OXO Living introduces real estate concierge service in Bali

Bali's boutique property developer and management services provider, OXO Living, has launched Asia's inaugural real estate concierge service. Designed as the perfect companion for those looking to purchase*, sell, rent or develop exceptional designer homes in Bali's most desirable addresses, OXO Living's Real Estate Concierge provides clients with expert assistance, time-saving and risk-reducing solutions as well as the key to personalised services for all things real estate in Indonesia.

According to OXO Living, traditional property agents end their services when the purchasing process is completed, whereas their Real Estate Concierge does not. Each property in OXO Living's portfolio meets the team's stringent standards in architecture, interior design, engineering and construction in alignment with OXO Living's brand ethos of Effortless Living. The real estate opportunities presented to clients are chosen to match their lifestyle and investment objectives, the company said.

Property rental and transactions in Bali are known to be a challenging undertaking since most publicly available information tends to be outdated or unreliable. Through close-knit relationships forged with homeowners and partners over the years, complemented by OXO Living's expert market knowledge, the Real Estate Concierge will relieve clients from complex, time-consuming struggles that come with navigating Bali's property landscape, OXO Living said. In addition, the team provides access to the island's off-market properties.

Aside from off-market rental options, the concierge also allows for the short and long-term rental of OXO portfolio in Bali. These include luxury jungle residences in Buwit, Tabanan, family lofts with scenic views in Canggu plus townhouses and studio units in Berawa. A local OXO Rental Manager is available to facilitate move-in, transport, travel and international owners' visa arrangements.

OXO Living also offers the expertise and resources to style, renovate and extend homes to match their owners' lifestyle needs and taste.

“With this innovative Real Estate Concierge service, we can provide buyers and sellers the best of both worlds,” said Johannes Weissenbaeck, founder and CEO of OXO Living.

“The buyer benefits from exclusive access and deep understanding of Bali's luxury property market, while the seller can leverage on our discreet and professional concierge service in ensuring that the architectural significance of his home remains well-appreciated by its next owner.”

“There are only very few things that money cannot buy – health and time. Just like how you can entrust your health to the very best medical specialists, you can also save precious time by entrusting OXO Real Estate Concierge for all things real estate here in Indonesia,” said OXO Living partner Michael Luible.

*There are various regulations governing the ownership of property by non-Indonesians, as OXO Living explains in a blog post.

UAE relaxes rules on foreign residency

The UAE government has announced a new residency programme, the Golden Card visa, for foreign nationals in the UAE. In May 2018, five- and 10-year visas were announced for expats investing AED5 and AED10 million respectively, real estate included.

Other criteria for the visa have yet to be revealed but it is confirmed that permanent residency status will include the spouse and children of the visa holder.

Previously, foreign nationals could only stay two to three years at a time on employer-linked visas. Foreign nationals comprise roughly 90% of residents living in the UAE, the second-largest economy in the Arab world.

“This is a shining example of visionary leadership striving to create a big opportunity for everyone aspiring to work and invest in the UAE. Dubai, besides being a business friendly and tax-free environment, is also a vibrant property market offering high quality real estate, stable rental yields and continuous planned expansions.

“It is also a great initiative for real estate investors who have been here for long. It is a big security to know that you can remain,” said Kanika Gupta Shori, founder and COO of leading proptech firm, Square Yards. Square Yards has been helping non-resident Indians as well as other foreign nationals navigate UAE’s primary residential markets.

“Overall, I feel this will encourage expats to invest more in this country and to give back even more through their businesses, professional services and social work,” Shori said.

Tech startups a key source of demand for real estate in APAC: JLL

Startups have emerged as a new category of urban occupiers, with more tech firms adopting unconventional formats such as coworking and industrial spaces, say JLL, a professional services firm that specialises in real estate and investment management.

Mobile devices, e-commerce and the rise of fintech have driven rapid growth of the technology sector in Asia Pacific, supporting occupier demand for both commercial office and business park space, the property specialist said. India and China in particular are rapidly adopting innovative mobile shopping, financial and payment platforms, reflected by the fact that the Asia Pacific region is home to seven of the 22 global fintech unicorns – startups valued at more than US$1 billion.

In China, there is increasing demand for coworking spaces from these fast-growing companies, with a new trend of coworking operators becoming anchor tenants in retail malls. The number of coworking spaces in China has grown rapidly: in 2016, there were more than 500 coworking sites in Shanghai and Beijing alone, compared to just a few in 2015.

“While there is a greater utilisation of coworking space, tech startups are a future source of Grade A office leasing demand and this is an opportunity for real estate investors and developers to create space that will meet this need,” says Dr Megan Walters, Head of Research, Asia Pacific at JLL.

“Technology companies continue seeking high quality office space to attract talent, and we’ve seen a significant number of tech occupiers upgrading their premises from serviced to proper offices, and from Grade B to Grade A space. Landlords are sitting up and taking notice of what this new category of occupier wants,” she adds.

Source: JLL website. Tech is hot in the Asia Pacific region, affecting demand for real estate.

Continued tech sector growth, however, faces a number of challenges. Recent data from JLL reveals that rising labour and operational costs, skills gaps, lack of supportive government policies, as well as real estate and infrastructural development remain the key tests to the burgeoning industry.

“High and rising labour and operating costs were frequently cited by our leasing experts as obstacles to future growth of the tech sector,” says Christopher Clausen, Associate Research Director, Asia Pacific at JLL. “High home prices and cost of living were also mentioned as key considerations in some markets, while a shortage of talent and skills gaps may hold back tech development in others.”

When searching for office space, tech firms look for reliable power supply, and room for future expansion within the same building. “The importance of a high-quality and stable power supply to tech companies cannot be overstated,” says Clausen. “Many tech firms continue to store large volumes of data onsite meaning they are housing a large number of server racks within their office.”

“Tech firms also want large floor plates that allow them flexibility in layout,” adds Clausen. “In addition, these companies are putting a priority on quality of life for their employees, so transport connectivity is another important factor.”

Interested?

More details are in JLL's Tech firm office location choice — where do they cluster and what building features do they want? report

View the video introducing findings from the Tech firm office location choice — where do they cluster and what building features do they want? report

Keppel Land adds virtual show suites to marketing arsenal

Keppel Land is the first developer in Singapore to create 360-degree immersive virtual reality (VR) show suites leveraging Oculus Rift technology for its Highline Residences property. Two off-plan* virtual suites have joined the three physical suites at the Highline Residences showroom in Singapore.

Developed jointly by Keppel Land and visualisation firm VMW Group, the new VR platform features both the Highline Residences show suites showcasing newly-released units as well as a virtual exploration of key landmarks in the trendy Tiong Bahru neighbourhood where Highline Residences is located.

Visitors can experience 360-degree virtual immersion where cutting edge displays and optics, high refresh rates and a low-persistence display work hand-in-hand to provide a new level of visual fidelity and a wide field of view.

Foo lists the advantages of creating a virtual reality experience.

Albert Foo, GM of Marketing at Keppel Land, noted that going the VR route is more economical than building a new physical show suite, and has the added advantage of being portable, easily edited, and quicker to create.

He said, “In line with our brand philosophy of Thinking Unboxed, Keppel Land is constantly exploring new ways to provide our customers with an enhanced experience. Harnessing Oculus Rift VR technology, we are now able to showcase different configurations and apartment types without having to create the physical show suite, which is a more efficient solution especially in land-scarce cities such as Singapore. This ‘portable’ technology also enables us to reach out to customers overseas more effectively.”

Lee lists the advantage of the Oculus Rift.

According to Foo, building a physical suite would have required permits to be processed and physically constructing the building, a process which would have taken six months or more. The virtual versions took two months to complete.

Lee Hon Kit, MD, VMW, said, “Each VR show suite was created in great detail, aligning strictly to the actual size of the unbuilt units and integrated with the unit plan overlay for orientation and navigation. Users will be able to experience a comprehensive view of everything including the high-end interior finishes and fittings, with future iterations of the technology allowing users to change materials and fittings they would like to explore for their future homes.”
 
"It is not about being the first in the market to do something," Foo added. "The whole purpose of doing show suites is for our customers have the experience of the development, to give them a very good idea of how the apartment will turn out."

While Keppel Land has supported augmented and virtual reality, the company had not felt that the experience would be immersive enough until seeing work made for the Oculus Rift VR headsets about four months ago. "We couldn't tell if (the content) was real or a computer rendered image," he said. "After testing we are convinced that the experience is indeed immersive and that you really can't tell what is real and what is not real any more."

No detail too small.

Foo added that authenticity had been a focus for the project, with four iterations required just to ensure that the toilet paper looked exactly like the real thing.

"In future we expect to have both physical and virtual show suites," he said, noting that requests to change the decor or the layout of a unit can be accommodated more easily virtually.

Highline Residences comprises a total of 500 homes ranging from one- to four-bedroom units, dual key apartments as well as penthouses, spread across three residential towers and four low-rise blocks. Approximately 88% of the 320 launched units have been sold as at end-September 2016.

Keppel Land has two virtual reality walkthrough stations with swivel chairs for ease of exploration. Prospective customers can wear the Oculus Rift headset and navigate with the help of a handheld one-button cursor control. The images delivered to the left and right eyes can be viewed on dual screens. Lee stands behind a volunteer to explain how the walkthroughs work.

Keppel Land is recognised for its portfolio of residential developments and investment-grade commercial properties with Singapore and China as its core markets, as well as Indonesia and Vietnam as its growth markets. The Asian property developer has a pipeline of about 70,000 homes in Singapore and overseas. It is behind prime office space such as the Marina Bay Financial Centre, Ocean Financial Centre and One Raffles Quay.

The showroom also boasts an interactive video board with a three-panel display that allows visitors to explore landmarks, shopping, dining and transport options in the neighbourhood where Highline Residences is located. Landmarks can be tapped on for deep-dives.

The showroom also boasts an interactive video board with a three-panel display that allows visitors to explore landmarks, shopping, dining and transport options in the neighbourhood where Highline Residences is located.

Interested?

The virtual show suites can be experienced at the Highline Residence Sales Gallery at Kim Tian Road (entrance roughly opposite Block 123) from 15 October between 10am to 6pm daily.

A bedroom in one of the physical show suites. There are a lot of textures to digitise.

Hashtags: #HighlineResidences, #ThinkingUnboxed

*Off-plan properties are those which do not yet have a physical representation, and are only available as plans.

CoAssets adds SME projects to crowdfunding portfolio, looks towards Australia

Singapore crowd funding company CoAssets has announced that it has extended its crowdfunding platform into the SME sector. Through the company's lead generation platform, which allows registered users to view, research, and ultimately invest in real estate or SME projects, Singaporean SMEs can now immediately connect with investors, bridging a funding gap in the business funding sector.

Getty Goh, CEO, CoAssets said, "Given our proven track record with real estate crowdfunding, and the growing demand for business loans in Singapore, we decided to extend our platform to the SME sector. We are an alternative source of capital for property developers and SMEs, both in Singapore and abroad, and look forward in facilitating their search for competitively priced capital in a timely fashion."

In addition to its advances in the Singapore market, the company is looking to expand the reach of its business crowdfunding arm into Australia, via its wholly owned subsidiary. The company recently became a Corporate Authorized Representative of the Melbourne Securities Corporation, allowing CoAssets to target the Australian business and real estate crowdfunding market. With the start of operations in Australia, CoAssets will solidify its regional expansion with presence in five key markets: Singapore, China, Indonesia, Australia and Malaysia.

Goh said that recent financial results are encouraging and set the stage for the company's transition onto the Australian main board this year. "As flagged in November 2015, CoAssets sees its Australian operations as a key driver of future growth. The company will now be operating its leading crowdfunding platform in five countries, targeting a combined population of 1.5 billion+, and an addressable market estimated to be US$100 billion annually. The Australian Government has set a big focus on financial innovation, including crowdfunding, and given our success throughout the region, the time is right for us to expand our offering in Australia," Goh said.

CoAssets further announced that Singapore's Ex-Chief Artillery Officer, Colonel Lawrence Lim, will be their Chief Operating Officer (COO) from 4 May 2016. As COO, Colonel Lim will drive CoAssets' day-to-day operations, while Goh further implements the company's operational strategy.

To date, CoAssets has brokered deals worth more than S$44 million in total. 

Rush for office space in Metro Manila continues in Q315

Premium and Grade A office space takeup in Metro Manila's main business districts (CBDs) continued to accelerate in Q315 due to strong pre-leasing activity, according to the most recent Office Briefing published by Savills international associate KMC MAG Group, a Philippines real estate services firm.

More than 200,000 sq m (232,961) was newly delivered in Q3, and almost everything was snapped up, at 231,412 sq m - a record takeup rate. 

"Most of the new spaces delivered have been pre-leased prior to completion; that is why takeup is very high," said Michael McCullough, KMC MAG Managing Director.

Upcoming supply is estimated to reach around 1.8-million sq m in 2018. Despite the significant amount of supply, KMC MAG says that overall office rental and vacancy rates are expected to remain stable given the strong pre-leasing activity.

"We continue to see interest from both local and foreign firms across all CBDs, although most of the interest is currently in Bonifacio Global City (BGC) only because it is where most of the new supply will come from," said McCullough.

"The profiles of companies who have pre-leased or are currently pre-leasing space vary across all CBDs. Ortigas, Bay Area, and Quezon City are very attractive to new IT-BPO firms who are just starting to outsource services and processes to the Philippines because of the lower rates.

"Makati remains the CBD of choice for large-scale enterprises who want to upgrade their headquarters and move to a better location, however many firms are forced to look towards BGC due to the lack of available and suitable space."

Thanks to the sustained IT-BPO industry demand and the relatively low level of new supply in these areas, Bay Area and Quezon City are projected to have the lowest vacancy rates and strongest rental rate growth among the business districts within the next 12 months.

In Q3, the Bay Area recorded a 17% year on year (YoY) rental rate growth, with Grade A rentals averaging from Php673.4 to Php700 per sq m/month and an ultra-low 1.3% vacancy rate.

Meanwhile, Quezon City posted an 8.5% YoY growth, with average Grade A office rates ranging from Php700.4 to Php750.0 per sq m/month. Located in the northernmost part of Metro Manila, Quezon City boasts vacancy rates of under 1% with only 0.2% of its total stock unoccupied, making it the best performing CBD in the country this quarter.

Makati, on the other hand, remains as the premium CBD, posting a 4.3% YoY growth with the highest asking net Grade A rental rates averaging Php 979.1 to Php 1400.0 per sq m/month. In spite of this, Makati's vacancy rate remains low at 3%, and is likely to become lower once Tower 6789 becomes fully occupied.

BGC comes in next, with a rental growth of 3.7% YoY and an average asking rental rate of Php860.4 to Php1,100 per sq m/month. The district's vacancy rate increased slightly to 2.6%; however, it should be noted that this is because it has absorbed most of the new demand, allowing it to post its highest recorded quarterly takeup since Q114 of 49,639 sq m.

Ortigas' growth remains strong at 6.8% YoY, bringing average rental rates up to Php624.6 per sq m/month, with an upper rate of Php750 per sq m/month. Ortigas' strong rental growth is expected to continue, given its current 2.5% vacancy rate and lack of new supply until the end of 2016.

Alabang is the only CBD office market with sluggish growth. YoY growth was 0.6% and vacancy rates 16%. This brought down the average asking rental rates to Php 605.3per sq m/month in Q315 from Php601.8 per sq m/month a year ago.

Interested?

Read the report (PDF)

Japan and Australia to be real estate investment magnets in 2016

Real estate activity in Asia next year will continue trends seen in 2015 - an abundance of capital flowing to core spaces, as well as a flight to safe havens in the region's most developed and liquid markets, according to Emerging Trends in Real Estate Asia Pacific 2016, a real estate forecast jointly published by the Urban Land Institute (ULI) and PwC. 

Japan and Australia remain the favourite countries for investment and development, with Tokyo, Sydney, Melbourne and Osaka taking four of the top five spots for promising markets in the Asia Pacific region. Ho Chi Minh City, rated fifth, rounds out the list of most favoured markets.

"Asia's real estate markets are the product of almost eight years of easy money from the world's central banks. Although easing in the US may be ending, both Japan and the European Union continue to provide liquidity, while interest rates in many Asian countries are lower than one year ago," said ULI North Asia Chairman Raymond Chow, Executive Director, Hongkong Land in Hong Kong. "This, combined with an allocation of capital from both local and global institutional investors, is resulting in more and more money chasing fewer and fewer real estate assets. This is pushing up prices across most markets and sectors, even as the current industry cycle appears to be winding down. We can expect this to continue throughout 2016, with the most attention being paid to markets perceived as offering certainty in terms of low risk and satisfactory returns."

"As the bull market in Asian real estate enters its seventh year, the positive atmosphere is encouraging investors to sell assets purchased years ago in the wake of the global financial crisis. Our report finds that investors are increasingly opting to take profits and exit from deals made in recent years. Opportunistic returns lie in Japan, where cheap debt and high leverage provide outsized profits, and in China, where developers are in need of capital and liquidity is in short supply. Meanwhile, investors with an eye on a possible peak in the cycle are attracted to the safety of core assets in gateway cities," said KK So, Asia Pacific Real Estate Tax Leader, PwC. 

"In terms of capital flows, investors continue to see increases in capital movements from Asia to real estate markets elsewhere in the world. The main contributor to this trend is China, where institutional, corporate, and private capital is buying mainly in Australia, Japan and the US."

Emerging Trends provides an outlook on Asia Pacific real estate investment and development trends, real estate finance and capital markets, and trends by property sector and metropolitan area. It is based on the opinions of 343 real estate professionals, including investors, developers, property company representatives, lenders, brokers and consultants.

The top five investment markets for 2016 are: 

Tokyo, ranked first for investment and development, ticks all the boxes for investors given its status as Asia's top gateway city, and the market with the greatest depth and liquidity. Despite the continuous heavy activity fuelled by easy credit and low interest rates, some are wary that the market is slowing. While the short-term outlook is favourable, a slowdown, accompanied by price stagnation or declines, could prove problematic for those needing to refinance high loan-to-value loans in the future, the report cautions.

Sydney, ranked second for both investment and development, is a draw for institutional investors seeking core office properties. The shortage of those assets and an influx of new investors competing for the properties, coupled with a depreciated local currency, is resulting in strong property yields. Real estate in Sydney is also benefiting from the transformation of Australia's economy from a commodities-driven to a service sector-driven model. A significant number of office-to-residential conversions and redevelopment projects have drawn investor interest. 

Melbourne, third for investment and development, is perceived as offering a similar environment to Sydney. However, even with double-digit price increases in 2015, properties in the city remain more affordable than those in Sydney, mainly because more land is available for an expansion of the central business district (CBD). 

Osaka, fourth for investment but fifth for development continues to benefit Tokyo's spillover demand. The market's growth "marks the end of a long period of oversupply that plagued the city for years," notes the report.

Ho Chi Minh City - fifth for investment and fourth for development - was in 19th place in 2014. The report attributes its surge in popularity to successful efforts by the government to stabilise the local currency and keep inflation in check, coupled with a revival of real estate lending by banks. In addition, improved market access for foreigners is drawing outside investors, who could significantly boost purchases of both residential and commercial properties.

Across the Asia-Pacific region, the industrial/logistics sector continues to be the most popular property type for investment prospects. "Shortages of modern distribution facilities across almost all markets ensures that demand will continue to grow, especially in China," says the report. It notes that demand is being driven by the need for rapid delivery resulting from the e-commerce boom, buildout in the cold-food chain, and structural changes in regional manufacturing as operations move to emerging markets such as Vietnam. 

Mitsui-Nusajaya Tech Park joint venture offers custom workspaces for lease in Iskandar, Malaysia

Source: Ascendas.

Mitsui & Co. has entered into a joint venture agreement with Nusajaya Tech Park (NTPSB), a company jointly owned by Asian business space solutions provider Ascendas, and Malaysian property developer UEM Sunrise to offer build-to-suit (BTS) properties for lease in Nusajaya Tech Park in Iskandar Malaysia.

The joint venture marks the first Japanese partnership for industrial parks in Iskandar Malaysia. Mitsui has an extensive network in Japan and strong know-how in areas such as industrial property development, management and leasing. Ascendas has an established track record and capabilities in quality business space development and management, while UEM Sunrise has in-depth local market knowledge and capabilities. 

Combining the respective strengths of these three partners, Nusajaya Tech Park will be well-positioned to provide differentiated solutions to Japanese corporations in Iskandar Malaysia, as well as attract a new wave of Japanese investments into the region. The park will also benefit from potential synergies with the Smart City project that Mitsui is undertaking in the Medini District within Iskandar Malaysia. Under the agreement, a total land area of 10.7 hectares will be set aside for BTS for lease within the 210-hectare Nusajaya Tech Park, at a projected development value of approximately S$167 million (RM468 million) over four years.

The joint venture will provide one-stop solution to companies who prefer to operate in customised facilities on long-term leases, without the hassle and capital expenditure associated with the construction process. The joint venture will oversee and finance the entire real estate process for customers – from design, construction, project management to property management.

Designed for a wide range of light to medium industries, Nusajaya Tech Park offers an eco-friendly and world-class business environment, with integrated industrial, commercial spaces, dormitories, amenities and support facilities in one location. It is also the first township in Malaysia to be awarded Singapore’s Building and Construction Authority’s Green Mark for Districts – Gold (Provisional) Award.

Reiji Fujita, General Manager of Urban Development Division of Mitsui, said, “Japanese companies are increasingly seeking investment and expansion opportunities in Southeast Asia as part of their globalisation strategies. Nusajaya Tech Park is a catalytic development in Iskandar Malaysia, located just minutes away from Singapore and well-positioned to serve as a key gateway for Japanese corporations to grow their presence in this region. Our collaboration with two very formidable industry leaders in this market, Ascendas and UEM Sunrise, will cement our position as a preferred partner for Japanese companies seeking growth in this part of the world.”

Manohar Khiatani, President and Group CEO of Ascendas and Chairman of NTPSB, said, “By leveraging Mitsui’s strong network of clients and partners, we can elevate our marketing efforts for Nusajaya Tech Park, particularly to Japanese companies, and help these companies harness the potential of this fast-growing region.”

William Tay, Chief Executive of Ascendas South East Asia and Director of NTPSB, said, “Through this new joint venture, our customers in Nusajaya Tech Park will not only benefit from solutions that are customised to their business needs, but also enjoy international standards of business space development and operations as a result of the collective strengths of all three partners.”

Raymond Cheah, Chief Operating Officer, Commercial of UEM Sunrise said, “We are pleased that Mitsui is joining the Nusajaya Tech Park family. Mitsui’s involvement offers an added dimension that will propel Gerbang Nusajaya into an industrial and business engine to become the regional transformation hub, through a partnership of international proportions.”

Ibn Battuta Gate Office building in high demand as Expo 2020 Dubai draws nearer

Source: Seven Tides website.

As preparations for Expo 2020 Dubai gather pace, Ibn Battuta Gate Offices, owned by luxury property developer Seven Tides, is capitalising on its location in the heart of New Dubai, next to the Mövenpick Hotel, the Ibn Battuta Mall and a nearby metro station.

Interest has also heightened since an announcement was made to extend the existing Ibn Battuta Mall by 28,000 sq m at a cost of AED160 million. This will include a 350-bedroom hotel, 150 additional shops, 50 more restaurants and a 21-screen cinema.

Ibn Battuta Gate Offices is less than 30km from Dubai World Central, the Expo 2020 site and Dubai World Central Airport, and boasts a multi-storey, automated car park facility that can accommodate 765 cars.

Asteco, one of the region’s major real estate consultancy and property management firms, currently manages the Ibn Battuta Gate Offices building.

“We are now handling a steady stream of enquiries from small startups to international companies looking to set up their businesses here and we expect that to accelerate in the run-up to Expo 2020, particularly with the availability of fully fitted, fully inclusive offices with dedicated parking spaces,” said John Stevens, Managing Director, Asteco.

“Around US$7 billion has been earmarked for development and infrastructure projects linked to Expo 2020 which will effectively position the 150-hectare development as a hub in its own right, and Ibn Battuta Gate’s strategic location places it firmly in the sightline of opportunity with its ‘move-in-and-go’ setup.” 

Stevens said investment and employment creation are expected to fuel real estate market growth over the next five years with an estimated 277,000 jobs and 20 million extra visitors during the six-month long expo.

“I believe that this will have a positive effect on rental rates in the market for those developments that offer accessibility and convenience in the form of public transportation links and peripheral services such as retail, entertainment, residential and public services,” he added.

Commercial property outlook for Q4 2014 weakest in Hong Kong

Singapore Marina Bay business district at night.

The RICS (Royal Institution of Chartered Surveyors) Global Commercial Property Monitor for Q4 2014 has indicated that although key economic indicators continue to point to a softening in the economy in Hong Kong, economic growth is likely to pick up at a steady pace this year.

In Hong Kong, the RICS Occupier Sentiment Index* (OSI) fell slightly over the quarter from +4 to -3, while the RICS Investment Sentiment Index* (ISI) remained in negative territory in Q4, recording a value of -3. Tenant demand continued to increase in both office and industrial sectors, but a sharp decline was reported in retail. 

Over the next three months, rents are expected to grow in the office and industrial sectors, but fall in the retail arena. It is worth highlighting that on the investment front, the supply of commercial property for sale grew across each sector with retail units registering the steepest increase. Finally, over the next twelve months, the capital value of prime office space is expected to grow by 4%. Prime industrial space is expected to grow by 3%. No growth in capital value is predicted for prime retail space.

In mainland China, moderation in economic growth continues to weigh on overall commercial property sentiment. Moderate occupier demand and growing available space have pushed the headline rental value expectations into negative territory. 

In Singapore, sentiment in the investment market is weakening. Strong rental growth is expected in the office sector over the coming three months, but rents are expected to decline for industrial and retail sectors. 

In Japan, the near term outlook is still robust despite significant economic headwinds. Tightening market conditions continue to place upward pressure on rents, which are anticipated to rise strongly across the board at both the three and twelve month horizons.

RICS Senior Economist Andy Wu said: "We believe Hong Kong remains in a weaker position when compared to other Asian markets, with the growing uncertainty of the political situation and the lack of growth in the economy likely causing an unstained level of occupier activity and smaller scale flows of capital into the city this year. Values are faltering as a result of occupiers and investors being cautious over market prospects. 

"As such, the RICS Q4's overall property performance isn't surprising. Indeed, sentiment has been soft in line with its underlying economic fundamentals, and whilst it is important to focus on the wider market, it is worth highlighting that certain sub-sectors still remain downbeat, namely retail. The Q4 decline provides further evidence of the fragility of retail sector health and we believe this will continue until there is a sustained upturn in consumer spending growth. 

"Turning to Singapore, pretty much the same could be said of occupier and investor markets, with commercial property performing unsatisfactorily.

"As the economic challenges in China continue throughout rest of the year, it is likely to see a more pronounced divergence in the performance of commercial property markets between Tier 1 and lower-tier cities. Indeed, the economic slowdown has continued to hold back occupier activity, resulting in static rental values. Interestingly enough, SMEs and larger firms have continued to exercise a cautious approach to take space. They have attempted to minimise risk and cost through delaying the expansion or looking to downsize space. This reluctance to commit to new space has weighed on activity and left a growing quantity of stock in many of the Chinese cities.

"Q4 has continued to see positive performance in Japan. In fact, this positive trend in the commercial property sector is inconsistent with what is also being reported in the economy generally, through business surveys and other key economic data. While the levels of uncertainty surrounding the economic outlook remain, this has not prevented investors purchasing in Japan's largest cities, namely Tokyo and Osaka. What remains to be seen is whether Japanese commercial property market can continue to fare well, with a growing sense of pessimism for the economy."

*RICS Occupier Sentiment Index (OSI): The OSI is constructed by taking an unweighted average of readings for three series relating to the occupier market measured on a net balance basis: occupier demand, the level of inducements and rent expectations.

RICS Investment Sentiment Index (ISI): The ISI is constructed by taking an unweighted average of readings for three series relating to the investment market measured on a net balance** basis: investment enquiries, capital value expectations and the supply of distressed properties.

**Net balances: Net balance percents, or scores, are calculated by subtracting the numbers of respondents reporting 'down' from the number who reported 'up'.

Malaysia and Japan lead positive commercial property outlook going forward

The Royal Institution of Chartered Surveyors (RICS) has shown in the Q2 2014 RICS Global Commercial Property Monitor, that the Occupier Sentiment Index (OSI) for Hong Kong's commercial property market remains negative for the fourth consecutive quarter. 

Occupier demand continued to fall with the retail segment losing significant momentum, although office and industrial occupier demand remained stable. With falling tenant demand and rising supply, rent value expectations at the three month time horizon have turned more negative. 

Investment sentiment, as reflected by the Investment Sentiment Index (ISI), also remained in negative territory in Q2. RICS believes the growth trajectory is likely to continue to be bumpy in the second half as the global recovery will probably remain tepid, affecting the commercial property sector accordingly.

RICS Senior Economist Andy Wu, said: "In Hong Kong, rents in the central business district continued to struggle to show any significant growth in the second quarter, given a lacklustre employment market in the financial services sector and rising levels of available rental stock in the decentralised business districts. Our survey results also indicate that investors are still somewhat hesitant towards making a commitment in the commercial property and we expect the trend to continue for the time being."

Recent data indicates the short-term economic outlook for Singapore continues to to be relatively sluggish as well. Although the OSI remains in positive territory, it declined in Q2. Similarly, the ISI edged down over the quarter. 

Wu observed that there are signs that economic uncertainty is starting to affect the commercial property sector in Singapore. "We believe in the short term real estate activity will remain relatively depressed due to ongoing economic challenges. That said, the fundamentals of the city state's real estate market still look positive for the medium to long term as Singapore could continue to emerge stronger through a high level of transparency and a business-friendly set of policies."

China is not looking favourable either, with the OSI and ISI falling into negative territory for the first time since 2009. "The biggest threat to China, other than headwinds from a recurrence of tighter credit conditions, is the apparent oversupply of offices and retail space which will strain current rental values and prices during a period of fading interest from businesses and investors," said Wu. 

"We believe investment levels and transaction volumes will likely continue to be depressed through the reminder of the year. Nevertheless, acceleration of government reforms and measures aimed at stimulating the economy should offset some of the adverse market forces."

In contrast, Malaysia's OSI increased notably since Q1, climbing firmly into positive territory. In addition, the ISI has also turned positive for the first time since mid-2013, partly driven by domestic demand and growth in export. 

The OSI and ISI in Japan also continued upward, with both indicators posting another strong reading and remaining positive for the 12th consecutive quarter. Buoyant OSI and ISI figures indicative of high confidence levels were also seen for New Zealand.

"Interestingly economic optimism, thought gently fading, has continued to trigger strong demand for property space in Japan. It's clear both foreign and domestic investors still see the value of Japanese commercial real estate and remain particularly enamored with the office, retail and industrial sectors. We believe this upward trend will unlikely reverse itself anytime soon and investment numbers will continue to uptick for some time to come," noted Wu.
The RICS Global Commercial Property Survey is a quarterly guide to developing trends in the commercial property investment and occupier market. Find out more about the survey here.  

*About the RICS Occupier Sentiment Index (OSI) and the RICS Investment Sentiment Index (ISI)

The OSI is constructed by taking an unweighted average of readings for three series relating to the occupier market measured on a net balance basis; occupier demand, the level of inducements and rent expectations.

The ISI is constructed by taking an unweighted average of readings for three series relating to the investment market measured on a net balance** basis; investment enquiries, capital value expectations and the supply of distressed properties.

**Net balances are calculated by subtracting the numbers of respondents reporting 'down' from the number who reported 'up'.

Malaysia SMEs get a new property financing option from Bank Muamalat

Islamic bank Bank Muamalat Malaysia has announced it will extend RM200 million in new financing to small and medium sized corporations by 2015 through Muamalat BizSTAR-I, a financial package designed to cater for either financing or refinancing of business premises and to support SME corporations to own business premises.

Y.Bhg. Dato’ Hj. Mohd Redza Shah Abdul Wahid, Chief Executive Officer of Bank Muamalat said, “As the economy becomes more sophisticated, so will the requirements of the SMEs. One of the major levers of growth for the SME sector is access to financing and financial institutions therefore have an important role in the ecosystem for financing to SMEs.

“Business premises financing products are amongst the most popular financing products for SMEs, having grown from RM87.1 billion in 2003 to RM217.2 billion in 2012.”

Bank Muamalat has a network of 59 branches (including six kiosks), in addition to its electronic channel, encompassing i-Muamalat, the Bank’s Internet banking solution, and e-Muamalat, available at almost 240 locations, referring to its network of ATMs, CDMs, and CDTs. 

The Bridge Phnom Penh offers Cambodia's first SOHO properties

Singapore property developer Oxley Holdings has introduced a small-office-home-office (SOHO) property concept in Phnom Penh at the official launch of The Bridge in Cambodia. This is the company’s maiden project in Cambodia through a joint venture with local property developer Worldbridge Land Cambodia.

Source: Oxley. Oxley Holdings’ CEO Ching Chiat Kwong (first from left) at the ribbon-cutting ceremony for the showroom for The Bridge in Phnom Penh with Tan Teck Kee, Executive Director, Worldbridge Land, Guest of Honour H.E. Im Chhunlim, Senior Minister, Ministry of Land Management, Urban and Construction, H.E. General Sao Sokha, Deputy Commander in Chief of Royal Cambodian Armed Forces and Commander of Royal Gendarmary of Cambodia, and Oknha Sear Rithy, Chairman, Worldbridge Land.

The Bridge will comprise residential apartments, retail units and 963 SOHO units, spanning 46 sq m to 78 sq m, with starting prices of US$100,000. When completed in 2018, The Bridge will be the largest and tallest mixed development in Cambodia at 45 storeys and a land area of 10,090 sq m.
In conjunction with the official launch of the development, the Company opened a showroom in Phnom Penh featuring the possible configurations of both residential and SOHO apartments. More than 100 SOHO units have been taken up since the company began accepting bookings in June. This figure had doubled by the day of the launch.

A sales gallery for The Bridge opened on 14 June in Singapore, at 390 Orchard Road, #16-01, Palais Renaissance. It is open from 12 to 6pm daily.