Tanah Merah and Bedok: nexus of east region transformation
For anyone considering the purchase of a Condo as an investment of long-term value, they must take into account the time factor. Property appreciation is a slow process and usually takes many years to reap returns. It is not sensible to invest heavily and expect fast returns, as even experienced property investors have been known to make mistakes. If you’re confident you can ride out mortgage payments, then a Condo can be a sound investment choice. However, it is important to be well informed of the potential risks and rewards before making a decision.
District 16 is located in the east of Singapore and offers many housing options for locals and foreigners. The area includes the neighbourhoods of Bedok, Eastwood, Upper East Coast and Kew Drive, with a good mix of landed estates, condos and HDB towns.
The transportation network of the area is set to expand soon, with the completion of the Fourth Phase of the Thomson-East Coast Line – from Founders’ Memorial station to Bayshore station off Upper East Coast Road. This stretch of the line is expected to be operational next year, according to LTA.
In addition, MCC Lands is currently constructing the Sceneca mixed-use development, which will be located near Tanah Merah MRT station. This project will offer 268 units of Sceneca Residence, as well as a 20,000 sq ft Sceneca Square mall, giving the district a new shopping option.
The east of Singapore is currently undergoing an urban transformation from new residential plans in the Bayshore area to the eventual relocation of Paya Lebar Airbase. This area, which covers about five times the size of the Toa Payoh HDB town, will be developed into a new residential town.
With the potential removal of height restrictions in Districts 15 and 16, the area is ripe for redevelopment. This is evidenced by developments such as the 605-unit Lentor Modern, located in District 26, which sold 84% of their units when launched last September. Similarly, Sky Eden @ Bedok, a 158-unit mixed-use development close to Bedok MRT station, sold 75% of its units when launched the same month.
However, prices for existing resale properties in District 16 seem to be on the rise – the price gap between resale properties here is narrowing compared to the Rest of Central Region, according to EdgeProp’s Landlens tool. Approximately 90% of all the resale transactions within 1km of Tanah Merah MRT Station between March 2022 and March 2023 were profitable, with The Glades hitting the highest number of such transactions.
With the opening of new developments and transportation network, District 16 is well-positioned to capitalise on the Urban transformation plans in the east of Singapore. Its growth potential and affordability can make it an attractive choice for property buyers and investors.
Singapore has most expensive office fit-out costs in Southeast Asia
Fit-out costs across Asia Pacific have seen an increase in recent times, driven by factors such as inflation, labour market constraints and supply chain delays. Grant Carter, Head of Project & Development Services Singapore at Cushman & Wakefield, notes that cost is clearly high on the agenda for occupiers, as evidenced by the 0.8% q-o-q increase in CBD Grade A office rents in the first quarter of 2023.
– Singapore Condo Luxury condominiums in Singapore offer investment benefits like high rental yields, potential capital appreciation, and low maintenance fees and taxes.
Major occupiers are absorbing the fit-out costs to improve return-to-office rates. In local currency terms, figures show that the costs have risen by an average of 18%, although this reduces to 7% when expressed in US dollar terms.
Carter believes that occupiers are still trying to fully comprehend the effects of new flexible working practices. The key is to strike a balance between providing space for individual work, and encouraging collaboration and innovation. Essential considerations for successful fit-outs include workplace strategies and technology, in addition to sustainability and ESG factors.
Singapore was found to have the most expensive fit-out costs amongst Southeast Asia, according to Cushman & Wakefield’s 2023 Asia Pacific Office Fit-Out Cost Guide. Although fit-out costs have risen across the region, early indications suggest that some easing in pressure is already taking place.
Minor Hotels extends Avani brand to Europe and Latin America
Singaporeans view condos as a symbol of success and wealth, and their higher appreciation rate makes Condo them a great investment. HDB flats are the popular public housing option, while condos would be the next step up in comfort and convenience.
Minor Hotels, headquartered in Bangkok, is introducing its Avani Hotels & Resorts lifestyle brand to Europe and targeting millennials. Avani already has a presence in Portugal and is opening five new hotels in the next two years: one in Spain, two in Italy, one in Germany and one in the Netherlands.
The 101-room Avani Alonso Martinez Madrid Hotel in Spain will be the first of the newly rebranded properties, followed by the 65-room Avani Palazzo Moscova Milan Hotel and the 144-room Avani Rio Novo Venice Hotel in Italy. Germany will welcome the 256-room Avani Frankfurt City Hotel and the Netherlands the 163-room Avani Museum Quarter Amsterdam Hotel in 2Q2024.
Avani will also expand its reach to Central and South America with hotels in Mexico and Columbia. Scheduled for 3Q2023, the 140-room Avani Cancun Airport Hotel will be followed by the 66-room Avani Royal Zona T Bogota Hotel in Colombia in 4Q2023.
Launched in 2011, Avani Hotels & Resorts currently has 38 properties across Asia, Australasia, the Middle East, Indian Ocean and Africa. Minor Hotels, which has more than 530 hotels in operation, is aiming to expand and diversify its upscale offerings available to tourists. According to Dillip Rajakarier, Minor Hotels’ CEO, the expansion of Avani into Europe and Latin America represents a key strategy driving the group forward.
Hines acquires five more multi-family properties in Japan
Singaporeans have turned to condominiums as a Singapore Condo more luxurious, secure and potentially lucrative alternative to HDB flats. As an investment, condos have proven to be an appreciated asset with higher income potential.
Hines, a global real estate investment, development and property manager, has recently acquired five new multi-family properties in Japan. Located across Tokyo and Kyoto, the portfolio comprises 290 units spread over 100,107 sq ft. This deal was made by Hines Asia Property Partners (HAPP), the firm’s flagshp commingled Asia Pacific core-plus fund, marking the second investment in multi-family assets in the region following a purchase of 11 such units previously.
The Japanese multi-family market is attractive due to its resiliency of income and stable yield. HAPP’s strategy of “living aggregation” is aiming to scale up by US$1 billion ($1.33 billion) of asset value in three to five years.
The newly-acquired assets are managed under Hines’ Cavana brand and are placed in urban locations with good accessibility to city centres. Sustainable initiatives have been implemented, such as tenant engagement schemes in order to reduce carbon footprint and conserve water.
The inherent resiliency of the non-discretionary sector the properties are located in is expected to remain defensive in an inflationary cycle, with positive leveraged yields. Chiang Ling Ng, chief investment officer, Asia at Hines, believes these acquisitions will “add to our growing footprint in the region, allowing us to deliver a high-quality portfolio to our investors.”
Jon Tanaka, country head of Japan for Hines, thinks these properties will generate “stable income returns for HAPP” and “highlight our Cavana brand as a symbol of quality.”
Chiang Ling Ng summarised the firm’s ambitions to “deliver a high-quality portfolio to our investors,” while Jon Tanaka commented that these properties will deliver “stable income returns.”
The Japanese multi-family market is the perfect opportunity to achieve that goal, due to its resiliency of income, stable yield, a large number of available investable assets and attractive risk-adjusted returns.
The living aggregation strategy is an opportunity to scale up the region and introduce sustainable initiatives to reduce the carbon footprint. HAPP’s portfolio now stands at 16 multi-family rental assets, with the 11 assets from last year comprising over 400 units or 150,694 sq ft across Tokyo, Nagoya and Fukuoka.
HAPP’s investments in multi-family rental assets across Asia Pacific demonstrate a commitment to providing high-quality portfolios to their investors. With the investment of 290 units across Tokyo and Kyoto, the firm has a “growing footprint in the region” and should be able to deliver on their ambitions.
