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Visit EdgeProp.sg to find properties, research market trends and read the latest news The week of June 1, 2020 | ISSUE 935-157

MCI (P) 045/08/2019 PPS 1519/09/2012 (022805)

Covid-19 ReliefFortitude Budget

enhances rental support for SMEs ep2

Industry InsightPositioning investment

strategies in a post-Covid world: BlackRock ep3

SpotlightThe craft of office management in a

pandemic ep4

Under the HammerFreehold strata terraced house at Este Villa going

for $2.35 mil ep12

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Property sector in limbo as projects’ sales galleries

stay closedTurn to our Cover Story on Pages 6 & 7.

Sales gallery for CEL Development’s Kopar at Newton, which was launched just before the circuit breaker kicked in

EP2 • EDGEPROP | JUNE 1, 2020

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PROPERTY BRIEFS

JustCo to distribute free masks to members on June 2With the “circuit breaker” gradually easing from June 2, homegrown flexi-ble workspace operator JustCo is step-ping up measures to protect its staff and members in Singapore who will be going back to the workplace. The co-working company will also distrib-ute 100,000 free, surgical-grade masks to its staff and members, as well as give them out at buildings where it is located.

The masks are part of JustCo’s spon-sorship towards Singapore’s first fully automated mask manufacturing line, which was initiated and led by local company Razer.

JustCo says it will donate any re-maining masks to a charity which Just-Co members can nominate.

On top of this offering, the office- space provider is implementing meas-ures to maintain health and safety in its office environment. Safe-distanc-ing measures will be implemented through furniture reconfiguration in common areas and prominent sig-nages. Contactless thermometers and hand sanitisers are free for members and guests to use.

Virtual events will take place in lieu of physical events, and the com-pany says that members can utilise the JustConnect feature in its mobile app to reach out to other members to seek business opportunities.

Gaw Capital raises GBP28.5 mil in mezzanine financingReal estate private equity firm Gaw Capital has announced that it has raised GBP28.5 million ($49.4 mil-lion) in mezzanine financing to re-finance its preferred equity on four office buildings in Docklands, Lon-don. The lending consortium is led by Samsung Securities and KB Asset Management from Korea, and it will provide the five-year mezzanine fa-cility at a loan to value (LTV) of just under 71%.

The office developments in the Docklands were acquired by Gaw Cap-ital on behalf of Asian investors back in September 2014. They are close to Canary Wharf, the secondary central business district in London.

The collection of properties compris-es the buildings at Harbour Exchange 1, 2, 4 and 5, and feature 600,000 sq ft of Grade-A office space, as well as 500 car-parking lots. The offices have attracted tenants from government, financial services, insurance, as well as technology, media and telecom companies. Key occupants include Financial Ombudsman Service, CLS, Booking.com and QBE Insurance.

According to Gaw Capital, the lat-est finance deal highlights the grow-ing relationship between the private equity firm and Samsung Securities. Last year, the two companies worked together to acquire the Aoyama Build-

ing in Tokyo, Japan, another Grade-A office development.

Christina Gaw, managing prin-cipal & head of capital markets for Gaw Capital, says that the new mez-zanine financing “demonstrates that the market remains open for quality assets with the right fundamentals and strong cash flow. We are also ex-cited to collaborate further with our Korean partners on future opportuni-ties in the UK and beyond”.

Politics to play bigger role in moving Hong Kong property prices: DBSA report on Hong Kong’s property market by DBS Group Research points out that a mix of political and supply- side economic factors will determine future property price movements in the city, rather than just econom-ic forces.

Luxury residential property is heav-ily influenced by the supply of Chi-nese capital that enters the market. DBS research shows that liquidity from China has been the prime driv-er of property prices in Hong Kong and could easily ramp up asset pric-es in the Special Administrative Re-gion (SAR).

DBS notes that the prices of large units fell in tandem with renminbi de-preciation that occurred between 2015 and 2016. After that, prices resumed an upward trend as capital controls

were gradually relaxed from 2017.According to DBS, social instabil-

ity from June 2019 precipitated a de-cline in prices of larger-sized units, and this was deepened by the neg-ative effects of the current Covid-19 pandemic. “The imminent enactment of the National Security Law in Bei-jing to cover HKSAR will exert more selling pressure on the luxury seg-ment. Meanwhile, the global pandem-ic of Covid-19 has created a ‘positive home bias’ situation for Hong Kong people in the foreseeable future,” the research team says.

Other factors such as household income have been growing at a slow-er pace compared to property pric-es. Household income has grown by 48.6% over the past decade and resi-dential rents have climbed by 85.3%. Meanwhile, home prices have surged 209.1%.

DBS also notes that interest rates have been staying at such ultra-low levels that further declines in rates will not be able to fan demand any fur-ther. Thus, the resilience of medium- sized apartment units hinges heav-ily on the employment stability of the financial services sector. Profes-sionals in the finance, insurance and real estate sectors are the prime con-sumer groups which render the firm-est support to Hong Kong’s proper-ty prices, says DBS. — Compiled by Timothy Tay E

JUSTCO

JustCo will be implementing safe-distancing measures when members return on June 2

GAW CAPITAL

The office buildings in the Docklands, London, were acquired by Gaw Capital on behalf of investors

BY TIMOTHY TAYtimothy.tay@edgeprop.sg

The Singapore government is extending its rental relief sup-port to benefit more small and medium enterprises (SMEs), says Deputy Prime Minister

(DPM) Heng Swee Keat. He said this in a parliamentary address on May 26 to unveil the government’s proposed fourth budget — named the Fortitude Budget — to support the country amid the Covid-19 pandemic.

DPM Heng, who is also the Finance Minister, stated that many businesses, especially SMEs, have voiced their dif-ficulties in meeting rental costs at this time. “We will significantly add to the support for rental costs earlier provid-ed through the Property Tax Rebate for 2020 in the Unity and Resilience Budg-ets,” he says.

The government will provide a cash

grant to offset the rental costs of SME tenants, which will be disbursed through property owners. The grant will cost the government about $2 billion in to-tal, and will be disbursed automatical-ly from the end of July.

Christine Li, head of research for Singapore and Southeast Asia at Cush-man & Wakefield, says: “The expanded rental relief for SMEs is a welcome one, as SME tenants in commercial proper-ties are also part of the ecosystem of the real estate sector. The risk sharing between the government and the pri-vate landlords will allow SME tenants to benefit from four months of rental relief in total.”

DPM Heng says that together with the previously announced Property Tax Rebate, the government will off-set about two months of rental for qualifying SME tenants of commercial properties. This translates to about a month’s rent for qualifying SME tenants in

industrial and office properties.SME property owners who run a

trade or business on their own proper-ty will also be eligible for the new cash grant. This new grant comes on top of the $1.8 billion set aside for the Prop-erty Tax Rebate.

To ensure that SME tenants bene-fit from this handout, the government will table a new Bill that will mandate that landlords grant a rental waiver to their SME tenants, “who have suffered a significant revenue drop in the past few months”, says DPM Heng.

DPM Heng notes that the govern-ment does not ordinarily intervene in contracts after they have been signed, but this is an “exceptional situation” where the government needs to step in with “temporary targeted steps to safeguard the economic structure for the common good”, he says.

The new Bill will also cover provi-sions on temporary relief from “oner-

ous contractual terms” such as exces-sive late payment interest or charges. When passed, the Bill will allow tenants to pay their arrears through instalments.

But according to Li, some landlords will be stuck in a difficult situation if the mandatory rental waiver is legislated. “Many asset owners and operators (of commercial real estate) are faced with drastically reduced operating income arising from concessions and rebates they have to dish out to save struggling tenants,” she says.

Li adds: “Assets that thrive on the intensification of real estate and human interactions could also experience a much longer-term fundamental drop in future demand. By subjecting them to the mandatory rental waiver for their tenants, it could create a bigger prob-lem down the road when these asset owners are unable to re-position their properties in time to tide through the difficult period.” E

PICTURES: ASCOTT

Fortitude Budget enhances rental support for SMEs; rental waivers to be mandated

EDGEPROP | JUNE 1, 2020 • EP3

INDUSTRY INSIGHT

BY TIMOTHY TAYtimothy.tay@edgeprop.sg

The post-pandemic investment scene will be a profitable window of opportuni-ties for investors with ready capital to deploy, but for the majority with cur-rent investment exposure, the “abso-

lute focus” should be on preserving values and incomes, according to a report by Blackrock.

The global investment management firm says the office sector faces mixed trends, as telecommuting is on the rise while desks are spaced out further to reduce density. Demand for CBD trophy locations may also fade fur-ther as more back-office functions relocate to city-fringe locations, contributing to a narrow-ing gap in office rents.

The sudden clampdown on public life has been “exceptionally harsh on hospitali-ty, restaurants, and personal services,” says Blackrock, adding that until a vaccine for the novel coronavirus is found and widely dis-tributed, it is likely that these sectors will see more pain ahead.

The investment manager says it expects travel restrictions and limits on personal mo-bility to remain impaired for some time. This will have deep implications for real estate de-mand, particularly in the hospitality and tour-ism industries.

Logistics facilities are benefiting from e-commerce, even as demand for tradition-al warehouse properties diminish with the decline in traditional retail businesses. Retail malls should continue to see a structural de-cline, given the sector was already suffering from disruption from e-commerce before the pandemic hit. Work-from-home arrangements are also accelerating retail spend away from bricks-and-mortar shops.

In the residential market, multi-generation-al homes have shown to be resilient assets as

the weak job market turns some home buy-ers into renters, and also drives some back to live with extended family.

As measures to curb the spread of the pan-demic shut down parts of the global econo-my and cut wages for some, residential mar-kets with a high proportion of rental homes will be particularly vulnerable even though governments have stepped up their support through measures such as mandated rental holidays and eviction bans.

While these safety nets are important to protect some distressed tenants, Blackrock notes that they also reduce the certainty of leasing contracts for landlords. “Long term, we may see this higher risk premia feed into income yields,” says Blackrock.

The investment manager says near-ze-ro interest rates is likely to persist for much longer, even as fiscal handouts trickle down to the rest of the economy later this year. All of these may result in some inflationary ef-fects, particularly for real asset prices over the coming years.

However, compared to the Global Finan-cial Crisis in 2008–2009, financial markets are not exhibiting the same signs of excess lever-age, bad lending, or banking sector distress. This means there is a continuing flow of credit from banks which have been ordered to take a more accommodative stance and are less in-clined to foreclose on loans for now.

“In a low-growth world, positive drivers of occupancy expansion and rental uplift are go-ing to be harder to find. Asia Pacific markets will likely be a bigger slice of global growth ahead. Finding local demand expansion and deficient supply will be a key source of alpha returns,” says Blackrock.

The investment manager also says that a global recession, dipping consumer demand, rising vacancy, and falling rents will drive an unfolding correction in asset values around

the world. Therefore, investors with current exposure should focus on preserving income and asset values. This means working hard-er to maintain occupancy, collect rents, and keep up maintenance.

“For those with ready capital, (the upcom-ing recovery phase) points to a significant window of opportunity ahead, as prices fall, distress emerges and competition for assets fade. From prior cycles, we know that each market dislocation has historically been fol-lowed by prolonged recoveries in both rents and values, with the size and speed of that rebound determined by local demand-supply fundamentals,” says Blackrock.

Over the next five years, Blackrock also ex-pects the Asia Pacific region to own a great-er share of global growth over the next five years, which should support expectations of occupancy, rents, and returns. Diversification gains are also on the table amid a staggered post-Covid recovery phase. E

Positioning investment strategies in a post-Covid world: BlackRock

JLL: REIS FOR MAY

Past performance is not indicative of future results. For illustrative purposes only

Covid-19 impact starting to come through in 1Q2020

PICTURES: ALBERT CHUA/THE EDGE SINGAPORE

An empty Clarke Quay taken on April 21. Singapore’s lockdown has been difficult for the retail, hospitality, and tourism industry

The trickle-down effects of low interest rates and govern-ment support measures could inflate some real asset prices over the coming years

ous contractual terms” such as exces-sive late payment interest or charges. When passed, the Bill will allow tenants to pay their arrears through instalments.

But according to Li, some landlords will be stuck in a difficult situation if the mandatory rental waiver is legislated. “Many asset owners and operators (of commercial real estate) are faced with drastically reduced operating income arising from concessions and rebates they have to dish out to save struggling tenants,” she says.

Li adds: “Assets that thrive on the intensification of real estate and human interactions could also experience a much longer-term fundamental drop in future demand. By subjecting them to the mandatory rental waiver for their tenants, it could create a bigger prob-lem down the road when these asset owners are unable to re-position their properties in time to tide through the difficult period.” E

PICTURES: ASCOTT

EP4 • EDGEPROP | JUNE 1, 2020

SPOTLIGHT

BY CHARLENE CHINcharlene.chin@edgeprop.sg

The art of running buildings well has never been more pronounced. On June 2, more workers will return to the office as Singapore lifts its ban for some businesses to resume operations. The

office occupancy levels will not return to that of days past, and the workplace has changed, and will change, considerably. “In the short term, there’s going to be a lot of impact on how we run buildings, and also how people use offices and their workspaces,” says Jun Sochi, managing director of C&W Services Singapore, the facilities and engineering arm of Cushman & Wakefield (C&W).

By and large, employees have already had a taste of change even before Singapore an-

nounced its “circuit breaker” measures ef-fective April 7, which have seen the bulk of the workforce operating remotely. As early as February, long lines had snaked around skyscrapers in the CBD as staffers queued to get their temperatures checked at the en-trances, seeing delays of up to 40 minutes just to enter the office. “Moving forward, all of us will have to accept that there are going to be queues at the workplace,” Sochi tells EdgeProp Singapore in a phone interview.

New ways to workAs a result of the pandemic, crowd man-agement has been a new focus for the fa-cilities management industry. “Think about the CBD, and some of the large buildings that are there. Imagine at the peak hour in the morning, only four people are allowed in

the lift at a time,” says Sochi. This, together with related measures like pacing the flow of people entering a building, taking their temperature, and ensuring that individu-als keep a safe 1m from each other, would create crowds outside a building.

So, “[the management of] people travel-ling up and down the lifts is something that landlords and tenants here are going to have to think about,” he says.

The solutions could range from stagger-ing start times for offices, to splitting the workforce into teams, or a mix of both. So-chi shares that in Australia, due to the time lost just to enter the workplace, some com-panies have instructed their employees to spend their lunch breaks in the office.

Building managers and owners will have time to implement and refine such measures.

After the circuit breaker ends on June 1, Sin-gapore’s economy will gradually restart in three phases. From June 2, only a third of the workforce — on top of those classified under essential services — will be allowed to return to the office. Specifically, these are firms that run in environments with lower transmission risks, such as those engaged in manufacturing and production, finance, insurance, and IT and info services.

Despite the lifted ban, the government still expects most workplaces to remain largely empty. “Your staff should return to work only if they need specialised equipment and ma-chinery that cannot be accessed from home, or if they need to fulfil legal requirements,” National Development Minister Lawrence Wong wrote in a Facebook post on May 23, urging employers to allow staff who can

The craft of office management in a pandemic

CUSHMAN & WAKEFIELD

SAMUEL ISAAC CHUA/THE EDGE SINGAPORE THE EDGE SINGAPORE

A prototype of the office of the future, called the ‘six-feet office’ by Cushman & Wakefield, which embodies rules of conduct allowing staff to work safely within an office environment

C&W Services manages Biopolis (left) and Fusionopolis, which are R&D complexes in one-north. The firm provides facilities management services predominantly for office buildings, both commercial and government.

EDGEPROP | JUNE 1, 2020 • EP5

SPOTLIGHT

work remotely to continue to do so. Wong also co-chairs the multi-ministry task force tackling Covid-19.

Safer workplace measures Among other considerations for office build-ing management, Sochi suggests planning designated circulation paths where “peo-ple would all walk in a clockwise pattern, with arrows on the floor directing traffic”, so there are no crossed pathways, and con-tact among colleagues can be minimised. This would also mean controlled access, with a building having one essential entry and exit point only.

Already, some companies are looking at sneeze-guards to divide workstations, says Sochi. For large companies with in-house canteens, there are further details that need to be considered too, such as allowing only packaged food to be served.

Some building owners in China and Ko-rea are contemplating leaving the doors open for better ventilation, he adds. “In Singa-pore, there’s the added challenge [when do-ing] something similar because of the cli-mate here.”

To be sure, the pandemic has raised the costs of operating buildings. With addi-tional safety measures in place — person-al protective equipment, thermal imagers, and a higher frequency of cleaning servic-es — costs in the near term are likely to increase by 5% to 10%, says Robin Leow, senior director for facilities management at Savills Singapore.

Sochi says additional staff will also have to be employed to screen building tenants and visitors, while some owners will opt to provide hand sanitisers, wet wipes, and face masks. All these will add to costs.

Mid- to long-term view Overall, experts believe that it is still too early to forecast the impact of Covid-19 on office de-mand. “It’s going to be a combination of two factors that ultimately determine the overall space requirement for each company,” said Chris Browne, head of Asia Pacific’s global occupier services, Cushman & Wakefield, in a webinar on April 30. While some compa-nies would be more open to a broader, flexi-ble working programme, which would reduce the amount of office space required, others

may change their workspace layouts to en-sure better safe distancing, resulting in an increase in office space, he explains.

“For C&W employees, we are finding that our workplace experience has actually re-mained stable during this period. Those of us who have worked flexibly before, find it easier to adjust, but our millenials and Gen Z are struggling the most, as they often lack the space for focused work, with mini-mal distraction,” points out Browne.

In the medium term, Sochi expects em-ployers to think about how to reconfigure their offices to fit the new normal. “People are already starting to relook at the layout of their offices. So they’ve been engaging our design and project management and facilities management teams to help them through that process as they reopen.” Cru-cial to spatial planning will also be a rethink of what job roles can or cannot be carried out remotely.

A survey has revealed that as at May 24, 90% of employees prefer to continue work-ing from home in some capacity. Of these, only 15% of workers expressed a wish to work remotely all the time, while 67% of

respondents indicated their intention to work from home for at least half their of-fice hours. The ongoing survey by Engage- Rocket, an employee engagement software firm, involved 9,000 respondents across al-most 90 companies in Singapore.

One of the reasons why some staff wish to return to the office could be the lack of a conducive work-from-home environment. “Shared homes, which is prevalent in Sin-gapore, makes it difficult for many to have dedicated and conducive home workplac-es,” noted Tay Huey Ying, head of research & consultancy at JLL Singapore, in a news release in May.

JLL estimates that over 80% of Singapore’s households are living in homes with three or fewer bedrooms in 2019, making it hard to carve out specific work zones.

But whether workers eventually get to work out of the comfort of their homes, or return to the hustle of daily office commute, one thing will be for sure — entering the of-fice will no longer just be a matter of pro-ductivity and punctuality. With the poten-tial for snaking queues, it will also be a test of patience. E

ALBERT CHUA/THE EDGE SINGAPORE SAMUEL ISAAC CHUA/THE EDGE SINGAPORE

From June 2, only a third of the workforce — on top of those classified as essential services — will be allowed to return to the office

Facilities managed by C&W Services cover a broad range, such as schools, retail malls, townships, industrial sites, and sports venues such as the Singapore Sports Hub

Savills Singapore’s facilities management portfolio covers about 80% of commercial spaces, including Paya Lebar Quarter offices

ALBERT CHUA/THE EDGE SINGAPORE

EP6 • EDGEPROP | JUNE 1, 2020

COVER STORY

BY CECILIA CHOWcecilia.chow@edgeprop.sg

The Fortitude Budget announced on May 26 brought little cheer to those in the real estate sector as there was no mention of when the sales galleries of developers’ projects could reopen

and when property viewings could resume. This further dampened sentiment in the sec-tor where developers, consultants and real-tors were already disappointed that Phase One of reopening after the “circuit breaker” did not include them.

While hair salons, air-conditioning repair services and auto repair workshops are al-lowed to resume business from June 2, prop-erty projects’ sales galleries have to remain closed “until further notice”, according to URA in a circular on May 20.

For property agents, the circuit breaker seems to have been extended beyond June 1. They are still not permitted to have face-to-face meetings with clients, except where cli-ents’ physical presence is legally required to complete transactions. The latter has to take place in the office of the real estate compa-ny. Property viewings are still permitted to be conducted only through digital means.

“People like us are in limbo,” says Ong Choon Fah, CEO of property advisory firm Edmund Tie. “Real estate services are sup-posed to be in Phase One, but our hands are tied: salespersons still can’t meet with their clients in person, we still can’t conduct site visits, and transactions have stalled. While we understand the need to keep everyone safe, we hope we can go back to work soon so we can help keep our economy going.”

Alan Cheong, head of research at Savills Singapore, agrees. Property valuers should also be allowed to conduct site visits, espe-cially if a property is vacant, he says. Leasing activity — for office, retail and residential — should be allowed as tenants need to view the space before committing to a lease, he adds.

‘EMBRACING A NEW NORMAL’The Council of Estate Agencies (CEA) advised property agents to “embrace a new normal” in its guidelines on May 26. “The adoption of safe management measures and technol-ogy must intensify so that we can carry out

property transactions safely,” says CEA. “You should continue to work from home to the maximum extent possible and adopt informa-tion technology tools in place of face-to-face interaction and to conduct property transac-tion activities online.”

No doubt, the business of selling real es-tate will change even after the circuit break-er is lifted. “In the past, prospective buyers will visit five to eight projects’ sales galler-ies when shopping for a property,” says CB Chng, executive director of Logan Property, the Hong Kong-listed property development group in China. “Virtual tours of showflats

and other online platforms will help cut out the first round of viewings and help reduce the crowd at sales galleries.”

Once home buyers have narrowed down their choices to just two or three projects that they are keen on, “they will still want to vis-it the actual sales gallery and showflats as property is a big-ticket item and they want to make sure they see what they are buy-ing”, Chng adds.

The health of the property market affects many related sectors and livelihoods, observes Chng, from property developers and their staff to property agencies, consultancies, convey-ancing lawyers, contractors and others.

Consumer behaviour has definitely changed with the prolonged circuit breaker, but not many people are prepared to purchase a prop-erty based on virtual tours alone. “Still, a lot of clients are very receptive to meeting sales-persons via Zoom to understand more and to discuss restructuring their property portfolios,” notes Eugene Lim, director of marketing and sales at Oxley Holdings. “Feedback from prop-erty agents is that a lot of the buyers are wait-ing to make a decision only after they have viewed the actual showflat. The extension of sales galleries’ closure is a disappointment. We were hoping to see an uplift in new home sales after the circuit breaker.”

While property players understand the government’s concern about the risk of a sec-ond wave of infections should the economy reopen too quickly, Savills’ Cheong is of the view that reopening sales galleries should be allowed if sufficient conditions are put in place to minimise the risk.

“If visits to sales galleries are restricted to by-appointment-only and under strict safe dis-

SAMUEL ISAAC CHUA/THE EDGE SINGAPORE

ALBERT CHUA/THE EDGE SINGAPORE

In the first six to seven weeks of the circuit breaker, Logan Property sold 38 units at The Florence Residences

Property sector in limbo as projects’ sales galleries stay closed

With strict safe distancing measures in place, visiting projects’ sales galleries could be ‘safer than buying milk at the supermarket’, says Michael Ng of CEL Development

EDGEPROP | JUNE 1, 2020 • EP7

COVER STORY

tancing measures, such as limiting the num-ber of people per group and having a contact tracing system — like what we did at Kopar — it will be safer than buying milk at the su-permarket,” points out Michael Ng, executive director of CEL Development, the development arm of listed conglomerate Chip Eng Seng Corp.

CIRCUIT BREAKER SALESCEL Development had previewed Kopar at Newton in the fourth week of March, after strict safe distancing measures were intro-duced, and it was launched on the weekend of April 4–5, just before the circuit breaker kicked in on April 7. To date, 94 units have been sold, or close to 25%, out of a total of 378 units in the high-end condo located on Kampong Java Road, just off Newton Circus in prime District 9.

Of the 94 units, 20 were sold during the seven weeks — April 7 to May 22 — of the circuit breaker. CEL Development’s Ng esti-mates that 15 out of the 20 were purchas-es made without having visited the physical sales gallery.

At Logan Property’s 1,410-unit Florence Residences, 38 units were sold during the first 45 days of the circuit breaker, while the 1,259-unit Stirling Residences chalked up sales of 14 units over the same period. “If devel-opers are allowed to open their sales gallery, coupled with the virtual tours, sales should pick up pace,” Chng says.

Meanwhile, the biggest of the mega project launches, the 2,203-unit Treasure at Tamp-ines, captured 43 sales from April 7 to May 22. About half of the purchases were by those

who visited the sales gallery previously, notes a spokesperson for Sim Lian Land.

The 1,206-unit JadeScape garnered sales of about 30 units during the circuit breaker, notes Yen Chong, deputy general manager of Qingjian Realty. “It’s still a good number and we will continue to engage property agents during this period.” About 20% to 30% of the purchases were made by Singaporeans based overseas. “They want to purchase a property now because they feel that Singapore is still the place they want to invest in,” says Chong. “They are the ones who have been willing to purchase without having viewed the physi-cal showflats.”

Qingjian Realty and its joint venture part-ner, Perennial Real Estate, are also preparing for the launch of Forett@Bukit Timah, the re-development of the former Goodluck Garden at Toh Tuck Road. The project is scheduled to be rolled out in 3Q2020 — when sales galler-ies are allowed to open.

Oxley Holdings has also recorded relative-ly healthy sales — over 40 units sold from April 7 to May 20 — across three projects, namely the 1,052-unit Affinity at Serangoon; the 1,472-unit Riverfront Residences; and the 548-unit Kent Ridge Hill Residences. Oxley’s Lim anticipates the number of units sold to cross 50 by June 2.

GROWING ACCEPTANCE OF VIRTUAL VIEWING“During the first two weeks of the circuit breaker, most of the buyers were those who had visited the sales gallery previously,” notes Oxley’s Lim. “But from the fifth week of the

circuit breaker, we saw more buyers who only viewed the showflats virtually.”

Oxley was an early adopter of virtual tours for its projects, launching the virtual platform a few weeks before the circuit breaker kicked in. During the circuit breaker, Lim conduct-ed more than 20 webinar training and dia-logue sessions for property agents. “We con-tinuously engage agents to give them new insight into the various projects,” he says. “It’s during such times that developers have to engage property agents and treat them as partners in order to continue the sales mo-mentum on the virtual platform.”

Buying homes based on virtual platforms appears to be gaining acceptance, says Ismail Gafoor, CEO of PropNex. During the first two weeks of the circuit breaker, PropNex sold 16 units each week. That increased to 21 units by the third week, 40 units by the fourth week, 53 units by the fifth week, and 61 units by the sixth week, he relates. “There’s definite-ly greater confidence and acceptance by HDB upgraders and investors to make buying de-cisions based on virtual tours.” As such, Ga-foor reckons new home sales in the month of May is likely to be in the range of 250 to 300 units, similar to the level registered in April.

The relatively healthy weekly sales present-ly arise from two major types of buyers, says Savills’ Cheong. “The first group, the majori-ty, are mainly purchasers who had visited the sales galleries before the partial lockdown,” he says. “The second group are Singaporeans working overseas who wish to return once it is feasible, so they commit to a purchase while abroad. This group is the minority.”

‘GRADUAL FADING’ AS CLOSURE LENGTHENSSavills’ Cheong cautions: “For the majority, the longer the sales galleries remain shut, the memory of the visit will gradually fade and it will become even more difficult for agents to convince buyers to commit. The daily bar-rage of negative economic news would begin to hijack their minds, and even if they can af-ford to buy, they may not want to.”

As such, Cheong reckons monthly new home sales of 280–350 units in April and May could whittle down to the 150–200 range come June and July. “The resale front will fare much worse because potential buyers may not have had the chance to view the units prior to the lockdown,” he says.

Cheong estimates resale transactions to fall sharply from 388 units in April to below 200 in May. And with the extension of cir-cuit breaker measures for property agents, re-sales in the months of June and July are like-ly to see a downslide to 50–70 units, he adds.

Resales will suffer as face-to-face meet-ings are still not allowed except at closing in the real estate agency office, says Bruce Lye, managing partner of SRI. The new CEA guide-lines also means that agents are not allowed to visit even vacated or empty properties to conduct viewings and take pictures or videos. “The challenge during the circuit breaker is that property viewings are not allowed,” he says. “And with this condition being extend-ed beyond June 1, it will be especially diffi-cult for secondary sales of apartments, con-dominiums and even houses where buyers are looking to purchase for their own use.” E

Qingjian Realty sold 20–30 units at JadeScape during the circuit breaker despite the sales gallery being closed

The one-bedroom units at Affinity at Serangoon are fully sold

Treasure at Tampines, where 43 units were sold from April 7 to May 22

ALBERT CHUA/THE EDGE SINGAPORE

ALBERT CHUA/THE EDGE SINGAPORE

SAMUEL ISAAC CHUA/THE EDGE SINGAPORESAMUEL ISAAC CHUA/THE EDGE SINGAPORE

EP8 • EDGEPROP | JUNE 1, 2020

HOSPITALITY

PICTURES: SAMUEL ISAAC CHUA/THE EDGE SINGAPORE

BY TIMOTHY TAYtimothy.tay@edgeprop.sg

Consumer preferences and behaviour are likely to change as the Covid-19 situation evolves, and hotels will have to adapt to these changes “to stay afloat mid/post-pandemic”,

according to a CBRE report on Singapore’s hotel industry. Factors such as hygiene and sanitation in hotels will be among the top priorities when people start to travel again, says CBRE.

The report points out that in hotels, phys-ical check-in services and some face-to-face interactions between service staff and guests will have to be more carefully managed, as safe distancing becomes the new normal. Hoteliers must leverage technologies such as self-check-in kiosks and mobile check-in systems for contactless services in order to keep up with changing consumer prefer-ences. Robots can also help improve over-all operational efficiency by taking on some housekeeping duties.

The MICE (meetings, incentives, confer-ences and exhibitions) industry is also likely to be affected by safe-distancing measures, with the scale of future events reduced, says CBRE. Event organisers will also have to work more closely with venue holders to ensure hygiene and sanitation standards are met, and health screening measures put in place.

CBRE notes that when the post-Covid-19 recovery phase begins, the relatively small size of the Singapore market will put the lo-cal hospitality industry at a disadvantage, es-pecially when compared to some neighbour-ing countries which can tap a larger pool of domestic tourists.

So far this year, Singapore’s hospitality and tourism industries have been badly hit by the abrupt halt in international travel as well as the government’s “circuit breaker” measures. These have caused heightened uncertainty in the tourism and hospitality industries.

Statistics from Changi Airport Group show that in March 2020, passenger move-ments at Changi Airport fell by 71% y-o-y to just 1.65 million passengers. The Singa-pore Tourism Board (STB) also reports that only about 240,000 international visitors ar-rived in the city-state that month, a decline

of 85% y-o-y and one of the lowest interna-tional visitor tallies on record since the SARS outbreak in 2003.

According to CBRE, gazetted local hotel performance in 1Q2020 was subpar due to the performance in March. The month saw occupancy rates hit 40% — a decline of 50%

Hotels must adapt to Covid-19 changes to stay afloat

Hotels in Singapore’s upscale segment have felt the greatest impact, with RevPAR down by 76% y-o-y for March as occupancy rates fell by 69% y-o-y

The Singapore government has been supporting the local hospitality and tourism industries through measures such as tax rebates and job support schemes

EDGEPROP | JUNE 1, 2020 • EP9

HOSPITALITY

y-o-y — while the average daily rate (ADR) was $171, down 20% y-o-y. As a result, rev-enue per available room (RevPAR) took a big hit, declining 62% y-o-y to $69, close to the same levels recorded during SARS.

Upscale hotels felt the greatest impact, with RevPAR down by 76% y-o-y for March, as occupancy rates fell by 69% y-o-y and ADR dropped by 21% y-o-y. Economy ho-tels were partly cushioned by the influx in demand from workers from Malaysia seek-ing accommodation in Singapore after their country announced a movement control or-der on March 18, says CBRE.

When the pandemic began to impact in-ternational travel in March this year, Singa-pore hotels initially shifted gears to focus on the staycation market, banking on some lo-cal demand to stave off the decline in inter-national travel. However, the circuit break-er in April halted the hotels’ preparations.

The CBRE report notes that the Singapore government has been supporting the local hospitality and tourism industries. It has im-plemented various measures, including tax rebates and job support schemes, to prop up the sector. Some of the measures are includ-ed in the Resilience Budget, and the govern-ment has set aside $90 million to support the expected tourism recovery. STB has also set aside $20 million in the form of its Market-ing Partnership Programme, aimed at offset-ting part of the marketing costs for Singa-pore hotels to maintain their international presence and to woo more domestic visitors.

The government has given a 100% prop-erty tax rebate for qualifying properties, in-cluding registered hotels, serviced apartments and MICE venues. It also covers some of the retail shops within the qualifying properties. Further, job support schemes are in place to stem unemployment in the industry, as the government provides wage support for lo-cal employees.

Looking ahead, CBRE says for the local hospitality sector, some insights into the post- virus recovery could be drawn from the SARS experience, but the impact of Covid-19 and SARS differs. The consultancy says that the shock to Singapore’s hospitality sector dur-ing the SARS outbreak in 2003 was relative-ly short-lived, and overall performance re-bounded to typical levels about five months after the industry bottomed out.

According to CBRE’s research, RevPAR levels in 2004 were higher than in 2002.

However, the recovery from Covid-19 will take longer as the scale and impact of the pandemic are significantly greater, it notes. Governments around the world have been forced to close borders, limit domestic trav-el, and issue lockdown decrees to curb wide-spread community transmissions.

For the long term, CBRE says the out-look for the local tourism industry remains healthy on the back of strong fundamentals. About 2,400 new hotel rooms are in the pipe-line for the next two years, representing an annual growth rate of 1.8%, which is much lower than the annual growth rate of 4.5% from 2014 to 2019. CBRE says that “a swifter recovery is plausible, riding on the well- controlled supply situation in Singapore over the next couple of years”.

Top-down investments in improving tour-ism offerings in Singapore will also support the recovery. These include redevelopment plans for Sentosa Island and the neighbour-ing Pulau Brani, the expansion of the two integrated resorts, the new Mandai eco-tour-ism hub, and a planned tourism hub in the

Jurong Lake District from 2026.Separately, Colliers International has re-

leased its quarterly Hotel Insights report showing that for the Asia Pacific as a whole, room occupancy fell to 42.1% in 1Q2020, while ADR came in at US$97.86 ($138.50). These levels were last recorded when the Global Financial Crisis hit the region in 2009.

Hong Kong, Osaka and Shanghai were the only markets in the region that saw double- digit y-o-y declines in ADR during the quar-ter, says Colliers. Bali, New Delhi and San-ya (in China) were the only markets to re-cord y-o-y increases in ADR in excess of 1% during the period, as they implement-ed lockdown measures later than other cities in the region.

The Colliers report also states that hotels in mainland China, Hong Kong and Taiwan have been severely affected by the ongoing pandemic. The steep decline was felt across all hotel tiers, with mid-scale and lower-tier hotels experiencing the steepest declines. The impact of the SARS outbreak in 2003 on hotels in these economies was relatively less severe, but mainland China’s outbound tourism expenditure has increased sharply over the past 17 years. The impact on tour-ism from a slowdown in the Chinese econ-omy, coupled with a decline in the number of outbound tourists from China, has been deeply felt across the region, says Colliers.

Govinda Singh, head of hotels & leisure for valuation & advisory services, Asia, at Colliers International, says: “Due to the im-position of travel restrictions, lockdowns and border closures by governments across the world in response to the Covid-19 outbreak, hotels across Asia Pacific had lacklustre per-formance in 1Q2020. Our global economic outlook, as well as our outlook for the hos-

pitality industry in the region, is expected to remain muted in the near term, given the ongoing uncertainty.”

On the regional outlook, Colliers says: “It is unclear whether a strong rebound for the hotel industry in Asia Pacific will occur in the near term.” But the real es-tate consultancy advises hoteliers to take this time “to review their business strate-gies and position themselves for the even-tual upturn”. It adds: “Hotels should adopt a proactive approach towards communica-tion to maintain confidence amongst stake-holders and we expect a return to histori-cally trusted brands.”

Colliers adds that hoteliers should not low-er room rates as it is unlikely to drive occu-pancies and will extend the recovery period. Instead, hotels should take a “judicious” ap-proach when developing pricing strategies, it says. This lull is also an opportunity to refurbish the assets if possible, which will ensure a higher return on investment when the upturn comes. Other key repositioning possibilities include co-living, serviced apart-ments, and senior living.

The consultancy says that it has received an increased number of cross-border en-quiries for Japan, Singapore and other key urban and resort destinations, as private investors and owner-operators see this as “an opportunity to take advantage of pos-sible or anticipated pricing dislocation in the markets”.

Singh says: “We expect the robust govern-ment stimulus packages, policies and strong economic fundamentals to provide some cush-ioning to short-term impact, and to place the hospitality industry in a strong position for when the eventual recovery occurs.” E

ALBERT CHUA/THE EDGE SINGAPORE

STB, CBRE HOTELSCBRE HOTELS

COLLIERS RESEARCH

Universal Studios Singapore as at April 21, 2020. Singapore is experiencing one of its lowest international visitor travel numbers since the SARS outbreak in 2013.

RevPAR changes (y-o-y) across different segments

Notable hotel investments in Asia for 1Q2020

Government relief measures for Singapore’s hospitality sector

Note: USD conversions are at time of transaction and represent approximate values

EP10 • EDGEPROP | JUNE 1, 2020

OFFSHORE

PARC ESTA Apartment 99 years May 14 1,033 1,732,000 - 1,676 Uncompleted New SalePARC ESTA Apartment 99 years May 15 743 1,256,000 - 1,691 Uncompleted New SalePARC ESTA Apartment 99 years May 16 1,206 1,796,000 - 1,490 Uncompleted New SalePARC ESTA Apartment 99 years May 17 1,119 1,857,000 - 1,659 Uncompleted New SalePARC ESTA Apartment 99 years May 17 743 1,260,000 - 1,696 Uncompleted New SaleREZI 24 Apartment Freehold May 15 646 1,052,000 - 1,629 Uncompleted New SaleSIMS URBAN OASIS Condominium 99 years May 18 667 1,070,000 - 1,603 2017 ResaleTHE SUNNY SPRING Apartment Freehold May 18 1,259 1,225,000 - 973 1998 ResaleDistrict 15 COASTLINE RESIDENCES Apartment Freehold May 12 452 1,077,000 - 2,382 Uncompleted New SalePALM VISTA Apartment Freehold May 14 1,410 1,500,000 - 1,064 2008 ResaleTHE MEYERISE Condominium Freehold May 14 1,281 2,900,000 - 2,264 2014 ResaleDistrict 17 ASTON RESIDENCE Detached 946 years May 15 4,715 2,000,000 - 424 2010 ResaleBALLOTA PARK CONDOMINIUM Condominium Freehold May 13 1,313 950,000 - 723 2000 ResaleDistrict 18 Q BAY RESIDENCES Condominium 99 years May 13 1,119 1,318,888 - 1,178 2016 ResaleTHE TAPESTRY Condominium 99 years May 13 441 689,620 - 1,563 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 12 1,324 1,765,000 - 1,333 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 13 1,033 1,412,000 - 1,366 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 13 1,033 1,376,000 - 1,332 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 14 678 920,000 - 1,357 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 14 1,033 1,314,000 - 1,272 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 16 592 800,000 - 1,351 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 16 915 1,142,000 - 1,248 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 17 678 930,000 - 1,371 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 17 915 1,229,000 - 1,343 Uncompleted New SaleTREASURE AT TAMPINES Condominium 99 years May 17 678 901,000 - 1,329 Uncompleted New SaleWATERCOLOURS EC 99 years May 19 1,098 895,000 - 815 2014 ResaleDistrict 19 AFFINITY AT SERANGOON Apartment 99 years May 14 474 741,000 - 1,565 Uncompleted New SaleAFFINITY AT SERANGOON Apartment 99 years May 14 560 792,000 - 1,415 Uncompleted New SaleAFFINITY AT SERANGOON Apartment 99 years May 15 646 922,000 - 1,428 Uncompleted New SaleAFFINITY AT SERANGOON Apartment 99 years May 16 732 1,164,240 - 1,591 Uncompleted New SaleAFFINITY AT SERANGOON Apartment 99 years May 16 538 798,000 - 1,483 Uncompleted New SaleAFFINITY AT SERANGOON Apartment 99 years May 17 732 1,152,000 - 1,574 Uncompleted New SaleAUSTVILLE RESIDENCES EC 99 years May 14 1,098 840,000 - 765 2014 ResaleKINGSFORD WATERBAY Apartment 99 years May 14 850 1,020,000 - 1,199 2018 Sub SaleTAI KENG GARDENS Terrace Freehold May 19 1,873 2,350,000 - 1,256 Unknown ResaleOLA EC 99 years May 15 1,055 1,246,000 - 1,181 Uncompleted New SalePIERMONT GRAND EC 99 years May 12 840 959,850 - 1,143 Uncompleted New SalePIERMONT GRAND EC 99 years May 13 840 957,420 - 1,140 Uncompleted New SalePIERMONT GRAND EC 99 years May 14 969 1,023,030 - 1,056 Uncompleted New SalePIERMONT GRAND EC 99 years May 15 990 1,027,890 - 1,038 Uncompleted New SalePIERMONT GRAND EC 99 years May 17 840 970,380 - 1,156 Uncompleted New SalePIERMONT GRAND EC 99 years May 17 990 1,084,600 - 1,095 Uncompleted New SaleRIVERFRONT RESIDENCES Apartment 99 years May 14 517 707,000 - 1,368 Uncompleted New SaleRIVERSAILS Condominium 99 years May 15 1,066 1,168,000 - 1,096 2016 ResaleRIVERSOUND RESIDENCE Condominium 99 years May 13 947 940,000 - 992 2015 ResaleTERRASSE Condominium 99 years May 14 807 910,000 - 1,127 2014 ResaleTHE FLORENCE RESIDENCES Apartment 99 years May 12 484 715,000 - 1,476 Uncompleted New SaleTHE FLORENCE RESIDENCES Apartment 99 years May 13 721 1,117,000 - 1,549 Uncompleted New SaleTHE FLORENCE RESIDENCES Apartment 99 years May 14 484 745,000 - 1,538 Uncompleted New SaleTHE FLORENCE RESIDENCES Apartment 99 years May 14 893 1,380,000 - 1,545 Uncompleted New SaleTHE FLORENCE RESIDENCES Apartment 99 years May 14 936 1,364,000 - 1,457 Uncompleted New SaleTHE FLORENCE RESIDENCES Apartment 99 years May 14 936 1,383,000 - 1,477 Uncompleted New SaleTHE FLORENCE RESIDENCES Apartment 99 years May 15 936 1,374,000 - 1,467 Uncompleted New SaleTHE FLORENCE RESIDENCES Apartment 99 years May 17 474 772,000 - 1,630 Uncompleted New SaleTHE GARDEN RESIDENCES Apartment 99 years May 12 614 1,060,700 - 1,729 Uncompleted New SaleTHE GARDEN RESIDENCES Apartment 99 years May 16 452 728,500 - 1,611 Uncompleted New SaleDistrict 20 JADESCAPE Condominium 99 years May 13 764 1,346,500 - 1,762 Uncompleted New SaleJADESCAPE Condominium 99 years May 15 527 942,000 - 1,786 Uncompleted New SaleJADESCAPE Condominium 99 years May 15 764 1,344,000 - 1,759 Uncompleted New SaleJADESCAPE Condominium 99 years May 15 1,259 2,131,500 - 1,692 Uncompleted New SaleDistrict 21 BEAUTY WORLD CENTRE Apartment 99 years May 15 1,970 1,580,000 - 802 Unknown ResaleDAINTREE RESIDENCE Condominium 99 years May 17 1,055 1,787,710 - 1,695 Uncompleted New SaleVIEW AT KISMIS Apartment 99 years May 12 592 1,052,000 - 1,777 Uncompleted New SaleVIEW AT KISMIS Apartment 99 years May 12 710 1,207,000 - 1,699 Uncompleted New SaleVIEW AT KISMIS Apartment 99 years May 16 893 1,500,000 - 1,679 Uncompleted New SaleDistrict 23 BLOSSOM RESIDENCES EC 99 years May 14 1,087 968,000 - 890 2014 ResaleDistrict 26 THE ESSENCE Apartment 99 years May 17 732 1,030,000 - 1,407 Uncompleted New SaleDistrict 27 SELETARIS Condominium Freehold May 13 1,927 1,600,000 - 830 2001 ResaleDistrict 28 RIVERTREES RESIDENCES Apartment 99 years May 13 1,356 1,600,000 - 1,180 2017 Resale

Residential transactions with contracts dated May 12 to 19

PROJECT NAME PROPERTY TYPE TENURESALE DATE

(2020)LAND AREA/

FLOOR AREA (SQ FT)TRANSACTED

PRICE ($)NETT PRICE

($ PSF)UNIT PRICE

($ PSF)COMPLETION

DATE TYPE OF SALE

District 3 AVENUE SOUTH RESIDENCE Apartment 99 years May 14 657 1,559,000 - 2,374 Uncompleted New SaleONE PEARL BANK Apartment 99 years May 13 700 1,684,000 - 2,407 Uncompleted New SaleONE PEARL BANK Apartment 99 years May 16 527 1,297,000 - 2,459 Uncompleted New SaleQUEENS PEAK Condominium 99 years May 15 2,002 3,220,000 - 1,608 2020 New SaleSTIRLING RESIDENCES Apartment 99 years May 12 635 1,201,000 - 1,891 Uncompleted New SaleSTIRLING RESIDENCES Apartment 99 years May 13 764 1,504,000 - 1,968 Uncompleted New SaleSTIRLING RESIDENCES Apartment 99 years May 13 635 1,221,000 - 1,923 Uncompleted New SaleSTIRLING RESIDENCES Apartment 99 years May 16 635 1,205,000 - 1,897 Uncompleted New SaleDistrict 5 KENT RIDGE HILL RESIDENCES Apartment 99 years May 12 893 1,360,000 - 1,522 Uncompleted New SaleKENT RIDGE HILL RESIDENCES Apartment 99 years May 14 893 1,409,000 - 1,577 Uncompleted New SaleKENT RIDGE HILL RESIDENCES Apartment 99 years May 14 517 923,000 - 1,786 Uncompleted New SaleKENT RIDGE HILL RESIDENCES Apartment 99 years May 14 743 1,409,000 - 1,897 Uncompleted New SaleLYNNSVILLE 331 Terrace Freehold May 14 2,982 2,120,000 - 711 2009 ResalePARC CLEMATIS Apartment 99 years May 12 517 859,000 - 1,663 Uncompleted New SalePARC CLEMATIS Apartment 99 years May 12 1,238 1,984,000 - 1,603 Uncompleted New SalePARC CLEMATIS Apartment 99 years May 13 689 1,068,000 - 1,550 Uncompleted New SalePARC CLEMATIS Apartment 99 years May 16 915 1,404,000 - 1,535 Uncompleted New SalePARC CLEMATIS Apartment 99 years May 17 1,044 1,737,000 - 1,664 Uncompleted New SaleDistrict 7 CONCOURSE SKYLINE Apartment 99 years May 14 1,152 1,850,000 - 1,606 2014 ResaleCONCOURSE SKYLINE Apartment 99 years May 14 1,346 2,350,000 - 1,747 2014 ResaleSOUTH BEACH RESIDENCES Apartment 99 years May 13 936 3,190,000 - 3,406 2016 ResaleDistrict 9 HAUS ON HANDY Condominium 99 years May 15 463 1,326,400 - 2,866 Uncompleted New SaleKOPAR AT NEWTON Apartment 99 years May 13 614 1,483,000 - 2,417 Uncompleted New SaleKOPAR AT NEWTON Apartment 99 years May 15 689 1,600,000 - 2,323 Uncompleted New SaleMARTIN MODERN Condominium 99 years May 12 764 1,893,400 1,882,600 2,463 Uncompleted New SaleMARTIN MODERN Condominium 99 years May 14 764 1,993,100 - 2,608 Uncompleted New SalePARC CENTENNIAL Apartment Freehold May 12 1,249 1,700,000 - 1,361 2011 ResaleDistrict 10 CLUNY PARK RESIDENCE Condominium Freehold May 12 1,647 4,000,000 - 2,429 2016 ResaleDUKES RESIDENCE Apartment Freehold May 15 1,152 2,300,000 - 1,997 2011 ResaleGARDENVILLE Condominium Freehold May 19 2,659 4,510,000 - 1,696 1999 ResaleOEI TIONG HAM PARK Detached Freehold May 12 10,064 16,200,000 - 1,610 Unknown ResaleDistrict 11 35 GILSTEAD Apartment Freehold May 12 700 1,823,235 - 2,606 Uncompleted New SaleLINCOLN SUITES Condominium Freehold May 15 2,723 4,485,000 - 1,647 2014 ResaleNOVENA REGENCY Apartment Freehold May 19 560 1,185,000 - 2,117 2015 ResaleDistrict 12 JUI RESIDENCES Apartment Freehold May 13 893 1,530,000 - 1,713 Uncompleted New SaleJUI RESIDENCES Apartment Freehold May 14 657 1,281,280 - 1,951 Uncompleted New SaleTHE ARTE Condominium Freehold May 15 1,399 1,910,000 - 1,365 2010 ResaleTREVISTA Condominium 99 years May 14 1,281 1,850,000 - 1,444 2011 ResaleVERTICUS Apartment Freehold May 16 635 1,268,000 - 1,997 Uncompleted New SaleDistrict 13 BARTLEY RIDGE Condominium 99 years May 14 495 743,000 - 1,501 2016 ResaleTHE TRE VER Condominium 99 years May 15 1,109 1,656,000 - 1,494 Uncompleted New SaleDistrict 14 LE REGAL Apartment Freehold May 18 366 498,800 - 1,363 2015 ResalePARC ESTA Apartment 99 years May 12 958 1,510,000 - 1,576 Uncompleted New SalePARC ESTA Apartment 99 years May 14 1,119 1,675,000 - 1,496 Uncompleted New Sale

Singapore — by postal district LOCALITIES DISTRICTSCity & Southwest 1 to 8Orchard/Tanglin/Holland 9 and 10Newton/Bukit Timah/Clementi 11 and 21Balestier/MacPherson/Geylang 12 to 14East Coast 15 and 16Changi/Pasir Ris 17 and 18Serangoon/Thomson 19 and 20West 22 to 24North 25 to 28

PROJECT NAME PROPERTY TYPE TENURESALE DATE

(2020)LAND AREA/

FLOOR AREA (SQ FT)TRANSACTED

PRICE ($)NETT PRICE

($ PSF)UNIT PRICE

($ PSF)COMPLETION

DATE TYPE OF SALE

Source: URA Realis. Updated May 26, 2020EC stands for executive condominium

DISCLAIMER:The Edge Property Pte Ltd shall not be responsible for any loss or liability arising directly or indirectly from the use of, or reliance on, the information provided therein.

DONE DEALS

BY LAM KA-SING

Nineteen Hong Kong homebuyers who put down deposits for flats at the height of a market rally around June 2018 have walked away from their purchases, forfeiting as much

as HK$11.83 million ($2.16 million) and HK$12.4 million in two instances over the past month.

Nine buyers walked away from Hong Kong developer K Wah International’s Solaria pro-ject in Tai Po district, forfeiting the HK$11.83 million on Friday, according to the project’s Register of Transactions.

The second instance, of 10 forfeitures, was reported from Solaria on April 29. Altogeth-er, more than 100 homebuyers have walked away from their purchases so far this year, according to reports.

Hong Kong’s economy has taken a batter-

ing since the heydays of June 2018. The year-long US-China trade war, the city’s anti-gov-ernment protests and the novel coronavirus outbreak have all taken their toll, pushing the city’s economy into recession over two quar-ters of economic contraction. The proposed introduction of a new national security law by Beijing, announced at “Two Sessions” last week, has added to the turmoil by sparking fears about market stability.

Centa-City Leading Index, Centaline’s timelier price index for used homes, has de-clined about 5% between June 2018 and now. It has dropped about 6.8% since June 2019.

“The flats were bought less than two years ago. Some buyers might have problems with mortgages and funds,” said Ray Au, senior principal district sales manager at Centaline Property Agency. “Some might be more pes-simistic about market prospects.”

Some buyers might have found their cir-

cumstances had changed because of rising unemployment in Hong Kong, as well as un-certainty around jobs in the city.

Every project reports some cases of for-feiture, Au said. But the percentage was usu-ally low compared with the total number of flats sold, he added. The nineteen cancella-tions at Solaria were unusual in that respect.

K Wah did not respond to a request for comment.

The nine flats abandoned last week measure between 325 sq ft and 597 sq ft, and were of-fered at between HK$6.28 million to HK$10.92 million. These will now be resold in a new sales arrangement, as per common practice.

Such cases of forfeiture are common when there is an abrupt change in market sentiment, and with properties that have long settlement periods, said Thomas Lo, property director at Century 21 Deluxe Home. Other projects in the area, to be delivered next year or lat-

er, such as Centra Horizon and The Regent, might face similar issues, he added.

Projects that came up after Solaria in the area were cheaper, according to an agent. This may have prompted some buyers to ditch their relatively more expensive purchases at the K Wah project amid a deteriorating mar-ket and new, cheaper options.

The recent forfeitures have also coincid-ed with Beijing’s announcement that it was going to introduce a national security law in Hong Kong. This has “caused some buy-ers to worry about the withdrawal of funds in the market,” said Willy Liu, chief execu-tive of Ricacorp Properties. “The stock mar-ket plunged last Friday, which has dampened the confidence of buyers.

“Demonstrations and scenes of violence will have a greater impact on the volume and transactions in some districts,” he added. — South China Morning Post E

Hong Kong homebuyers walk away from purchases,spooked by recession and talk of national security law

EDGEPROP | JUNE 1, 2020 • EP11

GAINS AND LOSSES

BY CHARLENE CHINcharlene.chin@edgeprop.sg

The seller of a unit at Gardenville, along Walshe Road, made the top gain of $810,000 over the pe-riod of May 12 to 19. The 2,659 sq ft unit on the fifth floor was bought for $3.7 million ($1,392 psf) in June 2002 and sold for $4.51 million ($1,696

psf) on May 19. The seller therefore made a 22% prof-it, or an annualised profit of 1% over almost 18 years.

Located in District 10, Gardenville was completed in 1999. The freehold development is a four-minute drive to Stevens MRT Station on the Downtown Line.

The second top gain made over the week — a 35% profit of $605,000 — was at Concourse Skyline, along Beach Road. The 1,345 sq ft unit on the seventh floor was purchased for $1.75 million ($1,297 psf) in June 2009 and sold for $2.35 million ($1,747 psf) on May 14. This means that the seller made an annualised profit of 3% over 11 years.

Concourse Skyline, in District 7, comprises 360 units on a 99-year leasehold. It was completed in 2014 and is a five-minute walk to Nicoll Highway MRT Station

on the Circle Line. A unit sold at Beauty World Centre, along Upper

Bukit Timah Road in District 21, made the third largest gain over the week, netting a 58% profit of $580,000 for the seller. The 1,970 sq ft unit on the 24th floor was bought in May 2010 for $1 million ($508 psf), and sold for $1.58 million ($802 psf) on May 15. The seller therefore made an annualised profit of 5% over 10 years.

Beauty World Centre, on a 99-year leasehold, is a two-minute walk to Beauty World MRT Station on the Downtown Line.

On the other hand, the greatest loss incurred over the week in review was from the resale of a 560 sq ft unit at Novena Regency in District 11. Having sold the property for $1.19 million ($2,117 psf) on May 19, the seller suffered a 9% loss of $121,000. The unit was purchased in April 2013 for $1.31 million ($2,333 psf). Over a holding period of seven years, this translates into an annualised loss of 1%.

Novena Regency, along Thomson Road, comprises 55 freehold units. Completed in 2015, it is a five-minute walk to Novena MRT Station on the North-South Line. E

Top gains and losses from May 12 to 19

Non-profitable deals PROJECT DISTRICT AREA

(SQ FT)SOLD ON

(2020)SALE PRICE ($ PSF) BOUGHT ON PURCHASE PRICE

($ PSF)LOSS ($) LOSS (%) ANNUALISED LOSS (%) HOLDING PERIOD

(YEARS)

1 NOVENA REGENCY 11 560 May 19 2,117 Apr 26, 2013 2,333 121,000 9 1 7.1

2 CONCOURSE SKYLINE 7 1,152 May 14 1,606 Aug 25, 2010 1,684 90,000 5 0.5 9.7

Unit at Concourse Skyline reaps $605,000 profit

The seller of the Novena Regency unit, which fetched $1.19 million ($2,117 psf) on May 19, suffered a 9% loss of $121,000

PICTURES: SAMUEL ISAAC CHUA/THE EDGE SINGAPORE

The second top gain made over the week – a 35% profit of $605,000 – was at Concourse Skyline along Beach Road

Most profitable deals PROJECT DISTRICT AREA

( SQ FT)SOLD ON

(2020)SALE PRICE ($ PSF) BOUGHT ON PURCHASE PRICE

($ PSF)PROFIT ($) PROFIT (%) ANNUALISED PROFIT (%) HOLDING PERIOD

(YEARS)

1 GARDENVILLE 10 2,659 May 19 1,696 Jun 24, 2002 1,392 810,000 22 1 17.9

2 CONCOURSE SKYLINE 7 1,345 May 14 1,747 Jun 4, 2009 1,297 605,000 35 3 11.0

3 BEAUTY WORLD CENTRE 21 1,970 May 15 802 May 5, 2010 508 580,000 58 5 10.0

4 PALM VISTA 15 1,410 May 14 1,064 Jun 25, 2007 709 500,001 50 3 12.9

5 THE ARTE 12 1,399 May 15 1,365 Jun 22, 2009 1,028 471,800 33 3 10.9

6 THE MEYERISE 15 1,281 May 14 2,264 May 11, 2017 1,971 375,000 15 5 3.0

7 DUKES RESIDENCE 10 1,152 May 15 1,997 Oct 17, 2011 1,755 279,000 14 2 8.6

8 RIVERSAILS 19 1,066 May 15 1,096 Nov 20, 2012 863 248,440 27 3 7.5

9 RIVERTREES RESIDENCES 28 1,356 May 13 1,180 Jan 1, 2016 998 247,000 18 4 4.4

10 TREVISTA 12 1,281 May 14 1,444 Oct 27, 2015 1,296 190,000 11 2 4.6

11 SIMS URBAN OASIS 14 667 May 18 1,603 Apr 24, 2016 1,351 168,200 19 4 4.1

12 RIVERSOUND RESIDENCE 19 947 May 13 992 Apr 18, 2012 883 104,000 12 1 8.1

13 Q BAY RESIDENCES 18 1,119 May 13 1,178 Mar 8, 2013 1,092 96,758 8 1 7.2

14 KINGSFORD WATERBAY 19 850 May 14 1,199 Apr 10, 2016 1,110 76,235 8 2 4.1

15 BARTLEY RIDGE 13 495 May 14 1,501 Apr 29, 2013 1,354 72,700 11 1 7.0

Source: URA, EdgeProp SingaporeNote: 1. Computed based on URA caveat data as at May 26 for private non-landed houses transacted between May 12 and 19 2. The profit and loss computation excludes transaction costs such as stamp duties.

EP12 • EDGEPROP | JUNE 1, 2020

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UNDER THE HAMMER

BY VALERIE KOR valerie.kor@edgeprop.sg

A freehold, strata, terraced house at Este Villa, along Nim Road, is available for sale at $2.35 million. Spanning 3½ sto-reys and a basement, the 3,411 sq ft, intermediate terraced house has five

bedrooms and a helper’s room. It comes with private lift access to every floor and basement parking for two cars.

The 121-unit strata housing development was launched by MCL Land in mid-October 2011, and all the houses were taken up with-in a fortnight. The development has a pair of semi-detached houses and the remaining 119 are strata terraced houses. The project was com-pleted in 2013.

The intermediate terraced house at Este Vil-la that is on the market is a mortgagee sale. It was put up for auction in February and March with opening prices of $2.4 million, but was subsequently withdrawn both times after fail-ing to find a buyer.

The property will be put up for auction a third time when auctions can resume. In the meantime, it is available for virtual viewing.

“I believe the price [of $2.35 million] is rea-sonable as some units of the same size in the de-velopment are selling at higher prices of above $2.4 million, or $704 psf,” says Joy Tan, head of auctions and sales at Edmund Tie, who is marketing the property.

The latest transaction at Este Villa was for a corner terraced house that changed hands for $2.8 million ($743 psf) in February this year. Prior to that, another strata, intermediate ter-

raced house was sold for $2.4 million ($703 psf) last October, according to URA Realis.

Nearby are Belgravia Green and Belgravia Villas, both located on Belgravia Drive, off Ang Mo Kio Avenue 5. The two strata landed de-velopments are by developer Tong Eng Group.

Belgravia Villas — a 118-unit, freehold, stra-

ta landed development — contains 100 terraced houses and 18 semi-detached houses. The de-velopment was launched in 2013 and complet-ed in 2018. The latest transaction of a strata ter-raced house at Belgravia Villas was for a 3,585 sq ft unit that changed hands for $2.91 million ($812 psf) in April last year. Meanwhile, a strata

semi-detached house was sold for $3.4 million ($858 psf) in early May 2020, according to Realis.

Belgravia Green, an 81-unit, freehold stra-ta landed development, has 10 semi-detached houses, 14 terraced houses without lift and 57 terraced houses with private lift. The project was launched in late 2018, and is still under construc-tion. The latest strata terraced house transactions at Belgravia Green were for a terraced house of 3,132 sq ft that was sold for $2.79 million ($891 psf), and another slightly bigger one of 3,423 sq ft that fetched $3.03 million ($891 psf).

Tan notes that the transactions of units sold at Belgravia Villas and Belgravia Green, which are newer, involved prices well above $800 psf.

She expects Este Villa to attract young cou-ples with children or multi-generational fami-lies who want to enjoy condominium facilities while also upgrading to a landed property with the convenience of a private lift.

Este Villa is also near Seletar Aerospace Park, Tan adds. Hence, the property will also attract investors who want to rent it out to those work-ing there. Rental transactions for terraced houses at Este Villa ranged between $4,500 and $6,300 per month, from January to April this year. E

Freehold strata terraced house at Este Villa going for $2.35 mil

Este Villa is a freehold, strata landed housing development along Nim Road

Recent transactions at Este VillaContract date Area (sq ft) Price ($) Price ($ psf)

Feb 4, 2020 3,767 2,800,000 743

Oct 29, 2019 3,412 2,400,000 703

Jul 23, 2019 3,423 2,458,000 718

Jun 20, 2019 3,423 2,410,000 704

Jun 7, 2019 3,412 2,525,000 740

URA REALIS

Recent rents for 3,000—3,500 sq ft units at Este Villa Lease month (2020) Monthly rent ($)

April 4,500

March 5,450

February 5,000

January 6,300

EDGEPROP SINGAPORE

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