A rising tide, but will it lift all boats?

This week in Property

• Buyers sweep up almost 1,500 new homes at latest weekend launches
• The F&B sector’s woes will test the resilience of prime suburban malls  
• Expert views on Singapore real estate landscape   
• Deals done and corporate developments 

A confidence-boosting spurt?

The big push to get six new residential projects out the door this month brought about a burst of buying, at a volume not seen in years. The latest three condos to be launched this past weekend chalked up sales of almost 1,500 units in total, Goh Ruoxue and I report. The spurt will lift new sales in November to an 11-year high for monthly sales. These added to the momentum from earlier this month when Chuan Park started the ball rolling as it sold 76 per cent of its 916 units.   

Each of the latest three projects launched had their own distinct pull factors. Emerald of Katong, a much anticipated new project in the ever-popular East Coast with a District 15 address, cleared 99 per cent of its 846 units at an average of close to S$2,620 per square foot (psf). 

Nava Grove, in the Pine Grove neighbourhood on the edge of the Holland area, did better than many expected. Described by agents as “competitively priced” for the location, it sold 65 per cent of its 552 units at S$2,448 psf on average. It also outperformed its neighbour project Pinetree Hill, first marketed last year, in terms of launch sales. 

Novo Place, an executive condo (EC) in the new estate of Tengah, scored plus points for its proximity to an MRT station. It sold 57 per cent of 504 units in its initial release to first-timers at an average of S$1,654 psf, a price that marks a new benchmark for ECs. The 30 per cent quota allocated for second-timers is already fully subscribed, and agents expect that the second release will also sell well. 

The question on our minds now is whether buying momentum will continue and support an overall pick-up in the residential market, or if the weekend spurt was driven by a Fomo streak. Or if, indeed, the fear of missing out will keep Singapore’s private home prices high. Already, some other new projects near the latest launches are seeing spillover benefits from the weekend rush.

Eyes are on the next slate of projects to be released in the first half of next year. These include The Orie in Toa Payoh, Aurea in the Golden Mile complex redevelopment, Elta in Clementi, W Residences Singapore - Marina View, and Aurelle of Tampines EC. 

The other Big If is whether the market’s new-found optimism will translate to developers bidding more confidently for land, and what this will mean for prices ahead. Watch for our story tonight on the tender closing for a Faber Walk site, good for 400 units. 

In case you missed it, here’s what real estate experts think about Singapore’s property landscape. They share their views, insights and deep dive analyses across the residential and commercial sectors in our latest edition of BT Property Week 2024. 

Corporate moves

Keppel DC Reit plans to acquire stakes in two hyperscale data centres in Singapore from a Keppel joint venture for S$1.4 billion. The acquisition will be “immediately DPU-accretive”, the Reit’s manager said, and will expand assets under management by 36 per cent to S$5.2 billion. The S$1.4 billion sum includes S$350 million to be paid by the Reit for a lease extension for a further term of 10 years if the option is exercised. The two “AI-ready” assets sit in the Keppel Data Centre Campus at Genting Lane. The bulk of the outlay will come out of a S$1 billion equity fund-raising announced by Keppel DC Reit on the same day.

GIC sold its 50 per cent stake in a UK mall to a London-based Reit at a £164 million loss, amid a retail downturn. The sovereign wealth fund exited its investment, made in 2007 at £299 million, for £135 million (S$231.5 million). The deal follows GIC’s earlier divestment of another UK shopping centre investment in June. It sold its 17.5 per cent stake in Bluewater Shopping Centre in Kent to property developer Land Securities Group for £120 million – a more than 60 per cent discount to the £318 million it paid in 2005. 

At home, Singapore’s retail sector is seeing challenging times. Latest appraised values of “hero” mall properties held by suburban retail primo Frasers Centrepoint Trust (FCT) are holding up well, and the Reit lately posted year-on-year increases in both revenue and net income. Much of this can be attributed to its F&B tenants, who contributed 37.6 per cent of total gross rental revenue for FCT as at end-September 2024, Leslie Yee writes. This is double what F&B revenue contributed in 2005. 

But the F&B sector’s well-documented woes could get worse, and this will test the resilience of Singapore’s suburban malls, Leslie argues in The Level Ground. Intensifying competition in the arena while consumers may be cutting back spending could lead to a shake-out in F&B, and mall landlords could see falling demand from the sector. 

Frasers Property posted a net profit of S$148.9 million for its second half-year, reversing the year-ago period’s losses of S$52.6 million. Revenue for H2 2024 rose 33.2 per cent to S$2.7 billion. For the full year, net profit rang in 19.2 per cent higher at S$206.3 million, while revenue was up 6.8 per cent to S$4.2 billion. 

At its earnings briefing, group chief executive Panote Sirivadhanabhakdi said Frasers would focus on increasing its development exposure in the residential segment. It will be looking at more opportunities in Australia, Singapore and Thailand, but sounded a more cautious note on entry costs and margins in Singapore. CEO Soon Su Lin cited recent successful launches, saying the market remained “very resilient” with “good demand from residential buyers”. 

The company will redevelop its Robertson Walk assets, sitting on 999-year leasehold land, into a luxury residential property with 348 units. The complex will include some retail space for dining and entertainment. Frasers is teaming up with Japanese developer Sekisui House for the project, slated to launch in 2025 and complete by the end of 2028. 

Tuan Sing announced plans to create a “dynamic luxury retail and food and beverage precinct” in a major mixed-use redevelopment of its Melbourne assets on Collins Street. The property currently houses Tuan Sing’s 550-room Grand Hyatt Hotel, which will continue to operate. Tuan Sing is moving to expand its hospitality business, and in May acquired the newly completed Fraser Residence River Promenade for S$140.9 million. The Robertson Quay property, rebuilt by Frasers Property, houses a four-storey serviced apartment project with 72 units, three conservation warehouses and 47 car park lots at Jiak Kim Street.

CapitaLand Ascendas Reit has bought a site in the US on which it will build a new logistics property, for a total investment cost of S$94.8 million. This is Clar’s first development in the US, in line with the Reit’s strategy to expand its logistics portfolio and tap a growing market, it said. 

Will the recent spurt in home buying continue or could it be short-lived? Let me know your thoughts at mich@sph.com.sg

Top reads this week

• From ‘cowboy’ times to cooling measures: real estate veteran Chia Ngiang Hong on Singapore’s market
• The F&B sector’s woes could undermine the resilience of suburban malls
• Buyers sweep up almost 1,500 new homes in 3 weekend launches; Emerald of Katong 99% sold
• LHN making the most of shared spaces
• Johor-Singapore Special Economic Zone: The countdown begins