Tag Archives: Industrial Space

Nine shop units in Holland Road Shopping Centre up for sale

Nine units of Holland Road Shopping Centre and one unit of 211 Henderson, an industrial building, are up for sale, either collectively at a guide price of just over S$24 million or on a piecemeal basis. All of them are freehold units and are being sold with vacant possession.

They are owned by two companies controlled by the Lim family that used to operate Lim’s Arts and Living, out of eight of the Holland Road Shopping Centre units. All nine shop units are on the second level.

Lim’s Arts and Living, which used to sell mainly furniture and furnishing goods, closed about a year ago. The sale of the 10 units is said to have arisen from a resolution of differences within the family.

CBRE is the sole marketing agent for the public tender exercise, which will close on Aug 23.

The 211 Henderson industrial unit, which is on the second level, has a guide price of S$3.23 million or S$650 per square foot based on its 4,962 sq ft strata area. It is ideal for light industrial use, with activities such as printing, photocopying, photographic film processing, packing and storage, commercial laundry, assembly and disassembly, said Sammi Lim, CBRE director of investment properties.

Over at Holland Road Shopping Centre, which is next to the Holland Village MRT Station, the units range from around 237 sq ft to 732 sq ft. Their guide prices are S$1.09 million to S$4.17 million – adding up to S$20.85 million, which works out to an average price of S$5,085 psf based the total strata area of 4,100 sq ft.

Ms Lim said: “The units will appeal strongly to end-users who have been on the lookout for shops to purchase and operate. For investors, the freehold status and potential yield return would be key attractions.”

The landmark development in Holland Village has well-known names such as Cold Storage and United Overseas Bank that have been operating in the building for years.

Said Ms Lim: “Assets in the Holland Village location are always very tightly held and it is extremely rare for any to be available for sale. Widely regarded as a successful enclave, the purchaser is expected to benefit greatly from the area’s fast evolving development and continued rejuvenation.”

Rental growth for office space set to moderate in 2015: Analysts

Office rentals have been pushing higher in 2014, with tight supply pushing rentals up by more than 10 per cent.

Consultancy Jones Lang LaSalle (JLL) projects that rentals at office buildings in the Central Business District (CBD) – including Marina Bay, Shenton Way and Raffles Place – could grow by some 16 per cent, driven primarily by the tight supply of new office space in Singapore.

Looking into 2015, they said rental growth is expected to moderate in the first half of the year, in anticipation of new office projects. JLL said about 3 million square feet of office space will come on-stream in 2016 and 2017, including Marina One at Marina Bay, Duo in Bugis, V on Shenton, and Tanjong Pagar Centre. This new supply could put pressure on rentals, as it is twice the absorption rate of 1.2 to 1.5 million square feet.

On Dec 4, four sites with commercial components were placed on the Reserve List under the Government Land Sales programme for the first half of next year. They included plots in Holland Road, Beach Road, Woodlands Square and Marina View/Union Street. But some industry players said there is room for the Government to release more sites in the CBD.

Mr Warren Bishop, CEO of Raffles Quay Asset Management, said: “When you are talking about a site being released in 2015, it is unlikely to come to market until 2019-2020. We would probably see there is certainly room for the release of more land within the Marina Bay area. Looking at the longer term beyond 2018-2019, there will be consistent demand, what has been released is probably not going to be enough to meet that demand.”

Mr Bishop added that the demand for office space in the years to come will need to be met. Otherwise, “you end up with situations where perhaps you see office rentals rise”, he said. “We had a situation in 2007-2008 where there was an imbalance between demand and supply.”

Looking to future Government Land Sales programmes, analysts expect the urban planners to roll out more commercial sites in the suburban areas for sale under the Confirmed List. These include locations like Jurong East, Paya Lebar and Woodlands. Meanwhile, to meet demand for office space in the CBD, market watchers suggested that the Government could put some sites for sale on the Reserve List, which can be triggered for sale by developers.

Analysts said they have observed a new trend in the leasing market, with some deals going beyond the typical ‘three plus three years’ lease terms.

Dr Chua Yang Liang, head of research for Southeast Asia at JLL Singapore, said: “We are hearing some cases where landlords are chasing bigger occupiers and offering them slightly longer leases, such as ‘five plus five’ or ‘six plus six’. They are locking them in for a longer period. Likewise, from the tenants’ perspective, a longer lease in such instances helps them in terms of amortising their overhead cost – like their fit-out costs for example.”

Overall, analysts said sentiment in the industrial property market remains mixed as Singapore shifts towards higher value-added manufacturing and service-oriented sectors.

Mr Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants, said: “One of the challenges facing Singapore going forward is the changing nature of our economy, as it becomes a more service-oriented one.

“I think the Government needs to re-define the type of uses and trades and businesses that are allowed to use industrial space. As e-commerce within our economy expands, there will be more demand for storage space. The authorities could also re-look how they could allow more e-commerce companies to use industrial space.”

Industrial rents are seen falling by 3 per cent this year and SLP International said they could continue to decline in 2015 – by about three to five per cent – if supply continues to outpace demand.

Source : Channel NewsAsia – 22 Dec 2014

Enough retail, industrial space for businesses to grow: DPM Teo

The Republic has taken significant steps to remain competitive and companies that want to expand here will have sufficient space to grow, Deputy Prime Minister Teo Chee Hean said on Friday (June 20).

Speaking at a luncheon that followed the annual general meeting of the Singapore International Chamber of Commerce, Mr Teo said the Government hopes to see more companies use Singapore as a base to seize growth opportunities in Asia.

“The new industrial and retail space coming on-stream in the next three years provides new supply that is double the average demand over the past three years. This strong upcoming supply of industrial and retail space will give businesses more options and ample space to expand their operations in Singapore,” he said.

Mr Teo also said that by end-2016, prime office space in core business areas should have increased by about 13 per cent from current levels. Price and rentals of private residential properties have levelled off since the last quarter of 2013, he added.

Source : Channel NewsAsia – 20 Jun 2014

Industrial and office property markets stabilising: DTZ Research

Singapore’s industrial and office property markets are showing signs of improvement.

Property consultancy DTZ Research on Wednesday said that islandwide office occupancy improved in the first quarter of this year.

The average islandwide office occupancy rate rose 0.7 percentage-point on-quarter to 92.4 per cent.

DTZ said the improvement in occupancy rate was due to an increase in demand.

There was also no new completion of office space in the first three months of this year.

However, office rents will bottom out only sometime next year, or by the end of the year.

This depends on whether the economy grows stronger than expected.

Separately, consultant CBRE said the booming residential market has driven many existing commercial building owners towards redevelopment.

CBRE estimates that about 1.2 million square feet of offices will be converted to mainly residential use up to 2013.

With the economy on a growth path, DTZ expects the industrial rental market to bottom out this year.

But they caution that the recovery will be at a slow pace, due to new supply coming on stream.

Source : Channel NewsAsia – 1 Apr 2010

Singapore’s office and industrial rents continue slide in Q2

Property consultancy DTZ said office and industrial rents here continued their downward trend in the second quarter this year.

For the office market, average monthly gross rents of prime offices in Raffles Place fell by 19 per cent to S$9.70 per square foot, compared to a 25 per cent fall in the previous quarter.

Office rents in the Central Business District (CBD) fringe and de-centralised areas suffered a larger fall compared to the previous quarter.

The rent in Beach Road and North Bridge Road slid by 20 per cent to S$6.20 per square foot per month, worse than the previous quarter’s 13 per cent fall.

With office rents – especially those in the CBD – falling substantially, the rental gap between those in the CBD and those outside has narrowed.

Office rents in Marina Centre were 14 per cent lower than those in Raffles Place, less than the 23 per cent gap recorded during the peak last year.

Turning to the industrial market, DTZ said average monthly gross rents fell by 6.8 per cent for first-storey private industrial space and by 8.1 per cent for upper-storey space. This is the largest rental contraction since the third quarter in 2003.

Due to the large supply overhang in the office and industrial markets, DTZ expects the two sectors to remain soft until 2011.

Source : Channel NewsAsia – 6 Jul 2009