Cooling measures moderated home sales

Singapore's latest round of property measures have started to take effect, said Keppel Land.

Based on Urban Redevelopment Authority’s preliminary estimates, about 3,700 new homes were sold in the first quarter, 12.7% lower compared to the previous quarter. Residential prices grew at a slower pace of 2.1% in the first quarter of 2011, registering the sixth consecutive quarter of moderated growth since third quarter of 2009.

Keppel Land sold 85 homes in the first quarter, mainly from sales at The Lakefront Residences where about 91% out of 591 launched units have been sold as at end-March 2011. To meet the demand for homes near MRT and key transportation nodes, the Group made and won the bid for a prime residential site near Sengkang MRT in March 2011. Slated for launch by the end of the year, this development will yield 622 homes.

The office property market has continued to strengthen. According to CB Richard Ellis, Grade A rentals grew by 4% q-o-q to $10.30 psf in the first quarter of 2011, and is forecast to rise 10 -12% for the full year. Pre-commitment level at Ocean Financial Centre (OFC) rose from 80% to 82.3%, with new commitments secured from international companies in the professional services and energy sectors. OFC has obtained the Temporary Occupation Permit for part of its office tower in March 2011 and new tenants such as law firms Drew & Napier and Stamford Law have moved in.

The Group’s property fund management vehicles continue to seize acquisition opportunities in Singapore. Alpha Asia Macro Trends Fund, a fund managed by the Group’s private fund management arm Alpha Investment Partners, has jointly acquired Grade A office tower Capital Square for about $889 million with NTUC Income. K-REIT Asia’s strategy to be a leading landlord in Singapore’s key business and financial districts is reinforced with the acquisition of additional four strata floors in Prudential Tower for $125.1 million, which raised its interest in the Grade A office building from 73% to 93%.