Category Archives: Office / Retail Space

Redeveloped Funan mall to be completed in 2019

Funan DigitaLife Mall, which closed this July, will undergo three years of redevelopment works, according to CapitaLand Mall Trust Management on Friday (Jul 22).

This is to enhance the site’s attractiveness as a lifestyle destination in the revitalised Civic and Cultural District in Singapore, according to its press release.

Slated to be completed in the fourth quarter of 2019, the new integrated development will comprise retail, office and serviced residence components measuring approximately 887,000 square feet in total gross floor area – almost double its current size, it said.

CapitaLand Mall Trust Management, the manager of CapitaLand Mall Trust, also announced that CMT’s distributable income for the first half of the year was S$193.9 million, a 3.7 per cent increase over the S$186.9 million for the same period last year.

Distribution per unit (DPU) for the same period was 5.47 cents, a 1.5 per cent increase over the DPU of 5.39 cents for the same period last year, it added.

For the Apr 1 to Jun 30 period, the distributable income was S$97.1 million, a 3.3 per cent increase over the S$94 million for the same period last year. DPU of 2.74 cents for the second quarter was 1.1 per cent higher than the 2.71 cents for the same quarter last year.

Source : Channel NewsAsia – 22 Jul 2016

Katong Shopping Centre put up for collective sale for a third time

Katong Shopping Centre has been put up for collective sale for the third time.

The reserve price is set at S$630 million. This translates to a land price of S$2,248 per square foot per plot ratio.

The mall, which contains 425 units, sits on a freehold plot of nearly 87,000 square feet. Situated along Mountbatten Road, it houses among others, offices, employment agencies, printing and tailoring services shops, and eateries.

According to marketing agent Cushman & Wakefield, owners controlling at least 80 per cent of the share value and total area have agreed to the proposed sale.

The mall launched its first attempt at an en bloc sale in January 2010 for S$445 million. The deal fell through, and a second attempt was launched in June 2014.

Katong Shopping Centre was Singapore’s first air-conditioned mall when it opened its doors in 1973.

Source : Channel NewsAsia – 15 Jun 2016

Clarity in property cooling measures would help retailers, says Courts CEO

As retail players in the Republic recalibrate their strategies to stay afloat amid turbulent times, more clarity from the Government over property cooling measures is needed, said Mr Terry O’Connor, CEO of mainboard-listed electrical, IT and furniture retailer Courts Asia.

“We need some certainty in terms of what the policies are going to be and hope to see some long-term direction in the residential property sector soon. The worst thing is to label something as temporary as it gives nobody any directions. The future of the retail industry will be better when the needs of property owners, retailers and government agencies are completely aligned,” said Mr O’Connor in an interview with TODAY. As a leading retailer of household appliances, consumer electronics and furniture, Courts’ fortunes are closely tied to the health of the housing market.

The Government has imposed multiple rounds of property cooling measures and loan curbs since 2009 to tame the runaway housing market. When it announced the new Additional Buyer’s Stamp Duty and loan rules in 2013, the Government said the measures would be temporary and will be reviewed depending on market conditions.

Minister for National Development Lawrence Wong in April reiterated the official stance not to roll back the measures, saying it was “too early to declare victory”. Private home prices in Singapore surged more than 60 per cent after the global financial crisis in 2009 to peak in the third quarter of 2013. Since then, prices have declined 9.1 per cent over 10 consecutive quarters, according to Urban Redevelopment Authority data.

The Government also needs to pay more attention to the zoning of land for retail use, said Mr O’Connor. “There is no special place for flagship stores and there (is) lots of space for smaller stores. That is low productivity because of poor zoning,” he said.

Retailers will be more efficient if areas are marked specifically for high-end, mid-tier or boutique outlets, as is the case in the United States and several other developed countries. Tighter labour restrictions here have also resulted in hiring challenges and added to costs, he added.

While the economic outlook in Singapore, which accounts for nearly two-thirds of the company’s overall turnover, remains soft in the short term, Courts anticipates demand for household appliances and furniture to sustain over the medium term. The firm reported last month a 16.8 per cent growth in annual net profit to S$20.3 million for the fiscal year ended March 31, boosted by its efforts to cut costs and drive productivity.

In its latest financial results statement, Courts noted that the Housing and Development Board (HDB) plans to launch a total of 18,000 build-to-order flats for 2016. It added that the resale markets for public and private non-landed housing have also been encouraging, with the volume of HDB resale flats and private home sales increasing 10.3 and 17.6 per cent, respectively, in April from March.

Looking ahead, Courts plans to optimise retail floor space, pruning it to about 80 per cent of the current area on average, depending mainly on its sales mix as it tilts towards e-commerce. The retailer operates a chain of 15 outlets in Singapore focusing on the heartland market.

“Our store sizes overall will shrink for greater efficiency,” said Mr O’Connor. “This is largely driven by two factors: Our focus on e-commerce and the miniaturisation of the products. It is also about right-sizing the store for the catchment. In the future, our stores will be 80 to 85 per cent of our current size … I would not open a store in the remote part of the island without the cluster effect, or a megastore in the Central Business District. It is just not in the natural order of the way things are moving.”

The industry, meanwhile, has slipped into a relatively quiet zone in the product life cycle, throwing up challenges for retailers given the lack of breakthrough products.

On a brighter note, Mr O’Connor said weaker rentals mean Courts can pass on some cost savings to consumers and price its products more competitively. Besides price cuts, Courts will be making investments to enhance the consumer shopping experience.

“These are turbulent times,” he said. “It is difficult both at the macro and industry level. We have sharpened our prices, innovated our ranges and turned the breadth of our product offerings into our key strength. It is indeed a good time to invest.

“For the first time in many years, it is now a tenants’ market. As much as I want to see policy shifting and stimulus at the national level to help demand, the demand might sort itself out in the sense that landlords are waking up to a different world. We have re-negotiated five of the stores on absolute rental reductions for the next three years,” he added.

While the emergence of e-commerce has disrupted the retail sector, the white-goods sector remains relatively unaffected.

“In relative terms, despite the hype around it, the online penetration of large and bulky, touch-and-feel type products is low versus those which people are more sure (of) in terms of product specification and usage. The opportunity for us is in an omni-channel strategy with stores as a collective.”

About 50 per cent of the retailer’s customers who buy online pick up the products in-store, suggesting that they do not object to store visits but object to wasted store visits, he noted.

Courts also operates 64 stores in Malaysia and plans to grow this to 70 stores this year, said Mr O’Connor. He added that its Singapore expansion strategy is dependent on the availability of “right space at (the) right price”.

Source: Today – 6 June 2016

Qatar sovereign wealth fund to buy Asia Square Tower 1 for record S$3.4b

BlackRock has agreed to sell a 43-storey office building in Singapore to Qatar Investment Authority, a sovereign wealth fund, for S$3.4 billion, in what the US firm said was the largest-ever single-tower real estate deal in the Asia-Pacific region.

Asia Square Tower 1, located along Marina View at Marina Bay, has more than 1.25 million square feet of net lettable area and has Citigroup as its anchor tenant, BlackRock and Qatar Investment Authority said in a joint statement.

BlackRock was advised by real estate consultant firms JLL and CBRE.

“Following this flagship transaction, we expect there will be increasing investor interest in Singapore prime office stock in the coming months,” Greg Hyland, head of capital markets Singapore at JLL, said in a separate statement.

The sale comes as vacancy rates in Singapore’s office property sector are nearing their highest level in almost a decade, with the supply of commercial space set to increase amid slowing economic growth.

Developers are set to add 4 million square feet of office space in Singapore this year and another 1.4 million next year, said Nicholas Mak, executive director at SLP International Property Consultants.

BlackRock also owns a second tower in the Asia Square development.

Source : Channel NewsAsia – 6 Jun 2016