ST : Nov inflation up slightly

Dec 23, 2009
Nov inflation up slightly
By Fiona Chan



Housing cost went up by 0.2 per cent in November on account of higher gas tariffs. -- ST PHOTO: ALPHONSUS CHERN

INFLATION in Singapore stayed largely flat last month, according to the latest figures released by the Department of Statistics (DOS) on Wednesday.

Consumer prices slid 0.2 per cent in November from a year ago, the eighth straight month of year-on-year decline.

The slip was largely due to the lower cost of electricity and gas tariffs, said DOS. But this was partly offset by higher prices for transport and communication, food, and healthcare.

On a month-on-month basis, the consumer price index (CPI) inched up 0.4 per cent between October and November. Adjusted for seasonal differences, the increase would have been 0.5 per cent.

This follows a 0.6 per cent rise between September and October, an uptrend that looks set to continue into next year, economists said.

Retail rents start to pick up

Retail rents start to pick up
Dec 22, 2009 - PropertyGuru.com.sg

Retail rents in the prime Orchard Road and suburban malls are creeping up in the last quarter, after declining for 4 straight quarters.

A report by DTZ Research showed the gross rents of prime first-storey retail space in Scotts and Orchard roads increased 1 percent to $39.70 psf per month, after it dropped 7.3 percent over the past four quarters.

In the suburban areas, retail rents escalated after it stabilized in the previous months, while rents in other areas such as Great World City and Bugis Junction continue to fall. Quarter-on-quarter prime first-storey retail rents in suburban malls increased 1.5 percent to $33.50 psf per month, after falling 2.1 percent from its peak in the third quarter last year.

Ms. Chua Chor Hoon, DTZ South-east Asia Research head, said the leasing activity has increased, as retailers gain more confidence due to the economic recovery. "There is strong demand for prime first-storey space, evident from the little availability and speed at which they are being taken up, despite the amount of new space that has come up along Orchard Road.”

DTZ estimates that 2.6 million square feet of new retail space, including Mandarin Gallery and 313@Somerset, were added to the supply this year. This is the highest new stock ever seen. Ms. Chua expects that retail rents in Scotts and Orchard Road, and the suburban areas will continue to increase by 2 to 7 percent in 2010.

The new stocks of retail spaces in Orchard Road are expected to reach 165,000 square feet next year, nearly 7 percent of the almost 2.4 million square feet of new retail space expected to be available next year. Most of the new supply outside the city areas will be concentrated in Serangoon Central, Resorts World Sentosa and Nex.

Mayfair Gardens up for en bloc sale

Mayfair Gardens up for en bloc sale
Dec 22, 2009 - PropertyGuru.com.sg

There are more signs of life in the en bloc market, with owners of Mayfair Gardens located in Rifle Range Road being the most recent to put their estate up for sale.

Mayfair residents want $210 million or more for their 99-year leasehold plot, which accounts to around $857 per square foot of potential gross floor area.

That would permit owners of the development with 124 units to earn between $1 million and $2.1 million each, depending on the unit’s size.

In March, only about 80 percent of owners supported a sale but they preferred to hold back until the market starts to pick up prior to their launching.

Their price tag of $210 million also includes the topping of the site's lease to 99 years and an estimated development charge of $40 million.

The marketing agent for Mayfair Gardens is CKS Property Consultants, which also brokered the collective sale of Dragon Mansions.

Quest set to explore the Singapore market

Quest set to explore the Singapore market
Dec 22, 2009 - PropertyGuru.com.sg

Quest, a serviced apartment provider based in Australia is interested to break into the Asian market, beginning with Singapore. It has properties in Fiji, New Zealand and Australia.

Paul Constantinou, chairman of Quest, said that Singapore is a ‘priority market’, with its ability to lure both business travelers and investments and its stable economic performance.

“We know the market conditions here and have seen the industry to be a resilient one,” he said, referring to the Ascott Group and Frasers who have also set up in Australia. “The market is now ready for individual players to buy into the industry.”

The business model of Quest operates mainly on a franchised system. Apartments are built by Quest or a developer, and are sold to property trusts and individual investors, who lease it back to Quest for 25 years. Franchisees can buy the rights to manage the serviced apartment.

In Singapore, Quest hopes to associate with land owners and local developers.

Mr. Constantinou sees a rising tide of people who want to get involved in the serviced apartment industry, due to the growing wealth in Asia.

“Based on our own experience of starting out with a mix of company-owned and franchised properties, we found that franchised properties were able to deliver a better bottom line and scored a 15 per cent to 20 per cent better performance,” Mr. Constantinou said.

“The benefits of franchising are that the person who owns the business runs the business and there is certainty of income for the developer. Developers want the surety of income over extended periods of time.”

Currently, Quest owns 128 properties in New Zealand, Australia and Fiji, with 74 franchisees.