2007 was a record breaking
year for the residential property market, which witnessed blistering
performances in both sales activity and transaction prices. The
Urban Redevelopment Authority’s (URA) property market information
showed an all time high take-up of around 15,000 new private residential
units sold by developers in 2007, an increase of approximately
In 2007, prices of private
residential properties increased by 31.2%, compared with the 10.2%
increase in 2006. Unlike in 2006 where improved capital values
were mainly driven by prices of private apartments in Core Central
Region (CCR), price appreciation in 2007 was more widespread throughout
the whole island where prices rose by 32.7% in CCR, 30.4% in Rest
of Central Region (RCR) and 26.4% in Outside Central Region (OCR).
CCR comprises the prime districts (9, 10, 11, Downtown Core and
Sentosa Cove), while RCR refers to the area within the Central
Region that is outside CCR.
The sterling performance was
prevalent in all segments of the residential market, from mass
market to mid-tier projects as well as the luxury and high-end
projects. The star performer however, was the high-end market.
Although the traditional prime
residential districts (9-11) and central districts (1-4), which
include the Orchard Road area, Sentosa Cove and the Marina Bay
area achieved record prices and strong take-up, developers also
enjoyed brisk sales and premiums in new residential hotspots at
areas such as Buona Vista, Balestier and Keppel Road, in addition
to choice locations in the East and West Coast areas.
CDL's boutique 77-unit residence off Dunearn Road, will
be launched in 2008.
The year also witnessed a foreign
brigade of property investors including private equities, finance
houses and pension fund managers who went into “bulk buying”
of projects, thus providing further impetus for growth in sales
In 2008, the residential property
market is expected to remain relatively healthy given the forecast
of sustainable economic growth of between 4% and 6%, low interest
rate environment, low unemployment rate of 1.6% (a 10- year low
according to preliminary data by the Ministry of Manpower on 31
January 2008), continued arrival of more expatriates and foreign
expertise leading up to the opening of the two Integrated Resorts
and Marina Bay Financial Centre in 2010, as well as continuous
efforts by the government in remaking Singapore’s economy
with new and sustainable growth engines.
Rental growth in 2007 was 41%
and is expected to remain strong in 2008 with limited new residential
units completing in the next 2 years. This is expected to underpin
investors’ confidence and sustain capital values as the
market digests the US sub-prime situation.
Favourable economic conditions,
bolstered by a fifth consecutive year of growth in the global
economy and Singapore’s reputation as an international
financial centre and hub city, have resulted in rapid business
expansion in the banking and financial related sectors and
service industries. Incidentally, such buoyant conditions
coupled with an existing supply crunch of office space have
benefited the office property market which grew from strength
to strength in 2007.
The URA property market
information showed that prices of office space increased
by 32.6% and rentals rose 56.1% for the year. According
to a CB Richard Ellis market report, Grade A office space
rents grew 96.5% year-on-year to average $17.15 per square
foot per month in the fourth quarter 2007. The URA statistics
also showed that the island-wide vacancy rate has dropped
to 6.8% in the fourth quarter of 2007 with Grade A office
vacancy hovering at 0.2%, the lowest since the Asian Financial
The demand for
Grade A office space such as Republic Plaza, CDL’s
flagship building, will continue to remain strong in 2008.
Moving forward, office supply
is expected to remain tight with limited new space coming onto
the market over the next 2 to 3 years. Hence, any new supply should
be easily absorbed as demand for office space is likely to remain
buoyant, averaging about 2 million square feet per annum in the
next few years.
It was another bumper year for
the retail industry in 2007 with better retail sales and rental.
CB Richard Ellis reported a total retail sales of $23.83 billion
year to date which is 7.1% higher than 2006. The year 2007 saw
the completion of 625,388 square feet of retail floor space with
the introduction of new retail malls like The Central in Clarke
Quay, AMK Hub in Ang Mo Kio and Square 2 in Novena.
According to the URA statistics,
vacancy rate island-wide was the lowest since 1997 at 7.2% and
overall rentals for shop space have increased by 18.2% year-on-year.
In addition, a report by Colliers International indicated that
average monthly gross rents for prime ground floor retail space
in Orchard reached $42.25 per square foot.
Come 2008/2009, shoppers can
look forward to many new and exciting concept stores, flagship
stores and new entrants to the retail market as approximately
2 million square feet of retail space will be added. This includes
ION Orchard (663,000 square feet), Orchard Central at Somerset
(250,000 square feet), and Iluma at Victoria Street (191,580 square
feet). Demand will continue to be underpinned by sustainable economic
growth, low unemployment rate and an expected influx of tourists
for international events such as the upcoming 2008 FORMULA 1™
SingTel Singapore Grand Prix, as well as other tourist attractions.
A new record performance for
the Singapore tourism sector in 2007 was announced by the Singapore
Tourism Board (STB) as a new high of 10.3 million visitors (5.4%
increase over 2006) arrived in Singapore and a new record of about
$13.8 billion in tourism receipts (11.3% over 2006) were generated.
The STB has set its targets for 2008 to attract 10.8 million visitor
arrivals and to achieve $15.5 billion in tourism receipts.
On the back of buoyant demand
and continued supply crunch of hotel rooms in 2007, the STB statistics
showed that both average room rate and average occupancy rate
registered all-time record highs of $202 (23.1% increase over
2006) and 87% (1.7% increase over 2006) respectively.
The year 2007 also saw the opening
of the St. Regis Singapore, the first internationally-branded
luxury hotel to open here in 11 years. The outlook for the hotel
industry looks bright in 2008, with many new tourism developments
including the launch of the Singapore Flyer, the inaugural 2008
FORMULA 1™ SingTel Singapore Grand Prix and the Singapore
Airshow. To meet the growth in the tourism sector, a new supply
of 1,476 hotel rooms has been projected by the Ministry of National
Development (MND) to be added in 2008.
The St. Regis
Singapore — the first hotel in South East Asia to
offer the legendary St. Regis experience.