Singapore’s Business Park Market Is Currently Holding Steady

»Posted by on Feb 22, 2017 in Commercial News | Comments Off on Singapore’s Business Park Market Is Currently Holding Steady

Although Singapore is suffering from soft demand conditions, its business park office was still relatively steady during the third quarter of 2016, with vacancy dropping from 13.8% to 12.5%.

That’s the word from the CBRE.

Many medical and technology-related firms are helping with the leasing activity – companies like APACMed and Japan AMED along with Service Source and Pfizer at the Mapletree Business City II.

Business Pk

According to CBRE, there has been a stable level of inquiry about the location, although some deals were already in the works from various industries – transportation, communications, and banking.

When looking at it from a supply angle, the CBRE said pending future space is limited as the three business park projects are noted as being constructed-to-suit developments. In August, JTC set up a land site via a Concept and Price Tender that would offer some consistency in the market. The site, which has a 2018 completion goal, will offer nearly 361,000 sq. ft. of business park space in the main floor area.

Since there were no new buildings occupying the market in the third quarters, landlords had very little pressure on steady business park rents. The only exceptions were the International Business Park’s older developments, which saw a slight decline. CBRE said this was potentially due to the extremely high vacancy rate of the submarket.

Looking at the future, the CBRE believes interest in the recently completed projects will increase the total occupancy, but the process for this to happen will be steady. This may be due to the weak business feelings and completion of lower office rents.

It said the rents would likely be capped because of the tightening premiums to reorganized office rents and it’s anticipated that there will be pressure on older business parks’ rents.

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Grade A Office Buildings About To Suffer Major Tenant Loss With Openings Of Grade A Plus Buildings

»Posted by on Feb 21, 2017 in Commercial News | Comments Off on Grade A Office Buildings About To Suffer Major Tenant Loss With Openings Of Grade A Plus Buildings

This news was first reported in The Business Times

Older Grade A office buildings are facing a rent and occupancy shortage with more companies moving to new spaces.

This is resulting in the prime office market to experience the “two-tiered performance as Grade A offices are suffering from steep drops in rents than “Grade A-Plus” buildings in the next several quarters.  And, according to Knight Frank Projects, a property consulting firm, average office rents are projected to continue dropping until they finally hit bottom in 2018.

Business Graph with arrow showing profits and gains

Business Graph with arrow showing profits and gains

Grade A-Plus offices are in reference to new buildings that have better specs and are located in a prime office market.

Market observers, noting the office rents are dropping and especially ahead of the upcoming project completions, are wondering when the bottom is going to happen.

Some analysts believe the bottom will be here sooner rather than later.  Religare and DBS Group Research feel it’ll happen in the last half of 2017. Maybank Kim Eng feels it’ll take place in the fourth quarter of 2017.

According to Calvin Yeo, head of Knight Frank, rivalry for occupants will be extensive, especially for buildings looking to fill vacancies from tenants moving to quality locations in the next few quarters. He said buildings that have tremendous net lettable area that are up for lease renewal – currently and until 2018 – are going to be facing tenant loss threats.

In the third quarter, Grade A Office in Raffles Place/Marina Bay district saw a drop 2.9% in its monthly gross effective rents. On the CBD fringe, Grade A office space in the Marina Centre and Suntec City location experienced a a 2.7% decline in rents.

New office projects in the last few quarters have gone after tenants at the expense of these older buildings that will be losing tenants as they move into the new buildings.

In The Business Times, there was an onslaught of pre-lease commitments for the new projects. For instance:

• ING, which has 70,000 sq. ft. of space Republic Plaza, will move into a similar space at the Guoco Tower when it’s complete.
• Itochu Singapore, which is presently at the Republic Plaza, will lease 28,000 sq. ft. at the Guoco Tower.
• Dentsu Aegis Network, a Communications Agency, does business at 77 Robinson Road with member firms in various locations. The company is completing a deal with Guoco Tower for 90,000 sq. ft.
• Palo Alto Networks, a Cybersecurity firm, is getting a space upgrade when it comes into the Guoco Tower from Millennia Towers – from 20,000 sq. ft. to 36,000 sq. ft.

Yeo said there would be more and more vacancies at these Grade A buildings with tenants relocating, which puts pressure on the rents.

Knight Frank released its skyscraper index, which keeps an eye on the rental performance of 30 or more stories commercial buildings. It noted that the key office rents of the upper floors in Singapore skyscrapers are the world’s eighth costliest.

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30-Year Fixed Mortgage Rate Dropped to 4.2% in USA

»Posted by on Feb 21, 2017 in Finance News | Comments Off on 30-Year Fixed Mortgage Rate Dropped to 4.2% in USA

Homebuyers who want a 30-year fixed rate mortgage hit 4.20 percent, down from 4.32 percent just last month.

It’s the first drop in the rate since the November presidential elections. Possible tax and spending cuts by Donald Trump as well as a Federal Reserve rate hike send the interest rate on the nation’s 10-year Treasury note rose after Nov. 8. These notes are a target for all kinds of credit such as mortgages. When the rates are higher, it’s more expensive for people to borrow money.

The buildup in the bond market appears to have waned as the bond yields have dropped.

Bankrate Chief Financial Analyst Greg McBride said the increase is based on the excitement that there will be a fiscal stimulus and lead to a quicker economic growth.  However, even if there is a fiscal stimulus, the money may not work for the 2017 economy.

The increase in rates has affected the mortgage market, especially the refinancing activity. According to information from Mortgage Bankers Association, there has been a 12 percent drop in the amount of mortgage applications. The Refinance Index dropped 22 percent.

Watch this video on the Prediction of Mortgage Rates in 2017

Freddie Mac Deputy Chief Economist Len Kiefer said the bond market is volatile. He said it’s a wait-and-see game to learn if the trend will continue.

McBride believes the mortgage rates will flip and flop during the year but never exceeding 4.5 percent. A drop below 4 percent is likely to cause a market selloff.

Although the rise was recent, rates are still historically low.

Due to limited inventory, home prices have risen, and even minute higher rates can affect a homebuyer’s budget. The average rate last year was 3.97 percent.

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2016 Experiences Drop in Prices of High-end Property in Singapore

»Posted by on Feb 16, 2017 in Residential News | Comments Off on 2016 Experiences Drop in Prices of High-end Property in Singapore

Surprisingly, the prices of luxury property dropped in the previous year. However, real estate experts advise that upgraders shouldn’t fret much, and as such forge ahead while taking necessary caution. Outstanding districts ranging from Orchard road to Central Business district and that falls between experienced a 1.2% decline in 2016. Going by the Urban Redevelopment Authority (URA) details, the 1.2% decline is a way better performance when compared to that in other areas of the Island. They said that in the data they released on Thursday that the prices dropped at a rate of 2.85% and 3.4% respectively in the Fringe and suburbs. The URA has it that there was an increase in the rate of transactions last year, with a full 48.7% increased as regards the previous year; the rise in the suburbs and fringe were neutralized.

WCY Sg BankerWee Cho Yaw, a banker, after an about 18% discount from developer CapitaLand, had his private Real Estate cubicle buy The Nassim for $4411.6 million. The Nassim is a 45 unit Nasimluxury condo, unlike the normal condo anyone could buy in that district, one may find it hard to get such condo for such price. An average new luxury condominium in the prime areas of Singapore will have the land price cost about $2,300 for each sqft. Consequently, one wouldn’t go wrong by saying that Mr. Wee got the apartment for free, this has placed a new price standard for the neighborhood there.

The fact that Mr Wee chairs UOL acquired a freehold site located at 45 Amber road for $156 million doesn’t underscore the idea that the premium for freehold has been scrapped.  Undoubtedly, 2017 appears to be a year when any real investor with deep pockets should go for luxury condominiums because there market has experienced a fall in price in the last few years. Although there is a general expectation that home prices will fall, home sellers may not want to sell at an obvious low price.

It is worthy of note that the luxury home market has a low new supply, and as such there will be a limited option to choose from as a buyer. If the government should normalize that property cooling measures, there is an awesome potential that lies up front for those who buy homes now.

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Redas Calls for the review of Property tax policies in the Singapore’s 2017 Budget

»Posted by on Feb 15, 2017 in Finance News | Comments Off on Redas Calls for the review of Property tax policies in the Singapore’s 2017 Budget

There is a call from the Real Estate Developers’ Association of Singapore (REDAS) for the amendment of the Property fiscal policies in the 2017 budget, as well other views of the budget. This association in their call, is asking the government of Singapore to cut down the property tax placed on vacant lands, remove the tax on projects under construction or buildings under renovation; as well take the valuation process to a more open level.

Singapore DeveopmentThe Redas also in their call for the budget review advocate that the tax policy should be reviewed so as to show the land’s lease term while amending the present tax assessment for empty lands.  Moreover, there are some other budgets on Redas’ wish list. They advocate that maintenance and technical expertise skills should be sought for and attained, while cutting down fees for achieving this desired level of expertise.

In a bid to maximize cost and sustain a profitable business, Redas came up with their proposal.  It is clear that the economic and geopolitical instability and uncertainties have the potential of posing a risk to the property sector. Also, the economy of Singapore will be highly affected when the property market is under pressure, and as such Redas seeks review of the budget.

It is important to note that Redas never asked the government of Singapore to remove property cooling measures despite the fact that segments of the property market undergo constant oversupply and poor demands on increasing vacancy rates. Over the last four years, there has been a drastic decrease in private homes transactions; with about 50% decrease, reducing from a whole from 15,900 units to 8,000 under five years. Albeit with the slight increase in sales at property launches lately, there is still no very positive view of recovery in the near future.

Undoubtedly, the seeming continuous decline in employment, population, earnings can spell harm on property sales. Recently, there has been a lot of uncertainties with the economic and geopolitics in Singapore; this has led to a prospect of a hike in interest rates. Apparently, it is envisaged that the decline continues in the year 2017.

The budget is meant to be announced on the 20th of February, and Redas has professed their commitment to ensuring that the vital ideas outlined by the committee are met.  Redas stated categorically that are poised to inculcate and develop digital capabilities and key into the urban logistics.

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Amazon Still Growing In Seattle Area

»Posted by on Feb 15, 2017 in Commercial News | Comments Off on Amazon Still Growing In Seattle Area

Amazon has grown significantly in the state of Washington, especially in the Seattle area.

amazon_According to the company, it employs 35,000 workers and hires an additional thousands more for seasonal work during the holidays. The number last year was 30,000 and is roughly what the company had total – worldwide – five years ago. The company now employs over 300,000 people around the world.

It appears that Amazon isn’t done yet either.  The company said it’s looking to expand to 10 million square feet of office space in the Seattle area. This growth has led to several huge real estate deals in the Puget Sound region and some stories about what the company’s facilities will include such as a futuristic biosphere building that will be the center of Amazon in downtown Seattle.

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Glenwood Management Firm Agrees To Pay $200,000 Fine

»Posted by on Feb 9, 2017 in Commercial News | Comments Off on Glenwood Management Firm Agrees To Pay $200,000 Fine

Real estate firm Glenwood Management has been ordered to pay a $200,000 fine in its role that led to corruption charges against Dean Skelos and Sheldon Silver, disgraced ex-legislative leaders.

The firm allegedly violated the New York lobbying laws.

Leonard Litwin is a political powerbroker who owns Glenwood Management. Litwin agreed with the Glenwoodsettlement fine, which the Joint Commission on Public Ethics imposed on the firm. The panel found, during the 2015 trials of former speaker of the state assembly Silver and majority leader of the state Senate Skelos, that there were several improper activities.  The pair were charged with corruption.

The commission also imposed a $70,000 penalty on Administrators for the Professions, Inc. for their actions that were discovered in the Skelos trial.

Seth Agata, the organization’s Executive Director, said the settlement agreements are a huge breakthrough in ethics law enforcement.

Litwin, with his real estate business, have donated generously to the state, offering up millions of dollars in the last few years to an array of lawmakers and Gov. Cuomo.

Glenwood offered Skelos’ son a consulting job and to attain other referral fees in an effort to preserve good relationships with the lawmaker. Glenwood said it retained a law firm even though Silver was pocketing some of the fees.

In the meantime, Administration for the Professions dealt with the business operations of Physicians Reciprocal Insurers, an insurance company, that lobbied the Skelos on malpractice matters. Dean Skelos asked the firm to provide Adam, his son, a job so he could get health benefits.

Agata said lawmakers were trying to use their formal positions to attain unwarranted privileges were already punished. He said the lobbyists’ clients who assisted in these and other acts and gave the public officers special benefits are facing consequences for them.

No comment was provided from either Glenwood Management or Administrators for the Professions.

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