Takings at the till dropped for the fourth consecutive month in May as wary consumers kept a tight rein on their purse strings. Retail sales slid 2.1 per cent over the same period last year, according to figures released by the Department of Statistics, although that still beat the expectations of analysts in Bloomberg, who tipped a fall of 3 per cent. If motor vehicles are excluded, sales would have dropped 1 per cent year on year against a 2.1 per cent fall in April. May's estimated total retail sales value was about $3.7 billion with online making up about 5.3 per cent of this. Analysts remain cautious regarding the retail outlook for the rest of the year.
Row of six Joo Chiat shophouses up for sale
A row of six three-storey shophouses in Joo Chiat Road has been put for sale via public tender. To be sold as a bundle, the conservation shophouses are located at 454, 456, 458, 460, 462, and 464 Joo Chiat Road. They sit on a freehold site of about 7,400 sq ft and the total existing built-up area is around 13,000 sq ft. The property is zoned for commercial use with a plot ratio of 3.0 and a maximum allowable gross floor area (GFA) of some 22,200 sq ft, under the Urban Redevelopment Authority's Draft Master Plan 2019. The buyer can choose to either immediately receive stable rental income based on the current GFA, or value-add to the property and fully maximise the allowable GFA by building a rear extension, subject to the authorities' approval. Alternatively, the buyer can configure the space to suit his or her own-use requirements or to cater to the needs of the tenants.
Grade A office rents in Singapore's central business district (CBD) rose for the eighth straight quarter, hitting a 10-year high at S$9.93 per sq ft per month ($ psf pm) in the second quarter. This is up 12.6 per cent from a year ago. Out of the six office micro-markets tracked, rental growth remained the strongest in the Beach Road or Bugis area, rising 18 per cent from a year ago, largely due to tight vacancies in office buildings in the area. Average gross effective rents were at S$9.18 psf pm. The micro-market with the second-highest rise is City Hall, which grew 13.6 per cent year on year with an average gross effective rent price of S$10.14 psf pm. From a cumulative standpoint, Singapore CBD Grade A rents grew 5.4 per cent in the first half of 2019. Office rents are projected to grow by 5 per cent in 2020 and continue to moderate from the 15 per cent year-on-year growth seen in 2018.
Iconic Eu Yan Sang Building up for sale
The Eu Yan Sang Building in Chinatown has been launched for sale with a guide price of $62.5 million. The building was erected in 1910 and housed the first traditional Chinese medicine Eu Yan Sang outlet in Singapore, set up by its founder Eu Tong Sen. It was designed by architect Alfred Bidwell, who also drew up the plans for Raffles Hotel and Victoria Memorial Hall. The building is now a row of four conservation shophouses leased by Eu Yan Sang's flagship store, two hostels and a law firm. The three-storey shophouses at 265 to 271 South Bridge Road are in the Telok Ayer conservation area and owned by EU Realty (Singapore), a unit of Eu Yan Sang International. They sit on a combined land area of 6,262 sq ft and have a gross floor area of 19,885 sq ft. There is also a 2,562 sq ft open terrace on the fourth floor that overlooks Chinatown. The $62.5 million price guide works out to about $3,150 psf based on GFA, and $2,785 psf with the terrace included.
Singapore remains on radar of China tourists
China's economy is slowing down - weighed down by a trade spat with the US with no resolution in sight - but there's no let-up in its consumers' wanderlust. Tourists from the Middle Kingdom continue to stream here in the first half of 2019, with some travel agencies posting double-digit growth in Chinese visitors. Tour operators and hotels are also sanguine about the rest of the year. From January to May this year, Singapore received 1.5 million tourist arrivals from China - the biggest inbound market for the Republic - marking a "good absolute growth'' of 4 per cent over the same period last year, according to Poh Chi Chuan, director of digital transformation at the Singapore Tourism Board (STB). The 4 per cent outperforms the 1.5 per cent year-on-year growth for all tourist arrivals to Singapore for the same period. China accounted for about 19 per cent of the 7.8 million in total arrivals for the January-May period.
HK protests to hit retail, tourism, but limited effect on Singapore: economists
Prolonged protests in Hong Kong are likely to hit the market's retail and tourism sectors in particular, say economists, who see a limited impact on Singapore in the short term. With the protests having lasted two months and an attempted general strike, Hong Kong chief executive Carrie Lam warned that the city was being pushed "to the verge of a very dangerous situation". Preliminary estimates put Hong Kong's second quarter gross domestic product growth at 0.6 per cent year on year, the slowest in a decade. Q2 figures have been attributed as a consequence of the trade war. Apart from demand for trade and financial services weakening, property and equity prices fell in the second half of last year, dragging down consumption.
Retail, industrial property markets set to feel the heat
Trade tensions and a gloomy economic outlook could stifle any near-term recovery for the retail and industrial property markets A prolonged economic downturn, should it happen, will likely crimp consumer confidence, resulting in cutbacks on discretionary spending among households. Meanwhile, industrialists may be more cautious and could shelve expansion plans. That said, there are pockets of opportunities for investors in both markets that will likely provide a decent yield. Retail rents remained weak in the first six months this year. One mall slated to open later this year is PLQ - the 340,000 sq ft retail part of Paya Lebar Quarters. Islandwide retail vacancies declined by 0.8 percentage point from the second half of last year to 7.7 per cent in the six months to June 30 this year, likely boosted by the good take-up at Jewel Changi Airport and Funan mall. Separately, the industrial real estate sector seemed to have found its footing, with overall rents bottoming out. However, deteriorating manufacturing and trade statistics could put pressure on industrial rents and occupancy.
The appearance of a site in River Valley Road for a hotel development to be integrated with the Fort Canning MRT Station, in the second-half 2019 Government Land Sales Programme, comes at an oppportune time for CapitaLand and City Developments Ltd (CDL). The pair recently gained full control of the ageing Liang Court complex next door, after an equal joint venture that they had set up completed a S$400 million acquisition of Liang Court mall from an entity linked to PGIM Real Estate.
There are two other components in the Liang Court mixed-development complex: Somerset Liang Court Singapore serviced residence, which is owned by CapitaLand's listed unit Ascott Residence Trust; and the Novotel Singapore Clarke Quay hotel, owned by CDL's indirect subsidiary CDL Hospitality Trusts (CDLHT). While CapitaLand and CDL's immediate priority is the daily operations of the recently-acquired mall, market expectations are that they will also be exploring a redevelopment of the overall Liang Court complex. This would be facilitated by the fact that control of the mixed development has tightened from three parties previously to just two. The Liang Court complex, which was completed in the 1980s, is getting on in years and is ripe for redevelopment. It would not be surprising if the two developers have their eyes on the 1.07-hectare River Valley hotel plot, which was unveiled on the reserve list of the H2 2019 GLS Programme released early last month.
Moving out sale as Times bookstore at Centrepoint prepares to close
Times Bookstores is closing its Centrepoint branch on Sept 23 as part of an "ongoing renewal of store locations from time to time", said a spokesman for the chain. It is the latest in a slew of closures on Singapore's book scene that has included Books Kinokuniya's Liang Court outlet in April, Popular's Thomson Plaza outlet in June and MPH's last two local outlets. MPH's Raffles City store closed on July 28 and its Parkway Parade branch will close on Sept 1. Times Centrepoint opened in 1983 and was, at the time, one of the biggest bookstores in Singapore at 8,000 sq ft. It expanded across three floors in 2002 in an ambitious overhaul that included a Magnolia Snack Bar, but later downsized again.
Times has six remaining outlets in Singapore. It closed its Tampines One branch in August last year but opened its first standalone multi-category concept store for children, Times Junior, in Jewel Changi Airport in April. Times also has outlets at Paragon, Plaza Singapura, Jelita, Marina Square and Waterway Point; and sells online at GoGuru.com.sg
Largest FairPrice store opens in VivoCity
FairPrice's newest store is also its largest, with features such as an in-house vegetable farm, an ice cream truck, a play castle for children and spaces to repair baggage as well as bicycles. The 90,000 sq ft FairPrice Xtra hypermarket and Unity Pharmacy officially opened its doors yesterday. The size of two football fields, it spans two floors of VivoCity mall. Singapore's largest retailer said the store was designed to better meet customers' changing lifestyles and needs, and provide a unique brick-and-mortar shopping experience amid stiff competition from online grocers. Shoppers at the VivoCity outlet can have their food prepared for them - from cut vegetables to marinated meat and grilled seafood - for them to take home and cook without fuss. There are also dining areas for those who want to eat at the store while grocery shopping. In addition, shoppers can buy loose quantities of grain, nuts, spices and pasta - instead of those prepacked in larger amounts.
Yishun integrated transport hub to open on Sept 8
The Yishun integrated transport hub (ITH) - Singapore's 10th - will open on Sept 8. The facility will have an air-conditioned bus interchange, as with all ITHs, and is connected to Yishun MRT station and Northpoint City shopping mall. It will also be fully barrier-free. A Land Transport Authority spokesman said: "It has dedicated boarding points at each berth and graduated kerb edges to facilitate boarding by passengers in wheelchairs. The Yishun ITH has parking for around 600 bicycles, as well as upgraded facilities for bus captains and other staff, including an air-conditioned staff canteen, dedicated staff toilets and a lounge. To improve safety, the bus interchange is equipped with a reverse-warning system to the detect movement of buses from their parking bays into the driveway. With the opening on Sept 8, the stopping points of all the bus services that currently operate from the temporary Yishun bus interchange will be adjusted accordingly. Other ITHs in operation are in Ang Mo Kio, Bedok, Boon Lay, Clementi, Joo Koon, Sengkang, Serangoon, Toa Payoh and Bukit Panjang. Several other ITHs are planned for, including in areas such as Beauty World, Bedok South, Hougang, Jurong East, Marina South, Pasir Ris, Tampines North and Tengah.