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Balestier factory en bloc after rezoning

Posted on 19 Nov 2009 | Comments Off

The owners of a terrace factory building off Balestier Road have put up their property for an en bloc sale following the Urban Redevelopment Authority’s (URA) decision in 2008 to consider rezoning the site for residential use upon redevelopment.

The freehold property is being marketed by Credo Real Estate with a price tag in the region of $27 million to $30 million.

About $18.7 million is payable as development charge (DC) for the rezoning of the site. After factoring the DC payable, the estimated price tag reflects a per square foot per plot ratio (psf ppr) price of $586 psf ppr to $625 psf ppr. Breakeven for the project is at about $950 psf to $1,000 psf.

The three-storey strata-titled development at 6 Jalan Ampas comprises four terrace factory units built in the 1980s. They belong to four unrelated owners. The building sits on a corner rectangular-shaped land measuring just over 2,586 square metres. Tan Hong Boon, Credo’s deputy managing director, said that the URA issued a circular in July 2008 to say that it had completed a review on a cluster of 15 industrial buildings at Jalan Ampas/Lorong Ampas, and was prepared to consider rezoning the properties to residential use at a gross plot ratio of 2.8 upon redevelopment. Based on this rezoning, the site may be redeveloped into a high-rise residential development comprising some 100 apartments with an average size of 780 square feet.

The tender for the launch closes at 3pm on Dec 10. Credo said that the site is about 50m from Shaw Plaza, a shopping mall that houses a major supermarket, a multiplex cinema, banks and fast food eateries such as McDonald’s.

A new development in the same vicinity, Prestige Heights, was recently launched at a median sale price of $1,322 psf.

Source : Business Times – 19 Nov 2009

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Posted in En-bloc / Collective Sales, Office / Retail / Industrial

Tagged Balestier Road, Collective Sales, Enbloc, Jalan Ampas, Singapore Industrial

High-spec space losing favour due to low office rents

Posted on 14 Nov 2009 | Comments Off

HIGH-spec industrial space has lost favour with tenants in the past few months. As office rents plunged, some companies have gone back to leasing commercial space, says Colliers International.

The move has, in turn, driven down rents for high-spec space. According to the property consultancy, the average monthly gross rent of high-spec space fell 14.1 per cent to $2.93 per square foot at end-September from $3.41 psf at end-March.

The lower rents reflect stiff competition for tenants, Colliers said, adding that some companies had taken advantage of the sharp drop in office rents to relocate to office premises.

This marks a reversal of the trend that started in 2007. As office rents soared on the back of a booming economy, more firms moved away from the central business district to cheaper high-spec industrial space.

But office rents have plummeted amid the economic slowdown. CB Richard Ellis said in September that monthly prime office rents averaged $7.50 psf in the third quarter, dropping 12.8 per cent from the previous quarter. They have fallen 53.4 per cent from their peak in Q3 last year.

Colliers said that on top of shrinking demand, a large supply of high-spec space is expected to appear next year, which has also contributed to falling rents.

In contrast, rents for some factories and warehouses have been relatively stable. Colliers said that from end-March to end-September, the average monthly gross rent of single-user factories in central Singapore stayed firm at $1.30 psf, while that of warehouses in eastern Singapore held up at $1.20 psf.

And on a positive note, Colliers said that there has been a noticeable pick-up in sales of industrial space. These involved mainly private investors, owner-occupiers and domestic companies.

While industrial space markets across the Asia-Pacific appear to be bottoming out, Colliers remains cautious in its outlook. It believes that these markets could stay subdued in the next 12 months, given that the global economy is still recovering and excess manufacturing capacity still exists.

Colliers research and advisory director Tay Huey Ying expects rents and capital values of factories and warehouses in Singapore to rise by up to 5 per cent in the next 12 months ‘on the back of the expected improvement in the economy and the manufacturing sector, as well as more optimistic business sentiment’.

Source : Business Times – 12 Nov 2009