-landed homes have shot up from an initial launch price of $785 per sq ft in November 2004 for The Berth to current $2,800psf for Lippo Group’s The Marina Collection.
Copyright MediaCorp Press Ltd. All rights reserved.
Business parks and high-tech sites gaining popularity
July 3, 2008
Business parks and high-tech sites gaining popularity
By Chua Hian Hou
BUSINESS parks and other high-tech industrial sites in Singapore have become increasingly popular among eligible tenants.
According to a new report released yesterday by CB Richard Ellis (CBRE), the overall occupancy rate at business parks probably hit a new high of 90 per cent last month, up from 88 per cent in March.
To rent space at sites like Changi Business Park, prospective tenants must meet certain criteria. These include carrying out research and development work.
Rental rates at these high-tech spaces are heading north. The rates may be cheaper than ultra-high-tech business parks and prime office space, but they were expected to have risen 6.8 per cent last month to $3.15 per sq ft per month from the first quarter.
The popularity of these sites, the report said, was due to the 'limited availability and continued rental increases' of office space in the Republic, although the dizzying upward spiral in rental rates had abated in recent months.
Nevertheless, prime office spaces can cost upwards of $16 per sq ft per month - far more expensive than in business parks.
Last year, prime office rents nearly doubled on the back of tight office space and a strong demand from occupiers, including global financial institutions expanding their operations in Singapore. This was on top of the 50 per cent-plus rise that prime office rents registered in 2006.
More business park and other high-tech sites are being built in Singapore. Recently, two business park sites in one-north were awarded.
Biopolis Phase III, which will have a gross floor area of 41,505 sq m when completed late next year, is being built by Crescendas Bionix.
Solaris, formerly known as Fusionopolis Phase 2B, will be built by Soilbuild Group Holdings. When completed by June next year, Solaris will have a gross floor area of 50,271 sq m.
Industrial landlord JTC Corp has also launched a new 'concept and price' tender at Changi Business Park.
This site will have a maximum gross floor area of 47,006 sq m, of which 40 per cent is designed for hotel and retail use. The tender will close next month.
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Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Business parks and high-tech sites gaining popularity
By Chua Hian Hou
BUSINESS parks and other high-tech industrial sites in Singapore have become increasingly popular among eligible tenants.
According to a new report released yesterday by CB Richard Ellis (CBRE), the overall occupancy rate at business parks probably hit a new high of 90 per cent last month, up from 88 per cent in March.
To rent space at sites like Changi Business Park, prospective tenants must meet certain criteria. These include carrying out research and development work.
Rental rates at these high-tech spaces are heading north. The rates may be cheaper than ultra-high-tech business parks and prime office space, but they were expected to have risen 6.8 per cent last month to $3.15 per sq ft per month from the first quarter.
The popularity of these sites, the report said, was due to the 'limited availability and continued rental increases' of office space in the Republic, although the dizzying upward spiral in rental rates had abated in recent months.
Nevertheless, prime office spaces can cost upwards of $16 per sq ft per month - far more expensive than in business parks.
Last year, prime office rents nearly doubled on the back of tight office space and a strong demand from occupiers, including global financial institutions expanding their operations in Singapore. This was on top of the 50 per cent-plus rise that prime office rents registered in 2006.
More business park and other high-tech sites are being built in Singapore. Recently, two business park sites in one-north were awarded.
Biopolis Phase III, which will have a gross floor area of 41,505 sq m when completed late next year, is being built by Crescendas Bionix.
Solaris, formerly known as Fusionopolis Phase 2B, will be built by Soilbuild Group Holdings. When completed by June next year, Solaris will have a gross floor area of 50,271 sq m.
Industrial landlord JTC Corp has also launched a new 'concept and price' tender at Changi Business Park.
This site will have a maximum gross floor area of 47,006 sq m, of which 40 per cent is designed for hotel and retail use. The tender will close next month.
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Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Step up scrutiny to curb illegal renovations
July 3, 2008
Step up scrutiny to curb illegal renovations
I REFER to last Friday's report, 'Illegal storey in house: Buyers lose case', about the couple who lost their case against the sellers of a 1 1/2-storey property.
The Building and Construction Authority (BCA) had informed the parties that the property had an illegal storey added to it.
This was a case that was in the making for a long time.
Innocent parties have wasted resources when they are not familiar with the building rules and regulations and believe that the property they are purchasing has duly complied with such regulations.
The illegal structure may not be a mere transgression of building rules - where a backyard shed is built right up to the rear perimeter wall.
Situations may arise where neighbours are so much nearer to you because walls and roof eaves are being built with less than the permitted distance set back from the boundaries of the property.
Or your property is now less private because your neighbour is looking down at you from his third-storey bedroom window.
If rectification work is required for these transgressions, it could be very costly.
In the last 10 years or so, there have been a lot of renovation work all over the island. I have seen many renovations or reconstruction of houses which do not seem to abide by BCA rules.
I believe this may be attributed first to inconsistent application of these rules by the regulators.
Second, too much reliance on certification by the architect/engineers who submit the building plans and endorse that the plans have conformed with all aspects of building regulations.
Third, too little groundwork by regulators to confirm that the actual construction adheres to these regulations.
As an example, in certain housing estates, properties can be redeveloped but the new structure should not exceed 2 1/2 storeys.
However, it is evident when you drive around the housing estates that several of these renovated structures are actually three-storey buildings.
Ng Wai Hong
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Step up scrutiny to curb illegal renovations
I REFER to last Friday's report, 'Illegal storey in house: Buyers lose case', about the couple who lost their case against the sellers of a 1 1/2-storey property.
The Building and Construction Authority (BCA) had informed the parties that the property had an illegal storey added to it.
This was a case that was in the making for a long time.
Innocent parties have wasted resources when they are not familiar with the building rules and regulations and believe that the property they are purchasing has duly complied with such regulations.
The illegal structure may not be a mere transgression of building rules - where a backyard shed is built right up to the rear perimeter wall.
Situations may arise where neighbours are so much nearer to you because walls and roof eaves are being built with less than the permitted distance set back from the boundaries of the property.
Or your property is now less private because your neighbour is looking down at you from his third-storey bedroom window.
If rectification work is required for these transgressions, it could be very costly.
In the last 10 years or so, there have been a lot of renovation work all over the island. I have seen many renovations or reconstruction of houses which do not seem to abide by BCA rules.
I believe this may be attributed first to inconsistent application of these rules by the regulators.
Second, too much reliance on certification by the architect/engineers who submit the building plans and endorse that the plans have conformed with all aspects of building regulations.
Third, too little groundwork by regulators to confirm that the actual construction adheres to these regulations.
As an example, in certain housing estates, properties can be redeveloped but the new structure should not exceed 2 1/2 storeys.
However, it is evident when you drive around the housing estates that several of these renovated structures are actually three-storey buildings.
Ng Wai Hong
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Singapore's real estate transparency ranking dips
Business Times - 01 Jul 2008
Singapore's real estate transparency ranking dips
JLL cites enhanced survey questions for slide from 9th to 11th position
By ARTHUR SIM
SINGAPORE and Hong Kong now rank side by side in 11th position on Jones Lang LaSalle's (JLL) Global Real Estate Transparency Index 2008, down from joint ninth position when the index was last revealed in 2006.
However, JLL said the reason is not a change in market practices but enhancement of the survey questions.
The company's head of research (South East Asia) Chua Yang Liang said: 'Singapore remains one of the most transparent markets in Asia alongside Hong Kong. Among the five key attributes assessed in the survey - performance measurement, market fundamentals, listed vehicles, legal and regulatory environment, transaction process - both countries scored very well for their legal and regulatory environment. Together with Finland, they topped the global ranking for this sub-index.'
JLL said that in keeping with historical results, the Australian and US real estate markets remain among the most transparent in the world and now are joint-ranked second. But with the addition of new variables relating to the quality and frequency of valuations, service charge transparency and financing transparency, Canada now ranks as the world's most transparent commercial real estate market.
The index, which provides a framework for comparing the level of real estate transparency in 82 markets around the world, revealed that eight countries moved up a full transparency tier since the last index in 2006.
Dubai, Romania, Ukraine and Russia showed the biggest improvements in transparency over the past two years.
A number of countries in the frontier markets are included in the index for the first time, with Belarus, Sudan, Algeria, Cambodia and Syria all scored as 'opaque'.
Other new entrants to the index, Bahrain, Bulgaria, Estonia, Latvia, Croatia, Abu Dhabi and Lithuania, scored in the 'semi-transparent' range, while Oman, Qatar, Morocco, Kuwait, Pakistan and Kazakhstan all scored in the 'low transparency' range.
The biggest improvers in Asia-Pacific were India, China and Vietnam. China (Tier-1 cities) showed the greatest improvement, moving up to the 'semi-transparent' tier to rank in 49th position.
Not all investors, however, target markets that are highly transparent.
LaSalle Investment Management global strategist Jacques Gordon said: 'Many cross-border investors focus on more mature, open and transparent real estate markets such as the UK, Canada, Netherlands and Hong Kong. However, opportunistic investors will consider the emerging, less mature, less open and semi-transparent markets, but will require higher returns to compensate for the higher risks associated with lower transparency.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Singapore's real estate transparency ranking dips
JLL cites enhanced survey questions for slide from 9th to 11th position
By ARTHUR SIM
SINGAPORE and Hong Kong now rank side by side in 11th position on Jones Lang LaSalle's (JLL) Global Real Estate Transparency Index 2008, down from joint ninth position when the index was last revealed in 2006.
However, JLL said the reason is not a change in market practices but enhancement of the survey questions.
The company's head of research (South East Asia) Chua Yang Liang said: 'Singapore remains one of the most transparent markets in Asia alongside Hong Kong. Among the five key attributes assessed in the survey - performance measurement, market fundamentals, listed vehicles, legal and regulatory environment, transaction process - both countries scored very well for their legal and regulatory environment. Together with Finland, they topped the global ranking for this sub-index.'
JLL said that in keeping with historical results, the Australian and US real estate markets remain among the most transparent in the world and now are joint-ranked second. But with the addition of new variables relating to the quality and frequency of valuations, service charge transparency and financing transparency, Canada now ranks as the world's most transparent commercial real estate market.
The index, which provides a framework for comparing the level of real estate transparency in 82 markets around the world, revealed that eight countries moved up a full transparency tier since the last index in 2006.
Dubai, Romania, Ukraine and Russia showed the biggest improvements in transparency over the past two years.
A number of countries in the frontier markets are included in the index for the first time, with Belarus, Sudan, Algeria, Cambodia and Syria all scored as 'opaque'.
Other new entrants to the index, Bahrain, Bulgaria, Estonia, Latvia, Croatia, Abu Dhabi and Lithuania, scored in the 'semi-transparent' range, while Oman, Qatar, Morocco, Kuwait, Pakistan and Kazakhstan all scored in the 'low transparency' range.
The biggest improvers in Asia-Pacific were India, China and Vietnam. China (Tier-1 cities) showed the greatest improvement, moving up to the 'semi-transparent' tier to rank in 49th position.
Not all investors, however, target markets that are highly transparent.
LaSalle Investment Management global strategist Jacques Gordon said: 'Many cross-border investors focus on more mature, open and transparent real estate markets such as the UK, Canada, Netherlands and Hong Kong. However, opportunistic investors will consider the emerging, less mature, less open and semi-transparent markets, but will require higher returns to compensate for the higher risks associated with lower transparency.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
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