Your Essential Singapore COVID-19 Property Guide - Part 2 Commercial Property Market

 

In my earlier Part 1 of Your Essential Singapore COVID-19 Property Guide series, I have shared some insights on Singapore’s Residential Property Market amid Covid-19 outbreak.

Part 2 will cover a topic that is close to our heart... 

shop, eat, play & work!

Travel bans or partial lockdown (i.e., Circuit Breaker) or not, we still shop, eat, play & work right? 

Shopping

Online, online and online. While you may still pop by your neighbourhood hawker centre to or your nearest supermarket to do grocery shopping, we have relatively spent less time outdoors shopping during Circuit Breaker. 

Eating

No more dining out since the Circuit Breaker. I found the stock from my freezer depleting at a much higher rate as I hone my culinary skills. Family members being the guinea pig to my creations! For most of us, we either cook at home or resort to ordering food delivery or do takeaway. Facebook groups have started popping up consolidating and marketing wet market stall holders – Pasar, Hawkers, Restaurants and various eatery vendors. Searching for the various food options and facilitate ordering to satisfy my food cravings have become a breeze.  I am spoil for choices!! 

Playing 

You would have shelved your holiday plans ages ago! Did your screen time increase drastically? Mine sure did! Gym enthusiasts would continue to find creative ways to exercise at home or around their neighbourhood. If you are like me who is adamant to continue clocking your steps, You try to walk around your home or your neighbourhood to continue clocking your steps. 

Work

Unless you are in healthcare, F&B or essential services that require your physical presence at the workplace, most of us will be working from home. If not, some companies have implemented a staggered working schedule for staff to work in the office at different timing of the day or different days of the week. 

How is Singapore Commercial Property Market coping during Covid-19 crisis? 

See how apparent we have developed new shopping habits during the Circuit Breaker? There is an obvious drop in foot traffic in shopping malls. 

The retail scene is worsened with travel bans. According to Singapore Tourism Board’s statistics, Visitors arrival to Singapore as at March 2020 was at 239.9k (YoY -84.7% drop!). 

Certain sectors would be the hardest hit. Severe direct impact on tourism, oil & gas, MICE, retail, food & beverage sectors. 

Retailers that do not evolve and are not able to adapt will struggle and eventually disappear. This is evidenced from global brands such as American clothing brand J. Crew and California-based jeans maker True Religion Apparel. Both retailers have filed for bankruptcy protection recently. British fashion chains Oasis and Warehouse will also close all their outlets. Even one of my favourite retail brand, Cath Kidston have shut down all its 60 shops in Britain just to keep its online and franchise operations running. 

It’s quite evident that Commercial Property Market is currently bearing the brunt of the Covid-19 with a notably higher risk. Impacted commercial tenants face a higher probability of rental default or even business closure. 

Let’s take a look at 1st Quarter 2020 Real estate statistics. I have summarised the key statistics based on URA data.

Retail Space Statistics 2020 Q1 at a glance

Both Retail Prices and Rental have decreased on a quarter-to-quarter comparison. 

Commercial Tenants and Retailers

Due to Coronavirus, Great Singapore Sale is cancelled this year.  Although demand for retail space will still exist, retailers will be more cautious amid economic uncertainty.  Retailers with multiple stores might opt to consolidate their stores.  

   

Consumers preferences are changing.  Singapore retailers have to keep up with the consumers’ trend and create new retail experiences.  They also need to keep pace with the technology progression and e-commerce development in order to survive.      

I reckon demand for retail space will be subdued which will correspond with the reduced Retail pipeline supply.

Commercial Landlords

Industry research team observed that the rental decline is highest in the fringe areas among all the regions.

In order to maintain healthy occupancy rates for their malls or retail space, Commercial landlords might feel pressurised to lower rents.

To keep the local retail scene vibrant, let us continue to support our local retailers as much as possible. 

In our next blog, let us continue to take a look at another area of Singapore's Commercial Property Market - Office Space.  How is Singapore Office Space Market coping amid the Cornavirus outbreak?   

Do look out for Part 3 of Your Essential COVID-19 Singapore Property Guide.  Thank you for reading my blog post.

📬Let's chat about property.  Whatsapp Karen Woo @ 9159 2692 for an non-obligatory chat.

COVID-19 (Temporary Measures) Act 2020 - Practical Guide For Landlord

Landlord A: Karen, my tenants are requesting for a discount of rental.  What should I do?

This isn't the first time landlords have asked me for advice regarding rental discount.  Let me attempt to provide some clarity in this area.

For Landlord A who has leased out her shophouse space to a Restaurant Operator, she has agreed to give a rental discount to her tenant.  Her tenant has barely any business since Circuit Breaker.  Tourists also form part of this tenant’s customer base.  While this tenant is struggling to meet her overhead expenses with hardly any sales, the landlord has decided to give this tenant a discount to the monthly rental.

This gesture of goodwill by the Landlord came about as early as March.  That is even before The Temporary Measures Act 2020 came into effect.

Pursuant to Part 6 of the COVID-19 (Temporary Measures) Act 2020 (No. 14 of 2020) (the “COVID-19 Act”), it is the property owners’ obligation to fully pass the property tax rebate on to tenants.

Not all property owners are subjected to this obligation.  Only property owners of qualifying properties.  Put it simply, only non-residential property owners will be eligible to receive property tax rebate. 

Tenant of Landlord B: Karen, can you help me ask the landlord for rental discount for that condominium that my staff is renting?  My F&B business is struggling during this period.

Even though the tenancy is a company lease from a F&B operator, the property in question is a condominium  i.e, a residential property.  Landlord B will not be eligible to receive any property rebate from Inland Revenue Authority of Singapore (IRAS).  Therefore, Landlord B is not obliged to provide any rental discount to her current tenant. 

Also, do note that not all commercial property owners will be eligible to receive property tax rebate.   

Still confused?  Let me broadly categorised eligibility for Property Tax Rebate into 4 property categories:

You would probably notice that properties that are qualified for 100% property tax rebate are directly related to Travel and Tourism industry, Retail, F&B and so on - as we all know are the most impacted by the Cornavirus outbreak. Property owners of such tenanted properties are eligible for 100% property tax rebate. The amount of property tax rebate received is estimated to be slightly more than one months of rental.

I have given some examples of properties in each category in the above table.  For more details, please refer to IRAS.

Karen, my tenants are requesting for a discount of rental AGAIN.  What should I do?

In this case, this particular Landlord A has already given rental discount previously.  Then Landlord A has already satisfied the obligation imposed under the Temporary Measures Act.  That is, if the amount of rental discount given is equivalent or more than the property tax rebate the landlord has received from IRAS.

Of course, this does not stop the Landlord who might be in a better financial position to go beyond what is legislated as minimum obligations.  On top of the mandatory rental reductions, some landlords have in fact waived x% of rental payment instead of rental deferment.  

Some Landlords maybe in the same boat as the tenants.  The landlords are also equally concerned as they are experiencing the same limited cashflow situation. In order to strike a balance between ensuring that property owners will not be required to pass on more rebate that they have received on hand and ensuring that they pass on the rebate in a timely manner to their tenants, IRAS has set two milestones for the property tax rebate to be passed on to the tenant.

2 Milestones: To be observed by Landlord

Property Tax Rebate Amount Received from IRAS attributable to the rented property	Deadline to pass the rebate to Tenant
For period  1 Jan – 30 Jun 2020	31 Jul 2020
For period 1 July – 31 Dec 2020	31 Dec 2020

Mode of delivery:  Can be in the form of monetary payment, rental reductions or an offset against current and future rental.

For landlords who have not received the Rebate notice from IRAS and unsure of how much to pass on to your tenants, you can can log in to myTax portal from end-April to view your Rebate notices.  All qualifying property owners would receive their notices from IRAS by 31 May 2020.

Gentle Reminder to all Landlords of qualifying properties

You not only need to comply but ensure you have kept records evidencing compliance! So Landlords, please ensure proper documentation and retain relevant property tax rebate records up for a period of 3 years (ie, up till 21 Dec 2023). The soft c-copy or hard-copy records need to show clearly the following:

• When the rebate was passed on your tenants
• How much rebate was passed on to your tenants
• Basis used for rebate amount allocation to each tenant (if there are multiple tenants involved)

Lastly, landlord of qualifying properties, please take note!

It’s an offence for landlords who failed to properly pass on the rebate to the tenant or or to keep the records, without reasonable excuse. 

Penalty: Those guilty of such an offence shall be liable on conviction to a fine not exceeding $5,000.

Karen, my tenants have defaulted on rental payment for the past 2 months already. Can we charge them late interest payment?

And yet another inquiry from a landlord today. I shall leave this for further discussion in my next blog post.

Dear Landlords, hope you have found this post useful.  Do look out for the next part on more Practical Guide For Landlord.

📬 Let's chat about property.  Whatsapp Karen Woo @ 9159 2692 for an non-obligatory chat.

Reference: Inland Revenue Authority of Singapore. (Property Tax Rebate for Non-Residential Properties in 2020)

The Pinnacle@Duxton for Sale

Fancy living in a HDB skyscraper where you are able to enjoy amenities such as jogging track, outdoor gym, children playground, community plaza, fitness corner Resident Committee center senior citizen fitness corner, sky bridges and viewing decks right at your door step?

It can only be The Pinnacle @ Duxton!

The Pinnacle @ Duxton is indeed the one and only HDB project that has won the prestigious Best Tall Building Asia & Australasia award of a worldwide competition and also the President's Design Award - Design Of The Year.  This HDB project is designed by local firm ARC Studio Architecture + Urbanism who worked with RSP Architects Planners and Engineers.

Apart from these multiple awards won, it is also a public housing project of many ‘first’!

• first 50-storey public housing project in Singapore – the world’s tallest public residential building
• first one in the world to have two sky bridges connecting all seven towers. In fact, that is the world’s longest sky gardens spanning 500 metres each long!

That’s right! Residents can enjoy this scenic breath-taking panoramic views of the city on 26th and 50th floor of the building.

Launched in 2004 and completed in 2011, The Pinnacle @ Duxton is located at the prime location in Singapore’s city center, right next to the business district in Tanjong Pagar. within walking distance to Outram MRT station.  Outram MRT station is also the Interchange station on the East West line and North East line.

This HDB project is so sought-after that 2016 when The Pinnacle @ Duxton has just met its Minimum Occupation Period (MOP), an unit was sold for S$1.12 million. And in May 2020, it set another record highest price ever for a HDB unit. A 5-room unit of 1,151 sq ft was sold for S$1.232 million!

Here’s a rare opportunity to live at this premium iconic public housing project!

New Listing - The Pinnacle @ Duxton 4-I Room for Sale! 

        Unit highlight:

• 1,001 sq ft
• High Floor
• No west sun!
• Renovated
• Breezy & bright with natural light

Contact Karen Woo for viewing today.

 📬Let's chat about property.  Whatsapp Karen Woo @ 9159 2692 for an non-obligatory chat.

Your Essential COVID-19 Singapore Property Guide

Part 1 - How will COVID-19 (Corona Virus) affect Residential Property Prices in Singapore? 

My Singaporean friends living in the UK are moaning about the UK property market being bought to an almost complete standstill due to the COVID-19 lockdown. In fact, UK economists have warned that the corona virus crisis will wipe off more than £30,000 off the average value of a UK home. According to The Telegraph, forecasts vary, but analysts can mostly agree on one thing: prices are going to fall. Some predict a 3% drop in 2020 while some even forecasted to be a 13% drop.

Then just the other day, my friend from Hong Kong chatted me about how Hong Kong property prices are falling amid Covid-19.  Analysts: Hong Kong is poised for another real estate crisis as falling home prices drive more mortgage borrowers into negative equity.

What is going to happen to Singapore?!!

Singapore having over 92% home ownership obviously means most of us are residential property owners.  How can we not worry??!!  I dread to think what COVID-19 Corna Virus will do to Singapore’s residential property market.  Will we enter into an impending property crisis?  I am no crystal ball but let's look at some recent market data as our basis of analysis.

HDB Resale Price Index

Source: HDB, Straits Times Graphics

Based on recent (April 2020) data from HDB, HDB Resale transactions fell from last quarter 6,339 to 5,893 in the first 3 months. On a quarter-on-quarter comparison, this is a 7% drop compared to last quarter. However, on a year-on-year comparison, 2020 Q1 number is still 21.9% higher than 2019 Q1. 

It’s no surprise that HDB Resale transactions has been affected by the Circuit Breaker predominantly due to the following reasons:

• House viewings have ceased during this period.  Virtual viewings not counted!
• Economic uncertainties may have caused some sellers or buyers to put their plans on hold (be it upgrading or otherwise).

Despite the drop in HDB Resale volume, HDB prices remain stagnant.  In fact, the prices of HDB resale flats are seen to remain steady, maintaining the past five years trend with minimal fluctuations of /- 1%.

If the pandemic outbreak persist, Singapore (very likely = will) enter into recession given the significant uncertainty over the Covid-19 situation.  

Should the health crisis worsen and unemployment creeps up, overall HDB prices might drop.  Taking a general view, I expect the drop to be marginal.  Demand for HDB will prevail.  HDB is deemed to be relatively affordable to most home buyers (especially families who prefer a smaller home loan and are after more space).  Also, the valuation of HDB at central region, mature estate with amenities or sought-after areas that are near MRT stations tends to be stable.  In fact, popular area like the Pinnacle@ Duxton was recently sold at another record-high price again.  Just in May 2020, a five-room HDB unit (1,151 sq ft) at The Pinnacle@Duxton was sold for S$1.232 million!

 

Above is an overall view of HDB resale market without dwelling into the finer details.  We will take a look at HDB volume and price trends by room type and districts in a separate blog post. 

I am also an owner of a Private Residential Property!  Will the valuation of my Private Property decline?   

According to recent (April 2020) Urban Redevelopment Authority’s (URA) released data, Singapore’s Private home prices have also experienced a drop in 2020 Q1 2020 on a quarter-to-quarter comparison before Circuit Breaker measures – a 1% drop in 2020 Q1 from 2019 Q1.  However on  Year-on-year, private home prices in the first quarter are still up 2.4% from 2019 Q1.

These are the key reasons we think that are contributing to the downward pressure on the volume and prices of private property homes sales with Covid-19 hit:

• Circuit Breaker & travel restrictions have dampen private residential property sales. With the restriction of foreigner visitors into Singapore, the hardest hit will be the High-end luxury properties within the Core Central Region.
• The closure of sales galleries or show flats and also stay home measures had literally ceased physical viewings. Not counting the rare occurrences whereby buyers are comfortable to commit to a sale via virtual property viewing. 
• As for private resale property market, it is challenging to get a fresh valuation particularly for older resale properties during a near lockdown. Without a fresh valuation done means a less than ideal approved loan quantum for the home buyer. Consequently, home buyers are likely to put off from buying that dream home for the time being.

Here's also an important note that I have advocated constantly before.  It can’t be stressed enough:  Please do your due diligence and practise financial prudence before committing to your home purchase.  I am sure you did not over-leverage.  So if you are still servicing your home loan (which most of us is likely to fall within this category), there’s no need to get into any panic selling!!!

But this does not mean that you stay at home and do nothing.  Contact us to find out more how to achieve potential savings! 

Marginal, Short-term & Temporary Residential Property Market Impact?

The impact of the COVID-19 has already affected buying sentiment. The only question is to what extent will the impact be?

Residential Property Market will not come to a complete standstill. Despite the Circuit Breaker, below are some examples of the New Launches with units being sold during Circuit Breaker since 7th April 2020. Data accurate as of 28th April 2020:

1. Garden Residences
2. Florence Residences
3. Tapestry
4. Riverfront Residences
5. Daintree Residences
6. Piermont Grand
7. Hillion Residences
8. Treasure
9. Jadescape
10. Mayfair Modern
11. Parc Clematis
12. Stirling Residence
13. Kopar@Newton
14. Kent Ridge Hill
15. Parc Esta
16. Marina One
17. Boulevard 88
18. The Tre Ver

Most property sellers are not under pressure and able to hold on their properties. Underlying demand from property buyers are seen to remain unchanged. Demand will pick up. Property consultants potentially foresee a surge after the outbreak.

Here's the Burning Question - after the outbreak?  Will Cornavirus even end?  

Historical trends have shown that financial crises have had a greater impact on property selling prices as compared to a viral epidemics.  The sales volumes and prices dip during the Global Financial Crises (GFC) which lasted from April 2007 to March 2009.  However, property sales volumes and average unit price rose marginally after Sars outbreak and also H1N1 outbreak.  2007 GFC is a consequence of less credit and an imbalance of supply and demand.  Therefore, a greater impact on pricing.

There have been divided views though. Some of us liken the current virus outbreak to an economic crises as it  has directly put a pause on the global economy activities. 

Perhaps taking reference from past pandemic outbreak is of little relevance because Cornavirus is not the typical pandemic outbreak. It's much more contagious than Sars. It is spreading much faster than past pandemic outbreaks. Given its widespread nature, this is pandemic is on a global scale. Containment measures has led to lockdowns devastating the global economy. 

In fact, World Health Organization (WHO) appeared to suggest that Cornavirus is here to stay.  Nobody know for sure when the vaccine will be developed.  As long as there is no vaccine, the Cornavirus can spread to any parts of the world.  No effective treatment is found.  Anyone could be at risk. In any case, even if the vaccine is developed, I expect that will not happen immediately. It will probably take years.

What I observe is some countries including Singapore are preparing themselves with the aim towards easing measures safely.  The key is to focus on containment of the virus and work towards letting economic activities to return.  If I wish to take a more optimistic view, we do recognise that Singapore is ranked as World's most open and competitive economy  in the World Economic Forum’s 2019 Global Competitiveness Report.  

Navigate the new normal 

If Circuit Breaker is lifted as scheduled on 1st June 2020, I do expect safe distancing measures would still stay.  "IF" - to be deliberated with caution as the last thing anyone need is a new wave of infection just when virus spread appeared to be under control.

And even if measures are eased, it will take some time for the economy to regain its momentum.  New social norms would appear.  WHO has already cautioned us to prepare ourselves for a new way of living and working.  We need to continue to adapt our lives and approach to prevent virus transmission.

Eventually, as all of our lives are back to the "new normal" as we get used to living with the virus.  While Singapore's economy will be expected to take some time to recover, property investors will exercise prudence but home buyers who need a home for own stay would still continue home search.  Buying sentiments will pick up. 

   

So perhaps even before the cornavirus ends (if it ever disappears?), life will be back to some degree of normality.  And to me, that means we have to get used to living with the virus for the foreseeable future.  I liken the rainbow to mean a celebration for us to strive towards achieving that degree of normality.  

'The Storm shall pass and deliver a Rainbow'

 

Do look out for Part 2 of Your Essential COVID-19 Singapore Property Guide.  Thank you for reading my blog post.

📬Let's chat about property.  Whatsapp Karen Woo @ 9159 2692 for an non-obligatory chat.

Reference: https://www.straitstimes.com/singapore/hdb-resale-and-rental-volume-down-prices-stagnant-amid-covid-19-outbreak

What does TOP stand for?

I have bought a 3 bedroom condominium unit at a show flat about 1 year ago and my friend asked me “So when is TOP?” 

TOP? Oh yes TOP. I am so accustomed to using the acronym TOP that I have almost forgotten what does TOP stand for!! So what does TOP stand for?

Property Jargon Buster: 

  TOP stands for Temporary Occupation Permit 临时入伙证

If you have bought an uncompleted brand new private property during a new launch, you probably have to wait for TOP to be issued. Or for some of us, we may have bought an already TOP private property.

Basically, TOP is a permit that allows homeowners to occupy the building temporarily when the key requirements are met. When a housing developer has obtained TOP, it signifies that your unit is completed and the developer is able to issue Notice of Vacant Possession of the unit to the buyer.

‘Vacant Possession? Too many property jargon! I just wish to know when can I collect the keys to my unit!!

Vacant Possession means that the property is empty, is free of people and is ready to be occupied by a new owner. In a nutshell, when the housing developer has obtained TOP, your unit is ready to move in!

‘But isn’t this Temporary Occupation?  My friend read about CSC.  As my condo development has not received its CSC yet, the sale will not officially be completed until then.  So does this mean that the developer would still need to obtain CSC?’

Yet another jargon buster: What is CSC? The Certificate of Statutory Completion (CSC)`建筑竣工合格证书 is the permit that’s granted once all of the building requirements have been met.

In accordance to the Building and Construction Authority of Singapore (BCA), when the building works are completed, the applicant and the Qualified Person shall apply to the Commissioner of Building Control for a Certificate of Statutory Completion (CSC) or a Temporary Occupation Permit (TOP).

For some Developers who might not have fully completed certain building works such as minor touch up or minor rectification of works to comply with approved building plans or work-in progress condo facilities or yet to construct condo facilities, they will typically choose to apply for TOP first as CSC will take some time to be issued. And these Developers would still need to obtain CSC which will take some time to be granted.

‘Is it safe to move in before CSC is issued then?  After all, it’s supposed to be Temporary Occupation, isn’t it?”

Not to worry…Before the Application for TOP may be considered by BCA, the Housing Developer / Qualified Person need to request for a joint site inspection with BCA of the completed building works. The issuance of TOP will only be considered by BCA after successful site inspection and the submission of all the required documents and clearances from the other relevant technical authorities.

You’ll be able to move in to your new home once either the TOP or the CSC has been obtained. And It’s definitely OKAY and safe to move in even if only TOP has been obtained.

Congratulations!  You are now all set to collect the keys and move into your new home!

📬Let's chat about property.  Whatsapp Karen Woo @ 9159 2692 for an non-obligatory chat.

 

The Tembusu For Sale

President's Design Award - Singapore Design of the Year 2018 Award goes to .... The Tembusu!

Designed by Arc Studio Architecture + Urbanism Pte Ltd (the same architecture designer who has redefined high-rise Singapore Public Housing in Singapore by creating The Pinnacle@Duxton - the design winner of a worldwide competition!  Apologies for the digression!  Now let me get back to The Tembusu...).

The Tembusu is developed by Wing Tai Holdings’. This project has received two awards — for Development Excellence and Development Innovation.

Design Impact of The Tembusu - Raising Quality of Life, Advancing Singapore Brand, Culture and Community and Making Ground-breaking Achievements in Design.

One would find it hard to miss this development if you are commuting on Tampines Road towards the direction of Upper Serangoon Road.  The tall climbing columns of greenery which interweave with the architecture  is quite a sight to behold.  ‘That's a beautiful and lovely condominium!  Is that The Tembusu?’

It’s indeed The Tembusu.  A freehold development of 337 units situated on a 141,540 sq ft freehold site along Tampines Road, Hougang District 19.  Just a stone throw away from Kovan MRT station and Heartland Mall (Walking distance of about 8 minutes walk) and one station away from Serangoon MRT interchange station and NEX shopping mall. Residents may also head down to nearby Heartland Mall  where a myriad of amenities like shopping, food and eating establishments such as Lola's cafe, Ice Edge cafe, Punggol Nasi Lemak, banking etc awaits.

The Tembusu was launched in 2013 and completed in 2016.

Unlike the typical steel and concrete high-rise, high-density housing of typical private residential developments or condominiums,  The Tembusu comprises of five 18-storey towers of layered residences that are soften and surrounded by columns of lush greenery.  Neighbours of the different blocks are inter-connected by landscaped sky links and terraces.  The design blurs the conventional boundaries of communal spaces and private spaces.

If you love sunrise and beautiful skylines (like myself!), then be in awe and be captivated by the beautiful colors of sunrise at the sky link terraces of The Tembusu.  May each sunrise brings a new day with new hopes for a new beginning.

The top floor of two blocks has a community sky garden whereby residents of The Tembusu can also enjoy distant views while being able to easily interact as a community.  When I meant by distant view, it’s indeed instant view.  During National Day, one can even catch the fireworks and a distant view of the Singapore Flyer!

The Tembusu also promises an array of luxurious facilities throughout the development, which includes various sizes of pools, thematic pavilions, private clubhouse and tennis court etc.

If you are looking for a Ready-to Move-In RARE Dual-key 3 bedrooms unit at The Tembusu, look no further!

New Listing - RARE Dual-Key Unit For Sale!

• Tastefully Renovated 3 bedrooms Dual-Key Unit

• High floor

• Bright and Breezy

• Be surrounded by relaxing lash landscaping and an unique architectural and landscape features of The Tembusu.

Schools located within the vicinity are a plenty, namely Holy Innocents' Primary School, Xinmin Primary & Secondary Schools just to name a few. Hougang Stadium and Hougang Swimming Complex is a stone's throw away.

For vehicle owners, Tampines Expressway (TPE) and Central Expressway (CTE) are a short drive away!

Contact Karen Woo, your friendly Kovan Resident Agent for viewing today

Follow facebook page: YourAddress2day

https://www.facebook.com/YourAddress2day/

📬Let's chat about property  

Whatsapp Karen Woo @ 9159 2692 for an non-obligatory chat