Week in Review – 24 April 2014

A rosy outlook for the office rental market, Award of tenders for Prince Charles Crescent and Woodlands sites, tender launches for Tuas industrial site, Luxury projects positive signs, Affordability the key for successful property sales
In this week’s iProperty Week In Review:
A rosy outlook for the office rental market
The Singapore office rental market looks set for a rosy future as rents continue to increase, especially for Grade-A offices in Raffles Place, which rose 4.2 per cent quarter on quarter. In a report by The Edge, Lynette Leong, chief executive officer of CapitaCommercial Trust Management, said Singapore office rents “are set to rise as much as 15 per cent this year on increased demand and a dearth of new developments.” This is driven by global companies setting up offices in the CBD, such as Cargill Inc. and Bordier & Cie. DTZ Holdings also expects CBD rents to rise 15 per cent this year.
According to Chua Yang Liang, head of research for Singapore and Southeast Asia for Jones Lang LaSalle, several factors point to rental increases, including few new developments up to 2015, as well as demand coming from various industries, not just from financial institutions.
URA awards tenders for Prince Charles Crescent and Woodlands sites; JTC launches tender for Tuas industrial site 
A residential site at Prince Charles Crescent (Parcel B) has been awarded to UOL Venture Investments Pte. Ltd. and Kheng Leong Company (Private) Limited and a commercial site at Woodlands Square has been won by a consortium formed by Far East Civil Engineering (Pte.) Limited, Tannery Holdings Pte Ltd and Sekisui House, Ltd. The tendered price for the Prince Charles Crescent site was $463 million ($8,833.40 PSM of GFA). The Woodlands Square plot tendered at  $634 million ($9,755.18 PSM of GFA). Both land parcels are on a 99-year lease term.
In other government land sales news, JTC Corporation (JTC) has launched a tender for an industrial site at Tuas South Street 11 (Plot 39). The site was made available from 25 February 2014, through the Reserve List system, under the first half 2014 IGLS Programme. JTC received an application with a committed bid price of not less than $6 million.
Luxury projects – positive signs
While analysts, including Colliers and Reuters, cast gloom on luxury projects and luxury property developers, transactions recorded in District 9, particularly in Robertson Quay, appear positive. The Edge reports that a number of high value transactions were recorded in the district recently, including $3.78 million or $2,154 psf for a 1,755 sq ft three-bedroom apartment on the 21st floor at RiverGate and $2,548 psf for Up@Robertson Quay, a 70-unit loft-style apartment block with an adjacent 300-room hotel. At Up@Robertson Quay, about 78 per cent, or 55 units, have been sold. Julin Tan, senior associate director at OrangeTee noted in The Edge that prices appear strong and are unaffected by cooling measures as demand is ongoing for residential projects along the Singapore River.
Affordability continues to be the key for successful property sales
Predictions by Knight Frank Singapore and Barclays appear to be spot on. Properties like The Sorrento and Sky Habitat achieved great interest and significant sales with prices below $1,600 psf over the Easter weekend. In a Singapore Business Review report last week, the analysts suggested that properties priced in that range would be well received.
Allgreen Properties had planned to launch 80 units for sale, but eventually went into a full launch of the 131 units at The Sorrento on West Coast Road to meet demand. 100 units were sold at prices between $1,380 to $1,600 psf. At Sky Habitat, CapitaLand drew greater interest with a lowered relaunch price of $1,276 psf to $1,590 psf, 10 to 15 per cent lower than the initial launch price in 2012. 80 units were sold, bringing the total number of units sold at the 509-unit property to 262 units (51 per cent).
In a developer sentiment survey by the National University of Singapore (NUS) and the Real Estate Developers’ Association of Singapore (Redas), developers expect residential prices to correct further, with 68.4 per cent foreseeing a moderate decrease in the next six months. The Current, Future and Composite Sentiment Indexes on the NUS-Redas Real Estate Sentiment Index (Resi) Survey, have all lowered to below 4.0, which shows deteriorating market conditions. 
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