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Perennial Real Estate to set up healthcare business in S’pore

posted Jun 7, 2017, 8:57 AM by Benjamin Ng   [ updated Jun 7, 2017, 9:00 AM ]

The Straits Times

5 June 2017

Singapore-listed Perennial Real Estate Holdings is tying up with a top traditional Chinese medicine (TCM) hospital in China to set up its first treatment facility in Singapore.

The property and healthcare firm said on Saturday that it has, through its joint-venture company Perennial TCM Management, entered into a strategic partnership agreement with Beijing Hospital of TCM. The pair will jointly set up Ming Yi Guan at the House of Tan Yeok Nee within the Orchard Road precinct – set to be Singapore’s largest premier TCM treatment facility when it opens at the end of this month.

Ming Yi Guan will be Perennial’s first healthcare business here. It will also be Beijing Hospital of TCM’s first treatment facility outside China, and in South-east Asia. Under the partnership, Beijing Hospital of TCM will second a team of senior Chinese TCM physicians to Ming Yi Guan on rotation while Ming Yi Guan will be managed by Perennial TCM Management, said Perennial in a statement.

Both Perennial TCM Management and the House of Tan Yeok Nee, a gazetted National Monument, are equally owned by Perennial through its wholly-owned units, and Charles Quay International.

Ming Yi Guan will provide TCM services in the areas of chronic illnesses, oncology, subfertility, gynaecology, dermatology, pain management and health enhancement.

 “As consumers in Singapore and South-east Asia increasingly embrace TCM as a form of complementary medicine to Western medicine, Ming Yi Guan is well-positioned to deliver an unparalleled level of treatment and service in an exclusive environment,” Mr Liak Teng Lit, group chief operating officer of Perennial and chief executive of Perennial Healthcare, said. “In addition, the collaboration would facilitate the exchange of knowledge and skill sets between the Chinese and local physicians, thereby raising the bar for TCM standards and expertise in Singapore.”

The signing of the partnership was attended by IE Singapore chairman Seah Moon Ming, Mr Wang Xiaoming, deputy secretary general of Beijing Municipality, as well as other representatives of the Beijing Municipal Administration of Hospitals, among others. Shares of Perennial closed 1.1 per cent, or one cent, higher at 91 cents last Friday, before the announcement was made.

Credits: Jacqueline Woo, The Straits Times 

Bright outlook for property investment sales this year

posted May 9, 2017, 12:31 AM by Benjamin Ng   [ updated May 9, 2017, 12:33 AM ]

LL says investor confidence in office segment on the rise, supported by Singapore’s economic fundamentals

JLL has forecast a bright investment sale outlook for the year, driven by the recent sale of the $2.2 billion Jurong Point mall.

Private-sector property investment sales are set for a strong run after a spectacular start to the year.

The rosy outlook is being driven by the office, and possibly the retail and residential sectors, consultancy JLL said in a new report.

The overall value of real estate investment deals soared 67.4 per cent in the first three months to $4.99 billion – of which $4.47 billion was from the private sector.

Private investment sales of office property accounted for the lion’s share at $2.12 billion – the sector’s strongest first-quarter showing since 2008. The $2.12 billion figure was a 60.6 per cent rise from the fourth quarter, and more than treble that of a year ago, JLL said in the report yesterday.

“Investors’ confidence in Singapore’s office property market con- tinues to be on the rise, underpinned by the city state’s sound economic fundamentals,” said Mr Greg Hyland, head of capital markets for JLL Singapore.

He noted that i nvestors are aware the “window of opportunity to acquire available assets at an attractive point in the cycle is fast closing”, as the prime office leasing market in the central business district is already stabilising.

JLL said the top two office deals in the first quarter were entity sales, involving the sale of interest in firms holding the properties.

One was the sale of the entire interest in the holding company of PwC Building in Cross Street to an indirect unit of Manulife Financial Corporation for $760.6 million.

The other was the divestment of the entire interest in Plaza Ventures – the owner and developer of GSH Plaza in Cecil Street – to Hong Kong-listed Fullshare Holdings for $725.21 million.

JLL noted the potential for the full-year sales of private office assets to surpass the $6.49 billion recorded last year, considering the recent deal for One George Street and sizeable assets available in the market, including Asia Square Tower 2 in Marina Bay.

The residential segment, meanwhile, booked $1.69 billion in pri- vate investment sales for properties valued at $5 million and above in the first quarter. This was a fall of 35.3 per cent from the fourth quarter, but double the value of the first quarter last year.

Two other segments – retail and industrial – also saw private investment sales more than doubling from the previous year in the first quarter: $280 million for retail and $390 million for industrial.

JLL has forecast a bright investment sale outlook for the year, driven by the recent sale of the $2.2 billion Jurong Point mall and upbeat sentiment in the private res- idential market. A growing appetite for collective sale sites by developers facing depleting land banks and limited supply of sites from the Government could also lend support to investment sales.

“Barring unforeseen circumstances, private-sector investment sales stand a good chance to outshine 2016,” said JLL Singapore head of research and consultancy Tay Huey Ying.

Last year’s private-sector investment sales stood at $19.06 billion, JLL noted. 

  • Credits: The Straits Times
  • 9 May 2017
  • Wong Siew Ying

THE WORST IS YET TO COME FOR SINGAPORE'S COMMERCIAL PROPERTY MARKET

posted Aug 2, 2016, 3:21 AM by Benjamin Ng   [ updated Aug 2, 2016, 3:30 AM ]


Rents, investor demand are expected to crumble further.

 The Singapore commercial property market is headed for further decline, with chartered surveyors predicting rents contracting further in the next 12 months.

According to a report by RICS, rental values are seen to fall by 3.3% at the headline level with industrial properties taking the biggest hit from the negative outlook.

Singapore’s commercial property market in is mid-downturn, with a long way to go before hitting rock-bottom and then rebounding, RICS reports. More than 7 in 10 (78%), of contributors to the RICS (Royal Institution of Chartered Surveyors) Q2 2016 Global Cities Commercial Property Monitor believe it is set to plunge further. Looking ahead to the coming 12 months, respondents expect capital values to be 2.5% lower than at present.

Investor demand also dropped for the fourth consecutive quarter, as only the office sector saw a marked rise in interest from potential buyers. And despite two record-breaking deals announced in the past quarter, the office space supply glut still outpaces the increase in demand, leading to negative rental values.

“Against a backdrop of substantial supply locally and financial market turbulence regionally, the Singapore commercial property market is expected to further decline as rents fall and demand contracts,” commented Will Myles, Regional Managing Director for Asia Pacific.

“Across all sectors, investment sentiment continues to be dampened by the expectation of falling capital values. Surveyors are predicting a 2.5% decline within the next 12 months—sobering news for the commercial property sector despite improvements in lending conditions,” he added.


110 Robinson Put Up For Sale

posted Jun 27, 2016, 7:27 PM by Benjamin Ng   [ updated Jun 27, 2016, 7:28 PM ]


SINGAPORE - Another office building in the central business district has been offered for sale after recent blockbuster deals perked up the office property market.

A freehold 12-storey commercial building at 110 Robinson Road was put on the market on Monday with an indicative pricing of S$45 million.

The price works out to about S$3,161 per square foot based on a net lettable area of 14,233 sq ft, its sole marketing agent Cushman & Wakefield said.

Built in 1980s, the commercial building comprises 11 office floors with a retail unit on the ground floor which is currently tenanted to a dental clinic. The property is fully owned by OCBC Bank, according to the bank's 2015 annual report.

Mr Shaun Poh, executive director of capital markets at Cushman & Wakefield said: "Even before the owner decided to put the property on the market, it has proven to be highly sought after as various unsolicited offers have been made to the owner."

Mr Poh added that the asset is ideal for institutional fund groups, corporate end users, high net worth individuals as well as boutique developers who are looking to redevelop the building for strata sale. According to the 2014 Master Plan, the site is zoned for commercial use, and can be built up to 35-storey.

Cushman & Wakefield told The Straits Times that its occupancy rate hovers around 75 per cent and the units are leased mostly to small and medium-sized enterprises, including shipping companies and auditing firms.

The building is the latest office property to be placed on sale following the sale of Asia Square Tower 1 by BlackRock to the Qatar Investment Authority for S$3.4 billion, and Indonesian tycoon Dr Tahir's offer buy the Straits Trading Building for S$560 million, earlier this month.

Last week, the former SIA Building in 77 Robinson Road - a stone's throw away from 110 Robinson Road - was offered for sale at a guide price of S$575 million or S$1,960 psf.

Cushman & Wakefield said the tender exercise for 110 Robinson Road will close at 3pm on July 26, 2016.

 Credits: http://www.straitstimes.com/business/another-robinson-road-office-building-offered-for-sale

110 ROBINSON FOR RENT

posted Jan 17, 2016, 8:08 PM by Benjamin Ng   [ updated May 28, 2016, 9:42 AM by Benjamin Ng ]


A great piece of news for business owners looking to expand their operations in Raffles Place. A rare gem has been discovered in Central Business District, rent an office space of more than 1000 sf for less than $5,000 per month!

110 Robinson is a 12 storey office development along Robinson Road which has a floor plate of approximately 1200 sf of space. An ideal location for office space has it has many nearby amenities surrounding it. Lau Pa Sat food centre is within 5 mins walk, Amoy Street for some local food delights, major central banks and money exchange are all within reach along cecil street and Robinson Road. Not forgetting dental clinics, medical clinics and many other more amenities.

While the office rent in Raffles Place has generally been at least $6 psf, a lack of activity in the market has seen some landlords reducing their asking rent to attract tenants in outside CBD areas. Would there be a further reduce in rent in the coming next few months? Nobody knows but one thing for sure is to grab the opportunity now and reduce your operation costs while asking rental rates are fantastic now!


Size: 1176 sf

Asking Rent: $4.2 psf

Condition: Bare

Contact Benjamin at 9456 1194 for more information.

RAFFLES PLACE STILL THE MOST SOUGHT AFTER OFFICE LOCATION

posted Dec 17, 2015, 12:28 AM by Benjamin Ng   [ updated Dec 17, 2015, 12:31 AM ]

Raffles Place continues to enjoy high occupancy and positive absorption, revealed a Cushman & Wakefield report.

Occupancy rate hit a high of 97.1 percent in Q3 2015, up from 96.5 percent in Q2 2015. As at end-November, occupancy at Raffles Place climbed further to 97.2 percent, which is higher than the 95.9 percent average overall occupancy of CBD Grade A office.

Meanwhile, net absorption for Grade A office at Raffles Place stood at 110,000 sq ft year-to-date.

The report attributed the resilience to “strong tenant loyalty, no Grade A office supply and stable rental growth.”

According to Cushman & Wakefield, Raffles Place will continue to attract and retain tenants ranging from 10,000 to 20,000 sq ft considering the strong employee preference towards the area’s transport connectivity and F&B retail.

However, it noted that while Grade A office supply will reach by around four million square feet in 2016, none will occur in Raffles Place.

Nonetheless, the rental gap between Marina Bay and Raffles Place continued to narrow.

Raffles Place saw effective Grade A rent stand at S$10.31 per sq ft per month in Q3 2015, while that at Marina Bay was at S$10.70 per sq ft per month.

“The rental gap currently stands at four percent, the lowest since 2011, down from as high as 31 percent in 2013.”

Cushman & Wakefield said the gap is expected to widen again and revert to 20-30 percent as Marina Bay office rents stabilise and when overall CBD occupancy rate recovers from a potential dip in the next two years.

“Singapore office leasing market is approaching another fundamental shift as the CBD enters the second phase of its transformation with the supply of four million sq ft of prime Grade A office space in 2016. This will provide opportunities for larger occupiers to rationalize their portfolio and grow their businesses,” said Toby Dodd, Managing Director of Cushman & Wakefield Singapore.

Cushman & Wakefield data showed that at least 50 large tenants each occupying over 25,000 sq ft of space have not moved since 2007. This second phase of transformation could see some firms relooking their business consolidation or expansion plans.

Notably, tenants eyeing a “flight-to-quality” strategy could consider new mixed-use developments including Marina One (1.88 million sq ft) in Marina Bay, Guoco Tower (900,000 sq ft) in Tanjong Pagar and DUO (570,000 sq ft) in Bugis.

Through this cycle, Raffles Place will continue to attract and retain mid-size occupiers with proactive asset management and strengthened landlord and tenant relationships, said Dodd.


Source: www.propertyguru.com.sg

DECEMBER FITTED OFFICE PROMOTION

posted Dec 7, 2015, 1:49 AM by Benjamin Ng   [ updated Dec 17, 2015, 12:33 AM ]

Dear office tenants / prospects / business owners,

Special December promotion for fitted office spaces. Find office spaces that are under $3,000 for 3 – 4 pax in the heart of CBD area, Raffles Place. Extremely competitive pricing!!!  Contact us for more details before promotion ends! Call Benjamin at 9456-1194.

TOP 5 CHEAPEST OFFICES FOR RENT IN RAFFLES

posted Nov 17, 2015, 9:03 PM by Benjamin Ng   [ updated Nov 17, 2015, 9:15 PM ]

For the third quarter of 2015, office rents and value continues sliding down. This was mainly due to continual moves by financial institutions to send some functions out of the central city area to cheaper suburban locations, and the huge supply of new space in the pipeline (Marina One, Gucco Towers, V on Shenton, DUO Tower, etc) are most likely to keep the market in the slower lane.

As office rents continue sliding, office tenants located in suburban locations may be finding means and ways into entering CBD areas.

Hence, we bring to you the affordable and cheapest top 5 office buildings that you can find in prime Raffles place.


Afro Asia Building - $4.20 psf

Afro Asia Building is commercial property located at 63 Robinson road. It is around 10 mins walk from Raffles MRT Station, also closed to Tanjong Pagar MRT Station.

It is a very old building which is more than 20 over years, hence it is probably the lowest rent for office unit you can find in prime District 1 Raffles Place for just $4.20 psf.

There were rumors around in the street that the building might undergo a redevelopment, but nothing is confirmed yet. At the moment, it would be impossible to sign a 2 years lease with the landlord of this building.

Another factor which probably depressed the rent for this commercial property is the infamous murder case which happened 4 years ago. The law firm owner’s wife was murdered due to a legal dispute fee with the suspect. The law firm was then set on fire, leaving the wife unconscious in the burning unit. This case is still an on-going case till date with the trials still going on.


Shenton House - $5 psf

Shenton House is a 25-storey commercial development located along 3 Shenton Way.

It is being used primarily for office rental and sale. It is 5 minutes’ walk away from Telok Ayer, Downtown & Raffles Place Station.

It was completed in 1969, an old building stretching as long as over 40 years. It had a refurbishment project which upgraded the main lobby of the building.

If you are looking for a prime office location in CBD Raffles Place area for under $6 psf, Shenton House is the one not to be missed out.


Tong Eng Building - $6 psf

Tong Eng Building is a 26-storey office building located along 101 Cecil Street. It is an office tower with multiple ownerships whereby several Indian-owned businesses thrive. Nearly 35% of the roughly 190 offices in this building are occupied by them, many settled in decades ago while others are more recent arrivals.

For some, Tong Eng Building is filled with positive vibes which has been good for businesses. Event management firm De Ideaz's chief executive officer Purnima Kamath, who has been a tenant in the building for the past 11/2 years, agrees: "There is a certain good feng shui in this building; a lot of positive vibes... and a feel good factor."

While convenience is undoubtedly the key word, most of these businessmen agree that the atmosphere within the building is what they enjoy. Since almost 35 per cent of the building is occupied by Indian businesses, there is almost a community-like air in the building.


150 Cecil Street - $6 Psf

150 Cecil Street is a 16-storey commercial project situated along 150 Cecil street. It was formerly known as AXA Building. It is 5 minutes’ walk away from Raffles Place Station or Tanjong Pagar Station.

It was completed in 1973, also a very old building stretching for more than 40 years. It is undergoing some building upgrading at the moment, and although old the building has been nicely upkept by the building management.

If you are looking for an affordable office unit in CBD Raffles, be sure to check out 150 Cecil Street.


 Keck Seng Tower - $6.20 psf

Keck Seng Tower is a 18-storey office building that has recently in 2011 undergone refurbishment to its main lobby all lift lobbies and toilets. Its lift cars are also replaced.

It was completed in 1984, located along 133 Cecil Street. Although a fairly old building over more than 30 years, this refurbishment project gives a positive feel to the building. For an affordable and budget office rent in prime Raffles location, Keck Seng Tower would be your best bet.


For more reviews and insights of Singapore Cheap offices, please sure to check back regularly to this website for the latest updates.

INVESTING IN COMMERCIAL & INDUSTRIAL PROPERTIES

posted Sep 6, 2015, 9:22 PM by Benjamin Ng   [ updated Oct 16, 2015, 6:13 AM ]

There are many fundamental differences between investing in residential properties versus any other property segments.  Some of the common key differences are:
  • Goods and Services Tax (GST) and company ownership
  • CPF can only be used for residential projects
  • Higher loan interests imply higher risks
  • Difficult to get comparable data
  • Lease contracts and tenancy agreements
  • Interior design and furnishings
  • Tenants are 'Trouble-free' corporations
GST company ownership
This is pretty straight forward: if you purchase a non-residential property from a seller that is GST-registered, you have to pay GST to the seller such that the seller can pass the GST on to the inland Revenue Authority of Singapore (IRAS). As a buyer, if you were GST-registered (yes, even individuals can be GST-registered if you choose to be), you can settle your GST expenses against your GST collection and claim the excess back from the IRAS. Residential properties are exempted from GST, so even if the seller were GST-registered, like most developers are, there would be no need for buyers to pay GST to the seller.

Hence, as a buyer or as a buyer's representative agent, it would be important to enquire if the seller is GST-registered. If so, does the price quoted include GST? In general, the quoted asking prices exclude GST. Furthermore, if there were existing tenants, do ask if the rentals are being quoted with or without GST. This will help us under cash-on-cash returns better. If a company held the property, and the buyer is buying the company's shares, then there will be no GST on the transaction as share are also exempted from GST.

Things start to get complicated in situations such as the resale of 2-storey Housing & Development Board (HDB) shops or conservation shops with residential component. If the seller is GST-registered, then the buyer has to pay GST on the value of the commercial space (ground floor) but is exempted from paying GST on the second floor Living Quarters (LQ) even if a change of use has been approved. 

And then we have the perennial question of, should I set up a company to invest in this property? The standard reply to this usually leans towards a YES but it is dependent on each investor's current financial situation. Investors should consider whether the small additional costs of maintaining an investment holding company as well as the regulatory compliance required of company directors would be more than made up for by savings in their personal income taxes. The investment properties already attract a 10% property tax and then any surpluses from rental income add to the personal income tax, which could go up to 20% for those at the top tax bracket. There are pros and cons to each decision and the details go into the nitty-gritty such as tax exemptions for new companies, whether the new company should be GST-registered, the GST impact on the rentals of the SMEs tenant or start-up tenant, term loans with director's personal guarantees.

For more information on prudent investment in commercial properties, be sure to check regular updates from Rent Office Singapore.

WHY PROPERTY PRICES WON'T BE RECOVERING ANYTIME SOON

posted Aug 12, 2015, 8:29 PM by Benjamin Ng

There was a recent article in the newspaper with the headline "Time to review property cooling measures" (Straits Times, July 4).

The argument is that, if private home prices have been down; HDB flat prices have dropped; oversupply has worsened; rents have weakened; interest rates have risen; the real estate industry has shed jobs, it may be time for the government to review the cooling measures.

Many people fail to see that the government can only do so much to cool or stimulate the property market. After all, it is an open market and there are many other factors that could lead to the continual boom or downturn of the market, such as supply and demand, economic outlook, market confidence, etc.

I am re-reading James Rickards's book The Death of Money: The Coming Collapse of the International Monetary System. Below are some new inspirations from this interesting read.

 1. Regime Uncertainty

When the Singapore government finally decides to withdraw the cooling measures, it may do little help to restore the fallen prices.

Remember those government measures taken to stimulate the property market back in year 2005? Loan-to-value limit was raised to 90 percent. But not many buyers were interested.

The "regime uncertainty" theory from Charles Kindleberger explains the reason behind the lack of investment during the Great Depression.

"... even when market prices have declined sufficiently to attract investors back into the economy, investors may still refrain because unsteady public policy makes it impossible to calculate returns with any degree of accuracy ... the added uncertainty caused by activist government policy ostensibly designed to improve conditions that typically makes matters worse."

From mid-June, stocks in China tumbled 30 percent from their seven-year high. Then the Chinese government and Chinese brokerages suddenly announced drastic measures to revive the stock market. The intervention might have saved the market from the brink of collapse and demonstrated how powerful and cash-rich the government is (and compared with China's $3 trillion reserves the money spent is just peanuts). However, the whole incident exposes the vulnerability of the fundamentals and further undermines the market confidence of investors.

After all, who needs the government to step in if a market is healthy enough to recover on its own?

 2. Market Oversupply

With 24,800 vacant private homes, an additional 22,000 to be completed this year and another 21,000 to be ready next year, what kind of population growth do we need in Singapore to absorb the surplus?

Like what Rickards says: "In the end, if you build it, they may not come, and a hard landing will follow."

 3. Wealth Effect

Rickards points out the fact that two asset classes - stocks and housing - represent the wealth of most people (which is certainly the case in Singapore). When prices of stocks and properties go up, people "feel richer and more prosperous and are willing to save less and spend more".

It is a chicken-and-egg situation: Low borrowing rate and easy money make properties look affordable, attracting Singaporeans to put more money in properties, thus driving property prices to new highs.

4. Wealth Inequality

The wealth effect only benefits the "haves", not the "don't haves".

Wealth becomes heavily concentrated on the privileged who own properties, or businesses who own a stake in the industry (property developers, real estate agencies, banks, brokers, etc.).

When prices are rising faster than wages, housing becomes unaffordable for the common people who are the end consumers of all the housing products. The average person does not get anything from inflated housing prices, except the adverse effect of inflation.

 5. Asset Bubble

Cheap money widens the disparity between the rising costs of housing and the unchanged affordability of home buyers, all disguised under the continual growth of debt.

But many people fail to see that this wealth effect is superficial in the sense that it doesn't come from real economic growth of the country. In other words, the booming property market is not created out of increase in productivity, trade surplus or foreign direct investment.

When the real estate market softens, the net worth of people who are asset rich in properties diminishes with the deflated asset bubble.

 6. Asymmetric Information

Many buyers are looking for great bargains in this market. They assume that sellers would hang on to their properties if they are not so desperate to sell. This belief causes buyers to lower the prices they are willing to pay.

However, not all sellers letting go of their properties now are desperate sellers. They refuse to sell at unreasonably-low prices and withdraw their properties from the market. The see-saw situation results in less properties for sale and lower transaction volumes every quarter.

 7. Self-fulfilling Expectation

Buyers are sitting on the fence and holding back on home purchases. Investors are losing appetite for property investment and looking for a safe haven to park their wealth. The drop in transaction volumes and prices eventually becomes a self-fulfilling expectation.

A persistent depressed market, coupled with adverse factors like supply glut, interest rate hike, soft rental market, etc., requires strong holding power to tide through the storm. And holding power means a healthy level of cash reserve and high liquidity of other assets. Unfortunately, the near-zero-interest rate discourages savings which has depleted bank savings and fixed deposits in the past few years.

The market can be more vulnerable then what it appears to be. The loss of market confidence can trigger a ripple effect which causes frenzy dumping to cover losses.

It doesn't matter what the industry stakeholders are saying. It is still early to say that the Singapore property market is recovering.

To be prudent investors, take the hint from James Rickards.

"The key to wealth preservation is to understand the complex processes and to seek shelter from the cascade."

Source: propertysoul.com

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