PROPERTY PERSONALISED · A decline in prices was more pro-nounced — office prices in Singapore’s Central Region dropped 4% q-o-q in 1Q2020, falling for the third consecu-tive

PROPERTY PERSONALISED

Visit EdgeProp.sg to find properties, research market trends and read the latest news The week of May 4, 2020 | ISSUE 931-153

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EPJ2 • EDGEPROP | MAY 4, 2020

PROPERTY PERSONALISED

Visit EdgeProp.sg to find properties, research market trends and read the latest news The week of May 4, 2020 | ISSUE 931-153

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HDB WatchResale HDB volumedrops 7% in 1Q2020

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SpotlightThe city adjusts to

working from homeep6

Done DealsCircuit-breaker deals

in Aprilep8

Gains and LossesResale unit at Montview

reaps $969,400 profitep9

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May new home sales likely to hit 11-year low with circuit breaker extensionTurn to our Cover Story on Pages 4 & 5.

View of the CBD from Chin Swee Road area

EP2 • EDGEPROP | MAY 4, 2020

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Net absorption for office space in 1Q2020 has contracted for the first time in 11 consec-utive quarters, by 7,000 sq m (75,350 sq ft), marking a

drastic turn from 4Q2019 when 30,000 sq m of office space were taken up.

Island-wide, the vacancy rate has risen to 11% in 1Q2020, from 10.5% in 4Q2019.

The rise in vacancy rates and weak-er absorption have to do with an in-crease in office completions. In the quarter, there were 106,375 sq m of office space injected into the market — led primarily by the completion of works at Oxley @ Raffles and Woods Square. Other projects completed in-clude HD 139, and the asset enhance-ment works at 55 Market Street.

A decline in prices was more pro-nounced — office prices in Singapore’s Central Region dropped 4% q-o-q in 1Q2020, falling for the third consecu-tive quarter and recording its steepest drop since 1Q2017. In particular, pric-es fell 3.7% q-o-q for the Central Area, and 5.6% q-o-q in the Fringe Area. The data, however, is not indicative of the impact on current sentiments as many of these transactions could have been committed before the Covid-19 pan-demic, observe property consultants.

The impact of the pandemic on office rents has yet to be apparent — CBD Grade-A rents remained flat q-o-q at $10.09 psf per month in 1Q2020, compared with $10.81 psf in 4Q2019.

Further rent correction is to be expected. However, rates should be more contained than those seen dur-ing the Global Financial Crisis (GFC). Tay Huey Ying, head of research and consultancy at JLL Singapore, points to three factors.

First, the office market is current-ly not in a bubble, unlike during the GFC. Rents in the Central Region rose a moderate 13.6% over eight quarters from 2Q2017 to 2Q2019, whereas they spiralled up by 172% over 17 quar-ters prior to the GFC, from 1Q2004 to 2Q2008.

Second, the office market is cur-rently seeing a moderate injection of new supply — there is an expected incoming supply of 603,000 sq m be-tween 2Q2020 and 4Q2024, as com-pared to the supply during the GFC, which amounted to 1.529 million sq m between 2Q2008 and 4Q2012.

Construction delays due to “circuit breaker” measures could further ease supply over the next five years.

Third, the government’s relief meas-ures to business could help contain the fallout from Covid-19.

Office leasing slows downUnsurprisingly, leasing activity slowed in 1Q2020 as travel restrictions and safe distancing measures hampered viewings and negotiations. Those in the aviation, transport and travel-re-lated industries also shelved expan-sion and relocation plans during the quarter, observes Tay.

Comparatively, renewal leases have shown more resilience as compared to new leasing demand. To that end, landlords have become more realis-tic in their expectation of rents, and are offering more incentives to entice lease renewal or attract new lease

commitments, says Tay. Should this continue, the gap in de-

mand between rents for renewals and for new leases is expected to narrow, says Christine Li, head of research, Sin-gapore and Southeast Asia, at Cush-man & Wakefield (C&W).

Meanwhile, consolidation in the flexible workspace sector is expect-ed. “Their initial advantage in cater-ing to companies looking for flexible workspaces — to conduct split oper-ations as part of their business conti-nuity planning — amid the Covid-19 outbreak dissipated as working from home proved to be a superior option in containing the spread of the virus,” says Tay.

Looking ahead, the main demand driver for office space is forecast to be the technology sector, predicts Tricia Song, head of research for Singapore at Colliers International.

Grade-A and Premium CBD office vacancy of 3.1% is expected to con-tinue to rise over the next few quar-ters with incoming supply, but remain below the 10-year historical average of 6.2% in 2020-2021 as the new supply is quite limited, she adds.

With Covid-19 disrupting working arrangements, C&W’s Li believes this will change the demand for office space in the long term. “Over time, with prev-alent remote working in place, major occupiers’ footprints in the CBD office could shrink further. Meanwhile, there could be renewed interest in high-qual-ity decentralised office and business park spaces to complement the CBD offices,” she says. E

Net absorption for office space in 1Q2020 falls for first time in 11 straight quarters

ALBERT CHUA/THE EDGE SINGAPORE

Office prices in the Central Region dropped 4% q-o-q in 1Q2020, falling for the third consecutive quarter and recording its steepest drop since 1Q2017

OFFICE

Sentosa Cove bungalow’s swimming pool leased for $10,000 per monthA unique real estate deal closed on April 26 reflects the unprecedented cir-cumstances caused by the extended “cir-cuit breaker” measures.

Lester Chen, senior division director at Singapore Realtors Inc (SRI), leased out the swimming pool and garden of a Sentosa Cove bungalow for $30,000 over three months. The unique tenancy agree-ment was signed by a foreigner who lives in the Cape Royal condominium in the west of Sentosa Cove, the exclusive resi-dential enclave on Sentosa Island.

The bungalow is along Ocean Drive on the east of Sentosa Cove, and the rent for the pool is close to the average monthly rent for a three- or four-bedroom unit in the prime districts.

According to Chen, the tenant was ini-

tially searching for an entire Sentosa Cove bungalow to rent because the condo facil-ities at Cape Royal have been closed un-der the circuit breaker measures. But he disagreed with the $30,000 monthly rent the owner was asking for.

Instead, Chen suggested that he rent only the swimming pool and garden for $10,000. The deal took about two days to conclude. No physical viewings were con-ducted and no face-to-face meetings took place; instead, pictures were shared online.

According to Chen, he has received several enquiries from parties who are looking to rent bungalows in Sentosa, as condo facilities remain closed and the cir-cuit breaker period has been extended to June 1. Some of them live in apartments along Orchard Road, he says.

Most deals are still under negotiation because the price gap between what land-lords and tenants are asking for is still too

wide, he says. The average asking month-ly rent is between $15,000 and $17,000, but most bungalows in Sentosa are going for more than $18,000.

Global sentiments for real estate less pessimistic: SavillsIn a survey comprising 31 countries, Sav-ills has gathered that the property outlook worldwide has improved slightly — 19% of countries reported a “severe” negative impact on the real estate market, an im-provement from the 29% reported in its survey prior on March 31.

Correspondingly, 74% have described a “moderate” negative impact, as opposed to 67% as at end-March.

Sentiment in China has improved somewhat, seeing real estate activity re-sume as infection rates are contained. Retail and office leasing activity rose moderately in the first half of April. Utilisation rates have also increased as more offices and shops are now open with higher footfall, although these re-main below normal levels as social dis-tancing continues, it notes.

South Korea and Vietnam both re-ported a “neutral” market sentiment, benefitting from rapid declines in in-fection levels.

Surprisingly, rents have remained unchanged across 60% of sectors and countries worldwide. In the office sec-tor, rents have remained unchanged for 71% of the countries surveyed, support-ed partly by extensive concessions.

Retail tenants have been the largest beneficiaries for rent relief, with 80% of countries reporting receiving some form of concession.

Deferred service charges and chang-es in payment structures are the next most common, with 40% of countries receiving these.

Demand for office is gathered to be stable in 42% of countries, while 55% reported moderate falls in occu-pier demand. This is a significant im-provement from the 70% that reported moderate falls as at end-March, Sav-ills highlights.

Although real estate transaction volumes are down, they are no longer falling as sharply as in March. In the first half of April, 44% of countries not-ed no change in transaction volumes. Specifically in the office sector, nearly half of the countries surveyed report-ed no change in transaction volumes, whereas in March, 73% of countries reported moderate or severe decline in volumes.

Overall, capital values have been large-ly unaffected — 63% reported values to be unchanged. Logistics and health-care continue to fare well — 87% and 95% of countries reported respectively unchanged or increased capital values.

Meanwhile, over two-thirds of coun-tries report office and residential capital values to be unchanged, observes Sav-ills. — Compiled by Timothy Tay and Charlene Chin E

THE EDGE SINGAPORE

The pool and garden of the bungalow along Ocean Drive were leased for $30,000 over three months

EDGEPROP | MAY 4, 2020 • EP3

HDB WATCH

RESIDENTIAL

BY TIMOTHY [email protected]

The number of HDB resale transactions for 1Q2020 fell by 7.0% to 5,893, from 6,339 in 4Q2019, according to the hous-ing statistics released by HDB on April 24. On a yearly basis, the resale trans-

action volume in 1Q2020 was 21.9% higher.According to Lee Sze Teck, director of re-

search at Huttons Asia, the bump in y-o-y re-sale transactions could have been due to pri-vate residential projects which obtained their Temporary Occupation Permits in 4Q2019 and 1Q2020, resulting in more HDB upgrad-ers needing to dispose of their flat.

“HDB upgraders could be more willing to lower their asking price as the time pressure to meet the ABSD [additional buyer’s stamp duty] timeline increases,” says Lee.

He suggests that HDB should consider ex-tending the six-month period for HDB own-ers upgrading to an executive condo, while the six-month period to claim back ABSD should be reviewed as well, in view of the “circuit breaker” measures to tackle the Covid-19 outbreak.

Meanwhile, the resale price index for the first three months of the year remained un-changed on a quarterly basis.

“Prices of HDB resale flats have been rather stable as major price fluctuations have been few and far between in recent years. Over the past 20 quarters, the q-o-q price changes

had been within a narrow band of between -1% and 1%,” says Christine Sun, head of re-search and consultancy at OrangeTee and Tie.

In addition, the number of approved ap-plications to rent out HDB flats fell by 4.0%, from 12,079 cases in 4Q2019 to 11,591 cas-es in 1Q2020. On a yearly basis, the number of applications in 1Q2020 fell by 1.6% com-pared to 1Q2019.

Overall, there were 57,652 HDB flats rent-ed out at the end of last quarter, an increase

of 0.7% over the 57,224 units in 4Q2019.Nicholas Mak, head of research & consul-

tancy at ERA Realty, says: “The HDB leasing market is starting to weaken due to the Covid- 19 outbreak. Despite the lockdown of the Singapore-Johor border by the Malaysian government on March 18, leaving many Malaysians who were working or studying in Singapore rushing to find accommoda-tion, rental transactions did not increase in 1Q2020.”

Looking ahead, Mak says that the HDB resale volume in 2Q2020 could drop to less than half of the volume in 1Q2020. “We can almost write off the second quarter due to the eight-week circuit breaker period,” he says, adding that “it could bounce back once the circuit breaker is lifted”.

His sentiments were echoed by Sun, who says: “Property sales may pick up speed and regain some momentum when the crisis sub-sides, and safe distancing measures are grad-ually eased. Genuine buyers and those with urgent housing needs may return to the mar-ket when flat viewings resume.”

Sun estimates that the number of resale transactions for the full year could be be-tween 21,000 and 22,000 units, but Mak sug-gests that the number may eventually clock in at 17,000 to 20,000 transactions, with the resale price index falling by 0.8% to 2.0% for the whole of 2020.

According to Sun, the price affordabili-ty of most HDB flats remains attractive to some buyers, especially those looking for cheaper housing options, or a smaller hous-ing loan considering the current economic uncertainty.

“Overall prices of resale flats may en-ter the negative territory should the health crisis persist and unemployment creep up. Property values may hold steady for areas of higher demand such as those locat-ed near MRT stations, amenities or the city centre,” says Sun. E

Resale HDB volume drops 7% in 1Q2020, worse performance expected for next quarter

SAMUEL ISAAC CHUA/THE EDGE SINGAPORE

The HDB resale price index could fall by 0.8% to 2.0% for the whole of 2020, says ERA’s Mak


Private residential property prices fell 1% q-o-q in 1Q2020 after rising for three con-secutive quarters, absorbing the blow of Covid-19 on the economy.

Property consultants, however, caution that the impact of the pandemic has not yet been fully reflected in the data — 2Q2020 would paint a clearer picture of conditions on the ground, comments Christine Li, head of business devel-opment services, Singapore & Southeast Asia, at Cushman & Wakefield (C&W).

Private residential launches in the quarter also declined 6% q-o-q, marking a 30% y-o-y fall.

In 1Q2020, developers sold 2,149 private homes in Singapore, a 12% fall q-o-q, but a 16.9% rise y-o-y. New home sales started to slow down in March as the effects of the economic downturn began to unravel, says Ong Teck Hui, senior di-rector, research & consultancy at JLL.

Of the number of private homes sold in the quarter, 37.7% or 810 units were in the Outside Central Region (OCR), while the Rest of Cen-tral Region (RCR) accounted for 36.2% or 779 units. This indicates that affordability remains a key demand driver for most projects, says Ong.

Among the three market segments — OCR, RCR and Core Central Region (CCR) — homes in the CCR suffered the most severe drop in pric-es, taking a 2.2% decline. This is followed by a 0.5% fall of home prices in the RCR. Homes in the OCR tail behind, suffering a price de-cline of 0.4%.

The fall in home prices in the CCR could be

due to units at selected launches sold at per-ceived discounts, notes Tricia Song, head of re-search for Singapore at Colliers International. The M, which was launched in February, sold 381 units in 1Q2020 at a median price of $2,439 psf. Comparatively, Midtown Bay, located near-by, sold 10 units at a median price of $2,899 psf in 1Q2020.

The Enclave at Holland, also in the CCR, sold 14 units in 1Q2020 at a median price of $1,851 psf, compared to earlier units sold at between $2,500 psf and $2,600 psf.

A further correction of prices is expected for the rest of 2020. However, this would not take the magnitude of that experienced during the Glob-al Financial Crisis (GFC) when prices plunged 24.9% over four quarters, asserts Ong of JLL. “Unlike the preceding years of the GFC when

prices rose sharply, price increases in recent years have been mild due to the cooling meas-ures, thereby averting an asset bubble,” he says.

Ong adds that government support via the three recent rescue budgets released within two months would also help to cushion the fall in property prices, providing temporary relief for homeowners who have difficulty repaying their mortgage.

Meanwhile, sales of private homes in the sec-ondary market recorded 2,120 units in 1Q2020, a 12.9% fall q-o-q, but an increase of 11.3% y-o-y.

On the other hand, the oversupply of units is gradually improving. As at end-1Q2020, there were 29,396 unsold units, 3.5% lower than that in 4Q2019 and a sharp 22.2% decline from the recent high of 37,799 units in 1Q2019, marking four consecutive quarters of downtrend.

Rents rise amid tight supplyThe bright spot appears to be the rental mar-ket. Overall, residential rents rose 1.1% in 1Q2020, after a 1% q-o-q decline in 4Q2019.

In particular, rents for non-landed homes increased 1.3% in 1Q2020, after recording a 0.9% decline in 4Q2019. Rents for landed homes, however, fell 0.9% over the quarter, compared to a 1.6% fall in 4Q2019.

Property consultants attribute the overall rise in rents to tight supply. Only 1,528 private residential units were completed in 1Q2020, with another 4,506 units expected to be com-pleted over the rest of the year. However, the “circuit breaker” measures have temporarily stopped construction works, possibly delay-ing the completion of units till 2021.

Although rents would be supported by tight supply, the demand shock to the rent-al market — delivered mainly by foreigners who are not supported by government reliefs — will likely lead to flat or negative rental growth, observes Li.

OutlookLooking ahead, sales volumes in 2Q2020 for both the primary and secondary markets are expected to take a plunge. Consultants are expecting a 3% to 5% contraction in private residential prices this year. The circuit break-er that will last till June 1 will also minimise market activity in April and May.

However, over the long term, Singapore’s safe haven status and stable currency are likely to garner interest from foreign buy-ers, says Li. E

Private home prices fall 1% q-o-q in 1Q2020 SAMUEL ISAAC CHUA/THE EDGE SINGAPORE

The M, which was launched in February, sold 381 units in 1Q2020 at a median price of $2,439 psf


COVER STORY

STORIES BY CECILIA [email protected]

The combination of Covid-19 pandemic and extend-ed “circuit breaker” measures has led projections of monthly new home sales to mimic a limbo dance: how low will it go?

New home sales in April are likely to be about 280 units, estimates Ismail Gafoor, CEO of PropNex. Based on ca-veats lodged as at April 25, 238 new homes have been sold so far. “It will definitely be less than 300 units,” he adds.

If the projection of 280 units is correct, that will bring new home sales (developers’ or primary market sales) in April to just 42% of the 660 units sold in March. On a m-o-m basis, the March figure was already 32% below that of February’s 978 units, says Gafoor.

Before the circuit breaker came into effect on April 7, there was a small window of about six days (including the first week-end of April 4–5) for property developers and agents to lock in some sales. “It wasn’t just the launch of Kopar; people were rushing to close deals at other already-launched projects be-fore the start of the circuit breaker,” says Gafoor. “That’s why we still had 238 new homes sold in April.” (See Done Deals: Circuit breaker deals in April, on Page EP8.)

Meanwhile, secondary market (sub-sales and resales) sales last month are even lower. They currently stand at 204 units as at April 25, and is likely to end the month at 250 at most, reckons Gafoor.

‘DEALS CAN STILL BE DONE VIRTUALLY’With the circuit breaker extended until June 1, the suspension of property viewings and marketing roadshows as well as closure of project sales galleries will be stretched by another month. “Deals can still be done — through virtual tours on Zoom —even in the absence of physical project launches,” says Gafoor.

Some sales had originated from those who had viewed the virtual tours or video clips of projects, although admittedly, such deals are still relatively few in number, adds Gafoor. There are those who had visited sales galleries prior to the circuit break-er, and only made their decision later. Others could have been waiting for the funds from the sale of another property or as-set, resulting in the completion of the purchase during the cir-cuit breaker, he explains.

In the absence of new launches in May however, Gafoor

reckons new home sales this month could be in the range of 100 to 150 units. Deals in the secondary market are likely to be even more muted — to the tune of 50 to 100 transactions. “It will be the lowest monthly home sales in the entire year,” predicts Gafoor.

LOWEST SINCE GLOBAL FINANCIAL CRISIS?New home sales of 100 to 150 units will be a new low in over a decade. But it will still not be as dismal as in January 2009, when just 108 units were sold, excluding executive condos (ECs). “In 2009, the Lunar New Year holiday fell in January, so new home sales that month was hit by both the Global Fi-nancial Crisis (GFC) and seasonal lull during the holiday,” says Nicholas Mak, head of research & consultancy at ERA Realty.

In the depths of the GFC, monthly new home sales hov-ered within the range of 100 and 200 units between October 2008 and January 2009, notes Mak. In hindsight, January 2009 proved to be the trough: the following month, new home sales jumped to 1,332 units. Thereafter, monthly figures stayed at above 1,000 units for the next seven months until September 2009. “That marked the return of home-buyer confidence and market recovery,” he adds.

For the whole of 2009, total private residential sales (both primary and secondary) amounted to 13,642 units. Sub-sales accounted for 1,832 or 13.4% of total sales that year. The series of property cooling measures over the past decade have kept sub-sales in check: over the last three years from 2017 to 2019, sub-sales made up only 1.5% to 1.6% of total private residen-tial transactions, Mak says.

‘WARM UP’ IN JUNE Even after the circuit breaker is lifted on June 1, safe distanc-ing measures could still be in place, cautions PropNex’s Ga-foor. Consequently, he doesn’t expect any major launches that month.“Most launches are likely to be pushed to the second half of 2020, to July onwards.”

While the level of sales in June is likely to be higher than that of May’s, Gafoor reckons it could take some time for ac-tivity to “warm up” before returning to the pre-circuit breaker levels. One reason is that a number of developers had planned to launch their projects in April and May, but shelved them be-cause of the circuit breaker.

There is a possibility that the government could restrict the resumption of construction activity even after the circuit breaker

is lifted, given the scale of the outbreak at workers’ dormitories, says Gafoor. As such, there could be a delay in the completion of project sales galleries and showflats, which could also push back developers’ launch dates, he points out.

PROJECT LAUNCHES TO EXPECT IN 2H2020According to Gafoor, one anticipated new launch is The Land-

May new home sales likely to hit 11-year low with

circuit breaker extension

Kopar at Newton previewed towards the end of March, after stricter safe distancing measures were imposed, and was launched on April 4–5, the weekend before the circuit breaker kicked in

CEL DEVELOPMENT


Developers and buyers are adopting a wait-and-see approach to gauge sentiment in the property market after the circuit breaker ends


COVER STORY

mark (former Landmark Tower) by a ZACD-led consortium. The 396-unit private condo on Chin Swee Road, just at the fringe of the CBD, will be developed in a joint venture with Sin-gapore-based Chinese developer MCC Land as well as SSLE Development (the investment ve-hicle of the Lim family-controlled construction company, Sin Soon Lee, and its property devel-opment arm, Elitist Development).

Another project in the launch pipeline is the 258-unit Verdale by CSC Land, the property de-velopment arm of China Construction. The pro-ject is located just off Jalan Jurong Kechil and sits on a 99-year leasehold site purchased in a government land sale in September 2018.

Nearby is The Linq @ Beauty World by list-ed construction, engineering and property de-velopment group BBR Holdings. The freehold, mixed development with apartments is located on the site of the former Goh & Goh Building which BBR Holdings had purchased en bloc in 2017. The Linq is also adjacent to Beauty World MRT Station on the Downtown Line.

In the Toh Tuck area is Forett @ Bukit Timah. The 633-unit, 999-year leasehold condo is on the site of the former Goodluck Garden, purchased en bloc by a joint venture between Qingjian Re-alty and Perennial Real Estate.

PENT-UP DEMAND TEMPERED BY SUBDUED SENTIMENTWhile there may be some pent-up demand, it is likely to be tempered by more subdued sen-timent as job security has become a concern, notes Gafoor.

Business owners in sectors that are deemed non-essential have also been affected by having to shut down during the circuit breaker.

On the other hand, those whose jobs are se-cure and whose businesses are considered essen-tial services are likely to be in a position to pro-ceed with a new home purchase. They include civil servants, those working in the healthcare or medical supplies sectors as well as supermar-kets, food and delivery services.

For now, many developers are adopting a wait-and-see approach. “They want to gauge the market environment post-circuit breaker before deciding whether to go ahead with their project launch,” says ERA’s Mak. Sentiment is a key factor too, he adds. “After the circuit break-er, people will visit showflats. But will they be in the mood to buy a home? That is a big un-known at this point.”

The two-month pause in transactions could further widen the gap between prices buyers are willing to offer and owners are willing to sell at, leading to an impasse. This will further hamper transactions in the coming months, says Mak.

Given the fast deteriorating economic condi-tions, developers are expected to be more forth-coming with “star buys and discounts”, says Christine Li, Cushman & Wakefield head of re-search for Singapore and Southeast Asia. “As they have an ABSD [additional buyer’s stamp duty] deadline to meet, they would want to sus-tain their sales momentum if possible,” she adds.

PRIVATE HOME SALES FORECASTIn 1Q2020, total private home sales was 4,309 units, 11.7% lower q-o-q compared to the pre-

vious quarter. On a y-o-y basis, it is still 15.1% higher compared to 1Q2019.

“Sales continue to tip in favour of developers’ sales, with 50.8% of total sales being new sales in 1Q2020,” says Li. Sub-sales and resales make up 0.9% and 48.3% of total sales respectively.

Meanwhile, in 2Q2020, two-thirds of the sales are likely to be “written off” because of the cir-cuit breaker, reckons Mak. “Any light at the end of the tunnel is likely to come towards the end of 3Q2020 or start of 4Q2020,” he reasons.

Mak forecasts that the year could end with between 6,000 and 8,000 new home sales, about 19.3% to 39.5% lower compared to the 9,912 units recorded in 2019. Even at the lower end of the spectrum, the forecast is still higher than the 4,264 new homes (excluding ECs) sold in 2008 during the GFC, he notes.

Total transaction volume (both primary and secondary sales) in 2008 plunged by two-thirds y-o-y during the GFC, observes Ong Teck Hui, JLL senior director of research & consultancy. He at-tributes it to “a highly exuberant market in 2007” when private home sales totalled 40,654 units.

By contrast, the total transaction volume in 2019 was only 19,150 units, largely due to the cooling measures in place, says Ong. “While to-tal transaction volume in 2020 may not decline by the same magnitude it had in 2008, it could still be around 40% to 50%,” he adds.

Unsold inventory at 1Q2020 was 29,396 units, according to URA data. This is 3.5% lower than that in 4Q2019 and a sharp 22.2% decline from the recent high of 37,799 units in 1Q2019. “Four consecutive quarters of downtrend indicates that the oversupply situation is gradually improv-ing,” says Ong.

HOW FAR WILL PRICES FALL?“Price decline is unlikely to be steep in the next two quarters at least,” adds C&W’s Li. She at-tributes this to the Covid-19 temporary relief measures provided by the government, which include deferment of mortgage repayments for six months. “As such we expect residential pric-es to correct by around 5% this year, with fur-ther declines next year.”

Tricia Song, head of research for Singapore, Colliers International, is expecting private resi-dential prices to decline by 3% to 5% in 2020, in line with contraction in the economy. It will be the first decline since 2016, when prices fell 3.1%, she notes.

Goldman Sachs analysts Jason Yeo and Doug-las Eu are projecting a steeper price drop of 10% for the year. However, the degree of decline is already “more moderate” relative to the 25% drop during the GFC and the 45% plunge during the Asian Financial Crisis (AFC) of 1997–1998, note the analysts.

They attribute the more moderate price de-cline to several factors: fewer speculative trans-actions as a result of nine rounds of property cooling measures; smaller proportion of foreign property purchases, which has declined from 14% prior to the GFC, to 5% to 6% in 2019; and lower unsold inventory.

If property prices were to drop by 10% this year, “there’s a good chance that policy cooling measures could be eased”, say the analysts at Goldman Sachs. E

Upcoming new launches that were deferred because of the circuit breaker include The Landmark, a redevelopment of the former Landmark Tower


Behind the price declines in Core Central Region

URA data showed that the Core Central Region (CCR) — which covers the tradi-

tional prime Orchard Road dis-tricts of 9, 10 and 11, Marina Bay and the CBD area as well as Sentosa Cove — suffered the biggest quarterly decline of 2.2% in 1Q2020. In com-parison, the city fringe (Rest of Central Region) and sub-urban areas (Outside Central Region) saw 0.5% and 0.4% q-o-q declines over the same three months respectively.

The 2.2% drop in CCR pric-es followed a 2.8% q-o-q de-cline in 4Q2019.

This means that CCR home prices are now 4.9% below the recent peak in 3Q2018 and 7.2% below the all-time-high in 1Q2013, says Tricia Song, head of research for Singapore, Col-liers International.

A closer look at the trans-actions during the quarter sug-gests that the decrease in the CCR non-landed property pric-es in 1Q2020 could be due to “selected launches sold at perceived discounts”, ac-cording to Song.

Wing Tai Holdings’ 522-unit The M, which was launched in February, was the best-selling project in 1Q2020. It sold 381 units last quarter at a median price of $2,439 psf, compared to nearby Midtown Bay, which sold 38 units at a median price of $2,934 psf in 4Q2019, and another 10 units at a median price of $2,898 psf in 1Q2020, points out Song.

The Enclave at Holland, by the property arm of Jean Yip Group, is a 26-unit, freehold private condominium in the Holland Road neighbourhood. The developer sold 14 units in 1Q2020 at a median price of $1,851 psf, compared to earlier units that were sold at prices ranging from $2,500 to $2,600 psf when the project was first launched in July 2018, adds Song.

“We believe the take-up has yet to reflect the full impact of Covid-19 as the cir-cuit breaker measures kicked in after 1Q2020 ended, and most of the transactions had occurred in January and February,” notes Song.

In her analysis of property purchases by nationality from January 2019 to April 2020 to date, Han Huan Mei, director of research at List Sotheby’s International Re-alty, found that property purchases in the CCR by Singapore permanent residents (PRs) and foreigners grew steadily from October onwards (see chart below). “This was partly a function of supply, and partly due to a gradual return of confidence as the US-China trade negotiations were beginning to see daylight,” she says.

“The M was a beneficiary of this upturn,” adds Han. “However, the numbers be-gan to decline when the Covid-19 outbreak struck Southeast Asia.”

The number of transactions by PRs and foreigners is likely to be affected for a longer period of time now that the circuit breaker has been extended by another month, up to June 1. “Buying sentiment in the real estate sector is likely to remain cautious as the focus is on the economy and job security,” writes Han.

Meanwhile, foreigners who are already residents in Singapore might adopt a wait-and-see approach, but may be motivated to enter the market if developers dangle sweeteners to move sales, especially in the CCR and RCR, adds Han. E

Wing Tai Holdings’ 522-unit The M, which was launched in February, was the best-selling project in 1Q2020

WING TAI

Non-landed transactions in the Core Central Region: January 2019–April 2020YTD

*BASED ON URA REALIS DATA DOWNLOADED AS AT APRIL 25, 2020; LIST SOTHEBY’S INTERNATIONAL REALTY


SPOTLIGHT

BY VALERIE KOR [email protected]

On the weekend prior to the start of the circuit breaker on April 7, crowds of Singaporeans rushed to Ikea, the DIY furniture specialist. While some simply wanted a last

taste of the popular Swedish meatballs be-fore complying with stay-home rules, many of them actually needed proper tables and chairs to work and study on.

This is because until recently, work was mostly done in offices. With non-essential ser-vices suspended, companies have had their employees work from home to keep business-es going. At the same time, schools switched to home-based learning. The implementation of these arrangements meant parents had to start working side by side with their children who also needed extra space or even a new monitor to communicate with their teachers and classmates via Zoom or Microsoft Teams.

Content producer Lynnette Chia was one parent who had to make quick adjustments af-ter the “circuit breaker” measures kicked in. She brought her 27-inch monitor screen home from the office and converted the children’s study table and shelf into her workspace. Her children do their home-based learning on a makeshift mahjong table in their bedroom. Thankfully, they did not have to buy any new IT equipment or furniture.

She says, “They are on individual laptops by 8.30am on weekdays for their lessons. My husband and I occupy different areas of the house because if we have overlapping con-ference calls, we will not be able to concen-trate on the meetings with both of us talking.”

Joshua Li, a media practitioner, works from his en suite master bedroom, which is spa-cious enough to fit one king-sized bed, two single-person study tables, a built-in closet and a bookshelf. He already had his Macbook Pro and separate monitor set up in the bedroom to work from home. In the living room, his six-

year-old son uses a Macbook Air on the din-ing table for the daily morning chat sessions with his kindergarten teachers.

Li says, “I prefer to work from the office. At home, I have to barricade myself in the room but that does not stop my son from knock-ing incessantly, pleading to play together. My heart would just melt and I would cave in and open the door.”

For many working parents like Chia and Li, the work from home situation will contin-ue until June 1 since an extension has been announced by the multi-ministry task force to slow the local transmission of Covid-19. Schools will continue with home-based learning un-til May 4. Preschools have also been closed, only offering childcare for children of essen-tial service workers. Primary and secondary schools will break for the mid-year holidays from May 4 to June 1.

To be sure, working from home is not a new concept. In fact, employers from the tech in-dustry are known to offer work-from-home ar-rangements as a perk. Glassdoor reviews reveal that companies such as Google and Facebook allow working from home once a week, de-pending on teams. The take-up rate of work-from-home is relatively slower in traditional workplaces where supervisors still prefer to manage by presence.

Now, working from home is put on a na-tionwide trial. If companies can still function as per normal through online communication platforms, this may lead to a rise in flexible work arrangements that could generate cost savings for firms in terms of rental costs.

Desmond Sim, head of research at CBRE, says that two existing trends in the office leas-ing space are likely to quicken pace during this period. The first is a hub-and-spoke approach to renting offices.

Sim says, “The hub-and-spoke strategy is already something that big corporations, such as banks, have been using to equalise rent. They would have a front-facing office in the CBD and office spaces in the suburban areas,

where the non-revenue trading departments would operate from. In today’s context, this approach is useful for social distancing as well given firms are realising that it is not good to place everyone in the same place.”

“The second trend that may become more prevalent is the core-and-flex, which is used by smaller enterprises. The core team reports to a permanent office. Teams that are tran-sient and more mobile, such as salespeople, journalists or insurance agents who are con-stantly on the move, can report to co-work-ing spaces when required, hence the term ‘flex’,” he adds.

Sim says that flexibility is the biggest sell-ing point for the agile co-working space mar-ket as firms can increase or decrease the office space they require easily. But at the end of the day, he believes that businesses will probably still need a corporate location, even as work-ing from home becomes more viable.

Making space for work Since a decade ago, property developers have been marketing small office home of-fice (Soho) apartments in response to a grow-ing group of entrepreneurs and consultants who were increasingly working from home. Usually, these Soho units feature a loft for a bed, leaving the main area below free as a workstation.

When the term Soho first gained popu-larity, it created some confusion for proper-ty agents and buyers because it does not in-dicate an official planning status. According to URA, a unit has to be either an office or a home, not both. A development that has been approved for office use for business purposes cannot be used as a residence, and vice versa.

However, URA allows small-scale business-es to be operated within residences if regis-tration has been done under the Home Office Scheme introduced in June 2003. Owners of private properties should apply to the URA while those of HDB flats should apply to HDB. It will be approved if the business does not cause inconvenience to neighbours and does not employ more than two non-residents.

Even as developers have been discouraged by the URA to use the “Soho” term, they have continued to incorporate flexible spaces into the units in response to a growing demand.

Dora Chng, general manager (residential) at GuocoLand, shares that wherever possible, the group’s latest developments have incor-porated flexible spaces that allow residents to create conducive workstations.

At the new launch project Midtown Bay lo-cated opposite Suntec City, every unit comes with a ceiling height of 3.2m. The larger du-

plex units are dual-key with two full floors that are also 3.2m-high. Chng says that such a layout is quite rare in Singapore currently and allows investors and owners to have a lot of flexibility.

Chng explains, “We foresee three scenari-os. First, if an investor is based overseas and visits Singapore occasionally, the first floor can be rented out to a tenant and the up-stairs unit can be kept for own use. Later on, if there is a need to accommodate a family in Singapore, the investor or owner can occupy both floors instead. The third scenario might happen when the children are older and the owner needs an office space to work from home. The lower floor can then be convert-ed to a small home office.”

Meanwhile, other than the usual swim-ming pool and gym offered in residential de-velopments, developments such as Wallich Residence and Midtown Bay offer corporate event venues and meeting rooms that can be booked by residents. The lobby also comes with a concierge service that serves beverag-es and receives parcels. Such facilities have been well-received in Wallich Residence.

Still, even if not living in an apartment with flexible spaces or corporate facilities, one can also create dedicated “home offices” away from rest areas in regular floor plans. However, challenges arise when many family members live together and there is a lack of space in the typical three- to four-bedroom apartments that most Singaporeans live in.

Additionally, for multi-generational fam-ilies, physical space is not the only issue. Working from home often means grappling with a myriad of tasks that compete for men-tal space. During the circuit breaker, parents with school-going children have to toggle be-tween caregiving, home-schooling and work-ing. As the boundary between work and home blurs, many face distractions and may end up clocking longer work hours.

A recent Bloomberg article highlighted that according to data from NordVPN, in the past six weeks, employees in European countries ended up working two hours longer when working from home, while US employees clocked an additional three hours per day. Anecdotal evidence suggests that in the US especially, people are “overworked, stressed and eager to get back to the office”.

CBRE’s Sim says, “It could be that during this period, people might realise that they cannot work from home after all.” As such, he believes that due to space and domestic demands, whether this period of working from home will impact actual office demand remains to be seen. E

Wallich Residence’s boardroom on level 52 is one of the more popular facilities among residents

The city adjusts to working from homeLYNNETTE CHIA

Lynnette Chia had to bring home a 27-inch monitor screen from the office and converted the children’s study table and shelf to her workspace to work from home

GUOCOLAND


RETAIL


The retail sector is one of the hardest hit by the ongoing Covid-19 outbreak. Ac-cording to the latest URA figures, rents of retail space in the central region de-clined by 2.3% q-o-q in 1Q2020, after

two consecutive quarters of growth. Prices of retail space also fell by 3.1% q-o-q in 1Q2020.

Stringent safe distancing and other “circuit breaker” measures have made it worse for the sector from mid-February with vacancy rates moving up to 8.0% in 1Q2020 from 7.5% in 4Q2019. CBRE’s head of research Desmond Sim says higher degrees of stress were regis-tered in the fringe areas with the rental decline the highest among all regions. The decline of 5.1% y-o-y was also the highest since 1Q2017, when rentals last fell by 3.7%.

The amount of occupied retail space de-creased by 463,000 sq ft, compared to the in-crease of 280,000 sq ft the previous quarter. Christine Li, Cushman & Wakefield’s head of research, says that while both islandwide de-mand and supply fell, the fall in net demand (463,000 sq ft) outweighed net supply (-161,000 sq ft). It is the largest fall in net demand in six years since 1Q2014, which shows that more retail spaces are being vacated than occupied.

With the circuit breaker measures extend-ed to June 1, non-essential retailers will con-tinue to suspend operations. As a result, re-tail occupancy is expected to decline further in 2Q2020 with retail malls being the most

negatively impacted. Experts believe that the true impact of Covid-19 will be only seen then.

CBRE’s Sim says: “Rental decline is expect-ed to accelerate next quarter, as most existing tenancies were still locked in during 1Q2020 when the Covid-19 pandemic was still in its infancy. The downward pressure on rents was mitigated by reliefs from landlords, such as offering marketing assistance, allowing ten-ants to use security deposits to offset rental

payments, and offering rental rebates passed down from government property tax rebates.”

“Moving forward, landlords will face in-creasing pressure to strike a balance between vacancy and rents; they might have to lower rents in a bid to maintain healthy occupancy rates,” he adds.

Cushman & Wakefield’s Li also believes that 1Q2020 URA figures on the retail sector may not be fully reflective of ground conditions,

as a significant portion of these transactions could have been done pre-Covid-19. She notes that 78% of caveats lodged in 1Q2020 were submitted in the first two months of this year.

Meanwhile, Colliers International’s head of research Tricia Song says that retail sales — excluding that of motor vehicles — declined 10.2% y-o-y in February. The sharp declines in footfall have also led to severe cash flow constraints.

Comparing the impact of the outbreak to that of SARS, Song says: “During SARS, re-tail rents fell 2.6% in 1H2003 and 3.4% for the full year in 2003. We believe the impact of Covid-19 could be more detrimental and forecast a 5% decline in average retail rents in 2020.”

Tay Huey Ying, head of research and con-sultancy of JLL Singapore, notes that retailers are cautious and have held back expansion plans and lease negotiations due at the lat-er part of the year. Some lease renewals were committed at shorter lease terms and at low-er rents. She adds that during this challenging time, retailers with deep balance sheets and online capabilities will more likely survive.

Colliers’ Song says one positive factor is that the new supply of retail space will stay tight in 2020, taking up 0.3% of total stock which is far less than the 10-year historical average of 1.4%. The tight supply will re-main until 2024. Furthermore, the new sup-ply is concentrated in suburban and fringe areas, where “there is a well-defined popula-tion catchment”. E

BY TIMOTHY [email protected]

The first quarter of this year saw is-land-wide industrial prices fall by 0.4% compared to the previous quarter, while overall industrial rents dropped by 0.1% q-o-q, based on the latest statistics by

JTC released on April 23.According to Brenda Ong, head of logistics

and industrial at Cushman & Wakefield, “The drop in prices and rents do not fully reflect the full impact of Covid-19, given that stricter social distancing measures were implement-ed in April and many of these transactions could have been committed before Covid-19.”

The single-user factory rental index dipped by 0.2% q-o-q, while the multiple-user fac-tory rental index fell sharply by 0.4% over the same period.

Desmond Sim, head of research of South-east Asia at CBRE, says: “The drop in factory rents is a snap indication of weakening senti-ments which are possibly centred around the tail-end of the quarter. Looking ahead, fur-ther declines in factory rents can be foreseen in view of the challenging market outlook.”

He adds that factory rents could experi-ence a steeper decline against a backdrop of supply chain disruptions, as well as an ex-isting vacancy volume of 39.95 million sq ft. But warehouse rents are likely to be partially cushioned by a limited supply pipeline and

short-term demand for storage space, says Sim.Meanwhile, overall industrial occupancy

rates remain relatively high at 89.2% and unchanged from 4Q2019. However, sales of factory and warehouse properties cooled on the back of more cautious market sentiments. There were only 179 transactions, making it the lowest quarterly level of industrial strata

sales since 1Q2009 which recorded 161 sales.“Sales volumes are expected to remain

muted as the market takes a wait-and-see approach. The [industrial] market will like-ly trend lower over the year, as the impact of two months of strict social distancing meas-ures filter through,” says Ong.

Tay Huey Ying, head of research and con-

sultancy at JLL Singapore, adds: “firm de-mand for good quality space in the popular business parks was observed in the first two months of 1Q20, [while] the warehousing market experienced an increase in activity for short-term leases to accommodate med-ical supplies and consumer items as safety concerns and movement controls fuelled a spike in e-commerce.”

But she says that the tail-end of March also saw industrialists shelve expansion and relocation plans, opting to renew existing leases and submit requests for rental rebates.

Cushman & Wakefield’s Ong notes that a recession is likely on the cards for Singapore, but industrial rents could be more resilient compared to other local sectors. Bright spots in the industrial market could come from bi-omedical, e-commerce, logistics, and distri-bution companies, she adds.

She points out that central region office rents fell by 26.1% from 4Q2008 to 3Q2009 during the height of the global financial crisis, compared to industrial rents which dropped by 16.8% over the same period.

The Covid-19 pandemic is also expected to accelerate automation adoption and smart manufacturing processes in Singapore and reduce future dependency on human work-ers, says Ong. “This trend translates into higher demand for high spec factory space which are able to support these operations,” she says. E

Retail rents down 2.3% q-o-q in 1Q2020

Industrial property prices fall 0.4% in 1Q2020 as industrialists shelve expansion plans

ALBERT CHUA/THE EDGE SINGAPORE


Shopping malls are seeing drastic drop in footfall and sales, leading to cash flow constraints

Industrial sales volumes are expected to remain muted as the market takes a wait-and-see approach

INDUSTRIAL


DONE DEALS

District 13 SOMMERVILLE WALK Terrace Freehold Apr 15 1,733 3,638,000 - 2,101 2019 ResalePARK COLONIAL Condominium 99 years Apr 14 667 1,360,000 - 2,038 Uncompleted New SaleDistrict 14 PARC ESTA Apartment 99 years Apr 18 743 1,232,000 - 1,659 Uncompleted New SalePARC ESTA Apartment 99 years Apr 19 958 1,610,000 - 1,681 Uncompleted New SaleREZI 24 Apartment Freehold Apr 17 506 837,300 - 1,655 Uncompleted New SaleDistrict 15 OPERA ESTATE Terrace Freehold Apr 14 1,636 2,650,000 - 1,625 Unknown ResalePEBBLE BAY Condominium 99 years Apr 16 1,894 2,838,000 - 1,498 1997 ResaleRESIDENCE TWENTY-TWO Apartment Freehold Apr 16 861 1,405,152 - 1,632 Uncompleted New SaleDistrict 17 EDELWEISS PARK CONDOMINIUM Condominium Freehold Apr 14 1,270 1,050,000 - 827 2006 ResaleHEDGES PARK CONDOMINIUM Condominium 99 years Apr 16 1,012 880,000 - 870 2015 ResaleDistrict 18 LIVIA Condominium 99 years Apr 16 1,324 950,000 - 718 2011 ResaleTHE TROPICA Condominium 99 years Apr 14 1,787 1,450,000 - 811 2000 ResaleTREASURE AT TAMPINES Condominium 99 years Apr 16 657 930,000 - 1,416 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years Apr 18 915 1,131,000 - 1,236 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years Apr 18 678 961,000 - 1,417 Uncompleted New SaleDistrict 19 OLA EC 99 years Apr 17 1,389 1,407,000 - 1,013 Uncompleted New SaleRIVERFRONT RESIDENCES Apartment 99 years Apr 17 581 689,000 - 1,185 Uncompleted New SaleRIVERPARC RESIDENCE EC 99 years Apr 17 1,076 930,000 - 864 2014 ResaleTHE FLORENCE RESIDENCES Apartment 99 years Apr 16 667 1,019,000 - 1,527 Uncompleted New SaleTHE GARDEN RESIDENCES Apartment 99 years Apr 18 904 1,470,000 - 1,626 Uncompleted New SaleTHE RIVERVALE EC 99 years Apr 16 1,302 985,000 - 756 2000 ResaleDistrict 20 JADESCAPE Condominium 99 years Apr 16 527 944,000 - 1,790 Uncompleted New SaleJADESCAPE Condominium 99 years Apr 18 527 961,000 - 1,822 Uncompleted New SaleNUOVO EC 99 years Apr 15 1,281 1,060,000 - 828 2004 ResaleTHE GARDENS AT BISHAN Condominium 99 years Apr 14 1,152 1,380,000 - 1,198 2004 ResaleTHE PANORAMA Condominium 99 years Apr 15 797 1,100,000 - 1,381 2017 ResaleDistrict 23 HILLION RESIDENCES Apartment 99 years Apr 17 2,616 2,700,000 - 1,032 2017 ResaleREGENT HEIGHTS Condominium 99 years Apr 14 1,173 870,000 - 742 1999 ResaleTHE RAINFOREST EC 99 years Apr 15 947 910,000 - 961 2015 ResaleDistrict 26 MEADOWS @ PEIRCE Condominium Freehold Apr 15 2,045 2,050,000 - 1,002 2012 ResaleDistrict 27 SKYPARK RESIDENCES EC 99 years Apr 15 1,141 920,000 - 806 2016 ResaleDistrict 28 SUNRISE VILLA Terrace Freehold Apr 15 2,594 2,900,000 - 1,118 1993 Resale

Residential transactions with contracts dated April 14 to 19

PROJECT NAME PROPERTY TYPE TENURESALE DATE

(2020)LAND AREA/

FLOOR AREA (SQ FT)TRANSACTED

PRICE ($)NETT PRICE

($ PSF)UNIT PRICE

($ PSF)COMPLETION

DATE TYPE OF SALE

District 1 MARINA ONE RESIDENCES Apartment 99 years Apr 17 710 1,673,000 - 2,355 2017 ResaleDistrict 3 AVENUE SOUTH RESIDENCE Apartment 99 years Apr 14 527 1,060,000 - 2,010 Uncompleted New SaleAVENUE SOUTH RESIDENCE Apartment 99 years Apr 15 527 984,000 - 1,866 Uncompleted New SaleMARGARET VILLE Apartment 99 years Apr 16 1,184 2,006,354 - 1,694 Uncompleted New SaleSTIRLING RESIDENCES Apartment 99 years Apr 14 764 1,492,000 - 1,952 Uncompleted New SaleSTIRLING RESIDENCES Apartment 99 years Apr 17 786 1,522,000 - 1,937 Uncompleted New SaleDistrict 5 BLUE HORIZON Condominium 99 years Apr 16 1,152 1,230,000 - 1,068 2005 ResaleTHE CLEMENT CANOPY Apartment 99 years Apr 15 1,346 1,980,000 - 1,472 2019 ResaleDistrict 7 MIDTOWN BAY Apartment 99 years Apr 17 753 2,066,400 2,030,400 2,695 Uncompleted New SaleDistrict 9 KOPAR AT NEWTON Apartment 99 years Apr 17 958 2,053,000 - 2,143 Uncompleted New SaleSCOTTS SQUARE Apartment Freehold Apr 17 947 3,400,000 - 3,589 2011 ResaleDistrict 10 BOULEVARD 88 Apartment Freehold Apr 14 2,766 10,264,800 - 3,711 Uncompleted New SaleBOULEVARD 88 Apartment Freehold Apr 14 2,777 10,315,200 - 3,714 Uncompleted New SaleMONTVIEW Condominium Freehold Apr 16 1,227 1,900,000 - 1,548 2008 ResaleDistrict 11 DUNEARN ESTATE Detached Freehold Apr 15 6,609 9,380,000 - 1,419 Unknown ResaleNEU AT NOVENA Apartment Freehold Apr 14 818 2,184,000 - 2,670 Uncompleted New SaleNEWTON ONE Condominium Freehold Apr 16 1,216 2,425,000 - 1,994 2009 ResaleDistrict 12 TREVISTA Condominium 99 years Apr 14 1,776 2,300,000 - 1,295 2011 Resale

Singapore — by postal district LOCALITIES DISTRICTSCity & Southwest 1 to 8Orchard/Tanglin/Holland 9 and 10Newton/Bukit Timah/Clementi 11 and 21Balestier/MacPherson/Geylang 12 to 14East Coast 15 and 16Changi/Pasir Ris 17 and 18Serangoon/Thomson 19 and 20West 22 to 24North 25 to 28

PROJECT NAME PROPERTY TYPE TENURESALE DATE

(2020)LAND AREA/

FLOOR AREA (SQ FT)TRANSACTED

PRICE ($)NETT PRICE

($ PSF)UNIT PRICE

($ PSF)COMPLETION

DATE TYPE OF SALE

Source: URA Realis. Updated April 27, 2020EC stands for executive condominium

DISCLAIMER:The Edge Property Pte Ltd shall not be responsible for any loss or liability arising directly or indirectly from the use of, or reliance on, the information provided therein.

BY CECILIA [email protected]

The first weekend of April marked the launch of Kopar at Newton, where 77 units were sold at an average price of $2,350 psf. Other developers also used those first few days of April to push

sales of their projects before the “circuit break-er” slammed the door on all sales and market-ing activity, while sales galleries had to close from April 7.

In the Core Central Region (CCR), two units were sold at luxury condo Boulevard 88 on Or-chard Boulevard. The buyer was said to be an Indonesian and a “repeat buyer”, who snapped up two adjacent four-bedroom units on the sev-enth floor: one was purchased for $10.26 million ($3,711 psf), while the other went for $10.3 mil-lion ($3,714 psf). Both deals were brokered by PropNex. “The buyer had already seen the pro-ject before the circuit breaker,” says Dominic Lee, head of Luxury Team at PropNex.

Other projects that saw strong sales in April were those in the Rest of Central Re-gion (RCR) and Outside Central Region (OCR). Most of these are the mega projects — above 1,000 units — that were launched in the 2018-2019 period, notes Ismail Gafoor, CEO of PropNex.

The project with the most number of sales in April (after Kopar at Newton) was Treas-ure at Tampines. Based on caveats lodged as at April 25, 22 units were sold at an average price of $1,340 psf, bringing total sales to 1,106 (50%) out of a total of 2,203 units.

This was followed by Riverfront Residences,

whose developer is a consortium led by Ox-ley Holdings. In April, 14 units there were sold at an average of $1,278 psf, according to caveats lodged. The project is located at Hou-gang Avenue 7 in the northeast region in the OCR. This brings total sales in the project to 1,271, out of a total of 1,472 units, which means it is 86.3% sold as at April 25.

Another project that also saw strong buying momentum in March, and continued to see sales in April, even after the circuit-breaker, was JadeScape by Qingjian Realty. The pro-ject sold 76 units in March, and another 11 in April at an average of $1,745 psf, based on caveats lodged as at April 25. With 754

units taken up, the 1,206-unit JadeScape is 63% sold to date.

MCL Land’s Parc Esta sold close to 10 units as at April 25. It has sold 1,175 out of 1,399 units in the development, which means it is 84% spoken for, two years ahead of its sched-uled completion. Parc Esta is located on Sims Avenue, near Eunos MRT Station.

Another sought-after project is Stirling Resi-dences, a joint venture between Nanshan Group and Logan Property in the Queenstown area. The project also sold close to 10 units, based on caveats lodged as at April 25, bringing to-tal sales to over 960 units, which means the 1,259-unit project is 76% sold.

Other developments that have also gar-nered some sales despite the circuit breaker include Logan Property’s 1,410-unit Florence Residences in the Hougang-Kovan area; Af-finity at Serangoon at Serangoon North Av-enue, where close to 700 units in the 1,052-unit development have been sold to date; and the 327-unit Daintree Residence at Toh Tuck Road, developed by SP Setia.

For PropNex, as the circuit breaker has been extended, it will continue to do “a lot more consumer education through webinars”, says Gafoor. “Developers are also likely to be more sensitive in their pricing given the cur-rent market.” E

Circuit-breaker deals in AprilSIM LIAN GROUP

The crowd at Treasure at Tampines when the project previewed in March last year. The 2,203-unit private condo in the eastern region of Tampines sold the most number of units in April, after Kopar at Newton.


GAINS AND LOSSES


The seller of a unit at Montview, along Mount Sinai Drive, made the top gain of $969,400 over the period from April 14 to 19. The 1,227 sq ft unit on the eighth floor was bought for $930,600

($758 psf) in August 2005 and sold for $1.9 million ($1,548 psf) on April 16. The seller therefore made a 104% profit, or an annual-ised profit of 5% over almost 15 years.

Located in District 10, Montview was com-pleted in 2008 and comprises 115 freehold

units. It is a five-minute drive to Dover MRT Station on the East-West Line.

The second top gain made over the week — a 26% profit of $700,000 — was at Scotts Square, along Scotts Road. The 947 sq ft unit on the 27th floor was purchased for $2.7 mil-lion ($2,850 psf) in March 2017 and sold for $3.4 million ($3,589 psf) on April 17. This means that the seller made an annualised profit of 8% over three years.

Scotts Square, in District 9, comprises 338 freehold units. It was completed in 2011 and is a seven-minute walk to Orchard MRT Sta-tion on the North-South Line.

A unit sold at Blue Horizon, along West Coast Crescent in District 5, made the third largest gain over the week, netting a 79% profit of $542,930 for the seller. The 1,152 sq ft unit on the 17th floor was bought in Janu-ary 2006 for $687,070 ($597 psf), and sold for $1.23 million ($1,068 psf) on April 16. The seller therefore made an annualised profit of 4% over 14 years.

Blue Horizon, completed in 2005, com-prises 616 units on a 99-year leasehold. It is a five-minute drive to the Clementi MRT Sta-tion on the East-West Line.

The fourth top gain incurred over the week

was from the resale of a 1,894 sq ft unit at Peb-ble Bay in District 15. Having sold the proper-ty for $2.84 million ($1,498 psf) on April 16, the seller reaped a 23% profit of $538,000. The unit was purchased in July 2007 for $2.3 million ($1,214 psf). Over a holding period of almost 13 years, this translates into an annu-alised profit of 2%.

Pebble Bay, along Tanjong Rhu Road, com-prises 510 units on a 99-year leasehold. Com-pleted in 1997, it is one minute by foot to the upcoming Tanjong Rhu MRT Station on the Thomson-East Coast Line, slated for open-ing in 2023. E

Top gains from April 14 to 19

Resale unit at Montview reaps $969,400 profit

The seller of a resale unit at Montview made a 104% profit, or an annualised profit of 5% over almost 15 years A unit sold at Blue Horizon, along West Coast Crescent in District 5, made the third largest gain over the period, netting a 79% profit of $542,930 for the seller

PICTURES: SAMUEL ISAAC CHUA/THE EDGE SINGAPORE

Most profitable deals PROJECT DISTRICT AREA

( SQ FT)SOLD ON

(2020)SALE PRICE ($ PSF) BOUGHT ON PURCHASE PRICE

($ PSF)PROFIT ($) PROFIT (%) ANNUALISED PROFIT (%) HOLDING PERIOD

(YEARS)

1 MONTVIEW 10 1,227 Apr 16 1,548 Aug 16, 2005 758 969,400 104 5 14.7

2 SCOTTS SQUARE 9 947 Apr 17 3,589 Mar 13, 2017 2,850 700,000 26 8 3.1

3 BLUE HORIZON 5 1,152 Apr 16 1,068 Jan 11, 2006 597 542,930 79 4 14.3

4 PEBBLE BAY 15 1,894 Apr 16 1,498 Jul 30, 2007 1,214 538,000 23 2 12.7

5 THE CLEMENT CANOPY 5 1,345 Apr 15 1,472 Mar 5, 2017 1,205 358,000 22 7 3.1

6 NEWTON ONE 11 1,216 Apr 16 1,994 Jan 4, 2010 1,730 321,320 15 1 10.3

7 MEADOWS @ PEIRCE 26 2,045 Apr 15 1,002 Aug 22, 2011 939 130,112 7 1 8.7

8 LIVIA 18 1,324 Apr 16 718 Dec 22, 2009 631 114,000 14 1 10.3

9 THE PANORAMA 20 797 Apr 15 1,381 Aug 19, 2015 1,240 112,200 11 2 4.7

10 HEDGES PARK CONDOMINIUM 17 1,012 Apr 16 870 Nov 21, 2011 807 63,400 8 1 8.4

Source: URA, EdgeProp SingaporeNote: 1. Computed based on URA caveat data as at April 27 for private non-landed houses transacted between April 14 and 19 2. The profit and loss computation excludes transaction costs such as stamp duties.


UNDER THE HAMMER


Property auctions will be cancelled for another month as Singapore sits through tighter “circuit breaker” measures until June 1. Even so, deals can be found in private treaty lists. A four-bedroom apartment at The Sail @ Marina Bay is one such property recently

listed by Knight Frank. The 2,282 sq ft unit on level 37 — which enjoys panoramic views of Marina Bay and the down-town area — is being offered for a guide price of $4.6 mil-lion. It is an owner’s sale.

The apartment was purchased in January 2003 for $5.68 million, or $2,489 psf. This means the owner is prepared to make a loss of $1.08 million at the guide price of $4.5 mil-lion. It is currently tenanted at $10,000 per month until May 2020 — which translates to a gross rental yield of 2.1% for the existing owner.

At the same time, another apartment at The Sail is also be-ing offered for sale via private treaty. Located on the 28th floor, the guide price for the four-bedroom, 1,647 sq ft unit is $3.5 million. Also an owner’s sale, this apartment also enjoys an unblocked bay view and is currently being tenanted for $7,300 per month until May 2020. This unit last changed hands for $4.46 million or $2,708 psf in January 2014.

The Sail @ Marina Bay is a 99-year leasehold property that is centrally located on Marina Boulevard. It is within walking distance to the CBD, Downtown MRT Station on the Down-town Line and is linked underground to the Raffles Place MRT interchange station for the East-West and North-South Lines. As such, the development draws tenants who are working for international companies in the CBD and Marina Bay.

The two towers of The Sail were designed by architects NBBJ of New York and completed in 2008. There are 1,111 units across the two towers — the 70-storey Tower 1 and 63-storey Tower 2 — which are connected to an eight-storey podium block that houses a car park, retail shops and facilities such

as a tennis court, sky lounge, gym and fitness centre, swim-ming pool, barbecue pit and a playground.

A few units at The Sail have incurred losses in the past two months. The most recent one was a 1,432 sq ft unit that trans-acted for $2.55 million ($1,781 psf) on April 6, incurring a loss of $1.75 million from when the owner bought it in October 2007.

In March, the owner of another unit, a 657 sq ft one-bed-der at The Sail sustained a loss of $221,000 when the unit changed hands for $1.058 million. In the same month, an-other owner sold his one-bedroom unit (614 sq ft) for $1.1 million, incurring a loss of $158,900 over a holding period of 7½ years.

On the other hand, a 1,981 sq ft apartment at The Sail made a profit of $1.74 million when it changed hands for $3.75 mil-

lion on April 3. The owner bought the unit for $2.01 million in December 2008.

Rental transactions at The Sail had been healthy until March 2020. For units between 1,000 sq ft and 2,000 sq ft, the month-ly rents average between $5,200 and $7,200. E

Four-bedroom unit at The Sail offered for $4.6 milSAMUEL ISAAC CHUA/THE EDGE SINGAPORE

The Sail @ Marina Bay is a 99-year leasehold property centrally located on Marina Boulevard

Recent transactions at The Sail @ Marina Bay Contract date (2020)

Floor Area (sq ft) Price ($) Price ($ psf)

March 17 36 614 1,100,000 1,793

March 18 9 657 1,058,888 1,613

March 23 33 1,184 2,220,000 1,875

April 3 28 1,981 3,750,000 1,893

April 6 61 1,432 2,550,000 1,781

URA REALIS

Recent rental contracts for 1,000 to 2,000 sq ft units at The Sail @ Marina Bay Lease month (2020)

Unit size (sq ft) Bedrooms Monthly rent ($)

March 1,000 to 1,100 2 5,200

March 1,300 to 1,400 3 5,600

March 1,300 to 1,400 3 6,200

March 1,900 to 2,000 3 7,200

EDGEPROP SINGAPORE

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