Singapore - Keppel Land



Singapore - Keppel Land
Singapore Investment
In Raffles Place, the heart of the Central
Business District (CBD), two prime office
buildings, Capital Square and Prudential Tower
obtained Temporary Occupation Permits in
August and September 1998 respectively. With
these additions, the Group’s office portfolio
has grown to eight prime office buildings.
These include Ocean Building, Ocean Towers,
Keppel Towers, GE Tower, The Exchange and
Bugis Junction Towers, all of which enjoy good
Capital Square and
Prudential Tower are
Keppel Land’s latest
office developments in
Raffles Place.
Capital Square
Capital Square offers the largest column-free floor plate in Raffles Place spanning 31,000 sf
per floor and is supported by the latest intelligent office features. The 16-storey office tower
yields 320,000 sf of Grade A office space. There is also an adjacent row of 19 conservation
shophouses, which yield an additional 49,000 sf of space.
The 19 restored shophouses, in the historical precinct of China and Pekin Streets, have
modern features such as private lift lobbies. Floor areas range from 1,400 sf
to whole floor interconnecting units of up to 9,200 sf.
The office tower is almost 65% committed with Citibank NA as an anchor tenant taking
115,000sf of space. Another major tenant is Morgan Stanley Asia with 70,000 sf of office
Market Review
Office Market
Further decline in occupancy and rental rates
In 1998, some two million square feet of new office space was completed while demand growth was checked by the fall-out from
the financial sector. However, island-wide occupancy eased by only 3.7% from the previous year’s to an to average 88%.
The impact of the slower economic growth and downsizing of financial companies was more keenly felt in rentals than occupancy
rates as these declined by some 26% in 1998, to average $4.70 psf by the year-end. At Raffles Place, average rentals fell to about
$6.10 psf whilst capital values fell to $1,500 psf.
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The Year in Review
Market Review
Downward pressure for the office market is expected in 1999 before picking up in 2000
As the economy is closely linked to the political and economic uncertainties in the region, 1999 is expected to be another difficult
year for the office market. In addition, another two million sf of office space is also scheduled for completion with major projects
such as DBS Square (Parcel A) and Bank of China extension.
Demand is, however, expected to pick up by 2000, as the regional economies recover. With Singapore’s management of the
financial crisis and moves at liberalisation of the financial sector, foreign investors are beginning to recognize the advantage of
locating their headquarters and key financial businesses in Singapore as a gateway to the region.
Capital Square is a joint venture project with Rodamco
Pacific BV, a member of the Dutch Rodamco Group,
which is one of the largest and most diversified property
investment fund companies in the world. Rodamco has a
30% equity stake in this project.
Prudential Tower
Prudential Tower offers 250,000 sf of commercial space
within the heart of the CBD, with direct access to the
Raffles Place MRT station via an underpass. The 30-storey
building has column-free floor plates up to 12,000 sf.
Some features of the intelligent building include advanced
building automation systems, which allow for flexible
air-conditioning provisions after office hours.
Demand has been strong with close to 85% of the total
floor space either sold or leased. Prudential Assurance
Company Singapore bought 34% of the office space
(or seven storeys), together with the naming rights of
the building. New tenants include the major French bank
BNP Prime Peregrine, the publishing company McGraw
Hill, and a business centre.
Bugis Junction was voted
Singapore’s second most visited
shopping centre in a survey by
Singapore Press Holdings.
Bugis Junction
Bugis Junction is a successful mixed-use development in Singapore, well-known for its
creative blend of office space, shopping experience and an international hotel in restored
historic shophouse design. The complex has continued to outperform the sluggish market,
with both the office tower and retail space almost fully leased while Hotel Inter-Continental
Singapore achieved good occupancy of almost 70%.
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The Year in Review
During the year, Bugis Junction continued to win more
awards for its outstanding quality and performance, one
of which was the “Singapore Institute of Architects
Design Award” in the Urban Design Category.
Assessment was based on innovative solutions to design,
appropriateness of design to the tropical environment
and its quality compared with other world class designs.
Hotel Inter-Continental Singapore also bagged a few
awards during the year. The hotel was voted the “Third
Best Business Hotel in the World” in 1998, by readers of
Business Traveller International. It also won the “Green
Globe Distinction Award, 1998” awarded by The World
Travel and Tourism Council for the hotel’s successful
commitment to service excellence whilst caring for and
protecting the environment.
Singapore Residential, Industrial and
Other Properties
Villa Verde was a sell-out
In 1998, three major 99-year residential projects totalling 515 terrace houses and
1,146 condominium units were launched. Despite the weak market conditions, 100%
sales were acheived. Demand for Keppel Land homes was fuelled by competitive pricing
coupled with the Group’s signature quality, thoughtful layout and finishing. Customer
focus was pursued by market surveys and studies to understand the home-owners’ tastes
and needs.
Market Review
Residential Market
The residential market bottomed out with transactions picking up towards the end of 1998
The standoff between buyers and developers came to a head with developers cutting prices to improve cash flows in the third quarter
of 1998. Capital values of non-landed properties fell by about 23% from the previous year’s. This was a 40% decline from the peak
in mid-1996.
Despite the uncertain economic outlook, affordable prices of around $400-$450 psf for the lower-end private housing segment drew
buyers back to the market. The government’s decision to grant a 10% reduction in employer’s CPF contribution had minimal impact
on affordability as interest rates were on a downward trend, reducing to 6% by end-1998 and falling further to 5% in the first
quarter of 1999. Transactions surged by 2,987 sales in the last quarter of 1998, bringing annual sales to 6,096 units. This was a
10.4% increase from the previous year.
Buying momentum appears sustainable through 1999
The number of launched but unsold residential units has been reduced by a substantial 28% to around 6,300 units. Although there
are about 20,000 new residential units in the pipeline (half of which has secured the pre-requisites for sale), developers may defer
their project launches as holding costs have reduced with the decline in interest rates. The government’s freeze on land sales for 1999
will help to moderate supply. Although the buying momentum appears to be sustainable through 1999, buyers are expected to
remain price sensitive due to the uncertain economic outlook.
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The Year in Review
Villa Verde
Priced attractively and with one of the
biggest built-up areas of up to 4,000 sf
for terrace houses, Villa Verde was a hit
with over-night queues forming four
days before the launch. The 515 units
of three-storey terrace houses located
in the up-coming Choa Chu Kang area
have all been sold.
Launched when the residential market
was at a stalemate and demand for
99-year landed houses seemed to have
suffered, Villa Verde bucked the market
trend, drawing hundreds of buyers
back into the market.
Avenue Park at Sixth Avenue
will be redeveloped when there
is sufficient market recovery.
Palm Gardens and The Mayfair
Palm Gardens has a total of 694 condominium apartments and is located directly
opposite Singapore’s first Light Rail Transit (LRT) station, which is just one stop from
the Choa Chu Kang MRT station and is expected to be operational by 1999. The Mayfair
is located in Jurong East, Singapore’s new regional business centre and first
International Business Park. It is also close to the Chinese Garden MRT station and offers
452 condominium apartments. Both are expected to be completed by 2000.
Nassim Woods
Nassim Woods is Keppel Land’s luxury condominium in the prestigious District 10 and is
held for lease. Temporary Occupational Permit was obtained in August 1998, and all
35 apartments have been leased. Tenants were mostly expatriates from the United States
and Europe. The quality apartments in Nassim Woods range from 2,000 sf for a
three-bedroom unit to 6,400 sf for a penthouse unit.
Pebble Bay
Pebble Bay, an exclusive waterfront condominium in Tanjong Rhu, received Temporary
Occupation Permit in October 1997. Of the 510 luxurious apartments, 451 had been sold
and another 43 apartments leased. The remaining 59 apartments, including those which
have been leased, were re-launched in end-March 1999 and take-up has been good.
Freehold Landbank
Keppel Land has more than 720,000 sf of freehold residential land. They include sites in
the established areas of Sixth Avenue, Sunset Way and Newton. These will be developed
when there is sufficient market recovery. For the time being, existing properties on the
sites at Sixth Avenue, Sunset Way and Newton have been leased.
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The Year in Review
Keppel Land has two industrial properties in the Paya
Lebar and MacPherson Industrial Estates.
Located along the primary Paya Lebar thoroughfare,
Orion Industrial Building is a prime freehold industrial
To date, 60% of the space has been sold and another
13% leased.
Quartz Industrial Building is another prime industrial
building located at Aljunied Link, which is within the
MacPherson Industrial Estate. The eight-storey quality
industrial project has already achieved 93% take-up,
with 70% sold and another 23% leased.
Keppel Land has two conservation shophouse
developments for commercial and retail use at Peck
Seah Street and Joo Chiat Road.
Seven of the eight shophouses at Peck Seah Street near Tanjong Pagar MRT station have
Quartz Industrial Building
is one of Keppel Land’s
two industrial properties.
been sold while the remaining unit has been leased. At Joo Chiat Road, one of four units
has been sold and all the office space in the remaining units have been leased.
Market Review
Industrial Market
The industrial market remained soft in 1998 and is expected to weaken further in 1999
The industrial market remained soft in 1998 with island-wide stock of factory space increasing by 1.5 million sm to 22.6 million sm
and occupancy sliding by 2% to 88% by end-1998. Average monthly rentals also dipped to $2 psf for the first storey and $1.20 psf
for the upper storey units.
The slowdown in the industrial market was in tandem with the manufacturing sector which contracted by 0.5% in 1998. Average
capital values of prime freehold flatted industrial space fell to $595 psf for the ground floor and $425 for upper floors, in line with
the falling rentals.
As the manufacturing sector in Singapore is not expected to recover in the short-term, the industrial market is likely to weaken
further in 1999.
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