Wednesday, April 22, 2009

New Heart Of City Takes Shape

Source : The Straits Times, April 22, 2009

MORE than $22 billion of investments have been pumped into transforming Marina Bay and the vision of a prime waterfront location for living, working and playing is steadily taking shape.

'In one or two years' time, this bay will be alive with people, with activities, festivities and it's a testimony to the foresight of the people who started developing this area many, many years ago,' said National Development Minister Mah Bow Tan after touring key sites yesterday.

The immediate vicinity of Marina Bay will be ready 'for people to enjoy in a couple of years' time', he added.

The development of the entire Marina Bay area - Singapore's most ambitious urban transformation project - is expected to be completed in 10 to 15 years.

Yet the groundwork for the expansion of the existing Central Business District started back in the late 1960s. The new downtown comprises 360ha, which was reclaimed in phases from 1969 to 1992.

Plans started in earnest about 10 years ago when the area was first developed. The first site was put up for sale in 2004.

The transformation of Marina Bay into Singapore's new downtown is part of a bigger plan to remake the city and turn it into an exciting, liveable global city.

Mr Mah reiterated that the plans are going ahead in spite of the economic crisis. 'As a Government, we must be able to look farther ahead and we must be willing to invest,' he said.

While local and international investors have injected $16.5 billion into the bay area, the Government has invested $5.7 billion and will put in more than $1 billion in additional infrastructure. Key projects such as the Double Helix Bridge, Art Park and The Fullerton Heritage at Collyer Quay will be completed by year's end.

The Marina Bay Sands Integrated Resort will be ready in phases from the end of this year, while the first phase of the Marina Bay Financial Centre will be finished by the middle of next year.

Analysts Say Cash-Rich Investors Ready To Enter Property Market

Source : Channel NewsAsia, 21 April 2009

Singapore's property market turned in a poor showing in the first quarter as developers and home-buyers braced themselves for a prolonged downturn.

But analysts said there are cash-rich individuals out there who might inject life into the Singapore market in the coming months.

They said these individuals with deep pockets have been doing their homework in recent months and are now ready to close in on good deals.

Analysts said developers are also not looking to buy now.

Brandon Lee, investment analyst, DMG & Partners Securities, said: "Developers are also more focused on developing and selling their current backlog of units, so from that end, they'll not look to acquire more assets for residential space and also if you look at REITs, they're currently more concentrated and focused on capital preservation as well as organic growth.

"If you look at yields right now, they're trading in historically high of about 12 per cent, so it's going to be very tough for them to make yield-accreditative acquisitions."

Instead, analysts said developers are more open to joint ventures with private investors who have the cash.

Steven Ming, director, investment sales, Savills, said: "It could be transactions ranging from 10 million to 100 million. It could be individuals buying it or a few friends coming together with a pool of funds to buy into the right investments.

"These could be residential block opportunities - buying into unsold units within a launch development or potential joint venture opportunities with existing developers.

"Developers have amassed quite a sizable land bank in the last two to three years. If anything, they would welcome joint venture partners. So there are investors out there who are exploring opportunities or perhaps undertaking to buy off, say, half a project."

Analysts said such investors look for opportunities where prices have been discounted by 30 to 40 per cent from their peaks.

With gaps between buying and selling prices narrowing, analysts expect to see more deals being forged this quarter, if not the next. - CNA/vm

Marina Bay Sucks In $22b Of Investments

Source : The Business Times, April 22, 2009

More sites are available in the area but govt is in no hurry to release them

Marina Bay has attracted investments of more than $22 billion and while the area still has sites for development, the government has no plans to sell them at the moment.

'We are in no hurry to release these sites,' said National Development Minister Mah Bow Tan yesterday. He was speaking to the media after a tour of several projects taking shape along Marina Bay, such as the Marina Bay Sands integrated resort, the double helix bridge and the Fullerton heritage area.

According to Mr Mah, some investors are looking at specific sites and have approached the government, but 'we will pause for a while', he said. Of the 360 ha of land set aside for Marina Bay's development, around 24 ha have been sold, the Urban Redevelopment Authority (URA) said.

The agency has not put up any more sites at Marina Bay for sale through the Government Land Sales Programme. The timing and number of sites to be released 'will depend on the economic conditions and market demand and subject to more detailed planning later on,' URA added.

For now, 'the timing is not right,' Mr Mah explained. 'We also want to be sure that the infrastructure is in place and the other developments are up. Then we'll see what else we want to have that will add to the attractiveness of the bay.'

Of the more than $22 billion pumped into Marina Bay's development, close to $5.7 billion was the government's investment in infrastructure. Another $16.5 billion came from private investors both in Singapore and abroad.

The US$4.5 billion Marina Bay Sands integrated resort is one of the most significant projects in the area. In 2006, the consortium behind the Marina Bay Financial Centre (MBFC) also said that they would spend $2 billion on the first phase of the development.

Over the next 10 to 15 years, the government will continue to pump more than $1 billion into infrastructural works to support Marina Bay's growth and to enhance connectivity within the city.

'What we have seen today shows that the progress of Marina Bay is very much on schedule and on track,' Mr Mah noted.

One important project is the construction of the double helix bridge, which will allow pedestrians to cross from Marina Centre to the Marina Bay Sands Integrated Resort in just three to four minutes when it is completed at the end of the year. The bridge, together with an adjacent vehicular bridge and the nearby art park, cost $82.9 million.

The double helix bridge will be part of a 3.5 km long waterfront loop linking key developments along Marina Bay, such as the upcoming MBFC and 50 Collyer Quay. 'In one or two years' time, this bay will be alive with people and activities,' Mr Mah said.

There will also be an extensive underground pedestrian network linked to MRT stations and retail shops. Phase one of MBFC for instance, will have around 93,000 sq ft of retail space both above and below ground level.

MBFC manager Raffles Quay Asset Management may start marketing the retail mall in H2 2009. 'The exact timing depends on how best we could finalise our plans once all the necessary authorities' approvals are in place as well as market conditions,' said its general manager Wilson Kwong.

As for the MBFC, space across its three towers is 61 per cent pre-committed.

'Given the uncertainty and business volatility, it is inevitable and understandable that interested prospects would take a longer time before making any long-term pre-commitments,' Mr Kwong said. Nevertheless, MBFC still receives a 'healthy level' of leasing enquiries.

According to property consultant Cushman & Wakefield, 1.97 million sq ft of new office space could come onstream this year even as the property market softens. But Mr Mah was not unduly worried by such numbers.

'While we need to be mindful of the current economic downturn . . . we must also not forget that we have to prepare ourselves for when the economy recovers,' he said. 'When it does, we will be ready.'

Jurong Tech's Factory Building Is Up For Auction

Source : The Business Times, April 22, 2009

Company's judicial manager is offering it on sale and leaseback deal

A TWO-STOREY Tuas factory building owned by Jurong Technologies Industrial Corp has been put up for auction by the company's judicial manager Deloitte & Touche.

On the block: The factory building, at 18 Tuas West Avenue is on a 75,299 sq ft site with a remaining lease of about 17 years. BT understands the property could be worth more than $3 million

The property, at 18 Tuas West Avenue, is being offered at Colliers International's auction on April 29.

BT understands the property could be worth more than $3 million. The factory, which is being offered as a sale and leaseback deal, is on a 75,299 sq ft site with a remaining lease of about 17 years.

Colliers will also auction a total of eight apartments and five shops at Upper Serangoon Shopping Centre.

These units are understood to be part of a bigger batch of units in the ageing freehold development that had been offered for sale by tender in 2007 by the building's developer, Hong Huat Development Co, which is in voluntary liquidation.

The eight apartments on the top floor of the six-storey building will go under the hammer as a single lot at Colliers' upcoming auction.

Sources say that the opening price will be about $3 million to $3.1 million.

At $3 million, the price reflects about $261 psf of strata area and a net yield of about 3.5 per cent, based on the existing lease on the units, which expires in about a year. All eight apartments are leased to a company.

The shop units, which are being sold individually, are leased to various tenants. The leases expire from around the middle to end of this year.

Opening bids for the shop units are expected to be in the region of $700 psf, which would reflect net yields of about 4 to 5 per cent based on existing tenancies. Besides collecting a rental return, a key attraction for potential buyers of the shops and apartments at Upper Serangoon Shopping Centre would be the prospects of a potential collective sale of the complex.

Colliers is also offering at its auction two mortgagee sale properties. One is a ramp-up flatted factory unit at Tradehub 21 at Boon Lay Way. Tradehub is a site with a remaining lease of about 54 years.

The unit is expected to fetch about $600,000. The other mortgagee sale is of a three-storey freehold detached house, 5B Lim Tua Tow Road (off Upper Serangoon Road).

The property received offers above $2 million at an auction earlier this year, but the mortgagee bank declined to sell at the time.

It could be more flexible now, given the poorer economic outlook, auction market watchers suggest.

A 13th floor apartment at the freehold Orchard Towers - where a collective sale was once planned - will also go under the hammer at next Wednesday's auction. The 1,970 sq ft unit has an indicative price of about $2.2 million to $2.4 million.

Investors keen on buying strata shop units in the city can consider two basement units at High Street Centre and a couple of third-floor units at Sim Lim Square. These properties have been put up for sale by their respective owners.

Some $18 million worth of properties was transacted at auctions in Singapore in the first quarter of this year, more than three times the $5.4 million notched up in the preceding quarter and also surpassing the $9.5 million in Q1 last year.

Resorts World Expects Strong Hotels Demand

Source : The Business Times, April 22, 2009

RESORTS World at Sentosa (RWS) is expecting strong demand for its hotels from potential corporate clients, based on the positive response to sneak peaks of its designer hotel rooms.

'We fully anticipate over-demand,' RWS vice-president of rooms, Andrew Hickey, told BT. Hotel bookings will open in the second half of 2009. Meanwhile, RWS is also seeing enquiries for its MICE facilities.

Four of the six hotels - Maxims Tower, Hotel Michael, Festive Hotel and the Hard Rock Hotel Singapore - will be launched in the first quarter of next year when the $6.59 billion integrated resort opens its doors. The remaining two hotels, Equarius Hotel and Spa Villas, will be launched during the latter half of 2010.

The different hotels will 'provide a variety of guest experiences', said Patrick Burke, principal architect for Michael Graves & Associates.

For instance, the premier, 120-room Maxims Tower is mostly by invitation only and boasts 24-hour butler service while the 390-room Festive Hotel caters to families.

The six hotels will collectively add 1,800 rooms to the local hotel industry.

RWS, which expects to employ 10,000 staff in all, has over 500 on its payroll at present, of which 80 per cent are Singaporean.

Thirty per cent of the 10,000 staff will be employed in the casino while another 30 per cent will be stationed at the Universal Studios theme park. The remaining 40 per cent will be engaged by the hotels and corporate services.

URA Woodlands Site Available

Source : The Business Times, April 22, 2009

THE Urban Redevelopment Authority yesterday released detailed sale conditions for an industrial site at Woodlands.

Developers interested in buying the site can now apply to URA for it to be put up for tender. The plot, which is being offered from the reserve list, is at the junction of Woodlands Industrial Park E5 and Woodlands Avenue 4.

The site area is 2.5 ha and the gross plot ratio is 2.5. The lease period is 60 years. The site is being made available despite the depressed global economy and trade continuing to put downward pressure on the rents and capital values of industrial properties.

The investment market for industrial properties is not faring any better, with only one transaction above $5 million in Q1 this year, data from CB Richard Ellis (CBRE) shows. Against this background, demand for the Woodlands site is unlikely to be strong, analysts reckon.

'In such as weak market, even if there is interest, the price will not be very high,' said Knight Frank's head of industrial business space Lim Kien Kim. Bernard Goh, director for industrial and logistics services at CBRE, said: 'If there is a bid, the price is likely to be below expectations because of how the market is.'

Traditionally, demand for industrial properties in Woodlands has been weak, said Mr Lim. He expects bids in the range of $25-30 per sq ft per plot ratio.

Industrial rents are falling due to a slowdown in demand for industrial space. Consolidation and downsizing is the order of the day, and expansion is the exception rather than the norm, CBRE said in its Q1 2009 industrial report.

According to CBRE, monthly rent for hi-tech space fell 3.3 per cent quarter on quarter to $2.90 psf in Q1. Average monthly rents for ground and upper-floor factory units fell $0.10 psf quarter-on-quarter to $1.45 psf and $1.20 psf respectively.