Colliers International reports that 14 properties totalling S$25.92 million (RM63.78 million) were sold under the hammer during the Hungry Ghost festival (Aug 20 to Sept 18), the highest value in three years. This was a better performance than last year’s S$22.75 million over the same festival period. In total, 85 properties were put up for auction, of which 66 (78%) were by property owners and the remainder (19 properties) were mortgage sales. Thirty-five residential properties were offered, of which 26 were owners’ sale. The residential sector chalked up S$18.98 million from nine sales. This included two high-end condominiums at Four Seasons Park (off Orchard Boulevard), which sold for S$4.8 million and S$4.84 million, and a penthouse at Waterside (East Coast) for S$2.55 million. Retail was the next best-performing sector. Sales of shophouses and strata-titled shops totalled S$6.83 million.
Orchard Road occupancy stabilises as rents fall
Despite overall falls in rent, leasing activities for the new Orchard Road retail space have stabilised and most tenancies have been committed, reports CB Richard Ellis (CBRE). Mandarin Gallery is almost 100% occupied ahead of its pre-Christmas opening. Knightsbridge says it is 50% pre-committed and expects the remaining leases to be finalised by 3Q2009. TripleOne Somerset is 60% pre-let and [email protected] says it is 90% leased ahead of its late-November opening. Prime Orchard Road rents averaged S$32.90 (RM81) psf per month (psf month) in 3Q, a 3% q-o-q fall. CBRE says with the decline in prime Orchard Road rents expected to range from 10% to 12% in 2009, and a further fall not expected to pass 5% next year, the eventual rental trough should not be less than $30 psf month. The last time these prime rents fell below S$30 psf month was from 1998 to mid-2000 during the Asian financial crisis. Prime suburban rents inched up 0.7% to average S$28.50 psf month in 3Q.
Retail sales hit harder than expected
Singapore’s retail sales slipped more than expected in July, reports Bloomberg. The retail sales index fell 9.8% from a year earlier, after sliding 8.4% in June. Hardest hit were vehicles sales (down 28%) and purchases at petrol stations (down 23.6%). Economists predicted a median fall of 7.5% for July, but expect retail sales to now improve on the back of a stable job market and an improving global economy. Subtracting the vehicles segment, sales fell 2.2% in July from a year ago and 1.6% from June. Department store sales increased 2% from a year earlier and purchases of telecommunications and computer equipment climbed 6%.
OKP proposes bonus issue and rights issue of warrants
Infrastructure and civil engineering company OKP has proposed a one-for-two bonus issue and a rights issue of warrants on a one-for-four basis to shareholders. The bonus issue will involve the issue of 82,430,470 new OKP shares — one new OKP share for every two existing OKP shares held. The rights issue of warrants will be on the basis of one warrant for every four existing ordinary shares held by entitled shareholders. Each warrant will be issued at one cent, with an exercise price of 20 cents and an exercise period of three years. Proceeds will provide additional resources and working capital for the group.
Business confidence firming, but office outlook fragile
Office rents have fallen for the fourth consecutive quarter, reports CB Richard Ellis (CBRE), but the pace of decline slowed during 3Q and business confidence returned. Prime office rents averaged S$7.50 (RM18.4) psf month during the quarter. This was a 12.8% q-o-q decrease compared with the 18.1% fall in 2Q2009 and 18.6% contraction in 1Q2009. Prime rents have slipped 53.4% since the peak in 3Q2008. Grade A rents are at S$8.80 psf month, a decline of 13.3% q-o-q.
CBRE says occupiers are still looking for lower costs and better-value options. Notable leasing deals during the quarter included Servcorp pre-committing to 22,000 sq ft at MBFC Tower 2, and both QBE and Sumitomo Bank jointly taking 65,000 sq ft at the newly completed Mapletree Anson. Around 575,000 sq ft was added to office stock during the quarter. The occupancy rate at Tanjong Pagar fell from 86.2% in 1Q to 80.1%. Grade A vacancy rose to 4.2% in 2Q, up from 3.6% at the beginning of the year. The take-up rate for Grade A space for the first three quarters in 2009 was negative 223,397 sq ft. CBRE expects vacancy rates to remain at double digits over the next two years, owing to the high volume of supply. — The Edge Singapore
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 774, Sep 28-Oct 4, 2009.