Jump in May home sales lifts hopes for second half

The Business Times - June 19
May's firm pick-up in developers' property sales has prompted consultants to predict a take-off in the second half of the year as more new launches come onstream.
While the year got off to a slow start - with residential launches lagging that of last year - developers' sales survey by the Urban Redevelopment Authority for May showed developers sold 53 per cent more private homes (1,121 units) than a month ago or 8 per cent more than a year ago.
This came on the back of a 60 per cent month-on-month surge in launch units in May and a 186 per cent jump from a year ago as developers launched four new projects last month.
Including executive condominiums (ECs) - even though no new EC was launched - developers sold a total of 1,257 homes, 5 per cent fewer than a month ago or 11 per cent lower than a year ago.

Tricia Song, Head of Research: 
As expected, developers’ sales in May rebounded strongly thanks to a couple of major new launches. Two new projects - Amber 45 and Twin Vew – accounted for 48% of the 1,121 units (excluding executive condos) sold last month. May’s sales were the highest since the 1,246 units sold in August 2017.
The 1,121 new homes transacted were 53.1% higher than the 732 shifted in April 2018, and 7.9% more than the 1,039 units sold in May 2017. The sharp rise in take-up came as developers placed 1,060 new units for sale – the highest number of units launched in a month since 1,616 in April 2017.
This brings year-to-May developers’ sales to 3,434 units (excl. ECs), 38% lower compared to 5,568 units sold over the corresponding period last year.
Despite the slow start to the year, we think the sales momentum is catching on with more new launches –  1,259-unit Stirling Residences, 805-unit Park Colonial, 327-unit Daintree Residence, 1,472-unit Riverfront Residences (former Rio Casa) and Jadescape (former Shunfu Ville) – all of which will be put on the market in the coming months. Colliers expects 12,600 new private homes to be sold in the whole of 2018, up from 10,566 units in 2017.
That said, developers’ sales are likely to be muted in June owing to the typically slower market activity during the June school holidays. Read the full analysis here.

Emerging prime areas challenge traditional districts 9, 10, 11

The Business Times - June 16
Singapore's traditional prime districts 9, 10 and 11 are being challenged in their position as the upper echelons of the private housing market not only by new prime areas such as Marina Bay but also by what List Sotheby's International Realty terms "emerging prime areas" such as Tanjong Pagar and Ophir-Rochor Beach Road area.
The firm's analysis of transactions captured by the Urban Redevelopment Authority's Realis system shows that units at Duo Residences in the Beach Road area and Wallich Residence At Tanjong Pagar Centre for instance have sold for S$2,076-2,721 per square foot and S$2,756-3,894 psf respectively in the first quarter of this year.
In the same period, apartments at Marina One Residences have fetched S$2,175-3,004 psf while units at Martin Modern in District 9 have transacted at S$2,551-2,842 psf.

Tricia Song, Head of Research:
City living has been slower to catch up due to the protracted process of urban renewal and need for change in mindset against living amidst commercial buildings. However, with increasing good quality and mixed retail and residential developments in the Central Business District, they provide more options not just to investors but owner occupiers as well. Infrastructural changes that would shape the skyline (port relocation, development of the Greater Southern Waterfront) and accessibility (new MRT lines, closing of the loop of the existing Circle Line) should enhance the attractiveness of city living in the next decade. In the future, these factors could compensate the leasehold nature of some of the properties, versus those in District 9,10 and 11. 

More luxury condos to cross S$4,000 psf mark

The Business Times - June 15
Luxury residential properties crossing the S$4,000 per square foot (psf) mark in Singapore's prime Orchard Road district have been few and far between in recent years, but this could change, given the recent spate of record-setting land sales and upcoming launches in the district.
Hong Kong-listed Shun Tak Holdings said on Wednesday that it has purchased two freehold redevelopment sites for a total of S$593.5 million in Orchard Boulevard and Nassim Road.
One was the S$375.5 million purchase of Park House at 21 Orchard Boulevard via a collective sale, which set a new national record of S$2,910 per square foot per plot ratio (psf ppr); the other was a S$218 million purchase of a plot at 14 and 14A Nassim Road, which works out to an estimated S$2,744 psf ppr, inclusive of development charge.

Tricia Song, Head of Research:    
Singapore’s luxury home prices had been on a decline since 2013, due partly to the cooling measures and perceived oversupply. However, this situation has started to turn around as the supply has been soaked up, with limited new completions in the next two years. In addition, Singapore’s luxury home prices appear relatively attractive compared to other key gateway cities such as Hong Kong, Shanghai and London, which have seen prices continue to skyrocket over the past four to five years. The recent land sales won by Shun Tak, FEC, New World Development and Cheung Kong, also show that Hong Kong developers may have seen a better risk-reward proposition in Singapore’s luxury homes, compared to their local or Chinese properties. 

Great Eastern, NTUC Income sign up at PLQ

The Business Times - June 12
Homegrown insurance bigwigs Great Eastern and NTUC Income have leased office space at Paya Lebar Quarter (PLQ). BT understands that Great Eastern, a listed subsidiary of OCBC, has leased about 125,000 sq ft on four floors of the 13-storey Tower 3 in the project.
This is the same tower where SMRT has leased 97,000 sq ft (three levels) and property consulting group CBRE, 31,000 sq ft (one floor).
Paya Lebar Quarter has two other office towers, both 14-storeys high. According to market talk, NTUC Income has leased 55,000 sq ft, or two levels of Tower 2. There is also talk that multinational IWG is in advanced discussions to lease about 52,000 sq ft in Tower 1 for its lifestyle co-working concept, Spaces.

Duncan White, Head of Office Services:
The Paya Lebar Quarter (PLQ) development offers a new-to-market asset offering of Grade-A mixed-use development outside of the Central Business District (CBD), and East of the city. The East-strip between the greater CBD and Changi Business Park lacked alternate and pure office opportunities to occupiers, PLQ bridges that gap with high quality at relatively attractive rates. Creating its own business district in an up and coming micro-market. 
To date, the confirmed Tenants are predominately from the government and local sector, rather than the MNC pool which the development had initially targeted.
The movements boost decentralisation for some, and a move towards, (but avoiding) the core CBD for others, to enhance talent attraction and retention. 
We expect to see more decentralised consolidation movements from occupiers favoring PLQ over more expensive equivalent quality builds in the core CBD. It is expected that the rental rates may still rise in the decentralised markets as economic confidence grows and vacancy diminishes.  

Tricia Song, Head of Research:
These recent transactions bring the office pre-commitment levels at PLQ to approximately 50%, in line with the statement Lendlease announced in January that more than half of the development's office space had been either leased or was under final offer or in advanced negotiations.