Prime-central districts price gap narrows
Price-spread shrinks to 1% in 2005-06 from 7% in 2004, says DTZ
By KALPANA RASHIWALA
THE gap between the average selling prices for private apartments and condos achieved by developers in the traditional prime districts compared with emerging central districts narrowed to just one per cent in 2005 and 2006, the latest analysis of caveats by DTZ Debenham Tie Leung shows.
The price-spread between the two areas was 7 per cent in 2004. In that year, lifestyle projects like The Sail @ Marina Bay in the Central Business District and The Berth by The Cove at Sentosa Cove were introduced, boasting waterfront housing.
Central districts cover districts 1 to 4 and include the CBD, the HarbourFront area and Sentosa Cove. The established prime districts are 9, 10 and 11.
The gap was at its widest in 2002 at 29 per cent. The price convergence between the two areas in the past couple of years reflects the steady increase in prices of lifestyle projects with waterfront housing themes in the central districts.
DTZ said: 'With most of these new exclusive projects being 99-year leasehold, compared with still predominantly freehold homes in the traditional prime districts, the price convergence reflects the dwindling importance of tenure but a growing preference for unique lifestyle concepts.'
The property firm's executive director, Ong Choon Fah, said that projects in the central districts could overtake 99-year projects in the prime districts on a selective basis.
'There's potential for this in the Marina Bay area because it offers the whole live, work, play concept in a waterfront setting that will also have gardens, a museum, and the Marina Bay Sands with one million sq ft of retail space.'
DTZ's analysis of caveats captured by the URA Realis system also shows that while 2,063 apartments/condos sold by developers in the prime districts last year was almost unchanged from 2005's figure of 2,061 units, the number of non-landed homes sold in the central districts rose 9 per cent last year to 884, the highest since 1996.
The increase was on the back of several lifestyle projects launched in the popular Marina Bay and Sentosa Cove waterfront locations.
The concept of inner-city living in the traditional CBD received a boost last year, with the launch of The Clift and Lumiere, which further buoyed developer sales in the central districts.
While primary market sales of non-landed homes in the prime districts were flat last year, it was a different story in the secondary market, where strong collective sales activity drove up the number of prime district non-landed homes sold by 88 per cent to 3,603.
This is an all-time high and surpassed the last peak of 1999 by 34 per cent, a result which was helped by prime-district en bloc sales.
DTZ estimates that about 2,310 non-landed homes changed hands through en bloc sales in the prime districts last year.
'However, taking into account developments which were collectively sold towards end-2006 and which will be recorded in 2007, as well as some transactions where caveats have not been lodged, less than half of the prime apartments transacted in the secondary market are estimated to have been sold individually,' the firm said.
The secondary market in prime districts was also boosted by price gains in prestigious developments like Ardmore Park.
DTZ predicts that momentum in the prime districts will strengthen - particularly in the primary market as developers launch new projects on en bloc sites.
'Together with strategic projects like The Orchard Residences and Scotts Square, average selling prices in prime districts will continue to rise,' it said.
The secondary market in prime districts will also benefit from further price recovery and steady rental increases, which should fuel investor interest.
Thursday, March 29, 2007
Allgreen is top bidder for Handy Rd site
Allgreen is top bidder for Handy Rd site
MAINBOARD-listed Allgreen Properties has emerged top bidder for a 99-year leasehold site in Handy Rd near The Cathay with an offer of $72.3 million or $669 per square foot per plot ratio.
The 38,600 sq ft site, near Dhoby Ghaut MRT Station, is designated for residential use or residential use with first-storey commercial space. It can be developed into a 10-storey project with maximum gross floor area of 108,080 sq ft.
The Urban Redevelopment Authority's tender exercise had attracted four bids when it closed yesterday.
Alliance Development - controlled by Sino Holdings, not linked to property magnate Ng Teng Fong's Far East Organization or Sino Land group - bid almost $70.4 million.
GuocoLand's Rivaldo Investments offered $68.65 million. And Peak Venture, controlled by banker Wee Cho Yaw, tendered $50.5 million.
CB Richard Ellis executive director Li Hiaw Ho estimates Allgreen's breakeven cost for a new project on the site could be around $1,000 psf.
'Going by current prices of units at 8 @ Mount Sophia at above $1,000 psf in the subsale market, and those at the freehold Nomu selling at $1,100-1,300 psf, it is likely that the new project on the Handy Rd site will be able to sell at an average price of around $1,300 psf,' he said.
MAINBOARD-listed Allgreen Properties has emerged top bidder for a 99-year leasehold site in Handy Rd near The Cathay with an offer of $72.3 million or $669 per square foot per plot ratio.
The 38,600 sq ft site, near Dhoby Ghaut MRT Station, is designated for residential use or residential use with first-storey commercial space. It can be developed into a 10-storey project with maximum gross floor area of 108,080 sq ft.
The Urban Redevelopment Authority's tender exercise had attracted four bids when it closed yesterday.
Alliance Development - controlled by Sino Holdings, not linked to property magnate Ng Teng Fong's Far East Organization or Sino Land group - bid almost $70.4 million.
GuocoLand's Rivaldo Investments offered $68.65 million. And Peak Venture, controlled by banker Wee Cho Yaw, tendered $50.5 million.
CB Richard Ellis executive director Li Hiaw Ho estimates Allgreen's breakeven cost for a new project on the site could be around $1,000 psf.
'Going by current prices of units at 8 @ Mount Sophia at above $1,000 psf in the subsale market, and those at the freehold Nomu selling at $1,100-1,300 psf, it is likely that the new project on the Handy Rd site will be able to sell at an average price of around $1,300 psf,' he said.
Lack of new office space pushes rents up
Lack of new office space pushes rents up
Demolitions for redevelopment to exceed scheduled supply in 2007: DTZ
By ARTHUR SIM
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THE shortage of new office space is exerting increased pressure on rents, resulting in their rising by almost 30 per cent in some areas.
New benchmarks were also achieved in the Marina Centre, Orchard Road, River Valley/Singapore River, Novena and HarbourFront areas.
An analysis of market data in DTZ Debenham Tie Leung's quarterly property market report for Q1 2007 revealed that office space slated to be demolished for redevelopment will exceed the supply scheduled for completion in 2007.
In addition, average annual new supply in the next four years - 928,700 square feet - will fall short of the 1.7 million sq ft average annual take-up seen in the last 10 years.
DTZ noted that financial and business services sectors have continued to expand here.
DTZ executive director and regional head of consulting and research Ong Choon Fah added: 'The clustering of global businesses has resulted in across-the-board multiplier effects, for example, increased demand for supporting businesses.'
This has led to an increase in rents.
In Raffles Place, prime rents escalated by 28 per cent in Q1 2007 to average $10.90 per square foot (psf), higher than the previous peak of $10.50 psf in 1996.
The highest quarter-on-quarter increase of 29 per cent was achieved in the Marina Centre area, which has reached a historic high of $10.30 psf.
DTZ's report revealed that in microzones like Orchard Road and HarbourFront, rents similarly registered highs of $8 and $6.30 psf respectively.
DTZ also noted that higher rents caused some occupiers to relocate from the CBD to most cost-effective premises.
It also believes that more tenants will review workplace strategies or pre-commit earlier in future developments where possible, as rents are expected to top the highest peak in 1990 with prime rents in Raffles Place only 3 per cent shy of the $11.25 psf achieved 17 years ago.
Occupancies have also risen. DTZ highlighted increased occupancies at Samsung Hub in Raffles Place and at PSA Building in the Alexandra microzone in particular, where occupancies rose by 18 percentage points each to 98 per cent and 85 per cent.
Demolitions for redevelopment to exceed scheduled supply in 2007: DTZ
By ARTHUR SIM
Email this article
Print article
Feedback
THE shortage of new office space is exerting increased pressure on rents, resulting in their rising by almost 30 per cent in some areas.
New benchmarks were also achieved in the Marina Centre, Orchard Road, River Valley/Singapore River, Novena and HarbourFront areas.
An analysis of market data in DTZ Debenham Tie Leung's quarterly property market report for Q1 2007 revealed that office space slated to be demolished for redevelopment will exceed the supply scheduled for completion in 2007.
In addition, average annual new supply in the next four years - 928,700 square feet - will fall short of the 1.7 million sq ft average annual take-up seen in the last 10 years.
DTZ noted that financial and business services sectors have continued to expand here.
DTZ executive director and regional head of consulting and research Ong Choon Fah added: 'The clustering of global businesses has resulted in across-the-board multiplier effects, for example, increased demand for supporting businesses.'
This has led to an increase in rents.
In Raffles Place, prime rents escalated by 28 per cent in Q1 2007 to average $10.90 per square foot (psf), higher than the previous peak of $10.50 psf in 1996.
The highest quarter-on-quarter increase of 29 per cent was achieved in the Marina Centre area, which has reached a historic high of $10.30 psf.
DTZ's report revealed that in microzones like Orchard Road and HarbourFront, rents similarly registered highs of $8 and $6.30 psf respectively.
DTZ also noted that higher rents caused some occupiers to relocate from the CBD to most cost-effective premises.
It also believes that more tenants will review workplace strategies or pre-commit earlier in future developments where possible, as rents are expected to top the highest peak in 1990 with prime rents in Raffles Place only 3 per cent shy of the $11.25 psf achieved 17 years ago.
Occupancies have also risen. DTZ highlighted increased occupancies at Samsung Hub in Raffles Place and at PSA Building in the Alexandra microzone in particular, where occupancies rose by 18 percentage points each to 98 per cent and 85 per cent.
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