singapore property weekly issue 165

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CONTENTS

p2 Should You Invest in Iskandar Malaysia?

p7 Singapore Property News This Week

p11 Resale Property Transactions

(July 2 – July 8 )

Welcome to the 165th edition of the Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 165

Page | 2Back to Contents

By David Chong (guest contributor)

Should you invest in Iskandar Malaysia?

Some say it’s the next big thing, some say it’s

going to be the next big white elephant.

Singapore’s elder statesman, and former

Prime Minister, Lee Kuan Yew famously

cautioned Singaporeans: ―Let’s wait and see

how Iskandar develops. This is an economic

field of cooperation in which, you must

remember, we are putting investments on

Malaysian soil. And at the stroke of a pen,

they can take it over.‖

Should You Invest in Iskandar Malaysia?



White elephant or not, Iskandar Malaysia is

dependent on 3 critical success factors I call

INC:

I – International Buy-In

N – New Metropolis

C – Connectivity

INTERNATIONAL BUY-IN

Iskandar Malaysia, also commonly referred to

as Iskandar Johor, needs foreign investments

and the participation of the international

community. Without foreign participation,

Iskandar Johor will merely be, well, Johor. For

the longest time, properties in Johor have

been lagging behind places such as Kuala

Lumpur and Penang. For many Malaysians

including myself, Johor (Bahru) is more of a

stopover city before reaching Singapore.

All this started to change in 2012 with the

completion of major catalytic projects such as

Legoland Malaysia, Mall of Medini,

Marlborough College Malaysia, and the

coastal highway. The international community

began to see the commitment of the

government in carrying through various

catalytic projects and infrastructure

development.

Lured by incentives and the lower cost of

doing business, investments poured in from

Singapore, Spain, USA, Japan, and many

other countries. The bulk of these

investments are in manufacturing and

residential properties. Every now and then,

we hear of new investments pouring in, and

new projects being launched. This has

increased the demand for properties in the

Iskandar region.

While foreign investors are attracted by the

various incentives in Iskandar, this alone is

insufficient.



To sustain the investment flow, apart from

incentives and the lower cost of doing

business, companies need a sufficient pool of

talent in Iskandar Malaysia.

How do you attract a sufficient pool of talent?

NEW METROPOLIS

In order to attract skilled talent, Iskandar

Malaysia needs to be a metropolis of

international standards. You do not want a

scenario where there are impressive buildings

all around but with no one living or working in

it. Iskandar Malaysia needs to be sustainable

and liveable.

Johor is traditionally a place with high crime

rates – the issues of crime and safety needs

to be tackled. Residents need to feel safe

walking the streets of Iskandar. Iskandar

needs to create not only jobs, but a diversity

of job opportunities with competitive salaries.

Modern amenities need to be abundant to

cater to the diverse lifestyle of its residents.

What attracts young urban professionals and

retirees can be very different.

Iskandar Malaysia also needs to have its own

unique flavour in attracting migrants.

Malaysians in general are friendly and

hospitable. This can be a unique advantage

in itself (hint: Some cities are known to be

rude and unfriendly). Island resorts and

beautiful beaches along the Desaru Coast

can be another unique advantage.

One clear advantage that Iskandar Malaysia

has over other cities is its close proximity to

the economic powerhouse – Singapore.

CONNECTIVITY

In 2020, there will be a High Speed Rail

(HSR) connecting Kuala Lumpur to Singapore

with an estimated travelling time of



90 minutes. It will stop at Iskandar Malaysia

before reaching Singapore. A Rapid Transit

System (RTS) will also connect Iskandar

Malaysia to Singapore’s Thomson Line MRT

by 2019. Now imagine living in Iskandar and

working in Singapore by taking the RTS-MRT

(bypassing the busy traffic at Woodlands

Causeway or Second Link Expressway) and

arriving at work in 30 minutes. Or imagine

working in your Singapore office in the

morning, visiting your factory in Iskandar in

the afternoon, having your evening meeting in

Kuala Lumpur… and be back in Singapore on

the same day. All this is possible with

improved connectivity.

Once the HSR and RTS-MRT is completed,

Iskandar Malaysia will be a convenient place

to stay or work. The success of Iskandar

Malaysia is very much dependent on these

two projects proceeding as planned. Kuala

Lumpur-Iskandar Malaysia-Singapore has the

potential to be a mega region once the

connectivity is in place.

CONCLUSION

Lee Kuan Yew’s full quote is ―And at the

stroke of a pen, they can take it over. They

are not likely to because they want more

investments―. Investments in Iskandar

Malaysia have reached a total cumulative

committed investment of RM131.64 billion in

2013 with 64% contributed by domestic

investors. It has reached a point where there

is too much at stake for Iskandar Malaysia to

fail. There is such a thing as ―too big to fail.‖

Fuelled by the domestic and foreign private

sector, Iskandar Malaysia has created a

momentum of its own.

Remember Iskandar Malaysia ―INC‖ – the

three critical success factors when making



your investment decision. If you feel that

Iskandar Malaysia is able to transform itself in

these 3 major areas, then this represents a

window of opportunity for Iskandar properties.

Once Iskandar Malaysia has reached its

maturity, you might have already missed the

boat. Then you might be lamenting, ―Why are

properties in Iskandar Malaysia suddenly so

expensive?‖

David Chong is a Property Infopreneur and

founder of InsideIskandar.my, an online

magazine which helps property investors

understand Iskandar Malaysia.

http://insideiskandar.my/



http://propertymarketinsights.com/


Singapore Property This Week


Residential

Resale condo transactions on the rise but

prices still dipping

Data from Singapore Real Estate Exchange

(SRX) revealed that while there was a 7.9 per

cent increase in resale volumes for private

condominium units in the June from May,

resale prices have fallen by 1.4 per cent

month-on-month, across all regions. Condo

resale prices in June this year are the lowest

since December 2012. The total number of

resale transactions made this June is also

23.8 per cent lower than in June 2013. Ong

Kah Seng from R’ST Research believes that

property owners are adjusting their prices to

fit buyers’ demand. Furthermore, he believes

that sales have been affected by the June

holidays and the World Cup season. Data

from SRX showed that condo units in the

Rest of Central Region (RCR) suffered a 3.2

per cent fall in prices—the largest decline

among all regions. Also, condo units in the

Core Central Region (CCR) saw a 1.7 per

cent dip in prices, while those in the Outside

Central Region (OCR) only suffered from a

0.3 per cent price fall. Eugene Lim from ERA

Realty said that loan restrictions, increase in

developer stock, and a weak rental market

could have affected the resale market in the

CCR region.

(Source: Business Times)



Experts expect weak demand for condos

in H2

Although developers have lowered condo

prices, market experts still expect condo

demand to remain low. Data from URA

showed that developer’s sale of private

condos have fallen by 68 per cent to 482

units in June from May. Mohd Ismail from

PropNex predicts that 600 to 800 condo units

will be sold per month in the second half of

2014. Similarly, Chia Siew Chuin from Colliers

International also expects the market for

condos to shrink as buyers are less willing to

commit. Nonetheless, developers’ price cuts

in the previous months have captivated the

interest of some price conscious buyers. At

the re-launch of The Panorama at Ang Mo Kio

in May 2014, Wheelock Properties have cut

prices by 10 per cent to push sales. 100 units

were sold at the discounted median price of

$1,241 psf, proving that discounts may attract

price-sensitive buyers. However, sales have

cooled for other projects such as Kallang

Riverside and Waterfront @ Faber. Ong Teck

Hui from JLL said that the overall weak

demand for condos was due to the Total Debt

Servicing Ratio. Furthermore, Nicholas Mak

from SLP International expects the total

number of private homes sold by developers

in 2014 to be less than 11,000 units if

demand remains weak.


Spring Grove selling for $1.39b

In an en bloc sale, Spring Grove

condominium which is located at Grange

Road is asking for $1.39 billion or $2,512 per

square foot per plot ratio. The condominium

which is marketed by Knight Frank has a

maximum gross floor area of 553,377 square



feet. Located within the Core Central Region

(CCR), Spring Grove currently has three

blocks of 20-storey apartments with 325 units.

Its tender will close on September 10, 2014.

Besides the large land space and its prime

location, analysts believe that Spring Grove’s

own unit owners, who may have demanded

for higher compensation, may have pushed

its selling price up. Due to the hefty price tag,

market analysts are not optimistic about the

sale. Not only so, previous billion-dollar sales

that are similar in nature have failed to attract

committed buyers. Nonetheless, if it is

successfully sold, Spring Grove will triumph

Farrer Court’s $1.34 billion en bloc sale in

2007. Nicholas Mak from SLP International

said due to the hefty land cost, developers

may have to partner up in a joint venture to

purchase Spring Grove so as to spread risks.


Commercial

Real estate investments fell 11 per cent in

Q2

According to a report by DTZ, the overall real

estate investments in Q2 have fallen by 11

per cent from the previous quarter to $4.4

billion. Non-residential investments such as

investments in office units have also fallen by

6 per cent to $2.9 billion. However, market

experts believe that non-residential deals will

continue to push investment activities for the

rest of the year. While the total non-residential

transactions made in Q2 have driven real

estate investment volumes in H2 of 2014 to

$9.4 billion, it is still 17 per cent lower year-

on-year, compared to 2013. According to a

report by Colliers, the fall in residential

investment sales could be due to weak

investor interest in en bloc sales



and strata-titled properties. However, interest

in commercial properties is expected to

increase as the office rental market recovers

from its slump.


http://www.moneymatters.sg/



Non-Landed Residential Resale Property Transactions for the Week of Jul 2 – Jul 8

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 861 1,500,000 1,742 99

5 HERITAGE VIEW 1,313 1,500,000 1,142 99

8 CITYLIGHTS 678 1,175,000 1,733 99

9 VISIONCREST 926 1,730,000 1,869 FH

10 THE MONTANA 893 1,600,000 1,791 FH

10 ONE JERVOIS 1,701 2,820,000 1,658 FH

10 GALLOP GABLES 1,528 2,430,000 1,590 FH

10 ALLSWORTH PARK 1,959 2,900,000 1,480 999

11 NOVENA LODGE 732 1,120,000 1,530 FH

11 HILLCREST ARCADIA 1,970 2,230,000 1,132 99

12 BALESTIER TOWERS 1,410 2,608,000 1,850 FH


12 BALESTIER TOWERS 990 1,680,000 1,696 FH












Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure























15 THE ESTA 1,399 1,980,000 1,415 FH

15 HAWAII TOWER 2,239 2,600,000 1,161 FH



NOTE: This data only covers non-landed residential resale property

transactions with caveats lodged with the Singapore Land Authority.

Typically, caveats are lodged at least 2-3 weeks after a purchaser

signs an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 ROYALE MANSIONS 1,216 1,250,000 1,028 FH

15 SUITES @ EASTCOAST 1,787 1,700,000 951 FH

16 CASA MERAH 1,238 1,400,000 1,131 99

17 THE GALE 1,356 1,450,000 1,069 FH

18 MELVILLE PARK 1,044 826,000 791 99

19 KENSINGTON PARK CONDOMINIUM 1,658 1,828,000 1,103 999

20 THE WINDSOR 1,873 2,080,000 1,111 FH

21 THE CASCADIA 1,184 2,036,480 1,720 FH

21 THE STERLING 1,507 2,380,000 1,579 FH

21 SPRINGDALE CONDOMINIUM 1,119 1,090,000 974 999

22 THE LAKESHORE 1,270 1,260,000 992 99

22 PARC OASIS 1,227 1,060,000 864 99

23 HILLVIEW REGENCY 1,109 1,000,000 902 99

23 HILLVIEW REGENCY 1,130 948,000 839 99

26 FOREST HILLS CONDOMINIUM 1,163 950,000 817 99

27 ORCHID PARK CONDOMINIUM 958 753,000 786 99

singapore property weekly issue 165

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