Hong How Investments tests the market with a new SoHo development
LOCAL developer Hong How Investments is testing the market with the soft launch of 14 units in a SoHo development on Armenian street.
It has cut its asking price by 12.5 per cent to $2,100 to $2,200 per square foot (psf) from the $2,400 to $2,500 psf range when the developer was first ready for launch last August.
While enquiries have been forthcoming since the soft launch on April 9, Hong How said interested buyers have so far offered below asking price. “For some of the interested buyers, we are prepared to negotiate,” said Hong How director Teo Teck Weng.
SoHo stands for “small office, home office” and refers to purpose-built office units that double up as homes. They often come with like kitchenettes and bathrooms.
Hong How’s development is called “36/38 Armenian Street” and encompasses the former Mayfair City Hotel. It is located near The Substation theatre in the heart of the art and heritage district around City Hall.
Despite the gloomy sentiment, Knight Frank’s director of research and consultancy Nicholas Mak expects the appetite for SoHo units to remain intact when the economy recovers.
“There’s definitely a future for SoHo partly because it’s very difficult for property investors to buy commercial property,” said Mr Mak.
“SoHo also allows for flexibility uses which some office buildings don’t allow. So that’s another plus point.”
The SoHo hybrid concept is still relatively new to Singapore. Far East Organization was first to try it out on a large scale with its Central development above Clark Quay in 2004. This included 227 SoHo units which were sold out by 2007, fetching prices as high as $2,000 psf.
Other developments include Straits Trading and Great Eastern Life’s China Square Central project, with 81 shophouses converted into SoHo units alongside office and retail space.
Jones Lang LaSalle is the marketing agent for 14 of the remaining 24 available SoHo units in 36/38 Armenian Street.
So far, both investors and owner-occupiers like design firms and boutique fund managers have shown interest. But Hong How’s Mr Teo expects most buyers to be owner-occupiers. “It’s going to take us another nine months or so to finish the development … at which point I think we can get a much better price,” he said.
Last August, the developer sold an entire four-storey block in the project to a single art collector. It intends to sell the remaining 10 offices and 13 retail units as an enbloc sale to a property fund.
While analysts praise its location, Colliers International’s research director Tay Huey Ying said: “In today’s market, demand could be affected due to weak sentiment in the investors market and in the office market, when companies are down-sizing and we don’t see new businesses being started.”
Source : Today – 30 Apr 2009