Chesterton again urges release of more hotel sites Property consultant cites high occupancies and room rates

BY

LEE MEIXIAN

LEEMX@SPH.COM.SG   @LeeMeixianBT

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Imminent room shortage at hotels? Chesterton says there appears to be no attempt to alleviate the looming shortage of hotel rooms, and that no new hotel sites were released under the 2014 government land sales programme. - FILE PHOTO

More supply needed?

PROPERTY consultant Chesterton is again calling for the government to release more hotel sites.

Hotels in Singapore have been enjoying high occupancies (85.5 per cent from January to July this year) and average room rates (S$256.10 per room per night over the same period), which should trigger supply, and yet, according to Chesterton, there appears to be no attempt by the authorities to alleviate the looming shortage of hotel rooms.

"Rather, the authorities seem to be tightening the supply flow," it said in an exclusive report to BT.

For one thing, no new hotel sites were released under the 2014 government land sales programme at all, Chesterton said.

For another, from July, the Urban Redevelopment Authority (URA) has tightened approval of new development applications for hotels, as well as boarding houses and backpackers' hostels.

URA had been receiving more applications for new hotels, boarding houses and backpackers' hostels, including proposals to change the use of sites not zoned for hotel use, and had implemented the change because it felt that "such uses should not dominate and displace other commercial activities in (commercial) areas".

The new policy affects the Outram, Rochor, Downtown Core and Singapore River Planning areas - which include a big chunk of Chinatown and Little India shophouses. URA will also not allow such proposals outside the central area.

Akshay Kulkarni, regional director of hospitality, South & Southeast Asia, for Cushman & Wakefield, echoed Chesterton's views on the imminent hotel room shortage - particularly in the mid-market and upscale segments - as well as a need for more supply of hotel-zoned sites.

"Unfortunately, most of the sites that were released in the recent past have been so expensive that they don't make sense for building anything except luxury hotels.

"Luxury hotels have done fairly well in the Singapore market over the last couple of years, but eventually I think there will be a need for more upscale and mid-market hotels. That will be the need of the hour," he said.

However, Margaret Heng, executive director at Singapore Hotel Association (SHA), expressed surprise at Chesterton's call for more hotel-zoned sites to be released.

She said: "According to the Singapore Tourism Board (STB), 12,200 hotel rooms are coming onstream until 2018, which is a healthy pipeline. I don't foresee any shortage.

"The reason why URA might have tapered its hotel site supply could be because of the slight slowdown in visitor arrivals now. It could be cautiousness on their part as they monitor the market."

Visitor arrivals in Singapore slipped 2.8 per cent to 7.5 million in the first half of 2014 as the number of Chinese visitors slumped 30 per cent. This was partly due to the disappearance of Malaysia Airlines flight MH370 in March this year as well as political tensions in Thailand. Chinese tourists usually travel to Malaysia, Singapore and Thailand together as a multi-destination tour.

In its report, Chesterton said it expects the average room rates of hotels to increase, due to the curb on supply and a consequent restriction on the number of potential competitors.

"Existing hostels and hotels located in these planning areas would also see an increase in their capital values over time, with demand from investors seeking good yields," it said.

As it is, the influx of tourists coming to Singapore this month for the Formula 1 Singapore Grand Prix will put additional pressure on current hotel occupancies and room rates. Likewise for October, which will likely see a spillover from those who choose not to travel the month prior due to the event, Chesterton's executive director of hotels, capital markets and valuation Chee Hok Yean said.

According to her calculations, some 9,500 rooms are expected to come onstream from now until 2018 - a difference of about 3,000 compared to STB's estimate - but she could not reconcile the difference between the two statistics.

MAS poll: 2014 GDP growth cut to 3.3% Weaker Q2 brings down full-year forecast; further downgrades seen

BY

KELLY TAY

KELLYTAY@SPH.COM.SG   @KellyTayBT

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Economy watchers polled by Singapore's central bank have cut their 2014 growth forecast to 3.3 per cent, following a disappointing second quarter - PHOTO: ST

Forecasters' lower expectations

[SINGAPORE] Economy watchers polled by Singapore's central bank have cut their 2014 growth forecast to 3.3 per cent, following a disappointing second quarter. But some economists warn that more downgrades could still come in, as the Republic grapples with restructuring pains amid a patchy global recovery.

Professional forecasters, polled by the Monetary Authority of Singapore (MAS) from mid-August, have tempered their full-year growth projections by half of a percentage point, down from the 3.8 per cent median forecast seen in June's survey. The lower 2014 growth estimate now falls within the government's forecast range of 2.5-3.5 per cent.

Said Bank of America Merrill Lynch economist Chua Hak Bin: "I think the downgrades shouldn't come as a surprise, because a weaker Q2 basically brought down the full-year forecast. They key thing now is whether we'll see the economy pick up steam, or whether the sluggish growth will be a bit more persistent and structural in nature."

The slip in forecasters' optimism was due to softer growth expectations for all sectors within the Singapore economy, except for the finance & insurance segment, where growth projections have been kept intact at 5.5 per cent.

The manufacturing sector is now expected to grow at a slower pace of 4.2 per cent compared to June's estimate of 5.6 per cent, and wholesale & retail trade growth is projected at 2.6 per cent, much lower than the 4.9 per cent previously forecast.

Non-oil domestic exports (NODX) are projected to contract 1.1 per cent, in stark contrast to June's expectations of a 4.1 per cent expansion. The sharp pull-back in sentiment follows year-on-year contractions in both June and July.

Even as the market trimmed its full-year GDP growth forecast, economists The Business Times spoke to stressed that further downgrades could still happen. Dr Chua and DBS economist Irvin Seah estimate 2014 growth at 3 per cent - lower than the survey's median forecast of 3.3 per cent - while CIMB economist Song Seng Wun thinks increased geopolitical risks and "seesawing" regional macroeconomic data add to the uncertain outlook.

Said Dr Chua: "The data coming out of Europe and Japan has generally been on the soft side, so it's not like you have this story of the US recovery supporting a global recovery that's synchronised with an Asian exports recovery. It's all still very patchy - one month it's decent, another month things pull back ... Our view is that the recovery has been somewhat uneven and even elusive in certain countries. And in Singapore, the impact is going to be compounded by the fact that we're undergoing restructuring."

Added Mr Seah: "Some analysts are still hanging on to a thread of hope that we'll see some acceleration in the second half, but this thread is just getting weaker. I think that even if we get an acceleration, it's going to be a very gradual one. There are still downside risks from both external and domestic perspectives."

Externally, these include a stagnant Eurozone economy, lacklustre consumption and investment figures in Japan, and a dicey manufacturing outlook in China. Domestically, economists are wary of climbing business costs amid a tight labour market.

One consolation from MAS's latest quarterly survey is that forecasters have lowered their 2014 inflation projections from three months ago.

Their full-year inflation forecast is now 1.8 per cent versus 2.2 per cent previously; MAS core inflation - which strips out accommodation and private transport costs - is expected at 2.2 per cent, also lower than the 2.4 per cent reported in June's survey.

These projections are within the range of the government's 1.5-2 per cent forecast for headline inflation, and 2-3 per cent for core inflation.

The MAS also said in its "Recent economic developments in Singapore" article last week that it expects domestic cost pressures - particularly stemming from a tight labour market - to continue to be the primary source of inflation.

For the third quarter of 2014, forecasters are now expecting lower growth of 3.2 per cent. This fell from the previous median forecast of 3.5 per cent.

But respondents are expecting economic activity to increase next year, as they think GDP growth will reach 3.7 per cent. This is still down, however, from the June survey's forecast of 3.9 per cent.

SINGAPORE ECONOMY

Stalling global recovery hits S'pore growth prospects: Poll

Analysts tip economy to grow 3.3%, down from 3.8% forecast 3 months ago

By Melissa Tan

SINGAPORE'S growth prospects look dimmer after a poor second quarter, according to a survey of 22 private sector economists that was released by the Monetary Authority of Singapore (MAS) yesterday. The projections for exports seem especially dire.

The analysts surveyed by the MAS tipped the economy to grow only 3.3 per cent this year, down from a forecast of a 3.8 per cent expansion made in a similar poll three months ago.

"The earlier optimism about a global recovery is dimming," DBS economist Irvin Seah said. "The economy is also struggling with a drag from restructuring."

Barclays economist Leong Wai Ho noted that the more downbeat projections were factoring in the economy's poor showing in April through June, which was worse than expected.

The economy grew only 2.4 per cent in the second quarter over the same period last year, far less than the 3.3 per cent expansion that private sector economists had predicted.

Mr Seah said Singapore companies continue to struggle with high costs from restructuring, which has weakened exports and could prevent the companies from benefiting from any global upswing in the near future.

Exports had earlier been expected to climb 4.1 per cent this year but economists are now projecting a 1.1 per cent slide. Exports had tumbled a worse-than-expected 6 per cent last year.

The outlook is now bleaker for nearly all parts of the economy, with economists lowering growth forecasts for sectors ranging from manufacturing and construction to food services and trade. The only sector left unscathed was finance and insurance.

Manufacturing, which makes up about a fifth of the economy, is expected to grow 4.2 per cent this year - down from an earlier forecast of 5.6 per cent growth.

Ms Adeline Wong, a senior director at Superworld Electronics, which makes components for products such as mobile phones and laptops, expects sales to be "stagnant" this year.

"We don't see as much of a pick-up in consumer spending this year as we used to," she said. "We're keeping lower inventories due to price competition for finished products."

However, some economists expect the industry situation to improve later this year.

Mr Leong thinks manufacturing could rally this quarter as electronics exports pick up across North Asia ahead of Christmas.

"There are signs that Christmas sales are going to be more brisk this year, consumers are more confident," he added.

"There's higher demand from the United States and slightly more from Europe - not just for iPhones but also for products such as game consoles.

"This Christmas is going to be a little more jolly."

Since factories in North Asia are running close to full capacity, the demand for electronics could spill over into Singapore and boost factory activity here, he said.

Economists believe economic activity will pick up next year, leading to GDP growth of 3.7 per cent, according to the MAS survey.

As for inflation, the economists trimmed their forecasts marginally. They predicted that overall inflation will rise 1.8 per cent for the year, down from the 2.2 per cent increase they had tipped in the earlier survey.

They also cut their projection for core inflation, which excludes accommodation and private road transport costs, to 2.2 per cent from 2.4 per cent.

However, Mr Seah pointed out that core inflation was higher than overall inflation, which signals that living costs remain high.

The Government last month narrowed its full-year growth forecast to between 2.5 per cent and 3.5 per cent from its previous projection of between 2 per cent and 4 per cent.

melissat@sph.com.sg

Serangoon Gardens site for sale

By Fiona Chan

A FREEHOLD site in Serangoon Gardens with a single-storey detached house on it will go on auction later this month.

The 8,666 sq ft plot at 13, Brighton Crescent is zoned for two-storey mixed landed use and carries an indicative price tag of $7.7 million, said property firm Colliers International, which is conducting the auction.

This price works out to about $890 per sq ft (psf), said Colliers deputy managing director Grace Ng in a statement yesterday.

Ms Ng added that this is a "reasonably attractive price in the current market, given the site's redevelopment potential".

The rectangular plot can hold either two bungalows of 4,333 sq ft each, or three terraced houses with an area of 2,000 sq ft to 3,000 sq ft each, Colliers said.

Either configuration would appeal to home buyers seeking a larger space for a multi-generational household.

Developers may also be keen in acquiring the site due to "the rare availability of such sites being put up for sale in Singapore", Colliers added.

Ms Ng said that a new detached house in Serangoon with about 4,300 sq ft of land area could fetch $6 million, or $1,400 psf.

"Prices of landed properties continue to hold firm despite the recent government curbs in the residential market because there is still an underlying interest in landed properties," she noted.

The median price for detached houses outside the central region - such as in Serangoon - remained above $1,100 psf as at the second quarter.

The Brighton Crescent site is surrounded by landed properties, comprising a mix of single- and double-storey houses.

It is near the popular Chomp Chomp Food Centre and a short drive from the Central and Seletar expressways. The nearest MRT stations are Lorong Chuan and Serangoon.

The auction will be held at Amara Hotel at 2.30pm on Sept 24.

fiochan@sph.com.sg

PUBLISHED SEPTEMBER 11, 2014

Serangoon Garden bungalow up for auction

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The 14 Brighton Crescent bungalow site can be subdivided for redevelopment into either two bungalows or three terrace houses.

[SINGAPORE] A freehold bungalow at 14 Brighton Crescent in the Serangoon Garden area will go under the hammer at a Colliers International auction later this month.

The property is understood to have been put up for sale by the estate of the late Raffles Girls' School principal Noel Evelyn Norris, who died earlier this year.

The indicative price for the rectangular site is S$7.7 million or around S$890 per square foot (psf) on the land area of 8,666 square feet.

"This is a reasonably attractive price in the current market, given the site's redevelopment potential," said Colliers deputy managing director Grace Ng.

On site is a single-storey detached house. Under Master Plan 2014, the site is zoned for "two-storey mixed landed" use.

The site can be subdivided to accommodate either two bungalows of about 4,333 sq ft each or three terrace houses of some 2,000-3,000 sq ft each.

"Both configurations would appeal to owner occupiers seeking a huge space for multi-generation households and/or immediate relatives to live next to one another and yet enjoy privacy," said Ms Ng.

Moreover, the freehold tenure of the property would boost its appeal to developers, she added.

The auction will be held on Sept 24 at The Amara Hotel in Tanjong Pagar.

Another property that will go under the hammer at the same auction will be a two-bedder of 1,109 sq ft on the 12th floor of One Shenton. It is being offered for sale by its owner, with an indicative price of S$2.03 million or S$1,830 psf. One Shenton is on a site with about 90 years' balance lease. The project received Temporary Occupation Permit (TOP) about two years ago.

Colliers found buyers for four properties - three residential properties and an industrial unit - at its auction last month. The 1,614-sq-ft factory unit, on the fourth level of The Spire in Bukit Batok Crescent, fetched S$650,000, or S$403 psf. The unit was put up for sale at the auction by its owner, as was a two-bedroom apartment with private enclosed space at the first level of UE Square in the River Valley area. It sold at nearly S$1.57 million, or S$1,400 psf. The property has 929-year leasehold tenure from Jan 1, 1953.

The other two properties that transacted at that auction were put up for sale by mortgagees (or lenders).

A two-level apartment at Orchard Scotts on Anthony Road was sold for S$3.3 million. This translates to S$1,565 psf based on its strata area of 2,109 sq ft. Located on the ninth floor, the unit has three bedrooms plus a study room. The project is on a site with a balance lease term of 86 years.

The other mortgagee sale property that found a new owner at Knight Frank's Aug 27 auction was a freehold, three-storey corner terrace house at Eng Kong Drive in the Toh Tuck area. It changed hands at S$3 million. The property is on 2,827 sq ft of land area and has five bedrooms and a maid's room.

Mortgagee sales have gained momentum since the second quarter of this year.

Agents expect the number of properties put up for auction by mortgagees or lenders to rise because of difficulty that financially stretched borrowers face in securing buyers for their properties since the implementation of the total debt servicing ratio (TDSR) framework in June last year. As a result, financial institutions have had to repossess more properties and put them up for auction.

Condominium For Sale - Edelweiss Park Condo (D17)

***About Edelweiss Park Condo***
-Development Name: Edelweiss Park Condo.
-Property Type: Condominium.
-Developer: Tripartite Developers Pte Ltd.
-Tenure: Freehold.
-Completion Year: 2006.
-# of Units: 517.
-Price: S$ 2,550,000. Guide Price.
-Price (psf): S$ 797.62 psf (built-up).
-Floor Area: 3,197 sqft / 297.01 sqm (built-up).
-Condition: Renovated.
*Edelweiss is a freehold condominium development located at 80 - 102, Flora Road (S)506999 in District 17 near Simei MRT station. It was completed in 2006 and comprises 517 units. It is located in the vicinity of Balotta Park and The Japanese School.

*Condo Facilities at Edelweiss
-Edelweiss has full condo facilities which include fun pool, swimming pool, playground, bbq pits, jacuzzi, tennis courts, fitness corner, carparking and 24-hr security.

*Condo Amenities near Edelweiss
-Edelweiss is located just minutes drive away from Tampines Mall, where a host of amenities are readily available, such as retail outlets, supermarkets, restaurants and eating establishments, banks, cinema and other entertainment facilities.
There are schools located in the vicinity, such as Ngee Ann Secondary and East Spring Primary. Recreational facilities nearby include the Pasir Ris Park and Tanah Merah Golf Course which is just a short drive away.
For vehicle owners, travelling to the business hub from Edelweiss takes just above 15 minutes, via Upper East Coast Road.

*Condo Facilities
-BBQ pits
-Covered car park
-Fitness corner
-Fun pool
-Jacuzzi
-Playground
-24 hours security
-Swimming pool
-Tennis courts

*Description
-This premium stack enjoys pool view from all rooms.
-Rare gem and not to be miss.
-Sincere and motivated seller.

*Your Trusted Condominium People*
*www.SGCondoGroup.com*
+65 8292 8999

Factory For Sale - Tuas View Crescent (D22)

***TUAS VIEW CRESCENT***

-Detached B2 Big Factory @ D22.

*JTC Tenure: 30 + 30 years w.e.f 1 Dec 1999 (balance 45 years)

*JTC Land area :15,998.80 sqm (172,209.48 sqft)

* Factory Build up area: 16,538.20 sqm (178,015.53 sqft)

* Electrical Supply: 2000kVA via 2 feeders

* Ceiling Height (m) Floor Loading capicity (KN/sq.m)

3 Storeys Architecture

* 1st Storey (front) Office 2.9 m and warehouse 4.0 KN

* 1st Storey (centre & rear) 7.0 m and Production 20.0 KN

* 2nd storey Office 2.9 m and 4.0 KN

* 3rd Storey Warehouse 7.0 m to 10.0 KN

Access to upper storey

* 2 cargo lifts (3,000 kg each)

* Electrical: 2000kVA via 2-feeders

* B2 zone uses (subject to JTC)

* Near possible land use allocation for FTZ and port uses beyond 2030

JTC part 1/part 3-storey single-user detached industrial warehousing premises. Corner unit with loading 

compound and large open space for storage. Well maintained facility with corporate image. BCA-approved condition. 

Sell at vacant possession!

Your Trusted Landed Group

www.SGLandedGroup.com

+65 8292 8999

Cluster House For Sale - Lange 28 (D19)

***About Lange 28***
-Development Name: Lange 28.
-Property Type: Cluster House.
-Tenure: 999-year Leasehold.
-Completion Year: 2008.
-Valuation Price: S$ 1,800,000.
-Floor Area: 2,099 sqft / 195.00 sqm (built-up).
**Description
-Quite environment.
-Recommended for Condominium upgrader.
-2 Door step parking lots.
-Life style living.

**Lange 28 is a 999-year leasehold cluster houses located at Lange Road in District 19 Kovan. Lange 28 is close to Kovan MRT Station and Serangoon MRT Station. It is completed in 2008. Schools close to Lange 28 include, Zhonghua Primary and Peicai Secondary.

*Facilities at Lange 28 include swimming pool, fitness corner, BBQ pits and covered car park.

*Residents at Lange 28 can get to nearby supermarkets or shopping mall within the area for an array of amenities such as grocery and retail shopping, banks, eateries and more.

*Lange 28 is near to Shop 'N' Save Yio Chu Kang Road and Shop N Save Kovan Centre. It is also close to ICB Shopping Centre and Upper Serangoon Shopping Centre.

*Vehicle owners can take Upper Serangoon Road, Tampines Road and Kallang Paya Lebar Expressway to get to the business hub or shopping district in the city.
*Condo Facilities
-BBQ pits
-Covered car park
-Fitness corner
-Swimming pool

Your Trusted Landed People
www.SGLandedGroup.com