Month: April 2023

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Singapore’s real estate investments got off to a “slow start” in 2023, with the amount of investment sales for the first quarter of the year amounting to only $4.2 billion. This marked decrease in sales compared to that of 1Q2022’s $10.8 billion, is the lowest quarterly total since 2Q2020, when the government imposed “circuit breaker” measures.

Residential deals in the first quarter of 2023 amounted to $1.6 billion, with three notable collective sales; Meyer Park, Bagnall Court and of Holland Tower, totalling to some $583.8 million.

The sale of Holland Tower is particularly significant as it is the first successful residential en bloc transaction in the Core Central Region (CCR) since property cooling measures were imposed in December 2021, signifying “a nascent return” of interest for prime location development sites, upon the reopening of China.

However, the return does not guarantee success for collective sales. Daniel Ding, head of capital markets (land & building, international real estate) at Knight Frank Singapore, noted the gulf in price expectations between sellers and developers. The success rate for collective sales from 2021 up to now has been around 33%, compared to the 63% success rate from 2017 to 2018.

Chia Mein Mein, head of capital markets (land & collective sale) at Knight Frank Singapore, commented that “for the collective sales mechanism to work in the current cycle, owners must adopt reasonable expectations on price in order to pique the interest of developers and for developers to appreciate that replacement costs for owners have increased substantially.”

The commercial market in 1Q2023 was mostly quiet, however two noteworthy transactions include the sale of 39 Robinson Road to Yangzijiang Shipbuilding for $399 million, and Frasers Centrepoint Trust and Frasers Property’s acquisition of a 50% stake in Nex for $652.5 million.

The industrial sector saw an increase in investment sales in 1Q2023, rising 62.8% q-o-q to $681.1 million. Knight Frank attributes this to the market shifting focus while waiting on the potential repricing of assets in the commercial sector. Notable industrial deals last quarter include the acquisition of four Cycle & Carriage properties by M&G Real Estate at approximately $333 million, as well as the disposal of 12 and 31 Tannery Lane by Ho Bee Land for $115 million.

Knight Frank forecasts that investment activity in Singapore “will get worse before it gets better”, due to macroeconomic uncertainties and volatility in the global banking sector. Financing has become more challenging, and will remain so until there are visible signs of the global economy and financial conditions stabilising.

Consequently, the consultancy has downgraded its projections for full-year investment sales, from a range between $22 billion and $25 billion to a range between $20 billion and $22 billion. Investors will remain cautious as they monitor for signs of repricing before deciding on their next move.…

For a potential buyer looking to acquire an industrial site for shipbuilding, repair or maintenance activities, 1 Benoi Road in Jurong Industrial Estate offers an ideal opportunity. The property has a site area of over 500,000 sq ft with waterfront access, and is located at the junction of Benoi Road and Pioneer Road, roughly 24km from the City Centre. It includes a two-storey office block with a single-storey annexe office, three blocks of single-storey workshop, a mould loft building, a fabrication workshop and wharf.

The plot is regular in shape with a corner frontage of about 255m on Benoi Road and Pioneer Road, with an average plot depth of about 213m. Adjacent to it lies an approximately 230m frontage along the waterfront. It is generally at an access-road level with a flat contour, making it suitable for companies looking to expand their business.

Huttons Asia, the marketing agent for the property, has set a guide price of $11.3 million for the sale, which is subject to approval from relevant authorities. The EOI exercise for the property closes on April 27 at 3pm.

Recent transactions of industrial property in the vicinity of 1 Benoi Road may be indicative of the plot’s potential for future growth. In December 2020, a 328,105 sq ft plot at 5 Benoi Road was purchased at $10.5 million. Moreover, a shipyard with a site area of about 1.5 million sq ft at 55 Gul Road located 10 minutes away from 1 Benoi Road was acquired by ST Engineering for $95 million in February this year.

For anyone looking to take advantage of this rare opportunity to venture into shipbuilding or maintenance activities, 1 Benoi Road could make an ideal investment.…

GuocoLand and Hong Leong Group’s joint venture has emerged as the sole bidder for the 99-year leasehold residential government land sale (GLS) site at Lentor Gardens after the tender closed today, submitting a bid of $486.8 million. Translating to an estimated land rate of $985 psf per plot ratio (psf ppr), the two entities are looking to develop a new high-end residential project with around 533 units and 600 sqm of childcare facilities.

This is the first residential GLS tender to see only one bid since the tender of the Silat Avenue GLS site in 2018, which a consortium led by UOL Group won for $1.035 billion. The 1,074-unit Avenue South Residences was launched in September 2019 and is now fully sold.

Mark Yip, CEO of Huttons Asia, notes that the bid of $958 psf ppr is the lowest for a land parcel in the Lentor precinct. The $586.6 million bid for a GLS site at Lentor Hills Road (Parcel A) in January 2022 translates to $1,060 psf ppr, while the top bids for Lentor Central and Lentor Hill (Parcel B) were $481.03 million ($1,108 psf ppr) and $276.36 million ($1,130 psf ppr) respectively.

These two land parcels can yield about 470 and 265 units respectively, while the Lentor Gardens site has the potential to bring in 530 units. Steven Tan, CEO of OrangeTee & Tie, believes that the eventual launch at the site could see units priced around $1,950 to $2,050 psf.

The Lentor Gardens site is within walking distance of the Lentor MRT station and close to Thomson Nature Park and Yio Chu Kang Stadium and Sports Complex. Additionally, it is also about 1km away from CHIJ St Nicholas Girls’ School, which should be attractive to parents of school-going children.

Leonard Tay, head of research at Knight Frank Singapore, points out that all seven residential sites in Lentor – the five that have now been sold and the two still available for sale – could potentially bring about some 3,500 new units to the area, equating to almost 11,000 new residents.

This may deter developers from bidding given the possible oversupply of homes and the risk of being slapped with Additional Buyer’s Stamp Duty if they are unable to sell all units within five years, given the current economic outlook.

GuocoLand is set to launch the 598-unit Lentor Hills Residences, developed by GuocoLand, Hong Leong Holdings and TID. It follows GuocoLand’s launch of the 605-unit Lentor Modern integrated development last September, which is now 88% sold at an average price of $2,104 psf.

Two other GLS sites at Lentor are available for sale under the 1H2023 GLS Programme; a site at Lentor Central, capable of yielding 475 units, is expected to be launched for tender this month, while a 500-unit residential site at Lentor Gardens is listed on the Reserved List.…