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Thread: URA tries to limit small shops in new complexes

  1. #1
    Join Date
    Oct 2011

    Default URA tries to limit small shops in new complexes

    Published October 17, 2012

    URA tries to limit small shops in new complexes

    No formal guidelines, but it's suggesting caps on proportion of such shops

    By Kalpana Rashiwala

    [SINGAPORE] The Urban Redevelopment Authority (URA) could be looking to discourage an over-concentration of small strata shops in new developments, BT understands. It is also trying to steer them towards a certain size mix.

    No official guidelines have been spelt out but market-watchers believe that URA is sharing informal advice on shop sizes. They feel this could be a first step towards putting a lid on the proliferation of small shops in new developments. Small shops have been attracting property investors from the residential sector, which has been hit by six rounds of cooling measures.

    BT understands that URA is recommending that at least 50 per cent of the retail portion in a development should comprise units of at least 60 sq metres (645.83 sq ft) each. A maximum 40 per cent may be allocated to 25-59 sq m units, and no more than 10 per cent to 15-24 sq m units. It seems URA is discouraging units below 15 sq m (161.46 sq ft).

    "Probably informal guidelines on size requirements for retail units are slowly creeping in," said a developer. On the other hand, a clear guideline would create greater certainty for property developers buying sites with a view to incorporating strata shops in their project, he added.

    When contacted, URA declined to confirm the recommended unit size mix.

    But its spokeswoman, while acknowledging the need for flexibility to cater to diversity of business needs of different market segments, added: "A development consisting predominantly of small units may pose problems, for example, carpark shortage and traffic congestion, to the local area."

    URA's thinking seems to be that the bigger the number of retail units in a development, the more the retail operators and staff, thus increasing the car population in the building. However, industry players say even malls that are under single ownership have been experiencing carpark shortage.

    Knight Frank's head of investment Ian Loh suggests that a key reason for URA's advice on strata unit-size mix could be to keep a lid on investment demand for strata shops, which have been fetching eye-popping prices.

    Some developers have taken to minting smallish shops to keep lump-sum prices affordable to potential buyers, but in the process, setting high per square foot (psf) prices. For example, earlier this year, eight street-level cafe units ranging from 398 sq ft to 807 sq ft at Oxley Tower at Robinson Road were sold at $6,200-$7,200 per square foot. At the nearby EON Shenton, all 23 street-level shops fetched $4,000-$4,980 psf. The shops are 129 sq ft to 377 sq ft.

    Some of the shops in Oxley Tower have been flipped, based on caveats data.

    "The authorities may want to set some controls as to where prices are heading," suggests a market watcher.

    Agreeing, a developer said: "I suppose any recommended sizes on retail units would reflect continual concern by the authorities on over-speculation, ie hot money being attracted to smaller units which are more affordable on lump-sum price basis. This would be on a similar basis as the minimum 150 sq metre size introduced for industrial units."

    A common perception in industry circles is that for office units, URA is leaning towards 100 sq m as either a minimum or average unit size.

    URA's spokeswoman noted that businesses have very diverse needs and budgets. "Some small commercial and retail units exist in the market today to cater to businesses that do not require a big space... When evaluating commercial development proposals, we take into consideration the planning intention for the area and the potential impact on the surrounding environment and local traffic conditions.

    "We work closely with developers and architects in the design and layout of commercial and shop spaces to ensure that the layout caters to the needs of different users, provides a conducive environment to the customers and at the same time, minimises any potential disamenity issues to the surrounding uses."

    DWG senior manager Lee Sze Teck highlights that a mixed development, Suites at Bukit Timah, has a shop unit as small as 5 sq m based on caveats data. "If there are too many small shop units being built, it begs the question whether ultimately all these units can be rented out. If tenants find them too small, they could be left empty - a wastage of resources. Of course, potential operators could source for a few adjacent units and combine them into a larger space."

    Jones Lang LaSalle's SE Asia research head Chua Yang Liang said some owners may end up using their tiny retail units for storage if they can't find retail tenants. "An aggregation of small units in a mall could also lead to an unusual mix of operators, like massage outlets, nail salons, 4D booths and others, which could dilute the original intention of the planners for the site," he added.

  2. #2
    Join Date
    Jun 2008


    Panic mode now..

    Got auction by one of the usual ppty auction coy this month for Oxley 3rd level unit.. think it's 120-130sqft only.

    Title of auction.. "BUY NOW..PAY LATER".. lol

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