AVERAGE island-wide Grade A rents are currently just a shade under those of Hong Kong, but the highest rents achieved by Hong Kong Grade ‘AAA’ office buildings are still about 1.8 times higher than the top rents achieved in comparable buildings here.
A report by Savills reveals that in the CBDs of Hong Kong and Singapore, Grade A rents are now the equivalent of $9.80 and $9.70 psf respectively.
However, top rents in Hong Kong’s Grade ‘AAA’ buildings like the International Financial Centre, Chater House and AIG Tower are closer to $32 psf while those in Singapore’s Republic Plaza, One Raffles Quay and 6 Battery Road are at about $17.50 psf.
Rising business costs have come under scrutiny recently and Savills Hong Kong senior director (research and consultancy) Simon Smith does say that there is the perception that Hong Kong and Singapore are in direct competition to attract businesses for this segment of the property market. However, he added: ‘I have not come across any financial institutions that have chosen to relocate from Singapore to Hong Kong yet.’
Indeed, Mr Smith believes that the financial institutions that are so important to the economies of both cities are more likely to set up offices in both cities to service different markets.
In terms of new supply of office space, Mr Smith does point out that Hong Kong will see some ‘AAA’ space become available next year in areas like West Kowloon where the 2.5 million sq ft International Commerce Centre (ICC) is set to open. The ICC is said to have attracted some major financial institutions already.
In contrast, Savills notes that the recently awarded commercial development sites including those at Marina View and Beach Road are expected to generate a combined 3 million sq ft of office space, scheduled for completion between 2010 and 2012.
But competition actually could come from more unlikely quarters.
Savills’ survey of regional office rents includes the emerging Vietnamese cities of Hanoi and Ho Chi Minh City and already average Grade A office rents in both cities have outpaced those in Shanghai and Beijing (but are still less than Tokyo, Hong Kong and Singapore).
Mr Smith believes that rising rents and 100 per cent occupancies in Hanoi and Ho Chi Minh City are largely due to the shortage of quality buildings in these cities, and hence adds: ‘There is a huge potential there for developers.’
Giving an insight into the pace of development there, he said: ‘Vietnam is much like China was in the 1990s, where companies were running their businesses out of hotel rooms. But when the market matures, rents will settle down.’
Savills believes the outlook for Singapore office sector remains positive, with rents continuing to rise, although at a slower pace for Grade A space due to ‘resistance from tenants’.
‘Demand from multinational companies for offices in suburban areas and high-tech space is expected to increase, especially by those who are more conscious of their bottom-line,’ it said.
Source : Business Times - 22 Nov 2007
Monday, November 26, 2007
The US$58 million (S$84 million) investment in The Canary reflects a high level of investor confidence in Vietnam’s booming economy
SINGAPORE developer GuocoLand Group yesterday broke ground on its maiden development in Vietnam - The Canary - and says it is already on the lookout for further development sites.
The US$58 million (S$84 million) investment in The Canary reflects a high level of investor confidence in Vietnam’s booming economy, said a Singapore agency official at the ground-breaking ceremony yesterday.
The 17.5ha development will boast residential, commercial, hotel and educational facilities. It is the first integrated project to be built by a foreign investor in Vietnam, outside the commercial centre Ho Chi Minh City and the capital Hanoi.
It is being built in affluent Binh Duong province, 17km north of Ho Chi Minh City, near the Vietnam- Singapore Industrial Park (VSIP).
The flagship industrial zone was started in 1996 by a consortium of five Singapore firms led by SembCorp Parks, in a venture with Vietnamese state-owned Becamex IDC.
With a gross floor area of 290,000 sq m, The Canary is expected to yield 1,200 homes, in addition to a shopping mall with 85,000 sq m of retail space, a hotel, an international school and a sports complex. Homes will also face the popular 27-hole Song Be golf course.
Centre director Chiong Woan Shin of IE Singapore’s Ho Chi Minh City office told The Straits Times that the project reflects the level of confidence of Singapore companies.
Construction of the residential area’s first phase is under way and due for completion in 2009.
The two- to four-bedroom apartments, ranging from 85 sq m to 160 sq m, will be targeted at locals and expatriates alike, said Mr Lawrence Peh, general manager of Guoco- Land Vietnam.
GuocoLand’s international investment general manager Ho Sing added that the group is looking for more locations in Vietnam for further projects.
CBRE Vietnam’s managing director, Mr Marc Townsend, said he expected the project to be well-received. ‘With so many people working at the VSIP, it will be time- and cost-efficient to live there,’ he said.
The project will be launched for sale next year. He estimates that the homes will be priced at a premium above US$800 per sq m, or S$108 per sq ft - a price fetched by a residential project nearby.
IE Singapore’s Ms Chiong added that more Singapore companies were venturing into Vietnam.
But fast-rising home prices are also proving to be the bane of ordinary Vietnamese and even some expatriates. This is exacerbated by speculators flipping properties for a quick profit.
Property prices have jumped 50 per cent in Vietnam since the start of this year, and in Hanoi and Ho Chi Minh City, they have tripled.
The result is that owning homes in the cities is far beyond the means of most ordinary Vietnamese. The issue is a hot topic in the country’s legislature.
Source : Straits Times - 21 Nov 2007
The US$58 million (S$84 million) investment in The Canary reflects a high level of investor confidence in Vietnam’s booming economy, said a Singapore agency official at the ground-breaking ceremony yesterday.
The 17.5ha development will boast residential, commercial, hotel and educational facilities. It is the first integrated project to be built by a foreign investor in Vietnam, outside the commercial centre Ho Chi Minh City and the capital Hanoi.
It is being built in affluent Binh Duong province, 17km north of Ho Chi Minh City, near the Vietnam- Singapore Industrial Park (VSIP).
The flagship industrial zone was started in 1996 by a consortium of five Singapore firms led by SembCorp Parks, in a venture with Vietnamese state-owned Becamex IDC.
With a gross floor area of 290,000 sq m, The Canary is expected to yield 1,200 homes, in addition to a shopping mall with 85,000 sq m of retail space, a hotel, an international school and a sports complex. Homes will also face the popular 27-hole Song Be golf course.
Centre director Chiong Woan Shin of IE Singapore’s Ho Chi Minh City office told The Straits Times that the project reflects the level of confidence of Singapore companies.
Construction of the residential area’s first phase is under way and due for completion in 2009.
The two- to four-bedroom apartments, ranging from 85 sq m to 160 sq m, will be targeted at locals and expatriates alike, said Mr Lawrence Peh, general manager of Guoco- Land Vietnam.
GuocoLand’s international investment general manager Ho Sing added that the group is looking for more locations in Vietnam for further projects.
CBRE Vietnam’s managing director, Mr Marc Townsend, said he expected the project to be well-received. ‘With so many people working at the VSIP, it will be time- and cost-efficient to live there,’ he said.
The project will be launched for sale next year. He estimates that the homes will be priced at a premium above US$800 per sq m, or S$108 per sq ft - a price fetched by a residential project nearby.
IE Singapore’s Ms Chiong added that more Singapore companies were venturing into Vietnam.
But fast-rising home prices are also proving to be the bane of ordinary Vietnamese and even some expatriates. This is exacerbated by speculators flipping properties for a quick profit.
Property prices have jumped 50 per cent in Vietnam since the start of this year, and in Hanoi and Ho Chi Minh City, they have tripled.
The result is that owning homes in the cities is far beyond the means of most ordinary Vietnamese. The issue is a hot topic in the country’s legislature.
Source : Straits Times - 21 Nov 2007
CapitaCommercial Trust (CCT), one of Singapore’s biggest office landlords
CapitaCommercial Trust (CCT), one of Singapore’s biggest office landlords, announced yesterday the establishment of a $1 billion multi-currency medium-term note (MTN) programme.
The programme was established by CCT MTN Pte Ltd - a wholly owned unit of CCT trustee HSBC Institutional Trust Services Singapore.
The MTN programme will allow CCT MTN to issue notes in series or tranches in any currency as may be agreed between the company and DBS Bank, the arranger and the dealer of the MTN programme.
CCT MTN may issue each series or tranche of notes in various amounts and tenors, which may bear fixed, floating or variable rates of interest.
It can also issue hybrid or zero coupon notes.
All sums payable in respect of the notes will be unconditionally and irrevocably guaranteed by the CCT trustee.
The programme has been given a ‘Baa1′ rating by Moody’s Investors Service.
The net proceeds from each notes issue will be onlent by CCT MTN to HSBC. The CCT trustee can use the funds to: refinance existing borrowings; finance or refinance its investments; lend to any trust, fund or entity in which it has an interest; finance or refinance any asset enhancement works initiated by itself or such trust, fund or entity in which it has an interest; and for its general working capital.
CCT said yesterday that it has applied to the Singapore Exchange for permission to deal in, and quotation for, any notes which are agreed at the time of issue to be listed.
CCT last month posted distributable income of $29.6 million for the third quarter ended Sept 30, 2007 - 13.5 per cent higher than its forecast based on a circular dated August last year, and a 52.4 per cent improvement from the same period last year.
CCT’s Singapore properties include 6 Battery Road, Capital Tower, Robinson Point, HSBC Building, StarHub Centre and the Golden Shoe and Market Street car parks, and a 60 per cent stake in the Raffles City complex.
CapitaMall Trust is the joint owner of Raffles City complex.
Source : Business Times - 21 Nov 2007
The programme was established by CCT MTN Pte Ltd - a wholly owned unit of CCT trustee HSBC Institutional Trust Services Singapore.
The MTN programme will allow CCT MTN to issue notes in series or tranches in any currency as may be agreed between the company and DBS Bank, the arranger and the dealer of the MTN programme.
CCT MTN may issue each series or tranche of notes in various amounts and tenors, which may bear fixed, floating or variable rates of interest.
It can also issue hybrid or zero coupon notes.
All sums payable in respect of the notes will be unconditionally and irrevocably guaranteed by the CCT trustee.
The programme has been given a ‘Baa1′ rating by Moody’s Investors Service.
The net proceeds from each notes issue will be onlent by CCT MTN to HSBC. The CCT trustee can use the funds to: refinance existing borrowings; finance or refinance its investments; lend to any trust, fund or entity in which it has an interest; finance or refinance any asset enhancement works initiated by itself or such trust, fund or entity in which it has an interest; and for its general working capital.
CCT said yesterday that it has applied to the Singapore Exchange for permission to deal in, and quotation for, any notes which are agreed at the time of issue to be listed.
CCT last month posted distributable income of $29.6 million for the third quarter ended Sept 30, 2007 - 13.5 per cent higher than its forecast based on a circular dated August last year, and a 52.4 per cent improvement from the same period last year.
CCT’s Singapore properties include 6 Battery Road, Capital Tower, Robinson Point, HSBC Building, StarHub Centre and the Golden Shoe and Market Street car parks, and a 60 per cent stake in the Raffles City complex.
CapitaMall Trust is the joint owner of Raffles City complex.
Source : Business Times - 21 Nov 2007
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