New private home sales in January down 28.1% from December

The Business Times - Feb 15
Developers in Singapore sold 433 private homes last month, down 28.1 per cent from the 602 units they moved in December 2018, and also 17.8 per cent lower than the 527 units they moved in January 2018.
 
The figures exclude executive condominium (EC) units, which are a public-private housing hybrid.
 
Including ECs, developers found buyers for 434 units last month, again lower than the 605 units in December 2018, and the 627 units they moved in January 2018.
 
Tricia Song, Head of Research:
The lower sales in January were generally not unexpected given the fewer launches and as prospective home buyers return from their year-end holiday break. The festive period over the Lunar New Year in early-February could also have led to slower market activity last month.
 
Additionally, we think January’s sales were weaker compared with a year ago owing to the different market condition. In January 2018, more buyers – particularly those on the fence – might have been persuaded to enter the market as home prices started to climb. Meanwhile, transactions in December 2018 were higher than that of January 2019, possibly due to the momentum from the slew of new launches in November.
 
In terms of pricing, all the new launches in January probably set benchmark pricings in their respective localities.  For example, at SGD2,412 psf, Fourth Avenue Residences set a benchmark pricing for the Bukit Timah enclave for a 99-year leasehold project.  For the other existing launches, however, developers have kept their selling prices stable, especially for those which have yet crossed the 60-70% sell-through mark. Click here for our analysis
 
 

Singapore CBD Grade A office rents in 2018 post highest annual growth since 2010

The Business Times - Feb 13
Tightening vacancies have driven up Singapore prime office rents in 2018. This saw average CBD (central business district) Grade A office rent rising by 2.4 per cent to S$9.43 per square foot per month (psf pm) from Q3 to Q4 2018, bringing the full year rental growth to 14.9 per cent, Colliers International's data showed.
 
This is the fastest annual growth since 2010, where rents rebounded by 22 per cent following the Global Financial Crisis, said the property consulting group.
 
Shenton Way, Tanjong Pagar and Beach Road markets saw the largest rental increases in 2018, driven by the premium new builds such as Guoco Tower and Duo. These buildings - which were completed in 2016 - brought about a rerating of rents in their respective micro-markets.
 
Duncan White, Head of Office Services:
With limited Premium stock coming online in 2019 and with a lack of larger contiguous space on offer, we advise occupiers to review portfolios early, and consider alternatives including Flex & Core™ strategies, which combine traditional office leases with short-term lease tenures within flexible workspace offerings. Meanwhile, office landlords could be more proactive in engaging occupiers and be more progressive with varied lease structures to retain and attract tenants.
 
Jerome Wright, Director of Capital Markets & Investment Services:
We expect capital values to trail the projected rent growth and hence yields to remain largely stable over 2019-2021. This is mainly due to the hefty weight of global capital directed towards gateway cities. Moreover, the Singapore office market offers favourable fundamentals, given the impending supply shortfall over 2019-2021.
Click here for the report.
 
 

Six adjoining strata offices at International Plaza for sale with S$11.97m guide price

The Business Times - Feb 15
A batch of six adjoining and refurbished strata offices at International Plaza in Tanjong Pagar are up for sale with a guide price of S$11.97 million.
 
They are available on a sale and leaseback scheme with immediate annual gross rental yield of 4.2 per cent for at least five years, said marketing agent Colliers International in a press statement on Friday.
 
The guide price works out to S$1,850 per square foot (psf) based on floor area. Colliers added this “compares favourably” with the average price of S$1,895 psf achieved for 13 office space transactions at International Plaza over the last six months.
 
Steven Tan, Director of Capital Markets & Investment Services:
This is a rare opportunity to own adjoining strata offices in one of the most highly sought-after business locations in Singapore. The Tanjong Pagar precinct, a historically rich neighbourhood, has undergone significant transformation in recent years, becoming more vibrant, cosmopolitan and appealing. We expect the six office units to excite investors, given their excellent location and attributes, as well as the attractive immediate annual gross rental yield of 4.2% for at least five years while they are being leased to a reputable and established company.
 
We believe the six strata offices offered for sale will appeal to astute investors, who are looking to capitalise on the tight CBD office space supply situation in Singapore over the next few years and are keeping an eye on potential upside opportunities over the longer term, as the government’s plans to develop the nearby Greater Southern Waterfront unfold. Click here for the news release.