Property News!

[jq75]

Five sites up for en bloc development
Biggest is Faber Garden at indicative price of $830 million

Published on Oct 18, 2011

The owners of freehold Dragon Mansion (left) in Tanjong Pagar have lowered their indicative asking price to $132 million to $142 million. -- PHOTO: JONES LANG LASALLE
By Cheryl Lim
THE en bloc game is heating up, with some owners hoping to end the year with a big windfall.

Five developments have been put up for collective sale, including Faber Garden - the biggest of the lot.

Based on the site area of 544,738 sq ft and a plot ratio of 1.6, the development has an indicative price of $830million.

This works out to $988 per sq ft per plot ratio (psf ppr). The property's eventual buyer will also have to fork out an estimated development charge of $31.2 million.

Jones Lang LaSalle, the marketing agent brokering the deal, said the site could potentially hold some 760 apartments at an average size of 1,200 sq ft each.

The tender will close on Nov 22.

Another site that requires bidders with deep pockets is Dunearn Gardens.

The owners have pegged the indicative price for their property at $550million to $561 million, reflecting a price of $2,180 psf ppr to $2,220 psf ppr.

The 95,442 sq ft freehold site accommodates a total of 114 residential units spread across two 20-storey blocks and one 14-storey residential development.

Located along Dunearn Road, the property has a plot ratio of 2.8 and can be redeveloped to up to 33 storeys, said its marketing agent, DTZ.

Nearby, Newton Lodge is being put up for sale again.

Owners of the 16-unit property near Novena MRT station are sticking firm to their previous reserve price of $40 million. Including an estimated development charge of $2.5 million, this translates to $1,418 psf ppr.

CBRE executive director for investment properties Jeremy Lake said the property would provide an excellent opportunity for a developer to design a boutique project with small units catering to the needs of the young working population wanting to live close to town.

The tenders for Dunearn Gardens and Newton Lodge close on Nov23.

Another residential development that is being put up for sale again now has a reduced price.

The owners of Dragon Mansion - a freehold 18-storey property in Tanjong Pagar - are putting it on the market for a second time at an indicative price of $132 million to $142 million.

This works out to $1,200 to $1,290 psf ppr. At this price, each owner could receive close to $2 million.

That indicative price range is lower than the $150 million to $156 million the owners were seeking in May.

Located at 14 Spottiswoode Park Road, the property consists of two plots of land - Dragon Mansion and a substation. They have a combined area of 39,176 sq ft.

With a gross plot ratio of 2.8, the future development could be built up to 36 storeys. In addition, the adjoining plot of state land could potentially be amalgamated, yielding a potential gross floor area of up to 112,959 sq ft, subject to approval.

The development currently comprises 68 units, each measuring 1,324 sq ft.

The tender for this site closes Nov16.

Finally, Jasmine Court in Upper Thomson Road is going for an expected price of $45 million, or about $872 psf ppr. The freehold development measures 36,854 sq ft and can be built up to five storeys high.

The tender for this site closes on Nov15.

 

[jq75]

Govt seeks views on real estate agency industry
Posted: 18 October 2011 1010 hrs


SINGAPORE: The government is seeking the public's views on the real estate agency industry.

A nation-wide survey was announced by Minister of State for National Development, Lee Yi Shyan on Tuesday.

The survey will cover four areas, including consumer satisfaction and expectations.

The results will guide the Council for Estate Agencies (CEA) in industry development and consumer education.

Mr Lee was speaking at the inaugural Key Executive Officer Seminar on Tuesday morning.

Aside from public outreach, the authorities have also stepped up enforcement and checks on the industry.

CEA has formed an Inspection and Compliance Section.

Aimed at detecting infringements and unethical behaviours, there'll be inspection and compliance checks to ensure that estate agents have in place proper systems for management and supervision of salespersons.

The real estate agency industry generated more than S$1.25 billion last year in commissions.

As at end September, there are more than 33,000 property agents registered with CEA.

CEA was formed in October last year to regulate the industry.

 

[jq75]

New private home sales surge 21% in September, 1,631 homes sold

Published on Oct 18, 2011





New private home sales surged 21 per cent with 1,631 homes finding buyers last month.

This is more than the 1,351 units sold in August.

Including executive condos, the number swells further to 2,064 units. Top selling projects include A Treasure Trove near Punggol MRT Station, which saw a whopping 683 units sold at a median price of $915 per sq ft (psf).

Euhabitat was second place with 138 units sold at a median price of $1,191 psf, followed by The Meyerise with 108 units sold at $1,789 psf.

 

[FallenTalent2011]

Just to share this piece of news. Though not about SG properties, this is what is happening in China at this moment.

==========================
China property news (28Oct11) - Homebuyers furious as mainland developers slash price

(From SCMP.com, registration required)

Homebuyers furious as mainland developers slash prices by a third
Those who first bought into projects suddenly find they are the big losers as property values plunge

Peggy Sito and Ren Wei
Oct 28, 2011

Anger is rising among homeowners on the mainland as the value of their properties falls, with mounting demands for refunds in Shanghai, Beijing and other major cities after developers cut prices to boost sales.
Facing growing liquidity pressure, developers have started to slash prices for some new projects, with cuts of more than 30 per cent in some cases, angering homeowners who made purchases earlier.



The central government is seeking to cool the real estate market by tightening credit and limiting demand.

In the latest incident, about 100 flat owners gathered at a housing project in Shanghai's suburban Jiading district last Saturday after state-owned developer Greenland Group cut the sales price of unfinished flats by more than a third.

The homeowners, many in their early 30s, said they were not protesting or organising riots, but seeking justice. Unfinished flats at the housing complex, named Qiuxiafang, were priced at more than 17,000 yuan (HK$20,730) per square metre last December. The price has dropped to about 11,000 yuan per square metre.

"We're not against price cuts," said 29-year-old Xu Lijian. "I bought the apartment earlier under the pre-sale agreement. That means we paid the developer in advance to help fund construction but we ended up losers since new buyers can pay much less to own a flat."

In a sales office at Qiuxiafang, more than 20 owners crowded into a small meeting room, accusing three Greenland employees of being "irresponsible, unethical and incapable".

The owners demanded that their contracts for the unfinished flats be cancelled, saying the developer had failed to honour the terms of the deal.

Greenland had promised the apartments would be ready by March next year, but then pushed the date back to June.

The gathering at Qiuxiafang was relatively peaceful - in Pudong homeowners trashed the sales office of the Coastal Palace project after the developer China Overseas Property (Group) cut prices 20 per cent to lift sales.

They too demanded refunds or cancellations of their purchase contracts. China Overseas Property is a unit of Hong Kong-listed China Overseas Land (SEHK: 0688) & Investment. Prices have fallen to 16,000 yuan per square metre from about 22,000 yuan, say mainland media reports.

Separately, homebuyers stormed the sales office of Shanghai's Sunshine City on Saturday, saying developer Longfor Properties reduced prices to 14,000 yuan, from a high of 18,500 yuan.

Longfor said the company continued to communicate with flat owners and would listen to their requests, as long as they were legal.

In Beijing, some buyers of a residential project called Jingmao International City in Tongzhou district sought to have their purchase contracts cancelled after the developer cut prices to as low as 15,000 yuan per square metre, from a high of 25,000 yuan early last year, according to Xinhua.

Some buyers in Hangzhou and Nanjing have also demanded refunds, Xinhua said.

Jason Hu Zhijiang, a senior consultant with mainland property agent Holdways International & Technology, said the protests would not stop developers from reducing prices.

Moody's said in a report on Monday that mainland developers faced a lower-than-anticipated cash flow arising from slowing sales in an environment where credit from onshore banks was difficult to secure.

The number of new home transactions in Beijing fell 23 per cent year-on-year in the first half of the year. This situation will continue for the next six to 12 months as the central government is unlikely to relax the measures introduced to restrict property purchases, Moody's says.

Shanghai's statistics bureau said 10.6 million square metres of residential property was sold in the first three quarters of the year, a decline of 15 per cent over the same period last year, Xinhua has reported.

Between January and September, loans to the real estate sector fell 15 per cent against a year earlier, to 59 billion yuan, while mortgage loans to individuals dropped 17 per cent to 15 billion yuan.

An executive at a mainland developer, who asked not to be identified, says property companies will not refund or offer compensation to buyers. Refunding or cancelling contracts would hurt the future sales of projects, he said.

Local governments may intervene in the protests as the central government also wants to cool the market.

It is not the first time that homeowners have protested during a falling market.

In 2008, a group of flat owners gathered at the office of developer China Vanke in Shanghai to present a petition protesting a price cut. Similar cases had been seen in China Vanke's offices in Hangzhou, Shenzhen and Beijing.

China Vanke stood its ground and said there would be no compensation or refunds.
===================

 

[chopra]

Where is the bubble? Resale or Private

Public resale (open to SC & SPR)

Private (open to SC, SPR & Foreigners)

 

[jq75]

Marine Cove tenants want to cut losses and bail out
Leases end in March but they want to cut losses as buildings deteriorate and business falls

BACKGROUND STORY

LOSING MONEY

'I'm losing a lot of money. I want to close down as early as I can. The communal areas here are just filthy. Who wants to come here?'

Mr Amas Tan, 54, owner of Marine Bowl, who says business has dipped by half in the last six months.

Mr Amas Tan said business at his 25,000 sq ft Marine Bowl has dipped by half in the past six months. The bowling alley is not making enough to cover the $32,000 rent and he is $20,000 out-of-pocket every month. -- ST PHOTO: LIM WUI LIANG
By Jessica Lim


The leases on the businesses surrounding the McDonald's outlet at East Coast Park will lapse in March, but some tenants of the recreation and food and beverage outlets want out earlier.

At least five tenants of Marine Cove, as the area is called, say they have written to their landlord, the National Parks Board (NParks), to ask for an early termination of their leases. Three others say they will do so soon. Some have already called it quits.

This is an about-turn from a year ago, when many of the area's 32 tenants were fighting to stay and had by then wrangled three lease extensions, the last of which was to take them up to March next year.

Tenants who spoke to The Straits Times said they changed their minds about staying because maintenance of the place has lapsed and the buildings are falling into disrepair.

Many customers, thinking the place is already shuttered, are staying away, so the tenants are trying to cut their losses by asking to be let off their leases before March.

NParks, which took over Marine Cove from its previous landlord, the Singapore Land Authority, in March this year, has said it wants to free up space for parks, enhance beach access and cater to visitors' dining and recreational needs, and that existing buildings may have to go.

It did not elaborate.

When The Straits Times visited the area on Wednesday, there was litter lying around and the carpark was overgrown with weeds.

Mr Amas Tan, 54, who owns the 25,000 sq ft Marine Bowl, said business has dipped by half in the last six months. The tenant, who has been there for the last decade and pays $32,000 a month in rent, hopes to be released from the lease.

The bowling alley is not making enough to cover the rent and he is $20,000 out-of-pocket every month, he said, adding: 'I'm losing a lot of money. I want to close down as early as I can. The communal areas here are filthy. Who wants to come here?'

He added that, with the short-term extensions Marine Cove has been getting, it has not made sense for him to upgrade the bowling alley's air-conditioning system or lanes - another reason why customers have kept away.

Zen Cafe owner Allan Sim, 38, said business has shrunk 30 per cent in the last six months and he gets at least five phone calls a week from people asking whether the restaurant is still open.

'They're always surprised to find out that we are. Many think the area has shut down,' he said, disclosing that he hopes to shut down by Chinese New Year.

Mr Raymond Oh, 35, owner of the 12,000 sq ft Marina South Enterprise, an entertainment hub with a billiard hall and club, has been losing money in the past eight months. He said that when he asked NParks to let him move out early, it said rent was still due right up to March. He said he asked for a reprieve but has not received an answer.

Other businesses, including J.K. Don Cuisine, Mango Tree, Hook On Steamboat and Taroda Racing Engineering, have also seen business plummet by up to half in the last six months.

Mr Chia Seng Jiang, a general manager at NParks, said about half a dozen tenants have approached the agency about early termination of their leases and their requests were being reviewed.

He said NParks, in granting the extensions sought for up to now, had held back on its redevelopment plans as a result.

As for the cleanliness of the place, he disclosed that NParks had appointed cleaning contractors.

But at least a couple of tenants still hope NParks will reverse its decision to redevelop the place.

Mr Foo Chit Seng, owner of restaurant/bar The Beach Hut, said: 'The situation is bad. But if they let us stay, we'll have an incentive to upkeep the place. This place is like home. I have regulars.'

Adding that he has had talks with NParks, he said: 'I just wish they could work with us to see how we can fit into their new plans for the place.'

The nearby Irish bar Scruffy Murphy's and McDonald's, however, report brisk business.

McDonald's communications director Linda Ming said the outlet's popularity was the reason. She added, however, that the fast-food chain will close in Marine Cove in March, but has opened an outlet a 10-minute walk away

 

[jq75]

2nd Bedok waterfront project to be launched

Published on Dec 1, 2011

Archipelago is priced below recently launched Bedok Residences, which sparked debate on its applicant queuing system. -- PHOTO: UOL GROUP AND SINGLAND


Another new waterfront private residential development is about to be launched for sale in the Bedok neighbourhood, hot on the heels of CapitaLand's controversial Bedok Residences project.

Called Archipelago, the 577-unit development is a collaboration between the UOL Group and Singapore Land.

Between 180 and 200 units will be up for sale during the first phase of the launch, with preview sales expected to start from tomorrow.

Situated in Bedok Reservoir Road, facing the reservoir, it is priced below the recently launched CapitaLand project nearby, which sparked debate on its queuing system for applicants.

Average prices for Archipelago are slightly above $1,000 psf. It is understood that the smallest 527 sq ft one-bedroom units will be priced below $600,000, which translates to around $1,138 psf.

Bedok Residences achieved an average selling price of $1,350 psf. Showroom lists priced a 517 sq ft one-bedroom unit from $669,200, which works out to $1,295 psf.

Apartments at Archipelago are a mix of one-, two-, three-, four- and five-bedroom units and penthouses.

Units with studies are also available. Homes are larger too, averaging 1,332 sq ft.

The Straits Times was also told bigger units make up a majority of the homes at the development, with two- and three-bedroom apartments making up 63 per cent of the total homes.

Twenty-four strata-titled landed homes are also included. Foreigners will be eligible to buy the three-storey homes of more than 4,000 sq ft, expected to cost above $3 million each.

Archipelago's developers have appointed DTZ, Savills, Knight Frank and CBRE as the marketing agents for the project.

Giving an update on sales figures, a CapitaLand spokesman said more than 80 per cent of the 583 apartments at Bedok Residences have been sold since the project went on sale last week.

 

[jq75]

Bukit Panjang site draws $493m top bid

THE growing popularity of mixed-use sites led to a 10-way tussle over a plot in Bukit Panjang.
Sim Lian Group lodged the top bid of $492.9 million for the commercial and residential land at the junction of Jelebu and Petir Roads.
That works out to $805 per sq ft (psf) per plot ratio (ppr) for the 1.89ha site - 10.7 per cent more than second-placed Keppel Land at $445.2 million or $727 psf ppr.
A joint bid by United Engineers and Singapore Press Holdings was next at $416 million or $680 psf ppr.
Experts said the keen interest for the 99-year leasehold site was likely due to its mixed-use element.Credo Real Estate's research and consultancy head, Mr Ong Teck Hui, noted that buyers are keen on residential and commercial sites, especially if they are also integrated with a bus interchange or near an MRT station.
'The attraction is the convenience of being right at the doorstep of shopping and transport amenities, which is appreciated by owner-occupiers as well as investors as these are strong selling points to tenants,' he added.
There are not many mixed sites in the government land sales programme so when one arises there is strong competition, Mr Ong said.
The Bedok Residences mixed- use site attracted nine bidders with a top offer of $841 psf ppr in September last year while the Punggol Central site in February fetched a high of $752 psf ppr with seven contenders.
Mr Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group, noted that the bidders for the latest site likely took into account the success of last week's launch of Bedok Residences.
Prices averaged $1,350 psf and more than 80 per cent of the 583 units have sold.
The Bukit Panjang site has a maximum permissible gross floor area of about 612,000 sq ft, with about 214,000 sq ft set aside for commercial use.
A 0.66ha mixed-used site at the junction of Thomson and Irrawaddy Roads was made available for application under the reserve list yesterday.

 

[jq75]

Local developers clinch 8 industry awards

Published on Dec 1, 2011


SINGAPORE developers, including some of the sector's biggest names, swept eight prizes at the inaugural Southeast Asian Property Awards handed out yesterday.

Far East Organization clinched the best developer honour for both the South-east Asia and Singapore categories while YTL's Sandy Island project in Sentosa Cove won for best architectural design (South-east Asia) and best housing development (Singapore).

Mr Ho Kwon Ping, executive chairman of Banyan Tree Holdings, also made the honour roll with the real estate personality of the year (South-east Asia) award.

Keppel Land's Ocean Financial Centre won for the best shared ownership development (South-east Asia) while Nassim Residences, developed by UOL Group, Kheng Leong and Orix Corporation, was singled out for best condo development (South-east Asia) and best condo development (Singapore).

The awards, which were launched by Ensign Media , attracted more than 300 industry players for the presentation ceremony at Hotel Fort Canning.

Ensign Mediachief executive Terry Blackburn said the South-east Asia region has some of the world's most innovative and interesting developments.

'Amazingly, we received over 1,500 nominations and from those, over 300 entries. These figures are a testament to breadth and variety of quality developments in the region and the enthusiasm to recognise the companies behind them,' he added.

'They are also a reflection of the growing strength of the industry in South-east Asia.'

A total of 28 awards were handed out.

 

[jq75]

Watchdog spells out rules for queues in condo launches
It says agents shouldn't join line without actual buyers

Published on Dec 2, 2011

Hundreds of people were in the queue outside the Bedok Residences showroom days before the launch. The project is more than 80 per cent sold. -- ST PHOTO: DESMOND WEE
By Cheryl Lim

The estate agency watchdog has spelt out in detail for the first time the rules on queues for condominium launches as it investigates claims that agents may have flouted the guidelines in marketing CapitaLand's Bedok Residences.

Hundreds of people lined up outside the showroom days before the official launch. The Straits Times reported that the queue included agents and people paid by them to wait.

This scene raised the question of what was the true picture of the demand for the units, which were marketed by ERA Realty.

The Council for Estate Agencies (CEA) stated on Thursday that estate agents can queue on behalf of their clients or even employ queue helpers as long as they do not infringe any law or regulation.

But CEA said agents should not join the queue without actual buyers as it would give a false impression of the actual demand for the development.

The CEA also said that collaborating with someone or inducing them to join the line to then sell their queue numbers to potential buyers may violate the Code of Ethics and Professional Client Care. The code is part of the Estate Agents Act 2010.

The CEA's stand follows feedback received by CEA that those queuing at Bedok Residences were hired just to hype up the level of demand.

Following this feedback, CEA told The Straits Times that it conducted three on-site audits.

It has also told marketing agent ERA Realty that it should conduct checks on its agents to ensure no malpractice. It added that investigations are ongoing following the feedback.

ERA Realty said it is providing the CEA with information on how it manages sales.

'In the absence of any new regulations, how ERA will market properties in future depends on (developers') instructions and their preferred mode of sale, depending on the nature and response of the project,' said ERA Realty's key executive officer, Mr Eugene Lim.

CapitaLand reiterated that the queue system is fair and transparent, and said the marketing of each development will be decided on a case-by-case basis.

Bedok Residences is more than 80 per cent sold.

The CEA probe may have wider ramifications, possibly affecting the way projects are launched and marketed.

'Developers and agents will definitely be more careful of how they carry out their marketing and sale of new launches in future and... work through the possible issues they might face if they opt for a queuing system,' said Mr Eric Cheng, chief executive of ECG Property.

The CEA, which comprises academics, professionals and senior government officers from property related sectors, has the power and tools to investigate and discipline agencies and agents that fail to comply with regulations and codes.

It can issue warnings, fines, suspensions and even bar agencies and agents.

 

[jq75]

Property measures: Home prices may fall 30%, say analysts
Property stocks hammered, following stamp duty shocker

Published on Dec 9, 2011

Property prices could fall by as much as 30 per cent next year as a result of the Government's latest move to cool the market, analysts have predicted.

This would be a chilling replay of what happened during the global financial crisis in 2008 and 2009, when home prices slid 25 per cent over 12 months.

These sobering warnings arrived on Thursday amid a slew of analyst reports taking stock of the surprise measures to cool Singapore's property market announced on Wednesday night.

The curbs include an unprecedented extra stamp duty of 10 per cent on any foreigner buying a residential property here.

CIMB Research analysts called the Government's move a 'bazooka' that could shoot down property prices overall by 15 to 20 per cent over the next 12 months.

Goldman Sachs analysts see a 'state of paralysis' for the property market. Their prediction is for private home prices to slide 15 per cent over the next 18 months.

Standard Chartered Bank was the most bearish. A report by the bank last week had already envisioned prices dropping up to 30 per cent over three years. Now the bank expects the same fall to occur within one year.

Stock market investors reacted from the opening bell, sending property stocks into free fall. The worst hit were City Developments and Keppel Land, which lost more than 8 per cent, wiping hundreds of millions of dollars off the traded values of their companies by the end of the trading day. Inside their offices, these and other property developers went back to the drawing board. Some said they were caught off-guard by the measures, and were reviewing their next plan of action.

A City Developments spokesman said: 'The measures will have a dampening effect in the short term so we will have to re-assess the market situation and, if necessary, tweak our strategy.'

Some did not mince their words. A developer who declined to be named said that too many policies and the frequency of their shifts do not reflect well on Singapore as an investment destination.

'If the Government wants to target foreign buyers, then it should also look at the entire spectrum and specifically the increasing presence of foreign developers here who are driving up land prices.'

UBS analysts believe the next move from developers may be to offer a partial absorption or rebates of the additional buyer's stamp duty.

'Launches are likely to see delays as developers would have to spend more time building up a critical mass of buyer interest before having the confidence to launch a project,' they said in a report.

One of the first developers to be jolted into action was UOL Group. According to an internally circulated text message obtained by The Straits Times, it is offering agents a cash incentive of between $5,000 and $15,000 for each unit sold at its Archipelago project in Bedok from now till Sunday.

Those who had secured sales earlier made sure they did not lose them as buyers wavered. On Thursday, property agents were rushing around to make sure that options for deals were signed.

Analysts said anticipated transaction volume and price declines will not be uniform across the whole property market.

The high-end segment will be hit much harder than the mass market sector, as luxury homes tend to attract the highest proportion of foreign buyers.

Sales of private homes in the core central region, which includes prime areas such as Orchard Road and Newton, could plunge 40 per cent as a result of the new measures, said the chief executive of property agency PropNex, Mr Mohamed Ismail.

Foreigners and PRs accounted for 44 per cent of home sales in prime districts, such as Sentosa Cove and Districts 9, 10 and 11.

But the mass market property segment will not go unscathed.Though foreign buying activity in this segment is lower, the expectation of lower prices will cause Singapore buyers to also hold back.

'I would expect transaction volume to fall within the next 30 days as buyers hold back,' said Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia.'If prices ease, buyers might return but this is also conditional on whether the economy improves.'

Mr Ismail expects mass market home prices to slide 10 to 15 per cent in the next six months.

National Development Minister Khaw Boon Wan touched on the measures in an entry on his blog on Thursday, saying they 'will further strengthen, stabilise and sustain our property market'.

But investors who recently bought new properties will likely take some time to absorb the news. 'I am still shocked by what happened. Originally I wanted to hold on to the investment for four to five years, now it looks like I need to have longer staying power,' said a 32-year-old civil servant who wanted to be known only as Mr Lim.

He bought a two-bedroom, $1 million Bedok Residences unit about two weeks ago. 'In a way, I feel lucky that I chose a unit in a good location, which I think will be more resilient to price erosion.'

 

[jq75]

Property measures: Rush to calm jittery buyers and sellers

Published on Dec 9, 2011


Developers and property agents were in damage control on Thursday as they tried to stop home buyers backing out of deals while calming the nerves of sellers fearful about where prices will go in the wake of the stamp duty shock.

Some agents said they were rushing to issue options for Singaporeans and foreigners to purchase late into Wednesday night before the rules kicked in on Thursday.

Others reported deals falling through in the first few hours after the surprise stamp duty measures were unveiled.

They have also been inundated with calls from clients concerned about how the measures might affect their decision either to buy or sell.

Mr Benjamin Tan, an agent with GPS Alliance, said most of his Indonesian clients have put their purchases on hold in projects such as The Interlace and The Palette. Savills agent Alfie Cai told The Straits Times: 'On Wednesday, I had about 10 clients and friends of clients calling me all the way till midnight.'

UOL Group is so keen to lock in sales in what could be a fast-softening market that it is offering agents big cash incentives to close deals at Archipelago in Bedok from now until Sunday, according to an internally circulated text message obtained by The Straits Times.

Agents will get $5,000 for sales of one- and two-bedders, $10,000 for each three- and four-bedroom unit sold and $15,000 for sales of four-bedroom and larger units. These are in addition to the usual commissions.

Several developers say that while launches already announced will go ahead as planned, they might reassess others depending on how the market reacts to the stamp duty over the coming weeks.

Mr Wong Heang Fine, chief executive of CapitaLand Residential Singapore, said no buyers at Bedok Residences, which was launched last month at about $1,350 per sq ft, have said they would not exercise their options.

As far as possibly putting some of its new launches on hold, Mr Wong said: 'It is early days yet and more time is needed to assess the real impact of the measures on our sales and marketing strategy.'

A City Developments (CDL) spokesman said 'the measures will have a dampening effect in the short term so we will have to reassess the market situation and, if necessary, tweak our strategy'.

CDL's recent launches were largely aimed at first-time buyers and upgraders so the firm sees 'limited downside', the spokesman said. Its business is also diversified, he added.

Roxy-Pacific executive chairman and chief executive Teo Hong Lim said the firm is likely to stick to plans to launch its Treescape project in Telok Kurau around Chinese New Year. 'Nobody can predict how the market will react. We have to read beyond the current measures; this is not a financial crisis,' he added.

But agents were much less sanguine in the light of analyst estimates of prices plunging as much as 30 per cent next year and sales volumes falling 20 per cent.

The prime and mid-prime segments - where foreigners accounted for nearly 25 per cent of transactions in the third quarter - are expected to be hit the hardest with some experts even calling the luxury market, where prices are already languishing below the previous peak, 'dead'.

Savills' Mr Cai noted that some of his foreign clients who were keen to buy are going to hold off until they get their permanent residency status.

The new rules are the toughest on foreign buyers and corporate entities who will now be slapped with an additional buyer's stamp duty of 10 per cent.

This is on top of the existing stamp duty of about 3 per cent. Permanent residents buying their second and subsequent homes and Singaporeans buying their third and subsequent homes will have to fork out an additional buyer's stamp duty of 3 per cent.

 

[jq75]

Property measures: Why industry players were not consulted

Published on Dec 9, 2011




The National Development Ministry (MND) has responded to criticism from the main real estate developers body about the lack of consultation with industry players over the measures, explaining they were market-sensitive.

The ministry told The Straits Times on Thursday that 'it is not possible for the Government to conduct direct consultations with industry players before implementing demand measures as these are market-sensitive'.

But the Government monitors the market closely and has regular dialogues with various stakeholders in the property market, a spokesman said.

These include developers, property consultants, market analysts and real estate agents. The input from these discussions is factored into its policy formulation, he added.

MND's reply comes in response to a tersely worded statement issued by the Real Estate Developers' Association of Singapore (Redas) on Wednesday.

In an unprecedented move, the Government surprised industry players by introducing an additional buyer's stamp duty of up to 10 per cent targeted largely at foreign buyers and property investors.

This new stamp duty, which took effect on Thursday, is on top of the existing stamp duty of about 3 per cent.

In its statement, Redas had said it was disappointed by 'the lack of consultation' on the latest measures, and called them 'untimely' given the expected slowdown in the economy next year.

'(The measures) came as a surprise as the current market outlook is uncertain,' it said. 'The good take-up rate in the primary market is driven by the increased number of new launches and unique selling points of certain projects. It is not indicative of a return to a speculative market.'

 

[jq75]

Chestnut Ave landed site in Upper Bukit Timah draws 22 bids

Published on Dec 9, 2011


The close of a tender on Thursday saw 22 bids, the biggest field in about two years, for a plum landed housing site in Chestnut Avenue in Upper Bukit Timah.

The results came a day after tougher residential property measures were unveiled.

However, analysts say developers may believe the landed housing market will be unaffected by the measures, which are mainly aimed at foreigners, who are largely excluded from buying landed homes.

Most developers would have lodged their bids on Thursday, after the measures had been unveiled, they said.

This is the largest field since 32 bidders squared off over a Jurong West site in 2009, and beats 19 bids for a plot near Bishan MRT Station in February.

Property experts said the number of bids and the prices were above expectations, and speculated that the site being a landed project could have been a factor.

Located at the corner of Chestnut Avenue and Almond Avenue, the 99-year leasehold, 1.25ha site is located near an LRT station and the future Cashew MRT station.

The tender pulled in a mixed bag of developers, including big boys such as Frasers Centrepoint and Allgreen Properties and smaller players like EL Development.

SCB Terraform lodged the highest bid of $70.8 million, which translates to about $510 psf per plot ratio (ppr).

At the other end, Spazio, a unit of construction firm Teambuild, trailed the pack at $25 million, or $180 psf ppr.

The top $510 psf ppr price is markedly higher than the $360 psf ppr analysts had earlier anticipated.

'The dearth of new landed projects, the optimistic pricing for landed homes and the relatively low absolute value of the site are key factors,'said Mr Ong Teck Hui, head of research and consultancy at Credo Real Estate.

Other property watchers said the results reflect the strength of developers' balance sheets, adding that the profits they have made in the strong property runs over the last few years have helped buff up their bottom lines.

Mr Ong said Wednesday's round of measures might have sparked caution in the market, but not so much in the landed segment.

Foreigners can buy landed homes only in Sentosa Cove. If they are permanent residents, they may buy some types of landed housing elsewhere, but only with approval.

Dennis Wee Group (DWG) estimates that up to 64 strata landed homes with an average built-up area of 4,600 sq ft per unit could be built on the 1.25ha plot.

The breakeven cost for each unit is estimated to be $2.3 million to $2.4 million, with the expected selling price pegged at between $2.7 million and $2.8 million said analysts from DWG.

Nearby units at Foresque Residences sold at an average of $1,150 psf over the last three months.

 

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Citizens of 5 countries to pay same stamp duty as Singaporeans

Published on Dec 9, 2011


Citizens of five countries that have free trade deals with Singapore, including the United States and Switzerland, will be treated as Singaporeans for the purposes of the new stamp duty measures.

When they buy a private home, Americans, Swiss and nationals from Liechtenstein, Norway and Iceland will be treated the same as Singapore citizens, the taxman said in a guide on Wednesday.

This will enable them to avoid the new 10 per cent additional buyer's stamp duty that foreigners now have to pay when they buy a private home.

Free trade agreements usually ensure that a country's citizens are accorded certain trade protections when they are in the partner nation.

The Additional Buyer's Stamp Duty (ABSD), as the new levy is called, was announced by the Government on Wednesday and hits foreigners hardest. They have to pay an additional stamp duty of 10 per cent when buying a home.

But the foreigners from these five countries can apply for remission or relief.

The Inland Revenue Authority of Singapore (Iras) website says they must provide identification, acceptance to option to purchase/sale, the purchase agreement and the ABSD declaration form.

Under the new rules, permanent residents (PRs) buying a second and subsequent property will pay an additional 3per cent stamp duty, while Singaporeans buying their third or subsequent homes must pay an extra 3per cent.

The rule is also that for purchases made by two or more parties with mixed residency status, such as a Singaporean with PR, the higher rate will be imposed.

But Iras also gave examples of situations where remissions can apply. These are in cases where married couples have mixed residency status.

For example, a PR who currently owns a property while his Singaporean spouse owns none can apply for relief from the additional stamp duty when they co-purchase a home.

In another scenario, a PR and a Singaporean spouse co-own a property. When they next jointly buy a property, they can apply to be exempt from the 3 per cent levy.

The relevant documents have to be submitted to Iras.

Relief will also be provided for qualifying developers.

Iras also said that people who want to downgrade from private housing to an HDB flat will be allowed a concessionary period to sell their private residential properties. The application for relief in such cases can be made through the HDB

 

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Hefty stamp duty hike targets foreign buyers

Published on Dec 8, 2011


THE Government unveiled a set of unprecedented stamp duty taxes last night, in what many industry watchers have called the toughest round of curbs yet on Singapore's private property market.

The changes take effect today.

Hardest hit are foreigners, who have been snapping up a rising share of non-landed homes in recent years. They now must pay a hefty additional buyer's stamp duty of 10 per cent on any purchase of a residential property here.

This is on top of the existing buyer's stamp duty of about 3 per cent and applies to the purchase price or market value of the property, whichever is higher.

Corporate entities, including companies, trusts and collective investment schemes, are now also subjected to the new 10 per cent tax. They were active buyers in the last property boom in 2007 and 2008.

Singaporeans and permanent residents (PRs) who invest in property are also affected.

PRs who buy a second and subsequent residential property will pay 3 per cent in additional stamp duty. Overseas properties will be excluded from this count.

Singaporeans who already have two residential properties will have to pay the additional 3 per cent on their third and subsequent home purchases.

Concern over investment demand

Options granted yesterday or earlier and exercised within three weeks will not be subjected to the new rules.

This is the first time in 15 years that foreign buyers have been targeted by a set of measures to cool the property market.

Until yesterday, they faced only certain restrictions in buying landed homes.

In a statement, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said that Singapore had always had markets open to foreign investment and must keep them that way.

'However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low,' he warned.

'The additional buyer's stamp duty should help cool investment demand, and avoid the prospect of a major destabilising correction further down the road.'

Despite four previous rounds of property market cooling measures, private home prices have continued climbing for the past two years.

And even though price gains moderated to just 1.3 per cent in the three months to September, property prices are now at a record high - 13 per cent above the 1996 peak and 16 per cent above the most recent peak in 2008.

Sales of new private homes hit a record 16,292 last year. This year looks to be another banner year with 13,688 units sold in the first 10 months.

The numbers have clearly been given a boost by foreign buyers who accounted for 19 per cent of all private residential property purchases in the second half of this year, up from 7 per cent in the first half of 2009. And these figures exclude purchases by PRs.

Property experts said they expect the new measures to reduce demand for homes by up to 25 per cent in certain segments of the market.

'It will curb investment demand for private homes drastically. In the next one to two months, the home-buying demand from non-resident foreigners will almost dry up,' warned SLP International research head Nicholas Mak.

Credo Real Estate's research and consultancy head Ong Teck Hui said that the measures will have a stronger impact on the 'prime and mid-prime' markets - where foreigners accounted for nearly a quarter of transactions in the third quarter.

The Real Estate Developers' Association of Singapore (Redas) had sharp words for the Government last night.

In a statement, it said that it was disappointed by 'the lack of consultation' on the latest measures, and called the measures 'untimely' given the expected slowdown in the economy next year.

'(The measures) came as a surprise as the current market outlook is uncertain,' it said.

'The good take-up rate in the primary market is driven by the increased number of new launches and unique selling points of certain projects. It is not indicative of a return to a speculative market.'

Meanwhile, the Government also announced yesterday the release of 41 new sites under the government land sales programme for the first half of next year.

The 14 sites on the confirmed list and 27 on the reserve list site are in popular areas like Farrer Road, Tiong Bahru and Tampines and can potentially yield about 14,100 private homes.

On the list are six sites for executive condominiums (ECs), which have seen robust demand in recent launches.

Commenting on this, Minister for National Development Khaw Boon Wan said the supply of new EC sites will 'help higher-income Singaporeans own private condominium units in an affordable way', since foreigners and PRs cannot buy EC units.

First-time home buyer Yang Sue Ann, 25, a civil servant, welcomed the measures as she and her fiance had been holding off buying a home in the hope that prices would fall.

'These measures will help us greatly in getting our first home. We were thinking of buying at the end of next year but hopefully if prices drop, we can get something by early next year before we get married in June,' she said

Property measures: Home prices may fall 30%, say analysts
Property stocks hammered, following stamp duty shocker

Published on Dec 9, 2011

Property prices could fall by as much as 30 per cent next year as a result of the Government's latest move to cool the market, analysts have predicted.

This would be a chilling replay of what happened during the global financial crisis in 2008 and 2009, when home prices slid 25 per cent over 12 months.

These sobering warnings arrived on Thursday amid a slew of analyst reports taking stock of the surprise measures to cool Singapore's property market announced on Wednesday night.

The curbs include an unprecedented extra stamp duty of 10 per cent on any foreigner buying a residential property here.

CIMB Research analysts called the Government's move a 'bazooka' that could shoot down property prices overall by 15 to 20 per cent over the next 12 months.

Goldman Sachs analysts see a 'state of paralysis' for the property market. Their prediction is for private home prices to slide 15 per cent over the next 18 months.

Standard Chartered Bank was the most bearish. A report by the bank last week had already envisioned prices dropping up to 30 per cent over three years. Now the bank expects the same fall to occur within one year.

Stock market investors reacted from the opening bell, sending property stocks into free fall. The worst hit were City Developments and Keppel Land, which lost more than 8 per cent, wiping hundreds of millions of dollars off the traded values of their companies by the end of the trading day. Inside their offices, these and other property developers went back to the drawing board. Some said they were caught off-guard by the measures, and were reviewing their next plan of action.

A City Developments spokesman said: 'The measures will have a dampening effect in the short term so we will have to re-assess the market situation and, if necessary, tweak our strategy.'

Some did not mince their words. A developer who declined to be named said that too many policies and the frequency of their shifts do not reflect well on Singapore as an investment destination.

'If the Government wants to target foreign buyers, then it should also look at the entire spectrum and specifically the increasing presence of foreign developers here who are driving up land prices.'

UBS analysts believe the next move from developers may be to offer a partial absorption or rebates of the additional buyer's stamp duty.

'Launches are likely to see delays as developers would have to spend more time building up a critical mass of buyer interest before having the confidence to launch a project,' they said in a report.

One of the first developers to be jolted into action was UOL Group. According to an internally circulated text message obtained by The Straits Times, it is offering agents a cash incentive of between $5,000 and $15,000 for each unit sold at its Archipelago project in Bedok from now till Sunday.

Those who had secured sales earlier made sure they did not lose them as buyers wavered. On Thursday, property agents were rushing around to make sure that options for deals were signed.

Analysts said anticipated transaction volume and price declines will not be uniform across the whole property market.

The high-end segment will be hit much harder than the mass market sector, as luxury homes tend to attract the highest proportion of foreign buyers.

Sales of private homes in the core central region, which includes prime areas such as Orchard Road and Newton, could plunge 40 per cent as a result of the new measures, said the chief executive of property agency PropNex, Mr Mohamed Ismail.

Foreigners and PRs accounted for 44 per cent of home sales in prime districts, such as Sentosa Cove and Districts 9, 10 and 11.

But the mass market property segment will not go unscathed.Though foreign buying activity in this segment is lower, the expectation of lower prices will cause Singapore buyers to also hold back.

'I would expect transaction volume to fall within the next 30 days as buyers hold back,' said Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia.'If prices ease, buyers might return but this is also conditional on whether the economy improves.'

Mr Ismail expects mass market home prices to slide 10 to 15 per cent in the next six months.

National Development Minister Khaw Boon Wan touched on the measures in an entry on his blog on Thursday, saying they 'will further strengthen, stabilise and sustain our property market'.

But investors who recently bought new properties will likely take some time to absorb the news. 'I am still shocked by what happened. Originally I wanted to hold on to the investment for four to five years, now it looks like I need to have longer staying power,' said a 32-year-old civil servant who wanted to be known only as Mr Lim.

He bought a two-bedroom, $1 million Bedok Residences unit about two weeks ago. 'In a way, I feel lucky that I chose a unit in a good location, which I think will be more resilient to price erosion.'

 

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Foreigners buy a third of private homes

Published on Feb 9, 2012
By Esther Teo, Property Reporter

FOREIGNERS snapped up about 9,300 private homes last year - making it a record one-third of total sales - as factors such as low interest rates and robust economic fundamentals ignited the property market.

Their buying patterns have entered new territory as well, with purchasers moving from the traditional prime districts of 9, 10 and 11 to emerging hot spots in Tampines and Pasir Ris.

The 2011 boom could be a high water mark, given that December's cooling measures added a 10 per cent stamp duty on homes bought by foreigners.


While that makes this year one of uncertainty, there is no denying the market's strength last year.

Last year's numbers, contained in a report by consultancy Savills Singapore, found that foreigners, including permanent residents (PRs), accounted for 31 per cent of the transactions - an all-time high.

It also showed that Chinese buyers were behind 28 per cent of all foreign purchases, with Malaysians next at 20 per cent, Indonesians at 18 per cent, and Indians at 12 per cent.

Comparable figures for foreigner purchases in other countries are not readily available, consultants said. Singapore's proportion might also be skewed because PRs are included in the tally.

Foreigners look beyond prime districts

Mr Alan Cheong, director of research and consultancy at Savills, noted that although the Chinese were the top buyers, Indonesians had the largest budgets and dominated city-centre deals.

'About 79 per cent of their total purchases were above $1 million, indicating that Indonesian buyers were relatively less active in purchasing small-format or 'Mickey Mouse' homes, which are typically priced below $1 million,' he added.

The new stamp duty is expected to hit the luxury segment hard as foreigners made up 43 per cent of all prime home sales, Mr Cheong noted.

'There could be a significant retreat by the Indonesians... Some mainland Chinese buyers may also shift their interest towards cheaper homes.

'Anecdotally, more mainland Chinese investors were seen scouting for alternative properties in the United States of late, while some Indonesian buyers were observed to be sniffing out bargains in Europe,' Mr Cheong said.

The impact on suburban property is likely to be less as foreigners comprised only 27 per cent of mass-market home purchases last year.

While the make-up of foreign buyers remains relatively unchanged, they are broadening their horizons when it comes to buying a home.

Typically, prime districts 9, 10 and 11 and district 15 - which includes Katong, Marine Parade and Siglap - were most sought-after by overseas buyers, but now estates like Serangoon Gardens, Punggol and Geylang have become highly popular.

Different nationalities showed varying preferences when buying, said Savills.

Mainland Chinese bought mostly suburban homes in districts 14, 15 and 16, which includes much of eastern Singapore, from Geylang, Eunos, Katong, Joo Chiat and Upper East Coast to Bedok.

They are popular for their good schools and eateries and proximity to the beach, airport and the central business district, Savills said.

But go back to 2007 and district 14, which is now top among Chinese buyers, did not even make it into the top three for Chinese buyers. The area includes Eunos, Geylang and Kembangan.

Malaysians also expanded their housing options beyond the usual addresses.

District 19 - Serangoon Gardens, Hougang and Punggol - was their most popular last year, with districts 15 and 14 next.

But four years ago, district 15 ranked first; district 19 did not even make the top three.

The growing popularity of district 19 could be due to the increasing number of new homes launched there.

Indian nationals have bought the most number of homes in district 18 - it includes Tampines, Pasir Ris and Simei - possibly due to the many Indian IT professionals working in the Changi Business Park, Savills added.

This has sent district 18 jumping from third spot in 2007 to first last year, with districts 15 and 16 in second and third place among Indian buyers.

The shifting preferences are not surprising as prime districts waned in favour last year. The 2007 property boom took place largely in the high-end markets of districts 9, 10 and 11, but it was mass-market homes in suburban areas that fuelled the hot market last year.

 

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Mum loses bid for half share of en bloc sale
She gets 10% after judge rejects claim daughter had agreed to 50% split
By K.C. Vijayan, Law Correspondent


A woman who wanted half of the proceeds of over $617,000 from the collective sale of a privatised HUDC flat co-owned with her daughter will get 10 per cent instead.

The High Court, in a judgment released on Wednesday, ruled that Madam Lim Geok Swan, 76, was entitled to about 10 per cent while the rest belonged to her daughter Lim Shook Luan, 49.

Justice Judith Prakash rejected Madam Lim's claim that when the flat was bought in 1991, both mother and daughter had agreed upon a half-share each.

In a case filled with revelations about bitter differences between the two during court hearings last April, the judge ordered the division of the sale proceeds be pro-rated based on their contributions to its purchase.

The mother had claimed she had a verbal agreement with her daughter that they were joint tenants and the sale proceeds of the Minton Rise unit would be shared equally if it was sold. She claimed her daughter reneged on this.

The privatised HUDC apartment in Hougang Street 11 was part of a collective sale in 2007. Of the $617,737 proceeds, Madam Lim had sought about $308,800.

The flat cost $280,000 when it was bought in 1991. Madam Lim argued that she had paid for her share, including more than $87,700 between 1991 and 2009 for conservancy fees, utilities and property-tax charges.

Her daughter, an accountant, argued that she had made all the mortgage payments on a $200,000 loan taken in 1991.

Madam Lim claimed she had been persuaded by her daughter to buy the property. She had to sell her three-room Housing Board flat in Ang Mo Kio so proceeds could be used for its downpayment.

She did so on an understanding that her daughter would make her an equal owner and that the latter would buy her a three-room HDB flat should she decide to keep the Minton Rise unit for herself.

At issue was whether there was an agreement between the two when the HUDC flat was bought.

Justice Prakash was not convinced there was one. 'I am satisfied that at the material time the parties had a poor relationship and were not prone to long discussions with each other,' she said.

Among other things, the daughter and two brothers were not happy that Madam Lim's business partner Png Teck Kim lived in the same flat with them.

Madam Lim became 'abusive when drunk', creating a difficult relationship with her children. She and Mr Png would drink together frequently and this led the children to dislike him, noted the judge.

Against this backdrop of frequent quarrels, Justice Prakash found Madam Lim's version of events had many inconsistencies, and she was a difficult witness, 'frequently evasive or non-responsive'.

Madam Lim had also said in her evidence that her daughter was to use her CPF money to pay the mortgage instalments for the Minton Rise flat at the time it was bought.

'(She) cannot argue that she should be taken as having contributed half the housing loan simply because she was party to the mortgage,' said Justice Prakash.

After tabulating the monies spent on various items in the run-up to the flat's purchase, totalling $379,188, Madam Lim's contribution was found to amount to 9.56 per cent while her daughter paid some 90.44 per cent. The $617,737 collective sale proceeds was ordered to be shared based on those percentages.

 

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Report property agents who pester clients

Published on Feb 13, 2012



REAL estate salesmen use telephone calls to reach out to prospective clients ('Helpless against property brokers' by Ms Li Zhenyi; Feb 3).

When making such calls, they are expected to comply with the practice guidelines on ethical advertising issued by the Council for Estate Agencies (CEA).

They must also not apply unreasonable or improper pressure to solicit clients. If a salesman repeatedly calls a consumer despite being told not to do so, the consumer can report the person to CEA for investigation. Those who flout the guidelines may be subject to disciplinary actions.

The Government is planning to introduce a Data Protection Bill, which includes a national Do-Not-Call registry to better safeguard consumers' personal data. Once the Bill is effected, estate agents and other vendors will not be allowed to call those who are registered in the national registry.

Yeap Soon Teck

Deputy Director (Licensing)

Council for Estate Agencies

 

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Industrial parks now house churches, tuition centres
Lower rent, proximity to public transport networks draw non-industrial tenants

By Cheryl Lim
THERE is a quiet transformation taking place in the industrial real estate sector, with an increasingly diverse array of organisations making use of space once reserved for traditional manufacturers.
Organisations such as churches and tuition centres are rubbing shoulders with industrial tenants like furniture makers and warehouse operators in places like Woodlands Industrial Park, Jalan Pemimpin and Alexandra Industrial Estate.
Look at the signboards at one of the blocks at Jalan Pemimpin's Clarus Centre and you will find five religious groups, including Hope Sanctuary, Trinity Community Centre and Victory Harvest Church, and tuition centre TWIG listed as tenants.
It is similar at Henderson Industrial Park, with non-industrial businesses like outfitter Costume City, travel agency Star Holiday Mart and Acts Baptist Church housed across both wings of Block 203.
Offices are also springing up as businesses cut operating costs by taking advantage of the comparatively lower rents industrial landlords charge.
Buildings are being carved into puny office spaces, often of 1,000 sq ft or less.
Leases for industrial space can be as little as $2 per sq ft (psf) or less at older industrial buildings, a bargain compared with average commercial rents of around $9 psf.
Consultants told The Straits Times that changes in the industrial tenant mix are mainly due to the grey area that exists within the rules governing the use of industrial premises.
Urban Redevelopment Authority (URA) guidelines stipulate that space zoned industrial is primarily meant for industrial or warehouse use.
That can include manufacturing, production, workshop or storage and certain types of computer-related businesses.
In an e-mail reply to The Straits Times, a URA spokesman said supporting uses like childcare centres, showrooms and staff canteens can also be allowed.
But property experts said these guidelines do not clearly define which businesses are allowed to operate in industrial buildings, leaving the rules open to various interpretations.
Market observers also noted that the rising number of commercial tenants moving into industrial estates could hurt industrialists.
'Rent has traditionally been cheap to help industrialists and to encourage Singapore's manufacturing sector. However, these businesses are already facing tough times due to the economic uncertainty,' said one analyst.
'The strong interest from non-industrial tenants has contributed towards the increase in industrial rents. These two factors have put a huge squeeze on the end users of industrial space, which may lead to decreased profits for them.'
However, other property consultants said maintaining the grey area within the industrial rules benefits smaller businesses and start-ups.
Mr Nicholas Mak, head of research at SLP International, said: 'Small and medium-sized enterprises (SMEs) which may not have the financial muscle to move into commercial space often seek out industrial spaces when they are first starting out.
'Tighter rules could dissuade aspiring businessmen and dent the SME sector significantly.'
Another factor driving the business migration is the proximity to public transport networks.
Newer industrial buildings like Oxley BizHub in Ubi and even older buildings in established estates such as Jalan Pemimpin are within walking distance of MRT stations.
One tenant, an owner of a tuition centre in an industrial estate, who gave his name only as Mr Sim, said that while the low rent was one factor that attracted him to set up a branch within the estate, it was other factors like nearby schools and transport links that had him sold on the space.
'I had looked at other places like North Bridge Centre and spaces in the Bugis neighbourhood, but I finally settled on this location because it is close to my students' schools and to the MRT station,' he said.
Landlords noted that while they are willing to comply with the rules, the changing characteristics of the industrial market are making it difficult for them to do so, especially those managing older buildings.
Mr Chuang, the business manager of an industrial building within the Jalan Pemimpin estate, who declined to give his full name, explained that renting out larger spaces is a problem for older buildings like his.
'Our building was constructed as a factory in the mid-1970s; there are no loading bays and the floors are not optimised for warehousing capabilities,' he added.
'Tenants nowadays also want a certain type of glamour and luxury in the buildings they rent, so they avoid older structures.'
He noted that he normally gets one inquiry a year for larger spaces measuring 20,000 sq ft or more. Requests for those less than 1,000 sq ft are more common, with four to five calls a month.
There are no clear restrictions on sub-dividing space in older buildings, but the URA noted that non-industrial uses are generally not allowed and it would investigate unauthorised operations.
A URA spokesman added that a person or organisation using the space for unauthorised activity will be given time to stop.
If such activities continue, those found responsible may be fined up to $200,000 and jailed for up to 12 months.
cherlim@sph.com.sg