Category Archives: shopping

Lower than expected bids at tender for Yishun site

A HOUSING Board tender for a mixed-use commercial/residential site at Yishun Ave 4 which closed on Tuesday garnered a “muted” turnout from just five bidders.

This fell short of consultants’ earlier predicted six, to as many as 18 bidders by the most bullish of the lot.

Northern Resi and Northern Retail, both units of listed construction engineering group BBR Holdings, beat four others to offer the highest price of S$185.09 million, which translates to S$629.24 per square foot per plot ratio (psf ppr).

Again, this was below even the floor of consultants’ predictions of at least S$650 psf ppr for the highest bid.

The Yishun plot, with a gross floor area of about 27,327 square metres, is the first of two selected government land sale sites to adopt a new building method called prefabricated prefinished volumetric construction (PPVC). It has to meet a certain level of prefabrication under new government rules for the built sector.

Two Koh Brothers units, KBD Ventures and Changi Properties, put in a very close second highest bid of S$181.6 million (S$617.37 psf ppr), only 1.9 per cent less than the highest tenderer.

R’ST Research director Ong Kah Seng thus called the top bid a “chance occurrence”. When interest is high in a site, bidders would bid aggressively, resulting in a wide margin between the first and second bids, but there was notably no outlying top bid in this tender, he said.

Sim Lian (Focus) Pte Ltd put in the third highest bid of S$168 million (S$571.14 psf ppr). The fourth and fifth bidders were Wee Hur Development and KSH Land Development, respectively.

Desmond Sim, CBRE research head for South-east Asia, said it was not surprising that the tender participants were developers with a construction arm, given the site’s mandatory use of PPVC technology. “Such developers have the advantage of being able to control construction costs better, transferring potential savings into their profit margins,” he said.

But the higher construction cost using the PPVC method – which involves assembling whole rooms or apartment units complete with internal fixtures off-site, and installing them on-site Lego-style – may also have been priced into the subdued bids, SLP International executive director Nicholas Mak said.

“In a buoyant property market, the developer may be able to pass on the higher construction costs to the buyers. But this could be difficult in the current market,” he said. The alternative would thus be for the developer to lower its own land costs.

Ong Teck Hui, national research director at JLL, said the bidders also likely also took into account retail and residential competition in the vicinity.

Northpoint City, an integrated development which includes the largest mall in the north, will be completed in 2018, while Junction Nine at Yishun Ave 9 will be ready in mid-2017. There are also some 920 units for sale at Northpark Residences, and 660 units for sale at Symphony suites.

Chia Siew Chuin, director of research & advisory at Colliers, cited the requirement for the commercial component of the development to be held under a single strata lot as another reason for the low bids.

“This disallows any strata subdivision of the commercial component during the lease term, which could have prompted a more cautious bidding strategy from developers due to the more restrictive investment exit options available,” she said.

The expected breakeven price for the residential component is estimated to be S$950 to S$1,000 psf. Its selling price could range from S$1,050 to S$1,150 psf, depending on the state of the market when it launches, she said.

The retail component could also achieve monthly gross rents of S$6 to S$12 psf, she added.

http://www.btinvest.com.sg/property/local/lower-than-expected-bids-at-tender-for-yishun-mixed-site/

Changi’s Jewel: Not just another mall

What started as an urgent but mundane need to expand Terminal 1 will now end in a Jewel – Changi Airport’s hoped-for iconic centrepiece to wow travellers and enhance the air hub’s attractiveness when completed by 2018.

Merely to expand the terminal would have been a wasted opportunity, said the chief executive officer of Changi Airport Group, Mr Lee Seow Hiang, at the ground-breaking for the retail cum airport complex yesterday.

“To address the capacity bottleneck, we could have just pushed out T1 and built a multi-storey carpark over it. But we felt we could do so much more. We had a chance, for the first time, to hub the three terminals together.”

And so the decision was made to raze T1’s open-air carpark and construct in its place a five-storey-high complex with five basement levels which would link all three passenger terminals.

T1 would also be upgraded and expanded in the $1.7 billion project.

Explaining at length, for the first time, the rationale and thinking behind the project, Mr Lee, who is also chairman of Jewel Changi Airport Development, a joint venture between Changi Airport Group and CapitaMalls Asia, admitted questions had been asked about the project.

Was this a vanity showpiece? In the light of manpower constraints in Singapore, why build another retail mall? Was the airport getting distracted from its core business of aviation?

“This question of purpose is not a trivial one,” he said, stressing that the first driving force behind the project was the growing capacity constraints at T1.

– See more at: http://news.asiaone.com/news/singapore/changis-jewel-not-just-another-mall#sthash.4i6obKtr.dpuf

OneKM mall opens today at Tanjong Katong

UOL Group, which is officially opening its newest mall OneKM this Sunday, said it has garnered close to 93 per cent of pre-commitment lease for the mall at a time when retailers and restaurateurs are facing a challenging time given a manpower crunch and rising cost pressures.

More than 70 per cent of shops are open now. The mall is expected to be fully operating next month. According to UOL, this is the largest shopping mall in the up-and-coming decentralised commercial hub in Paya Lebar.

The addition of the mall to the group’s portfolio provides another avenue of recurring income and will raise its retail portfolio by 50 per cent in terms of net lettable area.

UOL Group president (property) Liam Wee Sin said he sees the mall as a “catalyst” in Paya Lebar Central amid the lack of new retail supply in the east and expects it “to replicate the success” of the group’s niche shopping malls in Novena, namely United Square and Velocity@Novena Square.

OneKM is also expected to enjoy strong catchment of residents in the 244-unit Katong Regency, the sold-out condo project on top of the mall, when the condo is completed.

Sitting on a freehold site that previously housed the Lion City Hotel and the adjoining Hollywood Theatre, OneKM – located just one kilometre away from the Paya Lebar MRT station – has a net lettable area of more than 200,000 sq ft and more than 150 shops.

“We worked closely with our tenants to see how we can improve productivity to overcome the manpower issue facing local retailers and restaurateurs,” Mr Liam said. This has led to the introduction of new concepts that are less labour intensive, particularly the first centralised kitchen for three restaurants within a shopping mall.

Home-grown Chinese restaurant chain The Paradise Group is opening a “Paradise Dynasty” outlet and two concept eateries “Para Thai” and “Beauty in The Pot”, which serve Thai food and hot pots respectively.

Paradise Group CEO Eldwin Chua told reporters that having a centralised kitchen helped reduce its manpower needs for the three restaurants from 45 to 28 staff.

Mr Liam pointed out that some 30 per cent of the shop space in OneKM is occupied by F&B outlets, 60 per cent by specialty retail and 10 per cent by enrichment schools.

The mall counts Cold Storage and Food Junction as its anchor tenants, which took up 15 per cent of its space. There is also a mix of international brands like Uniqlo, Esprit and Adidas as well as niche local brands. More than half the tenants at OneKM are existing tenants of UOL’s malls.

Meanwhile, the group is set to launch a nearly 800-unit condo project at Upper Paya Lebar in the first quarter of next year, followed by another condo project launch on the site along Prince Charles Crescent in the second half of next year.

Mr Liam said the group is under no pressure to cut prices at Riverbank@Fernvale in Sengkang to move sales ahead of the two upcoming launches next year.

Seventy Saint Patrick and Riverbank@Fernvale, its two condo projects launched this year, are 72 per cent and 50 per cent sold respectively, while Thomson Three that was launched in September last year is 96 per cent sold.