2008 Dec29 No351 Cc Theedgespore

Even though construction of major projects here may have
been deferred or cancelled, the refurbishment of older,
smaller buildings by new owners is still very much alive
WEEK OF DECEMBER 29, 2008
Beach Road
MAKEOVER
Aerial view of Beach Road with
Raffles Hotel at No 1 Beach
Road on the left and the South
Beach site on the right
Residential
outlook still bleak
Funds and investors in
search of opportunities
Looking for
daylight next year
More sales activity expected
in 2H2009 for office sector
CITY&COUNTRY
THEEDGE SINGAPORE | DECEMBER 29, 2008 • CC3
| BY CECILIA CHOW |
B
each Road, with its medley
of shophouses, mixed-use
commercial developments
and high-rise office towers,
was earmarked last year by
the authorities as “the next develop-
ment hot spot”.
While Marina Bay and the existing
CBD will continue to be key commer-
cial centres in Singapore to meet the
demand for space coming from the fi-
nancial, business services and tourism
sectors, the Beach Road/Ophir-Rochor
corridor “will be developed as strate-
gic gateways to the city centre”, ac-
cording to the URA Master Plan 2008.
The plans call for the doubling in size
of Singapore’s financial district to that
of Hong Kong’s with a total of 30.35
million sq ft office space.
In line with its development plans
for the area, the government also pro-
moted a 2.67 ha white site located on
Ophir Road-Beach Road and adjacent
to Parkview Square at an international
property road show in Cannes early
this year. The white site has the po-
tential to be developed into a mixed-
use project with commercial space of
1.5 million sq ft in gross floor area and
a 480-room hotel. Pegged at a price
tag of $1.4 billion back in March, it
was regarded then by property ana-
lysts as the most desirable on the gov-
ernment’s list of confirmed sites for
sale this year.
The enthusiasm was not unfound-
ed as the consortium of City Devel-
opments Ltd (CDL), Dubai World’s
Istithmar World, and Elad Group bid
for, and won, another site along Beach
Road in September 2007 for $1.69 bil-
lion. The new mixed development on
the 376,737 sq ft site, which includes
the conservation of the former Non-
Commissioned Officers’ Club and three
army barracks built in the 1930s, is
designed by renowned architect Nor-
man Foster.
“I see [Beach Road] as a definite
CBD extension but not necessarily
like Harbourfront,” observes Chris
Archibold, regional director and head
of markets at Jones Lang LaSalle. “It
will have more of an entertainment
feel with the retail portion of CDL’s
Beach Road development and the il-
uma, an urban entertainment centre
currently under construction on Victo-
ria Street. We may well also see more
F&B outlets springing up in the shop-
houses to service the new apartments
and offices.”
Global financial crisis clouds
development plans
By October, as the global financial
crisis continued to ravage markets,
and Singapore fell into recession, it
was clear that something had to be
done. On Oct 31, the URA cancelled
the tender for the Ophir Road-Beach
Road white site, and along with the
other sites on the confirmed list, was
pushed into the reserved list, meaning
a site will only be launched for tender
if triggered by an offer by a developer
with a minimum bid that meets the
URA’s reserve price for the site.
In November, CDL also announced
that the consortium was deferring the
construction of the $2.5 billion South
Beach project to 2H2009 in anticipa-
tion of lower construction costs.
The authorities have gone ahead
to gazette Master Plan 2008, which
puts into effect the government’s
plan for land use over the next 10 to
15 years. The government is sticking
to the four key thrusts outlined in
the plan: “to enhance Singapore as a
home of choice, a magnet for business,
an exciting playground and a home
to cherish”, according to URA in the
Dec 5 announcement. The “magnet
for business” is where Ophir Road-
Beach Road is positioned, and the gov-
ernment plans to release more devel-
opment land parcels in the area over
the next five to 10 years.
The mega development projects
may have been shelved for now, but
there are still pockets of redevelop-
ment or refurbishment of older build-
ings taking place on Beach Road. For
instance one of the most significant
launches this year was that of Con-
course Skyline in September, devel-
oped by the family-owned, Singapore-
listed Hong Fok Corp.
Construction of the 360-unit Con-
course Skyline residential high-rise
towers has started and consists of re-
developing the Concourse retail po-
dium and serviced apartments. The
developer also paid the government
$83 million to get a new 99-year lease
on the site.
The soft launch may have been
ill-timed — just the week before the
collapse of Lehman Brothers on the
weekend of Sept 13/14 – however,
Hong Fok still sold 60 units out of 90
released in the first phase that week,
with prices ranging from $1,500 to
$1,800 psf.
Philip Cox, the appointed design
architect of Concourse Skyline, joins
the growing list of luminary archi-
tects who’ve developed projects along
Beach Road — Paul Rudolph for the
original Concourse development,
The Gateway by I.M. Pei, James Ad-
ams for Parkview Square, and Nor-
man Foster for the upcoming South
Beach project.
“Most of the new developments
along Beach Road are by very estab-
lished and in many cases [boast] fa-
mous architects,” acknowledges Jones
Lang LaSalle’s Archibold. “The area
will be rejuvenated significantly with
the new buildings being planned in
the area.”
Investor interest
A couple of older commercial build-
ings changed hands earlier this year
and are now at various stages of re-
furbishment and repositioning, a sign
of investor interest in the area. One
of them is KeyPoint, a 25-storey of-
fice building with two retail/F&B po-
dium levels. It was acquired by the
former Allco Commercial REIT (now
Frasers Commercial Trust) in Decem-
ber last year for $370 million, in an
attempt to improve its tenant mix and
hence, rentals.
Early this year, real estate equity
fund, Fine Grain Property, purchased
the former InCity Lofts for $70 mil-
lion. It is close to completing the re-
furbishment of the eight-storey build-
ing into a designer boutique office
project called “700 Beach”, and is al-
ready 75% leased.
Meanwhile, in August, British
container transportation company
Bulkhaul Ltd acquired the six-sto-
rey office building at 67 Beach Road
from NTUC Income for $21.5 mil-
lion. Previously called NTUC Income
Beach Junction, the building is locat-
ed across the street from Shaw Tow-
ers and the upcoming South Beach
project. Bulkhaul is said to be plan-
ning a facelift and refurbishment of
the building to be in keeping with
the government’s plans to rejuvenate
Beach Road, and the Ophir Road-Ro-
chor Corridor.
Another building that’s ripe for re-
development is the Golden Mile Com-
plex, which commands a prominent
frontage along Beach Road and the
Nicoll Highway. Built at a cost of $18
million in 1973, it was pronounced “a
vertical slum”, “terrible eyesore” and
“national disgrace” by Nominated
Member of Parliament Ivan Png two
years ago. Various attempts by owners
to put the development up for collec-
tive sale failed due to complications,
the main one being the 705 strata-ti-
tles in a mixed use development with
residential, retail and offices, each en-
titled to its own share of votes. The
new and more cumbersome en bloc
regulations introduced on Oct 4 last
year made things worse.
With the fallout of the global fi-
nancial crisis, weakening property
market and high construction costs,
developers’ appetite for such collec-
tive sales have waned. Any plan of
a collective sale by the owners will
have to be shelved until the market
Beach Road makeover
Even though construction of the crown jewel of the area, the $2.5 billion South Beach project, may be deferred, and the tender for the
Ophir-Rochor white site cancelled, the refurbishment of older, smaller buildings in the hands of new owners is still very much alive
The white site (the green field in front of Parkview Square) on Ophir Road-Beach Road has been moved from the confirmed list
to the reserved list
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Archibold: Most of the new develop-
ments along Beach Road are by very
established and in many cases famous
architects. The area will be significantly
rejuvenated with the new buildings
planned in the area.
S
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improves. “Ideally, it should be refur-
bished in line with the plan to spruce
up this area,” admits Jones Lang La-
Salle’s Archibold.
Government picks up slack
Private sector development projects
may have taken a backseat, but the
government is picking up the slack
and going ahead with its plan to in-
vest a total of $6.7 billion in three
stages for the construction of the Cir-
cle Line MRT project. That will make
the whole Beach Road corridor more
accessible, and extend the connectiv-
ity of Beach Road towards the East
Coast and HarbourFront, says Archi-
bold. The three stages of the Circle
Line will have 29 MRT stations in a
33.3km stretch. Some of the stations
will be in the vicinity of Beach Road,
including Nicoll Highway MRT, and
Promenade Circle Line MRT.
In addition to boosting infrastruc-
ture and accessibility, the government
is also keen on preserving Beach Road’s
eclectic charm. The road is surround-
ed by the cultural, arts and education
hub in Bras Basah Road combined
with the urban entertainment district
of Bugis; the hodgepodge of F&B and
retail businesses in the conservation
shophouses in the Kampong Glam
district; the upcoming Sports Hub
and Kallang waterfront district; and
the Marina Bayfront developments.
They all play a role in the rejuvena-
tion of Beach Road.
CC4 • THEEDGE SINGAPORE | DECEMBER 29, 2008
CITY&COUNTRY
1 SOUTH BEACH DEVELOPMENT
• Architect: Norman Foster
• Owner: City Developments Ltd, Dubai World and Elad Group
• Description: Mixed-use project consisting of a retail piazza
and two high-rise towers — the 42m high North Tower and
45m high South Tower. Development consists of office, hotel
and residences as well as areas marked for conservation.
• TOP date: 2012
• Tenure: 99 years
• Site area: 376,737 sq ft
• Gross floor area: 1.58 million sq ft
• Recent activity:
Sold for $1.689 billion. Positioned as an environmentally-
friendly building, the development is aiming to achieve the
BCA Green Mark Platinum Award, the highest category for
sustainability.
2 SHAW TOWERS
• Architect: Iversen van Sitteren & Partners
• Owner: Shaw Towers Realty
• Year built: 1974
• Floor area: about 10,000 sq ft
• Gross floor area: about 280,000 sq ft
• Anchor tenants: DTZ Debenham Tie Leung, Daiken Corp,
Bates 141 Singapore, BBC World, Frost & Sullivan, Hill &
Knowlton.
3 67 BEACH ROAD
• Owner: Bulkhaul
(Singapore)
• Description:
Six-storey office
development near
the South Beach
development at the
junction of Middle
Road and Beach Road.
• Tenure: 999 years
from 1827. Commercial
zoning with maximum
permissible plot ratio
of 4.2
• Site area: 3,945 sq ft
• Net lettable area:
18,775 sq ft
• Floor area:
3,000 sq ft per floor
• Recent activity: Bulkhaul acquired the property from NTUC
Income in August for $21.5 million and plans to refurbish the
building in line with government plans to reposition Beach
Road including the Ophir-Rochor corridor.
BEACH ROAD GOES UP
BY CECILIA CHOW, WITH RESEARCH BY JONES LANG LASALLE

4 PARKVIEW SQUARE
• Architect:
James Adams Design,
DP Architects
• Owner: Chyau
Fwu Development
(Singapore)
• Description:
24-storey office
building with unique
intricate art deco
exteriors and interiors.
• Year built: 2002
• Cost of construction:
$88 million
• Floor area: About
15,000 sq ft per floor
• Gross floor area:
500,000 sq ft
• Anchor tenants: Embassy of United Arab Emirates,
McKinsey, Hitachi Medical Systems, Austrian Embassy,
Emirates Airlines, Cadbury Schweppes, ACE Insurance, DHL
Global Forwarding
5 OPHIR-ROCHOR SITE
• Development:
White site for commercial, hotel and/or residential use
• Site area: 287,065 sq ft
• Maximum permissible GFA: 1.722 million sq ft
• Tenure: 99 years
• Project completion period: 8 1/2 years
• Remarks: Can be developed into a 40-storey development.
6 TH
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GRAPHICS BY MEDELINE TING A

THEEDGE SINGAPORE | DECEMBER 29, 2008 • CC5
CITY&COUNTRY
UPMARKET
ent.
6 THE GATEWAY
• Owner:
Singapore Land
• Architect: I.M. Pei
• Description:
Two 37-storey towers
each standing at
150m high.
• Year built: 1990
• Site area:
242,801 sq ft
• Floor area: About
10,000 sq ft per floor
• Gross floor area:
105,307 sq ft
• Anchor tenants:
BenQ Singapore,
Brother International,
Toshiba Asia Pacific, Zuken Singapore, Connell Wagner,
Koelnmesse, Iggesund Paperboard, Pfizer, Mastercard Asia
Pacific, Rider Hunt Levett & Bailey, Mitsubishi Heavy Industries,
GlaxoSmithKline, Sumitomo Chemical, NDK, Kao Singapore.
7 THE PLAZA
• Owner:
UOL Group, strata-title
• Description: A mixed-
use development along
Beach Road comprising
hotel, shops, offices,
service apartments and
two adjacent four-storey
commercial buildings.
• Year built: 1979
• Floor area: 13,000 sq ft
• Gross floor area:
About 300,000 sq ft
• Anchor tenants: Diners
World Travel, Teva Pharmaceutical
• Recent activity: Minor refurbishment works recently
completed
8 CONCOURSE SKYLINE
• Architect:
The Cox Group
• Owner:
Hong Fok Corporation
• Description: Two
28- and 40-storey
towers having a total of
342 units with a seven-
storey podium block
with 18 apartments. The
proposed development
comprises one to four-
bedroom apartments,
sky suites, penthouses
and super penthouses.
• TOP date: End 2012
• Tenure: 99 years
• Average sale price: $1,500–1,800 psf
for the 1-4 bedroom apartments
• Gross floor area: 514,515 sq ft
• Recent activity: Hong Fok has set aside $200 million for
its construction. This is a redevelopment of existing retail and
serviced apartment podiums into two blocks of residential
apartments, with commercial space at the first storey.
9 THE CONCOURSE
• Architect: Paul Rudolph, Architects 61
• Owner: Hong Fok Corporation
• Description:
41-storey office block standing at 180m high
• Year built: 1994
• Tenure: 99 years
• Cost of construction: $248 million
• Site area: 220,563 sq ft
• Floor area: About 13,000 sq ft
• Gross floor area: 1.14 million sq ft
• Anchor tenants: Boehringer Ingelheim International, Cargill
Asia Pacific, Parsons Brinckerhoff, Merck Sharp & Dohme,
American Express International, Dentsu Young & Rubicam
• Recent activity: Part of The Concourse retail podium is being
redeveloped into the Concourse Skyline.
10 KEYPOINT
• Owner: Frasers Commercial Trust (formerly Allco
Commercial REIT)
• Description: 22-storey office tower with a three-storey
podium, and a four-storey car park block with 227 car bays
• Year built: Constructed in 1978 and underwent a
$35-million refurbishment that was completed in early 2000
• Tenure: 99 years from 1976
• Site area: 78,242 sq ft
• Total lettable area: 311,892 sq ft
• Recent activity: Former Allco Commercial REIT had
acquired the property in October 2007 for $370 million
($1,186 psf), and it became part of Frasers Commercial
Trust’s portfolio in July. Also, 2nd and 3rd floor retail podium
have floor plates of 45,000 sq ft and office tower from 4th
floor up have floor plates of 9,600 sq ft
11 700 BEACH
• Architect: Wee Chwee Heng
of Kumpulan Akitek
• Owner: Private equity
real-estate firm Fine Grain
Property
• Description: Boutique office
development comprising an
eight-storey loft-style office
tower
• Year built: 2002
• Tenure: 99 years from 2004
• Site area: 18,396 sq ft
• Floor area:
About 8,500 sq ft per floor
• Gross floor area: 67,000 sq ft
• Sale price: $70 million
• Anchor tenants:
Hirsch Bedner Associates, GroupM, Mindshare
• Recent activity: The building has just completed major
refurbishment works. $3.5 million have been spent to fully
upgrade and reposition it as a boutique office development.
12 GOLDEN MILE COMPLEX
• Architect: DP Architects
• Owner: CDL, strata title
• Description: Golden Mile is considered one of the first mixed-
use developments in Singapore where residential, commercial
and office spaces are integrated into one infrastructure.
• Year built: 1973
• Tenure: 99 years from 1969
• Cost of construction: $18 million
• Site area: 139,931 sq ft
• Recent activity: Minor refurbishment works were done in
1983 and 1986. As this is a strata-titled mixed development,
there had been plans for an en bloc sale, but these have since
been shelved given the weak property market.






DELINE TING AND PC LEE, PHOTOS BY SAMUEL ISAAC CHUA

BROUGHT TO YOU BY:
CC6 • THEEDGE SINGAPORE | DECEMBER 29, 2008
CITY&COUNTRY
| BY CECILIA CHOW |
T
he residential report card this year has
been bleak. Only 310 new homes were
sold in October and November, with
450 to 500 units in the full 4Q ring-
ing in at. The full-year figure stands
at 4,300 to 4,350 units, “a record low since
the early 1990s”, says Joseph Tan, executive
director of residential services at CB Richard
Ellis (CBRE).
Prices of new luxury homes have declined
25% y-o-y from an average of $3,200 to $3,500
psf to an average of $2,400 psf. “How the lux-
ury market will fare will depend on the rate
of recovery from the global financial turmoil,”
says Tan.
Generally, most property consultants are
expecting residential prices and rentals to be
earth bound next year, although no one is able
to call the bottom as yet. Tan expects weak
sentiment to continue into 1Q2009, and fore-
casts overall private residential prices to drop
another 10% to 15% in the new year, with
“even larger adjustments expected for the top
end of the market”. He’s also expecting rents
to soften by 5% to 10% next year.
DPS fears overblown?
Analysts have been speculating about the proper-
ties bought under the deferred payment scheme
(DPS) that are due for completion next year,
figuring that the en masse unloading by cash-
strapped owners will likely have a catastrophic
impact on an already weakened market. Prob-
ably to put an end to the speculation, the URA
released the DPS figures on Dec 19.
The DPS introduced in October 1997, in the
wake of the Asian financial crisis, was scrapped
at the end of October last year. Unlike a normal
progressive payment scheme that is linked to
the completion of each construction phase, the
DPS home buyer need not pay anything after
putting down the initial 10% or 20% down pay-
ment on the property until the temporary occu-
pation permit (TOP) is received — that’s when
the project is completed. It also means that the
owner need not take a mortgage nor pay any-
thing beyond the down payment until then.
According to URA figures, as at end-Novem-
ber 2008, 10,450 units sold in 2005-08 offered
DPS, and will be completed in the next five
years. The largest chunk that’s due for com-
pletion — an estimated 4,560 units (44%) —
is coming on stream next year.
Knight Frank’s director of research and con-
sultancy, Nicholas Mak, estimates that 10,033
new homes will to be completed in 2009. This
means 45% of total new private homes to be com-
pleted next year will be those that offered DPS.
Residential prices, rentals to
remain earthbound in 2009
Funds and investors looking for more attractive opportunities, developers
looking to sell properties beyond Singapore’s shores
could further depress real estate prices, and
some of these buyers may not wish to do so
in a weak property market.”
However, most of the units that are due for
completion over the next two years were prob-
ably purchased in 2005-06 at prices that are
still relatively lower than today’s levels or per-
haps even the price levels in 2009, say property
consultants. (Refer to table of major projects
to TOP from now till end-2009).
The Real Estate Developers’ Association of
Singapore issued a statement recently voicing
the same sentiment, adding that “with the pur-
chase prices of these units likely to be below
current market prices, we are confident that
such property purchasers will want to proceed
with completion of their sale, upon their unit’s
grant of the TOP”.
According to Chua Yang Liang, head of re-
search at Jones Lang LaSalle (JLL), about 13%
of new homes sold in 2007 eventually resur-
faced as subsales on the secondary market.
(Note that subsale buyers are generally not
entitled to DPS). Assuming the same percent-
age of buyers sell their property next year pri-
or to TOP, this will bring down the number of
DPS units next year to just under 4,000 units
or 40%, estimates Chua.
“There is insufficient information on the credit
standing of these buyers,” points out Chua, and
this makes it difficult to ascertain the number
of properties likely to default. “There are chal-
lenges,” he admits. “On the other hand, in the
event that distressed sales do happen, this will
provide an opportunity for buyers who are wait-
ing on the sidelines to jump in.”
Looking beyond 2009
Perhaps distressed sales are exactly the thing
needed to unclog the logjam before buyers
jump into the market again. “There are buyers
— both institutional and private — waiting for
these opportunities,” says Tan Tiong Cheng,
managing director of Knight Frank.
Other pockets of opportunities could come
from developers and homeowners who are
prepared to reduce their asking prices “to fa-
cilitate cash flow”, says CBRE’s Tan. He adds
that some developers may also consider sell-
ing units in bulk at an attractive price.
There are already property funds looking to
deploy capital to invest in residential as “they
like the residential story”, says Christopher Fos-
sick, managing director of Jones Lang LaSalle
for Singapore and Southeast Asia. “From a lot
of investors’ perspective, they may have felt
that they had missed the boat in 2007… But
with prices coming down in 2009, they [now]
have a chance to get into the market.”
Foreign funds are exploring several alter-
natives: either a joint venture with a local de-
veloper who has already bought sites and pro-
vide an equity infusion, or buy units en bloc.
“The foreign funds haven’t changed their me-
dium- to long-term view of Singapore,” notes
Fossick. “They still believe that Singapore will
grow, and give them good returns.”
Collective sales? Not just yet
The collective sale market was pretty much dor-
mant in 2008 as markets turned south. Lukewarm
response to new launches, rising construction
costs and the worsening global financial crisis
also took a toll on the collective sale market. “Al-
though construction costs have come down and
will continue to do so in 2009, the global econom-
ic downturn is expected to be protracted, lead-
ing to further downside risks,” says CBRE’s Tan.
“We do not expect much interest from develop-
ers [in collective sale sites] in the next three to
six months, as they have already built up a sub-
stantial landbank in 2006-07.”
Some have also decided to put their collec-
tive sale purchases back on the leasing mar-
ket for the time being. The latest was the 193-
unit Grangeford apartment block at Leonie Hill
Road, says Tony Darwell, head of Singapore re-
search (property) at Nomura Singapore in Dec
12 report. Grangeford was acquired by Over-
seas Union Enterprise (OUE) for $625 million
in August 2007 at an estimated $1,810 psf (in-
cluding the lease top-up premium to a fresh
99-year lease).
“The move by developers to return en bloc
units back to the leasing market to cover a degree
of the holding costs is not unanticipated,” notes
Darwell. With such developers being “price tak-
ers”, adds Darwell, this would put pressure on
an already weakened rental market. He forecasts
rents to fall 16.3% in 2009, and at a time of rising
risk premiums, “the reality is that asset prices are
destined to fall at a faster rate than we posited
in March 2008”. Hence, his forecast is for luxury
residential prices to fall a precipitous 43.8% over
2008-10, and for mass market residential prices
to fall by 32.1% over the same period.
To launch or not to launch
Knight Frank’s Tan is also expecting home buyers
at the mass market segment to turn cautious with
the
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Of the total number to be completed in 2010,
around 30% were sold on DPS.
“There is some concern in the property mar-
ket that a large number of the uncompleted
homes sold under the DPS could be disposed
of at distressed prices in 2009 and 2010 as the
buyers are required to pay the balance of the
purchase price when the projects are complet-
ed,” acknowledges Mak. “Such distressed sales
There is some concern in the property market that
a large number of the uncompleted homes sold
under the DPS could be disposed at distressed
prices in 2009 and 2010 as the buyers are required
to pay the balance of the purchase price when the
projects are completed — Mak
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THEEDGE SINGAPORE | DECEMBER 29, 2008 • CC7
CITY&COUNTRY
Major projects likely to be completed between December 2008 and December 2009
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the rapidly deteriorating economy and tighten-
ing labour market. “Some buyers may even de-
fer their housing aspirations, by choosing public
housing over private homes,” he adds.
Developers with projects in the pipeline
will have to prioritise their launches, contin-
ues Knight Frank’s Tan. They would need to
evaluate which projects are in “critical need”
of being launched, and which ones are with-
out “strong physical selling points”, and de-
ploy creative marketing methods and packag-
ing for the latter.
For some projects, developers may have
few options apart from waiting out the crisis
until market confidence returns, says Tan of
CBRE. Some are hoping that they could achieve
sales by embarking on overseas marketing road
shows. Beyond the traditional markets of In-
donesia and Kuala Lumpur, still the top two
foreign buyers of Singapore property, some de-
velopers are also venturing to other emerging
markets such as Russia and India.
There are developers who have turned up
their creativity a few notches to achieve great-
er product differentiation (in terms of prod-
uct development, promotional activities and
sweeteners to entice buyers.) “Starchitects” or
star architects are increasingly popular with
developers. Also popular is the practice of
engaging renowned or celebrity interior de-
sign firms to dress up show apartments, and
incorporating branded finishing and fittings,
and recreational facilities with wow-factors
(like an aqua gym). In terms of promotions,
CBRE’s Tan also sees more co-branding with
lifestyle retailers. Tying up with banks to con-
tinue offering the Interest Absorption Scheme
will also help in giving purchasers “a payment
holiday” till TOP.
E
PROJECT DISTRICT LOCATION TYPE NO OF UNITS TENURE DEVELOPER
The Clift 1 McCallum Street Apt 312 99Y Far East Organization
The Metropolitan 3 Alexandra Road/Tiong Bahru Road Condo 382 99Y CapitaLand/Lippo Group
The Regency@Tiong Bahru 3 Chay Yan Street Apt 158 Fh UOL/UIC
The Oceanfront@Sentosa Cove 4 Ocean Drive Condo 264 99Y City Developments/TID
The Coast 4 Ocean Drive Condo 249 99Y Ho Bee Developments/Ergo Corp
The Infiniti 5 West Coast Road /Upper Ayer Rajah Road Condo 315 Fh Frasers Centrepoint Ltd
Botannia 5 West Coast Park Condo 493 999Y City Developments/CapitaLand
one-north residences 5 One North Gateway/Slim Barracks Rise Apt 405 99Y Kheng Leong Co/UOL/Low Keng Huat
Carabelle 5 West Coast Way Condo 338 956Y Sim Lian Land
ClementiWoods 5 West Coast Road Condo 240 99Y Frasers Centrepoint Ltd
Southbank 7 North Bridge Road Mixed Devt 197 99Y UOL/Low Keng Huat
City Square Residences 8 Kitchener Road/Jalan Besar/Serangoon Rd Com/Resi 910 FH City Developments
Parc Emily 9 Mount Emily Road Condo 295 FH City Developments/TID
Vida 9 Peck Hay Road /Cairnhill Rise Apt 137 FH Far East Organization
The Inspira 9 Arnasalam Chetty Road Condo 120 FH Hock Giap Land
RiverGate 9 Robertson Quay Condo 545 FH CapitaLand/S’pore Warehouse
The Trillium 9 Kim Seng Road Condo 231 FH Lippo Real Estate Pte Ltd
St Thomas Suites 9 St Thomas Walk Condo 176 FH Frasers Centrepoint
Tribeca By The Waterfront 9 Kim Seng Rd/Jiak Kim St Condo 175 Fh Hong Leong Holdings/City Developments
The Suites At Central 9 Devonshire Road/St Thomas Walk Condo 157 FH Keppel Land/Chip Eng Seng Corp Ltd
One Jervois 10 Jervois Close/Road Condo 275 FH Frasers Centrepoint Ltd
The Orchard Residences 10 Orchard Boulevard Mixed 175 99Y CapitaLand Retail S’pore Investments & Gresward
The Sixth Avenue Residences 10 Sixth Avenue Condo 175 FH Keppel Land/Singapore Land
Waterfall Gardens 10 Farrer Road Condo 132 FH MCL Land
Ardmore ll 10 Ardmore Park/Anderson Road Condo 118 FH Wheelock Properties
Sky@eleven 11 Thomson Road Condo 273 FH Singapore Press Holdings
Pavilion 11 11 Minbu/Akyab Road Condo 180 FH UOL
One St Michael’s 12 St Michael’s Road/Serangoon Road Condo 131 FH Frasers Centrepoint Ltd
Atrium Residences 14 Lorong 28 Geylang Condo 142 FH Novelty Properties Pte ltd
One Amber 15 Amber Gardens Condo 562 FH UIC/UOL/SingLand
The Seafront On Meyer 15 Meyer Road Condo 327 FH CapitaLand
Tierra Vue 15 St Patrick’s Road Condo 129 FH MCL Land
Grand Duchess@St Patrick’s 15 St Patrick’s Road Condo 121 Fh UIC Ltd
Casa Merah 16 Tanah Merah Kechil Avenue Condo 556 99Y NTUC Choice Homes/Wing Tai
Ferraria Park 17 Flora Drive Condo 472 FH Tripartite Developers Pte Ltd
The Quartz 19 Compass Bow/Sengkang Central/Buangkok Drive Condo 625 99Y GuocoLand
Fontaine Parry 19 Poh Huat Road Condo 125 999Y OUB Centre Ltd
The Centris 22 Jurong West Central 3/Jurong West St 64 Mixed 610 99Y Guthrie/Lee Kim Tah/TMW Asia Pty Fund No 1
Yew Tee Residence 23 Yew Tee Close/Choa Chu Kang North 6 Com/Resi 139 99Y NTUC Choice Homes
TOTAL 11,366
Projects in Sentosa Cove, downtown & prime districts — 3,677 or 32.4% of total Data as at Dec 17, 2008
ad.indd 1 12/23/08 4:45:37 PM
CC8 • THEEDGE SINGAPORE | DECEMBER 29, 2008
T
he news that sent shock
waves through the retail
sector was not really the
collapse of Lehman Brothers,
the sale of Merrill Lynch to
Bank of America, or the bail-
out of AIG in September. It
was the announcement in ear-
ly October that Singapore was
in recession. “I remember that
Friday, it was terrible,” recalls
Turner Canning, associate di-
rector of retail consulting and
leasing at property consulting
firm, Cushman & Wakefield.
“I spent all day on the phone
calming people down, every-
one freaked out.”
Prior to coming to Singapore
in March this year, Canning
spent six years in Shanghai,
where he worked for a Morgan
Stanley Real Estate joint ven-
ture building hypermarket-an-
chored shopping malls.
The biggest shift in the re-
tail sector is the sluggishness
on the part of fashion and ac-
cessories retailers in taking up
new space. “It has fallen off a
cliff,” says Canning, who helps
several shopping mall landlords
along Orchard Road find ten-
ants, and retailers find space.
“Even the luxury brands are
taking a hit,” he adds.
Seizing up
Along Orchard Road, while
F&B space may still be quickly
taken up, the retail portion is
seizing up. Word on the street
is that retailers are renegotiat-
ing with landlords to reduce
the space they are planning
to take up in some of the up-
coming malls.
F&B players, on the other
hand, are going strong — lo-
cal players are still looking to
make acquisitions, he notes.
Big coffee chains, however,
are trimming back their oper-
ations or starting to walk away
from deals. “It’s really a matter
of being overextended,” says
| BY CECILIA CHOW |
I
nvestment sales all but evaporat-
ed this year, especially in 2H2008.
Of the $5.29 billion worth of office
investment sales done in 2008,
96.5% took place in 1H2008. The
situation in 1H2009 will likely mirror
2H2008 — with very few transactions
as buyers and sellers are still holding
on to very different price expectations,
says Jeremy Lake, executive director
of investment properties at CB Richard
Ellis (CBRE). “Sellers want last year’s
price and buyers want next year’s
price,” says Lake.
He expects the price gap to be
bridged for some deals in 2H2009,
and forecasts that total office invest-
ment sales in 2009 could possibly fall
below $5 billion, the volume seen in
2002 when Singapore was last in a
recession.
Shaun Poh, senior director for in-
vestment advisory services and auc-
tion at DTZ, is expecting to see more
assets coming up for sale, and more
deals happening in the commercial mar-
ket. Like Lake, he is expecting deals to
only start happening in 3Q, with peo-
E
More sales activity expected
in 2H2009 for office sector
View of Singapore’s city area — a bird’s eye view on buying opportunities?
CITY&COUNTRY
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Canning. “They just expand-
ed a little too quickly.”
The market will be espe-
cially challenging for new en-
trants trying to get a toehold
in Singapore. “If you’re an ex-
tension brand, and you may be
big in say, in your home coun-
try but nowhere else, then it’s
going to be tough,” says Can-
ning. “The F&B market is pret-
ty fickle. When push comes to
shove, people batten down the
hatches and go to Yakun Kaya
Toast, or Toastbox, and Food
Republic.”
A trend that’s emerging
among consumers as a result
of the global financial crisis is
creative ways to indulge without
blowing your budget. Instead of
a $10,000 vacation, people may
opt for a $200 meal instead. “It’s
still an indulgence,” says Can-
ning. “People are still buying
— you still need clothes, you
still need food.” With consum-
ers tightening their belts, even
retail sales have been affected,
with October sales dropping
6.8% versus September, and
3.6% from October 2007.
‘Slow going right now’
To date, most of the new malls
along Orchard that are opening
in 2009 — ION Orchard, Orchard
Central, 313@Somerset and the
New Mandarin Gallery — are
about 60% leased, notes Can-
ning. “How much more of that
they are really going to fill? It is
slow going right now.”
Canning expects Orchard
Road rentals to remain rela-
tively flat next year, as there
hasn’t been any new supply
on Singapore’s main shopping
belt in over a decade.
“I think they are going to
take a dip right now, but they
are not going to take a tum-
ble,” he says. “There’s a fi-
nite amount of space on Or-
chard Road.”
On the bright side, the big-
gest opportunities in 2009 will
be for smaller brands, fashion
retailers “who take the bull
by the horns and take space
that was not otherwise avail-
able to them”, notes Canning.
“When you see the big names
slowing down, and pulling
out, and maybe not taking
space they otherwise would
have, it is a tenant’s market.
So, it is a good thing as it al-
lows smaller brands to get a
foothold, and take space that
is otherwise earmarked for
someone else.”
ple watching the market closely for the
first two quarters of 2009.
“There are still a number of property
funds that are gearing up to buy,” says
Poh. The dilemma for some of them is
that, on the one hand they have raised
equity, but they haven’t drawn down
as they have yet to make an acquisi-
tion. With the asset-value destruction
happening in the market, “the real
fear is that if they bought something
today, the next day, the value would
drop further”, he adds.
Forced to liquidate
There are also funds that had bought
property in the last two years and are
now starting to face redemption re-
quests from some of their investors
— typically, a mix of institutional in-
vestors like fund of funds, superannu-
ation funds and foundations, as well
as wealthy private individuals. These
funds may now be forced to liquidate
their properties.
“Most of the buyers of Grade A and
B commercial buildings over the last two
years had been largely foreign funds”,
acknowledges DTZ’s Poh. He reckons
that those who have properties in Sin-
gapore, Hong Kong and Shanghai and
looking to liquidate them, are likely to
see greater interest from buyers, given
that these are established commercial
markets with high trading activity. “I
wouldn’t call them distressed assets,
but if you’re meeting with buyers to-
day, you would have to be prepared
to get some not-so-attractive offers,”
says Poh.
With debt funding getting increas-
ingly difficult, loan-to-value ratios are
now substantially below 50% to 60%.
Poh feels that those who’ve already
raised equity and are looking to se-
cure debt financing will be looking to
buy assets “at deep discounts”. With
the debt portion substantially reduced,
and very few funds willing to buy prop-
erties using only cash, the quantum
amount for acquisitions is also cur-
rently relatively small, at US$100 mil-
lion ($146 million) to US$200 million,
say property consultants.
Buying opportunities next year
This is a far cry from 1H2008, where
some acquisitions made by funds and
REITs were either close to, or exceed-
ed $1 billion. Singapore Power Build-
ing was sold to Pacific Star Group for
$1.01 billion, Hitachi Tower was ac-
quired by one of the funds linked to
Goldman Sachs for $811 million ($2,901
psf), and Commerz Real (a subsidiary
of Commerzbank AG) bought 71 Rob-
inson Road for $743.5 million ($3,125
psf). Meanwhile two CapitaLand-
linked REITs, CapitaCommercial Trust
acquired One George Street for $1.17
billion ($2,600 psf) and CapitaMall
Trust bought The Atrium@Orchard
for $839.9 million ($2,249 psf).
DTZ’s Poh observes that there will be
buying opportunities for funds emerg-
ing in the commercial sector next year.
“They are more familiar with commer-
cial property, and will prefer to look
at properties which are already gen-
erating income, and which they could
sell later,” he adds. The expectation is
that the level of activity will pick up in
2H2009, and perhaps we will see some
buildings changing hands.
A mixed picture for retail in 2009
E
Orchard Road rentals to remain relatively flat next
year, and perhaps see a slight dip