30% slump in private home sales: report

Posted on 18 Oct 2014 | Comments Off on 30% slump in private home sales: report

Sales of private homes in Singapore plummeted by over 30 percent in Q3 2014 from the previous quarter to around 2,800 to 2,900 units, according to a DTZ report.

The volume of transactions recorded last quarter is similar to the first three months of the year.

New private home sales were relatively weak in Q3, with developers moving about 1,500 units or 52 percent of all transactions in the period. It was a different story in 2013 whereby primary market sales averaged 65 percent of total sales in each quarter.

A major factor was the lack of any new launches in August coinciding with the Hungry Ghost Festival.

But there were still three major launches in the quarter, with City Gate in July and Highline Residences and 70 Saint Patrick’s in September.

City Gate and Highline Residences reported take-up rates of more than 70 percent and 80 percent of units launched respectively. Meanwhile, the freehold 70 Saint Patrick’s saw more than half of all units sold over the first weekend of its launch, with recently announced plans for the Thomson-East Coast MRT Line contributing to its popularity.

DTZ stated that strong demand for these city-fringe projects came despite the slew of cooling measures and relatively high prices. The average price of 70 Saint Patrick’s was in the range of $1,630 psf, while City Gate averaged over $1,800 psf and Highline Residences averaged $1,900 psf.

“Instead of lowering prices, some developers are finding ways to add more value for buyers. For instance, by providing a variety of personalised services within residences or selling fully-furnished units with upscale interior fittings. These added features are hoped to help sustain sales at certain prices,” said DTZ.

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Posted in Property Market / Real Estate

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Guide to help local firms, landlords negotiate tenancies

Posted on 11 Oct 2014 | Comments Off on Guide to help local firms, landlords negotiate tenancies

ONE of the country’s leading business groups is drafting a framework to help local firms negotiate fairer tenancy agreements as a way to offset the crippling rent rises many face when they renew leases.

The framework being drawn up by the Singapore Business Federation (SBF) will spell out the general elements of a fair agreement, including a clear basis for rent reviews and more transparency of tenancy terms.

It is intended to be a voluntary guide but both commercial landlords and government agencies have been engaged to be “pioneering adapters” of it, said SBF chief operating officer Victor Tay yesterday.

The framework will also help tenants negotiate fairer gross turnover schemes.

These allow landlords to collect a percentage of a tenant’s gross turnover on top of a base rent and are used by many mall owners.

The SBF will also publish a database of commercial rents by the end of the year with the help of government agencies as a move to increase transparency.

Many small and medium-sized enterprises (SMEs) have long complained about the toll taken on their businesses by ever-rising rents.

Mr Low Cheong Kee, the founder of local hardware chain Home-Fix, is often confronted with double-digit rent increases when he renews shop leases every three years or so.

He is not alone: Rising rents are a huge drag for many SMEs in the retail and food sectors. Rents can comprise 30 per cent of total costs among many retailers, said the SBF.

Mr Low said he backs the SBF initiative because “tenants are in a way being held hostage” to rent increases when their lease is up and they have already “committed to renovation, or taken two to three years of tenancy to build up a relationship with customers”.

But Mr Jimmy Fong, chief executive of Apple reseller chain Epicentre, feels the framework lacks bite as it will not be mandatory.

“Landlords are big boys. You take it or leave it. And if most contracts are going to be the same, how can you work out a deal?” he added.

Mr Teo Ser Luck, Minister of State for Trade and Industry, commended the SBF’s initiative when he spoke to more than 300 participants at the annual SME Convention at Suntec convention centre yesterday.

“We want to make sure that… tenants aren’t always being cornered and landlords aren’t always having the upper hand,” he said.

Mr Teo later told the media that “the SBF is also not over-protective of the tenants, so it’s fair on both sides”.

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Posted in Office / Retail / Industrial

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