Developers' November sales jump but challenges lie ahead

The Business Times - Dec 18
New sales of private homes jumped last month to nearly two and a half times that of the previous month as developers revved up launches to make up for lost ground when some of them held back launches in October.

That pause was partly to ruminate about the impact on sentiment after the authorities announced revised guidelines to increase the average unit size for non-landed private residential developments outside the Central Area from early next year. The change is expected to disrupt the popular business model of residential developers minting smallish units to drive up average per square foot prices in their projects, while keeping the absolute prices affordable.

Tricia Song, Head of Research:
Developers’ sales rebounded in November – more than doubling October’s new home sales - on healthy demand for several new launches. The seven new projects that were launched – 3 Cuscaden, Arena Residences, Belgravia Green, Kent Ridge Hill Residences, The Woodleigh Residences, Parc Esta, and Whistler Grand – accounted for 830 units or 69% of the new private home sales last month.

We think the sales performance in November continued to reflect an underlying genuine demand for astutely-priced and conveniently-located projects. The takeup for the new launches will also help to shore up developers’ confidence in the residential sector in Singapore, following the more muted market sentiment after new cooling measures were implemented in July 2018. Click here for our analysis.


Colliers aims to make *SCAPE 'hip and exciting'

The Business Times - Dec 15
Colliers  International has been appointed leasing and tenancy manager for *SCAPE for two years in a bid to help the Orchard youth hangout tap millennial demand.

Colliers envisions *SCAPE to be "a hip and exciting venue with a wide range of attractive experiential offerings, be it music, dance, sports, gaming or F&B," the company said in a statement.

Together with *SCAPE, it will also explore implementing smart technologies, including sensors and camera-based platforms. These will allow retailers and landlords to track footfall and study shopper movement and buying behaviour.

Colliers was also appointed as leasing and tenancy manager for the strata retail component of mixed-use development Stars of Kovan in what it called a "unique approach" for strata retail developments. The 26,910 sq ft strata mall is due for completion in 2019.

Tang Chee Charn, Head of Real Estate Management Services:
The retail property sector is one of the focus areas for our business growth as retailing becomes increasingly more competitive, differentiated, and customer-centric. We expect that there will be an increase in demand for bespoke strategy to enhance customer experience, maintain shopper traffic, retain and attract tenants, and integrate new technologies to transform the overall retail offering. Our team of experienced industry professionals, who are deeply committed to understanding clients’ needs and requirements, will formulate effective and strategic solutions to help improve the capital value of our clients’ real estate assets and also enhance building-user experience.

Real estate management services will increasingly become an important part of the retail ecosystem - playing a strategic role in supporting business demands, helping to enhance the customers’ overall experience at the mall, and preserving the value of the property. Colliers will proactively engage retailers and landlords in the design and execution of customised and integrated retail real estate solutions for the digital age. Click here for the news release.


Tender for Pasir Ris Central white site draws just three bids

The Business Times - Dec 15
A 3.8 hectare white site at Pasir Ris Central drew fairly subdued interest from developers with a lower-than-expected three bids at the close of the tender on Friday.

Among the bidders was Far East Organization, while Singapore Press Holdings and Kajima Development submitted a joint bid. The third bid was from Phoenix Residential and Phoenix Commercial; both companies are owned by Allgreen Properties and Kerry Properties, which are in turn linked to Robert Kuok.

Market watchers noted that this is the first government land sales (GLS) tender for a white site to be concluded after the July cooling measures, which could have prompted developers to take a more cautious stance. In October, the Urban Redevelopment Authority (URA) had also revised guidelines for the maximum allowable dwelling units in private residential developments outside the Central Area to curb the number of shoebox units in new projects. Those guidelines kick in from Jan 17, 2019.

Tricia Song, Head of Research:
The subdued bid response was slightly below our expectations partly due to developers taking a more cautious stance post cooling measures. The three bids paled considerably compared to the Sengkang Central tender which closed on 21 June and attracted seven proposals from six bidders. It was eventually awarded to the JV of CapitaLand and CDL for SGD778 million (SGD924psf ppr). 

The absence of some of the big players who had participated in the Sengkang Central tender such as CapitaLand, City Developments Limited, Keppel Land and Perennial, could also be due to competitive concerns. CapitaLand already has significant retail mall presence in the eastern Singapore with Bedok Mall and Tampines Mall, and the upcoming Jewel Changi Airport. Nonetheless, at the right price, the Pasir Ris site represents a rare opportunity to build an integrated project as well as leverage on the rising residential catchment -- we estimate a top bid of SGD820 million (SGD800 psf per plot ratio).