Developers gear up for flurry of launches before year-end

The Business Times - Oct 16
AFTER selling 7,220 private homes in the first nine months, developers are gearing up for a final burst of launch activity before taking the traditional year-end breather.

Oxley Holdings is due to begin its preview soon for the 548-unit Kent Ridge Hill Residences. Singapore Press Holdings and Kajima Development are expected to finally begin sales soon of The Woodleigh Residences next to Woodleigh MRT Station, while City Developments is expected to roll out its Whistler Grand condo in West Coast Vale.

Developers sold 932 private homes last month, up 51 per cent from the 617 units they moved in August and also nearly 42 per cent higher than the 657 units they booked in September last year.

Last month's sales figure marks the highest September new home sales since 2013.

On the launch front, developers released 1,169 private homes last month - almost 2.2 times the 534 units in the previous month and 16 times the 73 units launched in September 2017.

The September 2018 launch figure is the highest monthly figure so far this year - with the exception of July, when the 2,239-unit launch number was distorted by hasty launches on the evening of July 5 to avoid the cooling measures that took effect the following day.
Tricia Song, Head of Research:

Two months after the new cooling measures kicked in, developers’ sales showed strong underlying demand. From the developer take-up and trends in August and September, we believe there is still ample demand for properties that are well-located and priced realistically.

Developers’ sales jumped 51.1% to 932 units (excluding Executive Condos) in September, from 617 units in August. This shows a quick recovery, similar to the 57% MOM jump to 756 units in August 2013, from the 482 units sold in July 2013, after the eighth round of cooling measures which introduced the Total Debt Servicing Ratio (TDSR), in June 2013. The jump was due to the 327 units sold at the new launch – JadeScape which was launched at a relatively attractive price (below SGD1,700psf) given its city-fringe location near an MRT station as well as good schools. Click here for our analysis.

Singapore housing curbs won't cool prices, says Morgan Stanley

The Business Times - Oct 12
Singapore home prices may rise as much as 10 per cent by the end of next year and are on track to double by 2030 as faster income growth overpowers recent property curbs and higher interest rates, according to Morgan Stanley.
Home prices rose in four of the five previous rate hike cycles, Morgan Stanley analysts said in a note to clients. Faster economic growth, the city-state's attraction as a global hub and demand from buyers flush with cash from en-bloc redevelopments will underpin the housing market, they said.
The bullish outlook came after the latest property curbs prompted the analysts to revisit last year's forecast that home prices would double by the end of next decade.

Tricia Song, Head of Research:
We agree that in the long term the home prices should move in tandem with GDP and household income growth, but there are other factors, such as regulatory risks, socio-economic concerns that are harder to predict. We think in general home prices could remain flat in the next few quarters, barring any external shocks. We are more positive on the prime districts 9-10 due to the limited stock and the potential capital flows from the beneficiaries of the collective sales that happened in 1H18. We believe the below-average supply completions and increased demolitions stemming from collective sales would result in tighter vacancies and a stronger rental market in 2019-2021.

Jewel Changi Airport's retail space nearly 90% taken up ahead of March 2019 opening

The Business Times - Oct 11
Almost 90 per cent of retail space at Jewel Changi Airport has been taken up ahead of its expected launch next March, it was disclosed on 11 Oct.
About a quarter of the stores at the retail and lifestyle complex will be flagship stores and brands which are new to Singapore, according to Jewel's head of leasing Ms Tang Mui Neo.
They will include the Pokémon Centre Singapore - the only permanent retail store for the popular game franchise outside Japan - which will offer merchandise such as games and toys unique to Jewel. The move follows the "positive outcome" from a Pokemon event held at Changi Airport in 2016 which helped to promote the brand across the region, according to Pokemon Company corporate officer Susumu Fukunaga.

Tricia Song, Head of Research:

According to Mastercard Global Destination Cities Index 2018, Singapore is second in Asia and fifth globally in terms of international overnight visitors (13.91 million) and the top in Asia and fourth globally in terms of total spend (USD17.02 billion). With 280 shops over 53,800 sqm of retail space, Jewel Changi Airport will probably be the single largest mall in the eastern part of Singapore, and is positioned as a showcase of Singapore brands to the international audience, as well as to locals who will likely make up 60% of the visitors. We believe this will add significant competition to the retail landscape. Nearby malls such as those in Pasir Ris, Tampines, Bedok and Paya Lebar may need to up their game and carve out a niche for themselves. Orchard Road malls would also need to keep reinventing to stay relevant and keep the tourist dollar.

Co-working space operator signs six-year lease for 16 floors in Cecil Street building

The Business Times - Oct 9

A co-working space operator has signed a six-year contract for an entire building in Cecil Street.

The signing of a binding lease agreement was announced on Tuesday by Vibrant Group, which holds a stake in the property's owner, Ececil.

Vibrant did not give the name of the co-working space firm, but previous media reports have named the tenant as Hong Kong-based Campfire, which would mark its debut in Singapore.

The 11-storey building at 139, Cecil Street is now undergoing major renovation works that will add five floors, including a roof terrace.

Tricia Song, Head of Research:

In our view, larger players with sizable footprints of more than 50 desks per location, and a multi-location portfolio, are better equipped to cater for the next lap of growth from corporations seeking a flexible leasing strategy. The flexible workspace requirement from multinational corporations typically span hundreds of desks within a single market (e.g. Singapore). Moreover, scaling up also enables operators to better leverage economies of scale from technological investments or capital expenditures (e.g. bulk purchases of furniture).

Based on Colliers International's research, the average location size leased by flexible workspace operators in Singapore has indeed been trending upwards each year since 2015. Download Colliers' latest Flexible Workspace report.