Category Archives: Uncategorized

SingPost to develop Singapore’s first mall offering online, offline shopping

Singapore Post (SingPost) announced on Wednesday (Oct 28) that it would develop Singapore’s first shopping mall offering a suite of eCommerce logistics solutions, combining both online and offline shopping.

In their media release, SingPost said the mall will offer 25,000 square metres of retail space. Consumers will be able to shop online at the mall through e-merchants and choose delivery and pickup timings, according to SingPost.

Describing this shopping experience, SingPost said: “A consumer could browse in-store, purchase the product and arrange for delivery of the product directly to their home. The consumer could then continue shopping, watch a movie or have a meal in the mall without having to carry bulky shopping bags.”

SingPost also said that retailer can save on storage space in the store as fulfilment would be done at the backend of the warehouse.

A groundbreaking ceremony was held on Wednesday to mark the commencement of the construction of the mall, to be located at Singapore Post Centre in Paya Lebar, SingPost said.

SingPost said the development is aimed at creating opportunities for businesses in a “changing retail landscape”, and “catering to the evolving needs of consumers.”

Construction of the mall – which will have four above ground levels and a basement level – is expected to cost about S$150 million, which includes upgrading amenities and the façade for the adjoining office building, SingPost added.

It will also house an eight-hall cineplex, SingPost’s flagship post office, retail shops, food and beverage outlets, and three levels of underground carpark spaces. The mall is scheduled to be completed by mid-2017.

Source : Channel NewsAsia – 28 Oct 2015

Prices of office, retail space in Singapore both fell in Q3: URA

The prices of office space and retail space in the Republic both dipped slightly in the third quarter of 2015, the Urban Redevelopment Authority (URA) announced in a release on Friday (Oct 23).

The prices of office space fell by 0.1 per cent in the third quarter, reversing the increase of 0.3 per cent in the previous quarter. Rentals of office space also fell by 2.9 per cent, following on from a fall of 2.6 per cent in the second quarter.

This comes after analysts said that demand for Singapore office space could weaken.

There was a total supply of about 908,000 sq m gross floor area of office space in the pipeline at the end of the third quarter, said URA.

However, the amount of occupied office space increased by 15,000 sq m (nett) in the third quarter, adding to the 38,000 sq m (nett) increase in the previous quarter, URA said. This comes after the stock of office space decreased by 3,000 sq m (nett) in the third quarter, and as a result, the island-wide vacancy rate of office space fell to 9.6 per cent, down from 9.8 per cent at the end of the second quarter.

RETAIL SPACE PRICES ALSO DOWN

The prices of retail space in Singapore also fell, this time by 0.3 per cent in the third quarter, compared to the decrease of 0.5 per cent in the previous quarter. Rentals also fell, this time by 2.0 per cent, compared to the 0.5 per cent decrease in the second quarter.

As at the end of the third quarter, there was a total supply of 786,000 sq m gross floor area of retail space from projects in the pipleline.

The amount of occupied retail space also decreased in the third quarter. It fell by 13,000 sq m (nett) in the quarter just ended, compared to the zero net change in the previous quarter. The stock of retail space fell by 24,000 sq m (nett), compared to the 25,000 sq m (nett) increase in the previous quarter.

As a result, the island-wide vacancy rate of retail space fell to 7.0 per cent at the end of the third quarter.

Source : Channel NewsAsia – 23 Oct 2015

Suntec City officially reopens after S$410m revamp

Suntec City officially reopened on Thursday (Oct 22) following a S$410 million enhancement.

In a press release, ARA Trust Management (Suntec) Limited, the manager of Suntec REIT, said enhancement works began in June 2012 and were completed in June this year.

The works involved decanting low-yielding spaces and converting levels one and two of the Suntec Singapore Convention & Exhibition Centre for retail use. The retail footprint now covers close to a million square feet.

“Today marks an important milestone for Suntec City as we celebrate its official opening,” said Mr Yeo See Kiat, chief executive officer of ARA. “Through this transformation, Suntec City is now a more vibrant and exciting destination with new retail offerings and experiences for everyone.”

The event was attended by Minister for Social and Family Development Tan Chuan-Jin. To mark the occasion, Suntec REIT chairman Chew Gek Khim presented a cheque donation of S$200,000 towards President’s Challenge 2015 beneficiaries.

Source : Channel NewsAsia – 23 Oct 2015

CapitaLand Mall Trust sells Rivervale Mall for S$190.5 million

Rivervale Mall at Sengkang will soon have new owners, following CapitaLand Mall Trust’s (CMT) decision to sell the property to a private equity fund managed by AEW Asia for S$190.5 million.

CMT, which announced the sale on Thursday (Oct 15), said it will realise a gain of about S$72 million, after taking into account the divestment fee and other expenses. The property had been valued at S$116 million in June this year.

The sale of Rivervale Mall is expected to be completed on or about Dec 15. Upon completion, CMT will be left with a portfolio of 16 operational shopping malls in Singapore.

Completed in 2001, Rivervale Mall is a three-storey shopping mall with a net lettable area of 81,159 sq ft. Its major tenants include NTUC, Daiso, McDonald’s and United Overseas Bank. The mall had a committed occupancy of 100 per cent as at 30 Sep.

CMT is Singapore’s largest retail property landlord. It is also the Republic’s largest real estate investment trust (REIT) by market capitalisation, and its other properties in Singapore include Tampines Mall, Junction 8, Funan DigitaLife Mall, IMM Building, Plaza Singapura, Bugis Junction and Clarke Quay. The trust also has stakes in Raffles City Singapore and Westgate.

Source : Channel NewsAsia – 15 Oct 2015

CapitaLand confirms talks to buy Asia Square Tower 1

Southeast Asia’s biggest property developer, CapitaLand, on Wednesday (14 Oct) confirmed news reports that it was involved in talks to buy the Asia Square Tower 1 office building.

Its statement to the stock exchange came a day after Bloomberg News said a consortium of Norway’s sovereign wealth fund and CapitaLand has been chosen as the preferred bidder for the 43-storey office building in Singapore’s central business district. Bloomberg said the deal could value Asia Square Tower 1 at more than S$3.5 billion.

CapitaLand said that as discussions are still ongoing, there is no certainty that a transaction will materialise.

Should the deal proceed, CapitaLand said it anticipates drawing upon internal sources of funds and available credit lines. As of Jun 30, 2015, CapitaLand had about S$3.5 billion in cash and cash equivalents and approximately S$3.1 billion in available undrawn credit facilities.

Asia Square Tower 1, which is owned by asset manager BlackRock, counts Citigroup and Swiss private bank Julius Baer among its main tenants.

Source : Channel NewsAsia – 14 Oct 2015

Singapore’s office rents soften in Q3 on economic outlook: DTZ

Average monthly gross rents in the CBD (central business district) declined by 4.1 per cent quarter on quarter (q-o-q) to S$10.40 per square foot in Q3, the first decline from an uptrend since 2013, said DTZ Southeast Asia.

This comes on the back of headwinds in the external economic environment.

Average monthly gross rents in Marina Bay dropped 5.5 per cent q-o-q to S$13 per sq ft, while rents in Raffles Place fell 3.4 per cent q-o-q to S$10.45 per sq ft per month. Similarly, average rents in the city fringe – such as Beach Road, Anson Road and Orchard Road – declined by 2.1 per cent q-o-q to S$8.25 per sq ft per month.

“The subdued global growth and China’s economic slowdown contributed to a less optimistic outlook for Singapore, with the Ministry of Trade and Industry (MTI) narrowing the GDP growth forecast for 2015 to be between 2 and 2.5 per cent in August 2015,” said DTZ.

Cheng Siow Ying, DTZ executive director (business space), added: “Leasing incentives have increased as landlords compete to retain and attract tenants to sustain or improve space take-up. These leasing incentives can be in the form of longer fitting out periods, rent holidays or rental rebates, which will yield lower net effective rents for the occupiers.”

As such, office occupancy in the CBD declined 0.9 percentage-points q-o-q to 95 per cent in Q3. Within the CBD, both Shenton Way and Marina Bay registered q-o-q decreases in occupancy rates of 1.8 percentage-points and 1.1 percentage points to 94.3 per cent and 94.1 per cent respectively. On the other hand, Raffles Place’s occupancy edged up 96.7 per cent in Q3 from 96.3 per cent in Q2, supported by the relatively healthy occupancy rates of newer developments such as CapitaGreen.

“The large impending supply of office space is expected to place greater downward pressure on rents in the CBD in 2016,” DTZ added. “About 2.6 million sq ft office space will come on board next year in the CBD.”

Marina One unveils anchor tenants

Marina One announced on Friday that it had secured a strong line-up of anchor retail and food & beverage (F&B) brands that include Virgin Active, Cold Storage and Cookhouse by Koufu, ahead of the Singapore development’s expected issuance of its temporary occupation permit in 2017.

“Anchoring Virgin Active, Cold Storage and Cookhouse as our key retail tenants reinforces Marina One’s vision to be the choice destination to live, work and play in the heart of the Marina Bay financial district. Retailers recognise the potential of Marina One as the only premium integrated development to be completed in Marina Bay in the coming years and moved quickly to secure spaces at Marina One. Our retail strategy will continue to focus on introducing new, refreshing lifestyle and retail experiences which appeal to a sophisticated and cosmopolitan audience,” said Kemmy Tan, chief operating officer, M+S Pte Ltd.

Other tenants include Teppei Syokudo, a renowned and popular Japanese restaurant; Jewel, a “third-wave” specialist coffee house; and 4 Fingers Crispy Chicken. The Marina One store will be 4 Fingers Crispy Chicken’s first venture into the Central Business District.

M+S is owned 60:40 by Khazanah and Temasek respectively. It was set up on June 27, 2011, to develop Marina One and DUO, two integrated developments in Singapore.

Source : Channel NewsAsia – 18 Sep 2015

CPF Building along Robinson Road up for sale by public tender

The landmark CPF Building at 79 Robinson Road has been put up for sale by public tender, after the Central Provident Fund (CPF) Board signed a long-term lease to rent space at Novena Square Towers A and B for the Board’s operations.

Its marketing agent CBRE said the relocation of CPF offices in the building will “free up prime office space in the Central Business District for higher-value uses”.

The building, which was completed in the 1970s, sits on a regularly-shaped site with an area of about 47,056 sq ft. The current Net Lettable Area of the building is approximately 324,000 sq ft. It also has frontage of 120m along Robinson Road.

It could be redeveloped into a mixed use development with office, retail and serviced apartments or a hotel, subject to approval from authorities, CBRE said.

The tenure of CPF Building is 99 years from 1968 and the tender closes on Oct 28.

The CPF Board will be moving to Novena Square Towers from the last quarter of this year. The Board’s Service Centre at Robinson Road will continue to operate until further notice.

Source : Channel NewsAsia – 17 Sep 2015

Singapore office space demand could weaken: Analysts

The supply of new office space in the central business district (CBD) is likely to outstrip demand, giving tenants more options and forcing landlords to reduce rents amid global headwinds, according to analysts.

Property services firm Century 21 has said that Singapore, being such an open economy, will be hard hit by global economic conditions such as the slowdown in China and the turmoil in stock and commodity markets.

It added that there is eight million square feet of vacant office space in Singapore now.

One office building in the CBD, CapitaGreen, is currently 83 per cent occupied, below the average of around 95 per cent for most top grade office buildings there. The new 40-storey building, completed in December last year, is home to more than 30 multinational companies, including China Life, Lloyds Banking Group and Schroders.

The owners remain bullish about prospects.

“More than 50 per cent of the tenants have moved into CapitaGreen because they need more space, and that means growth for each of the companies,” said Ms Lynette Leong, CEO of CapitaLand Commercial Trust. “And 6 per cent of the building comprises tenants that are new to Singapore – they are brand new companies that are setting up offices in their companies for the first time. As a result of that we feel that there is still a very good vibrancy in the office market.”

The building is jointly developed by CapitaLand, CapitaLand Commercial Trust and Mitsubishi Estate Asia.

However, some analysts do not share the owners’ optimism. Property services firm Century 21 expects office rents to fall by 20 to 30 per cent in the next two years.

“We are seeing quite a lot of new supply coming on stream especially next year, and with the economy broadly heading into a lot of headwinds, as well as companies in oil and gas services sector, in the commodities sector announcing retrenchment or some companies even announcing pullouts from Singapore,” said Mr Ku Swee Yong, CEO of Century 21.

“Actually the demand for office space over the next 12 to 18 months should be pretty weak. I’m not expecting any significant net demand. Then the oncoming supply, especially in 2016, could exacerbate the current vacancy situation. So today’s vacancy rate is at about 10 per cent, with eight million square feet of vacant office space across the island … I think the crunch time will be next year when our vacancy rate will start to exceed the 12 per cent benchmark.”

Colliers International added the lack of new demand from banks is the main challenge facing landlords in the CBD. The other is the move by some companies to lower rents by shifting to outlying areas such as Jurong East, where new high-quality office space is available.

Source : Channel NewsAsia – 15 Sep 2015

Retail rental market operates without much Government interference: MTI

The Government, as a general principle, allows the market to operate without having to prescribe how landlords and tenants structure their leases, said Minister of Trade and Industry Lim Hng Kiang. Stepping in would lead to inefficient outcomes and make all parties worse off, he added.

Mr Lim said this on Monday (May 11) in a written parliamentary response to a question by Member of Parliament Lee Bee Wah, who asked if the Government will consider introducing measures to help small retailers in shopping malls, such as by disallowing the practice of landlords pegging the rental charge to a tenant’s sales volume when renewing leases.

Ms Lee also questioned if the Government could introduce a platform by which tenants can take reference on what should be the fair market rates for shop rent.

Mr Lim said that companies have other means to manage their rental consts, such as by referring to the Business Leasing Guide by the Singapore Business Federation, which was released in January this year.

The minister added that information on retail rates is publicly available on the Urban Redevelopment Authority’s website, and that the data is updated every quarter.

Source : Channel NewsAsia – 11 May 2015