Riady sees record property prices for next 3 years

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Published January 12, 2007

Riady sees record property prices for next 3 years

By KALPANA RASHIWALA


(SINGAPORE) Lippo Group deputy chairman Stephen Riady is confident that new record prices will be set in Singapore's office, retail and high-end residential sectors in each of the next three years.

He cites Singapore's regional hub status, the government's pro-business and growth policies, strong tourism numbers and an increase in population on the back of the strategy to attract foreign talent. 'With these factors coming into play, how can Singapore property values not grow?' he said in an interview with BT.

Lippo is also 'very interested' in the UIC Building and adjoining Shenton House sites, which can potentially be redeveloped into commercial and residential projects with a total gross floor area of about 1.3 million sq ft. And the group will be looking at the 'white' site next to 1 Shenton Way that the Urban Redevelopment Authority will release for tender in May this year, Mr Riady said. The site will be sold with a stipulation for a minimum office component.

Mr Riady is bullish about prospects for the office sector, saying Singapore prime office capital values are still significantly below the peak of 1996-97.

According to Colliers International, the average prime Grade A office capital value is now $1,553 psf - up almost 50 per cent from a year ago but still shy of the $2,225 in Q4 1996.

Says Mr Riady: 'We are looking at reaching towards the previous record towards end-2007 or early 2008 and from there, going even higher.' There is room to narrow the gap in office property values between Singapore and the likes of Hong Kong and London, according to him. He is also optimistic about the luxury residential sector here, saying: 'Achieving average prices of $3,500 to $4,000 psf for luxury residential launches in Singapore should be a reality within the next two years.'

The recent record price achieved for a prime residential site at The Peak in Hong Kong has again widened the price gap between high-end residential values in the two cities. And this will again create room for further growth in luxury home prices in Singapore, according to Mr Riady. Growth in tourism will be a key factor that will propel an increase in retail property values, he reckons.