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News Release


Singapore is on course to become Asia’s fastest-growing economy in 2010

Marina Bay district offers most exciting opportunities

Buoyant economic data has lead to Jones Lang LaSalle’s optimistic outlook for the office market, while residential activity remains healthy with rents and capital values rising accordingly. Retail market sentiment is also improving, with stabilization of rental values and healthy occupancy rates in most malls. A stronger than expected growth in the second quarter of this year has led to recent predictions that GDP will rise by 13 percent to 15 percent in 2010. Singapore is on course to become Asia’s fastest-growing economy this year with all markets responding positively to the growth.
Comprising commercial, retail and residential development, the beautiful Marina bay area is proving an attractive option for investors and occupiers alike. Although residential and commercial supply can be maintained until 2012 with the completion of MBFC, Asia Square and other major developments, there seems to be limited availability of high end residential and commercial projects beyond 2013 apart from the high end South Beach Development.

The South Beach development, set to commence construction in early 2011, has generated much interest among investors given that the mixed-use project will encompass residential apartments, offices, two hotels and a retail piazza. Originally sold as part of the Government Land Sales (GLS) programme in 2007, the state-of-the-art, environmentally sustainable landmark development will offer stunning panoramic views of Singapore’s Collyer Quay, Raffles Place and Marina Bay, and provide some resolution to the increased demand for Grade A commercial space and the overwhelming demand for city living.

Chris Fossick, Managing Director Singapore and South East Asia Jones Lang LaSalle said “The South Beach Development plans to capitalize on the ‘live-work-play’ concept within the city, offering residential occupiers and office tenants highly convenient access to shopping clusters, transport networks and plentiful food and beverage options.”

The development is targeting Green Mark Platinum status, the highest rating in Singapore for buildings featuring energy-efficient, water-efficient and environmentally friendly design which takes advantage of simple green building principles like passive solar, natural ventilation and natural cooling.

“We’ve seen a clear increase in the demand from commercial occupiers and MNCs for environmentally friendly and energy efficient buildings, driven in part by corporate social responsibility but also stemming from the reduced energy consumption and associated cost savings”

“People in Singapore are becoming increasingly aware of our impact on the environment, and residential investors and occupiers are starting to consider sustainability as part of the purchasing decision,” Mr Fossick added.

In 2Q10 the core CBD vacancy rate decreased significantly to 7% from 9% in 1Q10, due to good take up across the board especially in investment grade assets and recently completed buildings. In addition, pre-commitment leasing activity also increased, with the upcoming Marina Bay Financial Centre (MBFC) reporting near full pre-commitment levels prior to completion and Ocean Financial Centre announcing pre-commitment levels above 60%.

Residential prices continued to trend-up on the back of encouraging sales volume suggesting that the overall market sentiment is cautiously positive. In the resale market, 2Q10 saw 611 units transacted which is approximately 40% higher than the historical average of 437 units per quarter from 2000 to 2009. Growth of capital values for luxury residential properties also picked up in 2Q10, rising 8.2% q-on-q to SCD 26,910 per annum. Sustained hiring activity in Singapore has contributed to increased leasing activity and subsequently an improvement in rental income.

With tourist arrivals on the increase, retail vacancy rates in the Marina area experienced a decrease from 3.5% in 1Q10 to 3.4% in 2Q10. Competition for malls in the Marina area is expected to further intensify as new supply comes on stream. Retail supply for the rest of 2010 in the Marina area will include Marina Bay Link Mall, additions to the retail space in Raffles City Shopping Centre and the retail component of Fullerton Bay Hotel.

“With positive economic fundamentals backed by a strong regional economic outlook, optimism in the Singapore market has picked up and rents in all sectors are expected to stabilize,” said Mr Fossick.