Just one bid for Tampines condo site

Straits Times
Aug 13, 2008

THE property slowdown was clear for all to see yesterday when the tender for a condo site overlooking Bedok Reservoir closed with just one bid – and at a price well below expectations.

The Urban Redevelopment Authority (URA) will likely refuse to award the 3.2ha site, given the poor offer, consultants said.

Boon Keng Development bid $84.6 million, or $118 per sq ft (psf), for the 99-year leasehold site but consultants had expected anything from $150 to $230 psf.

Apartments on the site could sell for up to $700 psf, they said.

If Boon Keng does secure the site at the junction of Tampines Avenues 1 and 10, its break-even would be about $480 to $500 psf. It would then be able to sell the apartments for around $600 psf, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak. But he does not expect the URA to sell the land at such a low price.
The increasingly cautious mood among developers explains why the site drew only one bid.

‘If this site was not on the confirmed list, it may not be triggered for tender,’ said Mr Mak.

Confirmed list sites are tendered out at pre-determined dates regardless of whether developers have shown interest.

‘If confirmed list sites were launched for tender in an increasingly uncertain market, they would attract opportunistic bids, such as the one we witnessed today,’ said Mr Mak.

Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, who had tipped bids of $150 to $180 psf for the site, said: ‘Most developers have ample land, so unless a choice plot is available, they won’t bid.’

Rising building costs are forcing developers to look for cheaper land. In such a climate, the Government has to decide whether to lower reserve prices to ensure a steady supply of mass-market private housing, or maintain the value of plots on the sales list as they form part of the nation’s reserve, said Mr Mak.

He does not expect any residential site on the government sales list to be triggered for tender unless reserve prices are lowered. If not, there could be a sharp drop in the sale of residential land from the Government this year.
Singapore tenders out land on the reserve list if developers indicate interest by committing to a minimum bid acceptable to them.

Challenges for property sector

New engines drive Singapore’s property market but pitfalls remain

THE Singapore property market has weathered the storm from the US sub-prime crisis, soaring oil
prices and overall inflation, pretty well.

Runaway increases in property values in the high-end residential and prime office sectors seen in the
past couple of years, for instance, have started to ease. But they have not dived, and panic has not
set in, at least not so far.

Knight Frank managing director Tan Tiong Cheng says: ‘To some, this is a welcome breather from the
breakneck pace of increases recorded in the last 24 months.’

CB Richard Ellis chairman (Asia) Willy Shee too observes: ‘The overall market has displayed some
resilience. In the office market, there’s still demand for office space with occupiers still looking to precommit office space in yet-to-be completed buildings.’ While the private housing market is not as
buoyant as last year, transaction volumes have picked up in second quarter this year with
encouraging sales from mid and mass-market projects, he adds.

Market watchers feel that in the short-term, property values could head south, driven by near-term
fundamentals. However, the mid-term prospects for Singapore’s real estate sector are generally
considered sound. As a major developer puts it: ‘Population growth, global and regional wealth
creation, sustained government investment in infrastructure, the perennial sharpening of Singapore’s
competitive edge, limited land, security and political stability, internationalisation of the property
market – all these must be good for Singapore real estate prices in the long run.’

The Remaking of Singapore has helped create sound fundamentals for the local property market. The
government’s decision to break from the past and go ahead with developing two integrated resorts
with casinos as well as its efforts to position Singapore as a leading contender in the race among
global cities to attract wealth and talent have boosted the island’s prominence on the radars of
international property investors.

New engines for growing the Singapore economy have also been put in place and this to some extent
may also help shield the island and its property market from the full impact of what’s happening in the
US.

Investments and job creation from the IRs, Sports Hub, expansion plans for rail network and other
infrastructure projects, Singapore’s policy of welcoming foreign talent to its shores, and the strategy of
positioning Singapore as a hub for various industries – financial industry/wealth management, tourism,
education and healthcare – are expected to provide momentum for Singapore’s economy.

‘The IRs, F1, Sports Hub and Youth Olympic Games surprised observers who think that Singapore is
only a clean and safe place to do business but never a place where you can let your hair down,’
observes Knight Frank’s Mr Tan.

‘What do these initiatives mean to savvy investors? They mean that we are perceptive in discerning
changes in the global world, have the will to question old assumptions and have the courage to move
a population to accept initiatives that can be potentially divisive.

‘That the government and its people can move together to tackle challenges ahead demonstrates the
inherent strength of the country as a global city to do business and a place to live,’ Mr Tan added.
DTZ executive director Ong Choon Fah said: ‘Wealth management industry is still a very big thing
here. Wealth from high networths in Asia – China, India – is flowing into Singapore. With IRs and the

F1 race, Singapore is being marketed as a playground for the rich and famous. Family offices and
philanthropy are fast being added to the suite of services offered by private bankers.
‘The removal of estate duty has been a major boost to Singapore’s ambitions to be a wealth
management hub.’

New challenges
But the road ahead for the local property market is paved with challenges. Colliers International
director of research and advisory Tay Huey Ying argues that the ‘mid-term optimism for the Singapore
property market is underpinned by the IRs and the Marina Bay Financial Centre (MBFC). ‘If these
projects do not deliver, confidence may be shaken,’ she warns.

To be considered successful, the IRs will have to be able to continuously attract visitors year after
year and not fizzle out after the initial novelty wears off. Similarly, the MBFC can be truly considered
an achievement for Singapore’s aspirations to be a leading financial centre if the movement of tenants
into MBFC does not create a vacuum in existing office buildings that can’t be filled within a short span
of time; otherwise, it may just show there’s not that much depth in Singapore’s financial industry, Ms
Tay reckons.

In the residential property market, a short-term challenge that could materialise is if substantial
numbers of home buyers who’ve purchased private homes on deferred payment schemes in the past
few years begin to panic and dump their properties as the projects’ completion dates loom closer.
That would be the time when these buyers have to pay the bulk of the purchase price to developers,
and if some of them think they may have difficulty finding home loans, especially if they are still
holding on to several such units, they may panic and dump their properties at lower than current
market prices.

Such a scenario would be a house hunter’s dream, but could destroy wealth for the majority of
Singaporeans who already own their own homes.

‘Instead of subjecting themselves to panic selling, these property owners may wish to bear in mind
Singapore’s mid-term prospects and should try to hold their properties by securing a financing
package or a tenancy for their property,’ Ms Tay suggests.

Escalating construction costs
Escalating construction costs are another big concern going ahead. ‘The high construction costs
could translate into high purchase cost for buyers and investors of private property assets as well as
contribute to inflationary pressure for end-users of public infrastructure,’ says CBRE’s Mr Shee.
‘The high construction costs would also eat into developers’ profit margins and hence reduce the
incentive for developers to undertake new projects or acquire sites from the Government Land Sales
programme,’ he adds.

On the macro political front, Knight Frank’s Mr Tan says an immediate challenge is the confluence of
unstable political situations in three neighbouring countries – Malaysia, Thailand and Indonesia (which
will have a election next year). ‘Put simply, we’re a good property in a bad neighbourhood,’ he said.
CBRE predicts that office rentals are approaching a peak. The average monthly Grade A rental value
rose to $18.80 per square foot in Q2 this year, an increase of 43.5 per cent from the same period last
year. With completions of major office projects from 2010, including MBFC Phase 1 and 50 Collyer
Quay, the property consultancy group predicts the average Grade A office rental will ease to $12-15
psf post-2010.

On a more optimistic note, it highlights that with all the new office developments coming up, a
significant amount of future office stock will constitute world-class modern Grade A buildings. ‘Around
64 per cent of the office completions in the next five years will be Grade A quality,’ Mr Shee says.
For the private residential sector, CBRE has said a correction of residential prices to the tune of 5 to
10 per cent in the second half of this year is likely as the global economy suffers the continued
onslaught from the sub-prime mortgage meltdown and inflation.

Riding the turbulence
Colliers’ Ms Tay highlights the importance of a sound government land supply policy – ‘not just shortterm reactions’ – will help the local property market to ride out the challenges ahead.

‘For individual home buyers and sellers, they should arm themselves with the right information instead
of succumbing to herd instinct or following their emotions,’ she adds.

Knight Frank’s Mr Tan says: ‘Demand for real estate is dependent on economic prospects. With
strong economic fundamentals, I have no doubt that interest in real estate in Singapore by local and
foreign institutional investors will return once the current market turmoil blows over.

In similar vein, CBRE’s Mr Shee says: ‘Fundamentally, the long-term development of the office, retail,
residential and hospitality sectors will not change in spite of the present global financial worries.

‘It was all these government initiatives that attracted a fresh wave of foreign investment into
Singapore in the last 24 months, and it will be these developmental drivers that will continue to attract
investment from various parts of the world to Singapore.’

Home, retail, office rental growth to ease

Business Times – 25 Mar 2008

Housing rentals to rise 5-15% year-on-year in 2008: Knight Frank

PRIVATE housing rents are expected to grow at a slower pace this year than last year, Knight Frank said in a report yesterday.

The property consultancy firm expects a year-on-year rise of 5-15 per cent in 2008 – after a massive 40 per cent year-on-year increase in 2007.

Knight Frank’s estimates are based on the resistance of tenants and companies to even higher rents, and the limited availability of places at foreign schools for children of expatriates.

‘Due to the fact that foreign schools are full and there are long waiting lists faced by children of foreign families who relocated here, housing demand from new foreign family tenants is projected to decrease,’ Knight Frank said.

‘On top of this, foreign tenants as well as corporate HR (departments) have readjusted housing allowances this year, which constricts rental demand according to their budgets.’

Despite this, a demand-supply imbalance could still result in rental rises until a supply of new units is felt significantly from 2009.

About 8,400 new private homes will be completed this year. But the number will expand dramatically in the three years from 2009 to 2011, with an estimated 16,000 to 17,000 units completed each year.

This could put downward pressure on rents, Knight Frank said.

The same holds true for the retail sector. Knight Frank predicts that landlords could face stronger resistance from retailers to rising rents in the later part of 2008 as more space comes on stream.

‘Rents are forecast to maintain at their current level only until early 2008,’ it said. ‘Faced with a larger supply in the pipeline in the second half of 2008, island-wide prime retail rents are projected to appreciate by a relatively modest 5-10 per cent for entire 2008, compared to 22.1 per cent growth in 2007.’

Knight Frank also said growth in office rents and capital values in 2008 and 2009 will likely to be more moderate than in 2007. Office rents are forecast to rise 10-20 per cent year on year, while capital values are expected to increase 10-15 per cent year on year.

PROPERTY: Muted market gives buyers more bargaining power

The Straits Times March 23, 2008

Prices aren’t tumbling but it’s a good time to get a unit at a reasonable price, say experts

IT IS no secret that the residential property market is in a lacklustre mood.

With many buyers and sellers having scurried to the sidelines as the United States sub-prime woes brought about an uncertain stock market, new home sales slipped to a nine-month low last month.

For those looking to buy a home, the question is whether to buy now or later.

As fire sales have yet to hit the market and prices largely appear to be holding steady, it may not yet be a time when bargains abound everywhere.

But property experts say this may be the best time to bargain for a reasonable deal if you have something in mind.

It is a time when sellers – be it developers selling their new developments or individuals selling their properties in the resale market – are more flexible and buyers have more bargaining power, they say.

Generally, developers are still loath to lower their prices. So a good bet now is likely to be the resale market, where sellers can be more flexible, depending on their reasons for wishing to sell their property.

Completed properties also have the advantage of generating an immediate rental yield, or allowing buyers to move in any time they like, consultants say.

‘Right now, bargain-hunting may take place in the secondary market,’ says Mr Donald Han, Cushman & Wakefield’s managing director.

Some sellers may be looking to get out of the property market because they either cannot or do not wish to hold on to the asset on hand, he adds.

There are certainly desperate sellers out there, but it is not as though they are all ready to sell at a major discount or take a significant loss, says a property investor who declined to be named.

Last month, only 185 new homes were sold, down from 328 in January.

If the current standstill in the market continues, some small developers may start to lower their prices, say property consultants.

And if this happens, it will affect the entire market.

Home prices could fall, but by then, other buyers may beat potential buyers to the properties that they like.

This is why some property consultants say it is really an individual’s reading of the market on when to buy.

This is particularly so for those with a specific unit or a small project in mind, or those seeking unusual products such as suburban condominium units with pools.

The freehold 39-unit Ambrosia in Telok Kurau, for example, offers units with swimming pools, which is not common in small projects.

Its nine penthouses and two ground-floor units come with private pools and these have attracted fairly strong interest.

About 30 per cent of the five-storey development has been sold at an average price of $950 per sq ft (psf), says property consultancy Knight Frank, which is marketing the project.

‘Last year, valuation was trying to keep up with transacted prices,’ says Mr Han. ‘Now, transacted prices are keeping up with valuations.’ Mr Eric Cheng, executive director of HSR property group, says: ‘In today’s market, you can find cheap buys.’

But not all units are cheap, even if the sellers are willing to offload their homes without any profit, he adds.

For instance, some sellers at the 99-year leasehold The Rochester in Buona Vista may be keen to sell at around $1,200 psf, which could be the price they bought at last year.

But the project was launched at 2007 prices, at a time when the market was booming, he said, so they are not a real bargain.

Foreigners snap up homes as rents start to bite

Business Times – 12 Mar 2008Their purchases could account for half of 2007 transactions on the secondary market

 (SINGAPORE) A record number of foreigners here have opted to purchase homes instead of renting them at ever-climbing rates.

According to an analysis of transactions of private residential properties by DTZ Debenham Tie Leung, foreigners bought 6,536 non-landed homes from the secondary market in 2007 – the largest number since 1995.

They could account for more than 50 per cent of the secondary market transactions last year. That is because while more than 20,000 non-landed homes were sold on the secondary market last year, this number includes the units from more than 100 collective sales. DTZ’s analysis does not include en bloc units – though earlier reports had put this figure at around 6,000 for the first half of 2007 alone.

Purchases by foreigners on the secondary market represent a 105 per cent increase in volume compared to 2006.

DTZ research senior director Chua Chor Hoon said that while some buyers were investors, there were also those who ‘are not on company budget and find it more worthwhile to buy rather than face escalating rentals, especially if they are going to be in Singapore for more than a couple of years’.

DTZ’s figures for 2007 reveal that rents of prime apartments and condominiums increased 45 per cent year-on-year in 2007 to average $4.80 per square foot (psf). This was attributed to the influx of expatriates and a tight supply of prime apartments, as numerous prime developments were demolished or slated for redevelopment after being collectively sold.

The percentage of foreigners buying non-landed property from the primary market (developer sales) was lower at 25.4 per cent, or 2,314 transactions out of a total of 9,089, reinforcing the assertion that foreigners are more inclined to buy a home for immediate occupation.

Indonesians and Malaysians remain the biggest foreign buyers here, accounting for 23 and 17 per cent of all foreigners in 2007 respectively, but Indians (12 per cent), Britishers (8 per cent), Chinese (7 per cent) and Koreans (7 per cent) are also well represented.

While foreigners bought non-landed homes in record numbers last year, boosting demand in the process, their absence in the landed homes sector (because of restrictions imposed by the government) did not stop a record number of landed homes being sold in the secondary market.

DTZ’s analysis reveals that of the total 5,211 landed homes sold in 2007, 4,823 were from the secondary market.

Apart from the bullish sentiment which ’spilled over’ from the non-landed sector last year, the landed sector also saw demand rise as it was still considered comparatively good value.

DTZ’s figures show that average capital values for non-landed freehold homes in the prime districts increased by 55 per cent

year-on-year to $1,480 psf.

For freehold landed homes in the prime districts, average capital values of detached homes increased 31 per cent year- onyear, while average capital values of semi-detached and terrace homes rose 29 and 27 per cent respectively.

The situation was also exacerbated by the tight supply of new launches of landed homes in the year, estimated at around 650 units.

DTZ’s Ms Chua also believes that with speculation less rampant in the landed housing sector – ‘most buyers are owneroccupiers’ – prices are expected to be more stable and could even prove ‘more resilient’ if the downturn in the global economy is protracted.

However, DTZ expects future supply of landed homes to be relatively low at just 3,100 units over the next few years, so this could push up demand and prices for both primary and secondary market landed homes.

Speculation, defined by the number of subsales, was rampant among developer sales of non-landed homes last year, hitting an all-time high of 4,631 transactions – a 312 per cent year-on-year increase over 2006.

Interestingly, while subsale transaction volume in 2007 was just 27 per cent higher than during the previous peak of 1996, the value of subsales was almost twice as high, hitting $7.9 billion.

The fourth quarter, however, marked a shift in sentiment in the property market. Only 3,947 non-landed homes were transacted in the quarter, of which just 846 were sold by developers, reflecting a 64 per cent quarter-on-quarter drop. This was one of the worst performing quarters in the last three years.

Guocoland dives on options lapse

Business Times – 12 Mar 2008

Shares hit as Kuwaiti-linked fund pulls out of $815m property purchase

SHARES of Guocoland fell victim yesterday to news that a fund company managed by Kuwait Finance House (Malaysia) Berhad (KFHMB) did not exercise options to buy $814.8 million worth of  apartments in Guocoland’s upmarket project here.

Following analysts’ downgrade, the stock dived as much as 19 cents or 5 per cent to an intra-day low of $3.64 before closing at $3.70, down 13 cents or 3.4 per cent. More than 420,000 shares changed hands.

But the reaction from property counters was mixed, with Ho Bee falling two cents to 95 cents and SC Global dipping four cents to $1.50. Keppel Land edged up five cents to $5.35 and CapitaLand gained 18 cents to $5.89.

The fund company managed by KFHMB had purchased options in December last year to buy 97 units at the premier freehold development Goodwood Residence. There are only 210 exclusive units on this 24,845-sq-m estate fronting the expansive Goodwood Hill. KFHMB is the Malaysian unit of Kuwait Finance House (KFH).

Guocoland said on Monday that although the options have lapsed, the parties are still in discussions, with a view to granting fresh options for units in the development.

It is not known why the fund did not exercise the options, but Guocoland said in its Monday announcement that ‘the current private residential property market appears to be cautious in Singapore’. This could have prompted its decision to market Goodwood Residence units selectively at a later date.

But in the stock market yesterday, speculation was rife over reasons for the lapse. Some cited the cautious market sentiment while others cited over-pricing of the units. There was even talk of an unsuccessful marketing campaign for these units by KFH in Dubai. The median price of $3,200 per square feet that the KFHMB fund agreed was earlier seen by some as a possible benchmark pricing for the area.

DBS Vickers yesterday cut its rating on Guocoland to ‘hold’ from ‘buy’ and lowered its target price to $4.14 from $5.60 after revising downwards its average selling price estimates for Guocoland’s high-end and mid-tier projects and ascribing a 15 per cent discount to Guocoland’s revalued net asset value.

‘We believe that the decision by KFHMB to allow these options to lapse is a sign of the weak sentiment in the physical property market currently, particularly in the high-end segment,’ the brokerage said.

But Westcomb Financial Group said it believes that this lapse of options ’should not be taken as a signal that the Singapore private residential property market has fallen drastically.

‘In fact, the buyer has overpaid their purchases in December 2007, maybe with the view that the market would continue its uptrend in 2008.’

 

All eyes on govt land tenders this month

Business Times – 11 Mar 2008

$500m site above Serangoon MRT, 3 suburban housing plots on offer

AMID the current quiet market, all eyes will be on four 99-year leasehold suburban Government Land Sale site tenders that close this month.

They comprise three private residential sites including one for landed housing, and a ‘white’ site above the Serangoon Circle Line MRT station that could potentially be worth more than $500 million.

The action kicks off today, with the closing of a tender for a landed housing parcel in Westwood Avenue, Jurong West, big enough for about 50-60 landed homes.

Cushman & Wakefield managing director Donald Han reckons the 151,759 sq ft plot could fetch about $200-250 psf of land area. The plot is next to the landed housing area at Westville. Those looking for clues on how developers read the suburban mass-market residential sector will have to train their eyes on tender closings for two plots this month, both boasting scenic locations.

One is at West Coast Crescent next to Blue Horizon condo and faces West Coast Park and overlooks the sea. The other is in Yishun, fronting Lower Seletar Reservoir and close to Singapore Orchid Country Club/Golf Course. It is also near Khatib MRT station.

Property consultants polled by BT in January, when the tenders for the two sites were launched, indicated bids of about $200-300 psf per plot ratio (ppr) for the Yishun plot.

Mr Han reckons the winning bid will be closer to $300 psf ppr, reflecting a breakeven cost of about $550-600 psf and a possible average selling price of $700-800 psf for the new condo.

As for the West Coast plot, consultants earlier indicated a wide range of bids – $260-400 psf ppr. Mr Han estimates the plot’s value at the higher end of that range, around $380-400 psf ppr as ‘it is near parks, recreational facilities and the sea’, translating to selling prices of about $850-950 psf for a new condo on the site, on a project-average basis.

He expects the Yishun and West Coast condo sites to attract at least five bids each, while the landed housing plot at Westwood Avenue could draw more bids, about five to eight.

‘Developers may be willing to look at smaller profit margins because these are sure-sell markets, given pent-up demand in the mass market. However, buyers are still price-sensitive,’ he said.

While some analysts and consultants still feel the mass-market will be relatively resilient this year, City Developments executive chairman Kwek Leng Beng recently offered a different perspective.

‘The mass market will do well, but selectively. It’s not going to be what you’ve seen before. . . people queuing up,’ he said, noting that the Housing & Development Board provides a credible alternative to mass- market private housing.

The Serangoon Central site was quietly launched in December by the Land Transport Authority. The 269,180 sq ft plot can be developed into an estimated maximum potential gross floor area (GFA) of about 850,000 sq ft excluding a bus interchange that the successful bidder will have to build. The developer will be reimbursed the cost of building the interchange.

The site can be developed into any combination of commercial, hotel, residential, and sports and recreational use.

Cushman’s Mr Han said that assuming 30-40 per cent of the GFA is for retail use and the rest for residential, the plot could be worth about $400-450 psf ppr, or a total of around $340-380 million.

‘So the breakeven cost would be about $700 psf for the residential component and the developer might be able to achieve selling prices of say $900-1,000 psf on average. The retail component will break even at about $1,200-1,400 psf,’ he reckons.

However, other property insiders say that assuming an all-retail development, which would be the ‘highest and best use’ of the site, land bids could come in closer to the $600-700 psf ppr mark (about $500 million to $600 million in total).

Suburban malls are generally valued at about $1,800-2,000 psf of net lettable area currently,’ one player pointed out.

However, another major player countered that sentiment today is subdued, and said the challenge of securing bank finance for such a big project with a likely total investment of about $1 billion or more will put a dampener on bullish bidding for this site.

The action and market watching continues next month, with at least two interesting offerings at state land tenders – a private condo site at Toa Payoh Lorong2/3, and a 1.56-hectare site in Choa Chu Kang for residential development that comes with the existing Ten Mile Junction mall.

Speculators holding out for higher prices

Subsale activity slows but transacted prices remain resilient

(SINGAPORE) Property prices have been bolstered by speculators in the last year. But now that speculation is on the decline, could prices follow suit?

An analysis by Savills Singapore of properties subsold last year after being bought from developers in the same year has revealed that while subsale activity dropped significantly in the last quarter, subsale prices did not, suggesting that speculators are not ready to offload their investments yet.

The number of subsales fell by 66.7, 69.1 and 39.1 per cent in the high, mid and mass-market segments respectively in the fourth quarter of last year from a quarter earlier.

However, average gains made from subsales over the developers’ sale price remained relatively stable. They came to 34.2 per cent in the high-end segment in Q4, 14 percentage points higher than the full-year average gains. In the mid-tier segment, average gains fell marginally by 2.4 points to 21.1 per cent, while in the mass-market segment, they rose 1.6 points to 17.2 per cent.

Savills director (marketing and business development) Ku Swee Yong adds: ‘Speculators appear to be holding out for better prices.’

Interestingly, Savills’s analysis also shows that there have been several speculators that have subsold on very thin profit margins of 5 per cent or less, adding credence to market talk that some speculators may be looking to offload properties at bargain prices soon.

However, while Mr Ku believes that speculators that cannot manage the mortgage payments – especially after holding for a year or more on the deferred payment scheme – might be letting go at lower profits, he does not think they represent a majority.

By his estimation, there are about 6,000 residential units that will receive TOP (temporary occupation permit) this year. ‘While there may be some dumping from those who cannot afford to pay up at the point of TOP, we do not think that it will constitute more than one per cent of the 6,000 units,’ he adds.

The situation could change next year.

‘We expect around 10,000 units to receive TOP in 2009. Those who bought using the deferred payment scheme in the last couple of years might let go if they are really speculators and cannot afford to pay,’ says Mr Ku.

But he is optimistic that the low mortgage rates may mitigate the need to sell. ‘The buyers might go for rental yield instead.’

Subsales of major new launches in the high-end sector, which include developments such as Marina Bay Residences, Scotts Square and The Orchard Residences, fell to just four transactions in Q4, compared to 32 for the full year.

Two subsales were done at less than 10 per cent above the developer’s sale price.

The average gains from subsales over the developer’s sale price were highest in the high-end market, substantiating Mr Ku’s belief that this segment could prove more resilient if the global economic downturn is prolonged. ‘There is a large proportion of buyers in the high-end market that are so rich, they buy properties with cash.’

This segment is also largely supported by foreign buyers and Mr Ku says: ‘Foreigners are not speculators.’

Last year, the mid-tier segment saw 140 subsales of newly launched developments like Sky @ Eleven, The Rochester and One North Residences.

In Q4, one subsale was transacted at just 2.3 per cent above the developer’s sale price. In the mass market, there were 49 subsales of newly launched projects such as The Parc Condominium, Casa Merah and Clementiwoods for the year.

In Q4, there were 14 subsale transactions. Three were done at less than 10 per cent above the developer’s sale price.

The number of Sky @ Eleven subsales – over 60 – was among the highest in 2007. In July and August, four units were subsold for over 50 per cent of the developer’s sale price.

But the days of huge capital gains could be over.

Mr Ku says that, based on data for January so far, subsale gains could trend downwards slightly. But he adds that there is no evidence that speculators will find themselves in negative territory yet.

Source: Business Times 7 Mar 08

UOL unit unveils luxury serviced suites in Somerset

IT HAS been 28 years since Singapore’s listed UOL Group launched its last serviced apartment property, the Parkroyal Residences at Beach Road.

Now, it is entering the luxury extended-stay business with the launch of its new property, Pan Pacific Serviced Suites, at 96 Somerset Road.

The new property is similar to serviced apartments but has additional luxury features such as round-the-clock personal assistants who can provide guests with local connections to business and social events.

The property is the first of five planned serviced suites that UOL is also planning in China, Vietnam, Malaysia and Thailand over the next three years, said Mr Gwee Lian Kheng, group president and chief executive of UOL yesterday.

UOL’s wholly-owned unit Pan Pacific Hospitality, which owns the Pan Pacific Hotels and Resorts group of hotels, yesterday unveiled the luxury serviced suites.

The 16-storey building next to the Somerset MRT Station houses 120 one- or two-bedroom suites and six penthouses, ranging from 527 sq ft to 1,689 sq ft in size.

UOL believes demand for luxury serviced suites will rise as the number of international visitors to the region increases.

According to the Pacific Asia Travel Association, the Asia-Pacific region saw 361.7 million visitors last year, a jump of 7.9 per cent from the year before.

Mr Gwee expects another 6 to 7 per cent rise this year.

He also said some demand should be generated from a spillover effect of the current shortage of hotel rooms in Singapore.

There are at least 26 serviced residences in Singapore with about 3,500 units in all, compared with more than 37,000 hotel rooms.

According to CB Richard Ellis, the occupancy rate for serviced apartments in Singapore was 91.2 per cent in the fourth quarter of last year, an increase of 7.5 per cent from the same period in 2006.

Mr Gwee hopes the suites, constructed at a cost of $150 million, will see an occupancy rate of at least 90 per cent after the first six months.

The suites will launch early next month, and rates will range from $10,000 to $25,000 per month, or from $420 to $1,070 per day for a minimum stay of one week.

This is at a premium of 20 to 25 per cent over the market rate, said Mr Kam Tin Seah, UOL’s senior general manager of investment and strategic development.

Pan Pacific Hospitality plans to launch its second serviced suite in Bangkok a year from now. As a group, UOL also plans to roll out between 15 and 20 new hotels and serviced suites over the next three years.

Source: The Straits Times 6 Mar 08

DC rate hike lower than expected

Average industrial rates up 16.8%, muted increases for most other uses

THE government yesterday announced modest, lower-than-expected increases in development charge (DC) rates for most use groups, except industrial.

‘Limited transactions in the past six months, amidst cautionary sentiment set about the US sub-prime debacle, were probably an important factor for the moderate gains this round,’ said Jones Lang LaSalle regional director and head of investments Lui Seng Fatt.

Knight Frank director Nicholas Mak said: ‘The government may feel that there has been no significant appreciation in land prices in the last few months.

‘And DC rates for most use groups – such as commercial, non-landed residential and hotel/hospital – were already at a higher base because of substantial hikes in the last revision.

‘Industrial DC rates, on the other hand, had seen only a marginal rise the previous round and hence saw the sharpest increase this time.’

DC rates, which are payable for enhancing the use of some sites or putting bigger developments on them, are revised twice yearly, on March 1 and Sept 1, and are listed according to use groups and 118 locations across Singapore.

From today, the average DC rate for commercial use has gone up 1.5 per cent – after the 42 per cent increase in the last round on Sept 1, 2007. The average rate for non-landed residential use has been raised 2.6 per cent, again much smaller than the 58 per cent hike previously, while the average rate for landed residential use has been left unchanged.

For hotel and hospital use, the latest DC rates are up 3.3 per cent on average, compared with a 23 per cent hike previously.

Industrial DC rates have jumped 16.8 per cent on average, against a 2 per cent rise previously.

JLL’s Mr Lui said that the big hike in industrial DC rates is in tandem with growing demand for backoffice space as more firms relocate out of the CBD due to high rents.

For industrial DC rates, the biggest hike of 33.3 per cent was in the Jurong/Lim Chu Kang/Kranji location, which analysts attributed to JTC Corp’s sale of two industrial sites at Jalan Tepong and Pioneer Road/Tuas Avenue 11 at about double the land values implied by the previous September 2007 industrial DC rate for the area.

Similarly, the sale of an industrial plot at Commonwealth Drive/Lane at about four times the September 2007 DC rate-implied land value was probably behind a 32 per cent hike yesterday in the industrial DC rate for the area.

Industrial DC rates were raised by 22.2 per cent each in the Kallang  Way /MacPherson /Aljunied, and Braddell/ Potong Pasir/ Woodleigh areas, based on JLL’s analysis. The rate for West Coast Road/ Jurong East was upped 20.7 per cent.

Increases of 20 per cent were seen in locations such as Havelock Road, Telok Blangah, Tiong Bahru, Bukit Merah, Redhill, Alexandra and Henderson.

Commercial DC rates stayed put in Raffles Place, Marina Bay, Cecil Street and Robinson Road. Instead, the hikes were mostly outside the central business district, ‘reflecting the trend of office demand being pushed out of the CBD’, Savills Singapore director Ku Swee Yong said.

The biggest increases, of 25 and 23.3 per cent, were in the Toa Payoh/Potong Pasir and Paya Lebar/Eunos areas respectively.

The sale price of a 99-year commercial plot next to the HDB Hub in Toa Payoh in October and rising rents at SingPost Centre in Paya Lebar were likely reasons for the increases.

The Marine Parade and Tampines locations each saw a 19 per cent appreciation in commercial DC rates, apparently supported by the sale price of an office unit at Parkway Parade, and rental evidence at Tampines Mall and buildings in the Tampines Finance Park.

For non-landed residential DC rates, the biggest gain of 28.6 per cent was in Ang Mo Kio/Yio Chu Kang as well as an adjoining sector that covers Upper Thomson and Sembawang Hills. Far East Organization’s $601 psf per plot ratio top bid for a condo site next to Ang Mo Kio Hub in September last year – a record for 99-year suburban condo land – was the likely reason for the rate hikes.

The Telok Blangah and Tiong Bahru/Ayer Rajah locations each saw hikes of 22.2 per cent in non-landed residential DC rate.

CB Richard Ellis executive director Li Hiaw Ho said that the increases were probably supported by the $639 psf ppr fetched for a 99-year condo site on Alexandra Road last year. Mr Li also pointed to the sale of a freehold site on Margate Road as the likely reason for a 21.4 per cent rate hike in the Mountbatten/Meyer/Broadrick area.

For hotel use, gains of around 9-10 per cent were seen in DC rates for the traditional hotel belts in the Orchard Road, Marina Centre and Singapore River locations, as well as places like Marina Bay, Bayfront and Fullerton Road.

‘The tourism boom is expected to continue as the Singapore government drives towards the 17 million visitors goal by 2015.

Orchard Road remains Singapore’s main shopping belt, while upcoming developments in the Marina area such as the Marina Bay Sands integrated resort and the F1 race will further generate demand for hotels in the area,’ Mr Lui said.

The DC use group for hotels also includes hospitals and interestingly, the government did not raise the DC rate for the Irrawaddy Road location where a hospital site last month fetched a record price of $1,600 psf ppr from Parkway group.

A spokeswoman for the Chief Valuer said: ‘Parkway’s record bid was an isolated case. In general, there’s no compelling evidence that market values for hotel/hospital use in the area have moved up so much.’

Source: Business Times 1 Mar 08

DC rate hike lower than expected

Average industrial rates up 16.8%, muted increases for most other uses

THE government yesterday announced modest, lower-than-expected increases in development charge (DC) rates for most use groups, except industrial.

‘Limited transactions in the past six months, amidst cautionary sentiment set about the US sub-prime debacle, were probably an important factor for the moderate gains this round,’ said Jones Lang LaSalle regional director and head of investments Lui Seng Fatt.

Knight Frank director Nicholas Mak said: ‘The government may feel that there has been no significant appreciation in land prices in the last few months.

‘And DC rates for most use groups – such as commercial, non-landed residential and hotel/hospital – were already at a higher base because of substantial hikes in the last revision.

‘Industrial DC rates, on the other hand, had seen only a marginal rise the previous round and hence saw the sharpest increase this time.’

DC rates, which are payable for enhancing the use of some sites or putting bigger developments on them, are revised twice yearly, on March 1 and Sept 1, and are listed according to use groups and 118 locations across Singapore.

From today, the average DC rate for commercial use has gone up 1.5 per cent – after the 42 per cent increase in the last round on Sept 1, 2007. The average rate for non-landed residential use has been raised 2.6 per cent, again much smaller than the 58 per cent hike previously, while the average rate for landed residential use has been left unchanged.

For hotel and hospital use, the latest DC rates are up 3.3 per cent on average, compared with a 23 per cent hike previously.

Industrial DC rates have jumped 16.8 per cent on average, against a 2 per cent rise previously.

JLL’s Mr Lui said that the big hike in industrial DC rates is in tandem with growing demand for backoffice space as more firms relocate out of the CBD due to high rents.

For industrial DC rates, the biggest hike of 33.3 per cent was in the Jurong/Lim Chu Kang/Kranji location, which analysts attributed to JTC Corp’s sale of two industrial sites at Jalan Tepong and Pioneer Road/Tuas Avenue 11 at about double the land values implied by the previous September 2007 industrial DC rate for the area.

Similarly, the sale of an industrial plot at Commonwealth Drive/Lane at about four times the September 2007 DC rate-implied land value was probably behind a 32 per cent hike yesterday in the industrial DC rate for the area.

Industrial DC rates were raised by 22.2 per cent each in the Kallang  Way /MacPherson /Aljunied, and Braddell/ Potong Pasir/ Woodleigh areas, based on JLL’s analysis. The rate for West Coast Road/ Jurong East was upped 20.7 per cent.

Increases of 20 per cent were seen in locations such as Havelock Road, Telok Blangah, Tiong Bahru, Bukit Merah, Redhill, Alexandra and Henderson.

Commercial DC rates stayed put in Raffles Place, Marina Bay, Cecil Street and Robinson Road. Instead, the hikes were mostly outside the central business district, ‘reflecting the trend of office demand being pushed out of the CBD’, Savills Singapore director Ku Swee Yong said.

The biggest increases, of 25 and 23.3 per cent, were in the Toa Payoh/Potong Pasir and Paya Lebar/Eunos areas respectively.

The sale price of a 99-year commercial plot next to the HDB Hub in Toa Payoh in October and rising rents at SingPost Centre in Paya Lebar were likely reasons for the increases.

The Marine Parade and Tampines locations each saw a 19 per cent appreciation in commercial DC rates, apparently supported by the sale price of an office unit at Parkway Parade, and rental evidence at Tampines Mall and buildings in the Tampines Finance Park.

For non-landed residential DC rates, the biggest gain of 28.6 per cent was in Ang Mo Kio/Yio Chu Kang as well as an adjoining sector that covers Upper Thomson and Sembawang Hills. Far East Organization’s $601 psf per plot ratio top bid for a condo site next to Ang Mo Kio Hub in September last year – a record for 99-year suburban condo land – was the likely reason for the rate hikes.

The Telok Blangah and Tiong Bahru/Ayer Rajah locations each saw hikes of 22.2 per cent in non-landed residential DC rate.

CB Richard Ellis executive director Li Hiaw Ho said that the increases were probably supported by the $639 psf ppr fetched for a 99-year condo site on Alexandra Road last year. Mr Li also pointed to the sale of a freehold site on Margate Road as the likely reason for a 21.4 per cent rate hike in the Mountbatten/Meyer/Broadrick area.

For hotel use, gains of around 9-10 per cent were seen in DC rates for the traditional hotel belts in the Orchard Road, Marina Centre and Singapore River locations, as well as places like Marina Bay, Bayfront and Fullerton Road.

‘The tourism boom is expected to continue as the Singapore government drives towards the 17 million visitors goal by 2015.

Orchard Road remains Singapore’s main shopping belt, while upcoming developments in the Marina area such as the Marina Bay Sands integrated resort and the F1 race will further generate demand for hotels in the area,’ Mr Lui said.

The DC use group for hotels also includes hospitals and interestingly, the government did not raise the DC rate for the Irrawaddy Road location where a hospital site last month fetched a record price of $1,600 psf ppr from Parkway group.

A spokeswoman for the Chief Valuer said: ‘Parkway’s record bid was an isolated case. In general, there’s no compelling evidence that market values for hotel/hospital use in the area have moved up so much.’

Source: Business Times 1 Mar 08

CDL able to weather uncertainty for next 3 yrs

It posts full-year profit of $725m; bottom line would be $2.8b if fair value gains included

THE top brass at City Developments Ltd (CDL) yesterday said the property group has ‘the financial muscle to weather the current period of uncertainty even for the next three years’, after announcing a record full-year net profit of $725 million.

The group sold about $6.2 billion of residential projects in 2006 and 2007, which means it has locked in, to a very large extent, handsome profits which have yet to be booked.

These substantial and better-than-expected profits will continue to be recognised progressively based on construction progress.

‘Some will come in 2008, 2009, perhaps also into 2010,’ CDL managing director Kwek Leng Joo said at the group’s results briefing yesterday.

‘Even if the market recovery should take place a little bit later than expected, I think we’ll be OK,’ he added.

In short, the group can afford to delay launches of new residential projects if necessary to ride out the current weak sentiment.

As a major office landlord, CDL will also benefit from the office crunch as many of its key tenant leases are up for renewal between now and 2011 – a period when office supply is expected to be limited.

In the hospitality sector, CDL’s hotel arm Millennium & Copthorne Hotels has a string of hotels with a wide geographical spread – which should act as ‘an insurance against a downturn in any particular geographical area’, CDL executive chairman Kwek Leng Beng said.

The group also has many other attractive assets such as City Square Mall and St Regis Hotel in Singapore which it could potentially sell, boosting its bottom line.

As well, CDL has a healthy balance sheet, with relatively low net gearing of 48 per cent.

CDL posted a 106 per cent jump in group net profit for the year ended Dec 31, to a record $725 million. However, had it adopted the revaluation policy of its peers, its bottom line would have surged to $2.84 billion after factoring in about $2.1 billion of fair value gains on investment properties.

The $2.84 billion net earnings for the year ended Dec 31 would pip the $2.76 billion net profit posted by fellow property giant CapitaLand for the same period.

CDL’s fourth-quarter net profit rose about 71 per cent year-on-year to $235 million, with revenue inching up 3.7 per cent to $765.7 million.

The group has also yet to recognise any profits for One Shenton, The Solitaire, Cliveden at Grange and Wilkie Studio, as these residential projects are still in the initial stage of construction. These projects alone account for $1.7 billion in sales value.

Even if the group defers or paces its launches, it will proceed with the construction of its projects where construction cost had been favourably secured earlier, CDL said.

It may also consider building selected projects when the construction cost stabilises at a reasonable level. It expects that when sentiment improves and the market begins to recover, there will be pent-up demand which the group will be in a position to meet.

The group is planning to launch in the first half of this year some 427 private homes in four Singapore projects – Shelford Suites, a condo on the former Lock Cho Apartments site at Thomson Road, The Quayside Isle @ Sentosa Cove and a condo at Pasir Ris.

In its results statement, CDL also said that it has an investment commitment in the private fund Real Estate Capital Asia Partners, which acquired Jungceylon complex at Phuket’s Patong Beach. This is a 1.5 million sq ft mall which opened for business recently and is next to the Millennium Resort Patong Phuket.

CDL also reckons it has ‘ample time’ to review its strategy for its office portfolio, given improving office rental yields.

Its options include retaining its office properties at a low cost base, monetising the portfolio and/or extracting maximum value by selling its assets wholesale or individually. Another option would be to spin off an office real estate investment trust.

The group has all along been following its conservative policy of stating investment properties at cost less accumulated depreciation and impairment losses. On adoption of Financial Reporting Standard FRS 40, the group continues to state these assets at cost less accumulated depreciation and impairment losses.

Most other Singapore- listed property groups state investment properties at fair value, as permitted by FRS 40.

CDL’s full-year revenue for the year ended Dec 31, 2007, rose 22 per cent to $3.1 billion, also a record for the group.

The group also gave a segmental breakdown of profit before tax, including share of after-tax profit of associates and jointly controlled entities, which showed that pre-tax from property development more than doubled from $225.8 million in 2006 to $506.3 million in 2007.

Pre-tax profit from hotel operations fell from $396.6 million in 2006 to $285.4 million in 2007, mainly because the 2006 figure had included a $150.9 million one-off gain from the sale of long leasehold interests in four Singapore hotels to CDL Hospitality Trusts.

Profit before tax from rental properties more than quadrupled from $30 million in 2006 to $133.6 million in 2007.

CDL is proposing a final dividend of 7.5 cents per share as well as a special final dividend of 12.5 cents per share. Both payouts are tax exempt.

Source: Business Times 29 Feb 08

CDL boss punctures popular wisdom

Mid-market may not shine and high-end is unlikely to collapse, he says

(SINGAPORE) City Developments Ltd (CDL) executive chairman Kwek Leng Beng yesterday turned a popular market view of the Singapore residential sector on its head.

Many have whispered that the high-end residential segment is in danger of being hardest hit by the sub-prime crisis while the mid-tier and mass-market segments will be better shielded. Not true, says Mr Kwek.

‘The high-end is not going to collapse like what some (in the market) are saying. The mid-end is not going to be fantastic, like what is commonly believed, because of the subprime situation and Singaporeans’ wait-and-see attitude.

‘The mass market will do well, but selectively. It’s not going to be what you’ve seen before…people queuing up,’ Mr Kwek said.

The Housing & Development Board also provides a credible alternative to mass-market private housing, Mr Kwek said at a media and analysts’ briefing to announce CDL’s results for the year ended Dec 31, 2007. The group’s full-year net profit doubled to $725 million – a record.

Mr Kwek also acknowledged that the current market environment was not conducive to setting up real estate investment trusts (Reits). He would look into opportunities to buy into existing Reits, but only if they were being offered for sale together with their respective Reit management companies, which earn handsome fees.

On the high-end residential sector, Mr Kwek noted that it is supported not only by wealthy local investors with holding power, but also by well-heeled foreigners. ‘Super-rich investors from Russia, Middle East and even hedge-fund managers have yet to come into Singapore in a big way.

‘With Singapore developing into a global city and placed into the limelight, it can be a very attractive place to invest for these well-heeled clienteles, as seen in London,’ CDL said in its results statement.

The next big wave for the Singapore property market will come when the two integrated resorts are operating successfully. ‘It will be a different Singapore altogether. Singapore is a hub. I’ve been harping on this. Nobody believed me until last year,’ said Mr Kwek.

He also sought to debunk another popular view, that the deferred payment scheme which was removed by the authorities in October last year, had only served to fuel property speculation. ‘Deferred payment is not only an instrument for speculation. It is an instrument to enable buyers of new (residential) units to dispose of their existing units at a gradual pace, instead of being forced to sell their existing homes,’ he said.

Noting that sentiment in the local property market has become subdued because of the sub-prime issue, Mr Kwek said: ‘Sentiment is more important than supply and demand. The higher the prices, the more people buy.’

He also recommended buying real estate as a hedge against inflation, especially given the current low housing loan rate environment, adding in the same breath that he was not trying to talk up the market – drawing laughter from the audience.

But Mr Kwek also had some advice on affordability. ‘You must be able to pay your instalment, that is most important. If you can’t pay the instalment, and you hope (the property value) will go up tomorrow, then you are speculating.’

Referring to the squabbles among owners in estates with en bloc sales, Mr Kwek said: ‘People are fighting, because they are jealous somebody sold higher. Who can say this is the peak? You should be happy if you have a good gain, don’t fight. That’s my advice.’

He estimates that about 50 per cent of those who’ve sold their homes through en bloc sales have not yet bought replacement homes, even if they may want to downgrade.

Source: Business Times 29 Feb 08

Mass-market safe, high-end may take a hit

Property players sketch the best and worst-case scenarios for private homes in 2008

(SINGAPORE) Luxury-home prices could fall by up to 20 per cent in 2008, assuming sub-prime woes don’t end this year. But the mass market may hold its own or ease 5-10 per cent at most. This was the worst-case scenario according to most property players polled by BT.

In a best-case scenario with sub-prime woes clearing by mid-year, high-end prices could rise up to 10 per cent and mass-market homes as much as 15-20 per cent, the majority of respondents said.

The most optimistic is Jones Lang LaSalle Research, which forecasts an 18-22 per cent increase in luxury/prime prices and a 20-25 per cent gain in mass-market prices in a best-case scenario.

Sales activity is generally expected to be quiet in the first half, before picking up in the second half. ‘Interest is still very much there, but investors see no strong push factor to get into the market just yet,’ says DTZ executive director Ong Choon Fah.

Most developers and property consultants are hoping the sub-prime-related gloom will vanish in the second half. Voicing a common view in the industry, City Developments group general manager Chia Ngiang Hong said: ‘We expect the situation to improve after mid-year. Most of the high-profile sub-prime-related writedowns by major international financial institutions are already out. Hopefully, the rest of the write-downs, if any, should be out by March/April. This current period is good for consolidation.’

UOL Group chief operating officer Liam Wee Sin said: ‘If the sub-prime episode is short-lived, it can be seen as a welcome breather for the Singapore property market.

Both home and land prices in the high-end segment escalated too quickly, especially in Q2 and Q3 last year.’

But Wing Tai deputy chairman Edmund Cheng feels it may not be realistic to expect sub-prime problems to fade away by mid-year. ‘They are likely to linger beyond this year, as the exposure has extended to many other areas, and it may still take some time for the full extent of exposure to be discovered,’ he said.

But on a more positive note, he believes mid/ upper-mid projects near Orchard Road will be more resilient ‘as they should benefit from demand for replacement properties by those who have sold prime district homes through en bloc sales, as well as demand from expats who find prime district housing too expensive’.

Agreeing, Credo Real Estate managing director Karamjit Singh thinks mid-tier private home prices will appreciate 10-15 per cent this year in a best-case scenario, outpacing his estimate of gains of 10 per cent for the suburban/mass market and 5-10 per cent for upmarket homes.

In the high-end category, many property analysts with stockbroking firms see an oversupply of potential launches as sites sold through en bloc sales are redeveloped.

In a worst-case scenario, a major factor that could hurt high-end prices is if demand dries up and ’specu-vestors’ who bought luxury homes in the past few years offload them below current prices, as they still stand to reap huge gains given their low entry cost, reckons Knight Frank executive director Peter Ow.

In the primary market too, some smaller developers may drop prices to generate sales. But Mr Ow acknowledges that the bulk of the unlaunched high-end housing stock is in the hands of a few major players who have the financial capacity to delay launching projects. Instead, they could focus on selling their mid-tier and massmarket homes this year to generate cash flow.

Giving his take, a major developer said: ‘High-end depends on the appetite of foreign buyers and their perception of liquidity and value in the Singapore market. The strong Sing dollar will help persuade these investors that the property market here will be a good store of value.’

Observers also believe overseas funds are likely to turn increasingly to parking money in Asia, instead of the United States and Europe. Other demand drivers for the Singapore residential sector, especially in the mid and mass segments, include falling mortgage rates, the continued influx of expats from China and India setting up home here, and wage growth arising from the tight labour market.

Most market watchers say the upside for high-end residential prices will be limited even if the sub-prime problem clears around mid-2008.

‘Price increases would not so much apply to luxury-class homes as these have already increased significantly since 2005,’ CB Richard Ellis managing director Pauline Goh argues.

However, mid-tier homes could appreciate 5-10 per cent and mass-market prices 10-15 per cent this year, assuming things become more positive after June, Ms Goh added.

Frasers Centrepoint CEO Lim Ee Seng said: ‘Even in a worst-case scenario, I don’t really see mass-market home prices coming down much because construction costs are still going up and that raises the breakeven cost of such projects.’

Knight Frank’s Mr Ow says the mass-market will benefit from strong demand from HDB upgraders, given the shortage of HDB homes.

 

Source: Business Times 21 Feb 08

CapitaLand, HPL sue eight owners of Gillman Heights

Developers claim contract breach as owners seek ruling over validity of sale

A GROUP of home owners in Gillman Heights Condominium are being sued by the estate’s buyers for alleged breach of contract.

They face legal action by CapitaLand and Hotel Properties (HPL), which have agreed to buy the sprawling 607-unit estate in Alexandra Road.

The eight owners, who together own four units, had filed an application to the High Court last Monday. They want to know if a supplementary deal to the original collective sale agreement is valid.

The developers responded yesterday, claiming the action breached the owners’ contractual obligations, which includes an undertaking not to do anything detrimental to the sale process.

However, the owners argue that they need their question about the sale deal answered by the High Court before they can be said to have assumed such contractual obligations.

Their question stems from Gillman Heights’ unusually complex sale process, which involved two collective sale agreements. The original expired on June 22 last year, and a supplementary agreement was tacked on to extend it. Most majority sellers signed both; minority owners did not sign either one.

The eight owners being sued said they, and some others, signed the first deal but not the supplementary one.

They say they are caught in a unique position between the majority and minority owners. The group also claims that some of the signatures on the supplementary agreement came in after the deadline. If these tardy signings were excluded, the second agreement may not reach the required 80 per cent owners’ consent.

‘All they want is a judge to decide whether there was a valid extension or not, and if not, what are the consequences,’ said lawyer N.Sreenivasan of Straits Law, which is representing the eight owners.

‘Collective sales are in fact a form of compulsory acquisition, and even those who have signed the collective sale agreement have only agreed to tie themselves up for a fixed period of time.’

Mr Pang Tee Lian and his wife are among the eight owners facing legal action. Mr Pang, 59, said yesterday: ‘We know we’re fighting someone with very deep pockets, so we’re scared. But we’re also frustrated.’

‘In my mind, a collective sale is a win-win situation, with a happy seller and happy buyer. We’re not out to make an extra buck for the fun of it,’ added Mr Pang, a general manager at an architectural firm. ‘We just don’t know where we stand: Are we the majority or minority?’

In fact, groups representing both majority and minority owners have also clashed with CapitaLand and HPL, which last year agreed to pay $548 million for Gillman Heights.

At least one unhappy majority seller circulated letters among his neighbours earlier this year calling for a concerted action to invalidate the sale. CapitaLand

responded with a series of legal letters threatening to sue for breach of contract.

In the meantime, the condo’s minority owners want the High Court to overturn the sale, which got the go-ahead in December from the Strata Titles Board, the body that governs collective sales.

Their appeal hearing will take place next Monday.

This series of legal clashes is fast becoming an eerie echo of the prolonged tussle over the collective sale of Horizon Towers in Leonie Hill.

That struggle started last May after some majority owners tried to back out of the deal. They were subsequently sued by the buyers – which incidentally include HPL – while minority owners are now appealing against the sale.

Property row

‘We know we’re fighting someone with very deep pockets, so we’re scared. But we’re also frustrated…We just don’t know where we stand: Are we the majority or minority?’

MR PANG, explaining why he and seven other home owners filed the application to the High Court

‘Any extension must be very carefully scrutinised.’

MR N.SREENIVASAN of Straits Law, which is representing the home owners

Source: The Straits Times 21 Feb 08

Modest weekend sales at Waterfront Waves

IN A bellwether post-Budget property launch, Frasers Centrepoint and Far East Organization sold 20 units at the weekend at their Waterfront Waves condo fronting Bedok Reservoir. The project was officially launched at the weekend with the start of an advertising campaign.

The sales brought the total sold so far at the 99-year leasehold project to 100 units, including 80 sold earlier after the condo was soft launched around mid-January. So far, 180 units at the 405-unit development have been released.

The average price currently for the entire development is $750 per square foot after discounts, with the spread ranging from around $650 psf to $930 psf. However, for the 100 units sold so far, the average achieved is $801 psf, as they are among the better-facing units. About 85 per cent of buyers of the 100 units are Singaporeans and 35 per cent have existing HDB addresses.

Property industry watchers were keeping an eye on Waterfront Waves for an indication of buying sentiment after Friday’s Budget.

Some developers hoped the Budget would boost buyer confidence, paving the way for them to go ahead with launches they had held back because of sentiment dented by the stock market plunge and sub-prime woes.

While the 20 sales at the weekend seem modest, Frasers Centrepoint assistant general manager (sales & marketing) Elson Poon said the result was ‘within our expectations in view of current market sentiment’.

‘People are still cautious when it comes to making big-ticket purchases,’ he added.

The project’s pricing may have been a factor, market watchers reckon.

Mr Poon confirmed that the $801 psf average price achieved for the 100 units is a new high for a condo launch in the Bedok Reservoir area. Three-bedroom units at Waterfront Waves cost between $880,000 and just over $1 million.

Giving his take on the outcome for the maiden launch post-Budget, CB Richard Ellis executive director (residential) Joseph Tan said: ‘The buying mood is still cautious. But if you’re expecting a price correction, it may not happen for a while. The bulk of unlaunched projects are held by mainstream developers. They have the capacity to hold and control prices.’

Another property consultant said: ‘If there’s any price drop it may be started by smaller developers, who usually try not to hold. As long as they can make money, they’ll let go.’

 

Source: Business Times 19 Feb 08

PROPERTY: Where to find homes at or below $600,000

They include executive condos as well as older private apartments in suburban locations

THE property market has quietened considerably this year, but prices have yet to fall.

Nevertheless, if you have a modest budget of about $600,000 for a home, your choices are not just confined to HDB flats.

Some fairly new executive condominiums as well as older private condos or apartments are within reach, if you look hard enough.

These are typically 99-year leasehold properties in suburban locations such as Woodlands, Choa Chu Kang and Jurong.

Some city-fringe locations such as Geylang, where the red-light district is nestled, or small apartments in places such as Upper East Coast Road, may also offer some bargains. Landed homes, however, will require a bigger budget. So will new condo launches, unless you do not mind tiny studio apartments.

New versus Old

BUYERS tend to prefer buying new properties directly from developers, rather than old ones. They are drawn by the slick marketing promotions put out by developers and pay a premium for their new homes. But new properties may not be worth buying when you have a tight budget.

‘In 2006, all the record prices were achieved by new launches,’ said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

‘Units at Ardmore Park, an older development which is in a very good location and is well-maintained, were transacted at much lower prices than those in new high-end condos in not-so-good locations.’

It is the same in suburban locations, as buyers pay more for what is new, he said.

The 99-year leasehold apartments at the 636-unit Maysprings in the Bukit Panjang area are mostly going for $650,000 and below. A year ago, they went for $500,000 and below.

The 17-year-old, 616-unit Orchid Park Condominium in Yishun, which faces Lower Seletar Reservoir, also had some units that went for around $600,000.

At the West Bay Condominium, a 936 sq ft unit was sold for $585,000 in January, while a bigger 1,216 sq ft unit went for $650,000.

Studio apartments, which can range from around 500 sq ft to 600 sq ft, can be bought for $600,000 or less.

The only problem is that there are not many of them in suburban projects, Mr Mak pointed out.

Private versus HDB

NOW that HDB prices have risen and there is overwhelming demand for new HDB flats, buyers may do well to consider private homes if they can afford them.

‘There will be growing demand for mass market properties as Singapore continues to create jobs,’ said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong. The opening of the two integrated resorts alone will create a significant number of entry-level jobs, he said.

‘Our unemployment rate is at a 10-year low, which means that we will need foreigners for some of these jobs,’ he said. ‘As long as rental values remain strong, capital values should also trend up.’

For those buyers who may one day want to rent out their homes, a private property could be a better choice than an HDB flat.

First of all, not everybody can buy an HDB flat. Also, there are leasing restrictions.

Yields may be higher for some HDB flats than private homes, but a private condo unit may be easier to rent out as condos usually come with amenities and security, property consultants said.

On average, net rental yields for private homes across Singapore are at 3.6 per cent, said Mr Mak.

Government data shows that the median rental rate in the fourth quarter of last year for Maysprings was $2.38 per sq ft a month. For a 904 sq ft unit at Maysprings, the rent would work out to $2,151 a month, or a 5.2 per cent gross yield.

The median rate was $2.09 psf for Orchid Park Condominium and $2.98 psf for West Bay Condominium.

Using this rate, the rent at West Bay Condominium would work out to $2,789 a month for a 936 sq ft unit.

Whether you are buying a property to live in or to rent out, know that you have a fair number of choices even if your budget is only $600,000.

 

Source: The Sunday Times 17 Feb 08

Demand for mass market projects shifts into higher gear

Story Print Friendly Page

Developers not keen to release high-end projects in shaky market, say analysts

DEVELOPERS’ housing sales figures for January reflect a change in strategy to focus more on mass market projects.

Despite the still lacklustre figures for overall developer launches and sales last month, an analysis by Knight Frank shows the number of private homes (excluding executive condominiums) launched and sold in January in the Outside Central Region (covering traditional mass-market/suburban locations) rose 190 per cent and 123 per cent respectively from December 2007.

In contrast, launches and sales in the Core Central Region and Rest of Central Region fell in January, compared to December.

Given the dearth of activity in high-end locations, the Core Central Region suffered the biggest drop in median prices for units transacted during the month, with the figure halving to $1,623 per square foot in January, from $3,200 psf the previous month.

Elsewhere, median prices held steady, edging up 1.6 per cent to $1,053 psf in the Rest of Central Region and $811 psf in the Outside Central Region. The median prices include private homes as well as ECs.

Property consultants expect developers to continue to push out mass market projects, since demand fundamentals are stronger in this segment than the high-end sector, where buying traditionally emanates more from speculators.

‘Despite the more dismal global economic outlook, the employment rate in Singapore is still high and this will continue to support demand for mass market homes,’ says Colliers International director of research and consultancy Tay Huey Ying.

‘As for high- end/luxurious projects, developers are quite cautious and not so prepared to release them amid the current, uncertain market conditions. They will want to wait for better conditions before they launch these projects,’ she said.

Monthly data from the Urban Redevelopment Authority (URA) show developers sold a total 316 private homes (excluding ECs) in January, up slightly from 305 units in December, which was the lowest figure since URA began publishing developers’ monthly sales figures and prices in June 2007.

However, Colliers’ Ms Tay says that stripping out the bulk sale of 97 units at Goodwood Residence in December, the January sales figure was roughly a 52 per cent improvement from December.

January volume was boosted by the launch of new projects like Waterfront Waves at Bedok, which sold 79 units during the month, and Wilkie 80, which saw 50 units sold.

‘We observed that luxury prices remained firm despite a decline in sales volume. In the prime districts, units in Grange Infinite, Helios Residences, Hilltops and Scotts Square were sold at median prices between nearly $3,300 psf and $3,700 psf.

‘At Sentosa Cove, units in Marina Collection and Turquoise were sold at above $2,650 psf,’ says CB Richard Ellis executive director Li Hiaw Ho.

However, Knight Frank director (consultancy & research) Nicholas Mak points out that the number of homes priced above $4,000 psf sold by developers has fallen from 72 units last July to five units in December.

In January, there was not a single primary market transaction in this price range.

Colliers’ analysis shows the highest priced home sold in January was a $3,671 psf unit at Scotts Square, compared with $5,146 psf in December achieved at The Ritz-Carlton Residences, and the record $5,600 psf achieved for a unit at The Orchard Residences last October.

The number of new private homes (excluding ECs) developers launched in January sank to a low of 410 units, about 8 per cent less than the 446 units in December and about a fifth of the high of 1,885 units in August last year.

Property consultants suggest developer sales in February may be lower than those in January because of the Chinese New Year.

‘However, developers are likely to maintain prices at current levels as they monitor the market situation,’ CBRE’s Mr Li says.

 

Source: Business Times 16 Feb 08

Revision of DC rates expected to be ‘moderate’

Consultants project smaller DC rate rise for residential and commercial use

THE coming March 1 revision of development charge (DC) rates – payable to enhance the use of sites or build bigger projects on them – is generally expected to be more moderate than the past couple of revisions, which imposed steep rises.

That’s because on the whole, land price increases have slowed considerably in the the past few months. And collective sales, which traditionally account for the lion’s share of private-sector land sales, have virtually ground to a halt, property consultants have told BT.

‘We believe collective sale brokers are unlikely to feel inspired by the upcoming DC rate revisions,’ says Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt.

Most consultants project smaller average DC rate increases for residential and commercial use this time. However, JLL is predicting bigger hikes for industrial and hotel use, as hotel and industrial sites sold at government land sale (GLS) tenders in recent months have fetched top bids significantly higher than the land values implied by current DC rates.

This can be attributed to the shortage of hotel rooms and strong demand for industrial space by office tenants looking for cheaper backroom space, says JLL’s head of research (South-east Asia) Chua Yang Liang.

For non-landed residential use, JLL reckons the average DC rate will go up just about 5 per cent come March 1, compared with the 58 per cent hike that took effect on Sept 1, 2007.

CB Richard Ellis executive director (investment sales) Jeremy Lake also reckons that on the whole, non-landed residential DC rates are unlikely to rise significantly, although there may be hikes in locations where land sales have taken place at prices significantly above values implied by the prevailing Sept 1, 2007 DC rates.

Market watchers point to examples such as Westwood Apartments in Orchard Boulevard, Toho Garden in Yio Chu Kang Road and 15 terrace houses at Jalan Bunga Raya in the Balestier/Novena area.

Agreeing, Credo Real Estate executive director Yong Choon Fah says the increases for such locations could be in the order of 30-40 per cent, while the average islandwide hike will be much smaller at 5-20 per cent.

DC rates – revised every six months, on March 1 and Sept 1 – are listed according to use (for example, non-landed residential, commercial, and industrial) and 118 locations across Singapore.

Savills Singapore director Steven Ming, who predicts a 0-10 per cent rise in the average non-landed residential DC rate, reckons both prime and suburban/mass-market areas will see only moderate increases.

However, bigger rises may be seen in mid-tier locations like Pasir Panjang, Balestier, Upper Bukit Timah, Hillview and Upper Thomson, where condo prices have risen 20-40 per cent in the past six months.

For landed residential use, JLL projects the average increase this time could be 8-15 per cent – again lower than the 11.3 per cent rise in Sept 2007.

Jones Lang LaSalle expects the rates for places like Dunsfold Drive and Binchang Rise in the Bishan/Ang Mo Kio area, Sentosa and Chestnut Drive to increase about 20-25 per cent, as market values of landed properties in these locations are significantly above the values implied by prevailing DC rates.

JLL reckons that after a 42 per cent spike in the average commercial-use DC rate on Sept 1 last year, the rate could still rise a further 30-35 per cent come March 1. However, it believes rates may generally stay put in the central business district (CBD), and expects increases mostly in suburban locations, particularly in the Jalan Sultan and Toa Payoh areas. In the past few months in these areas, commercial GLS sites have been sold at prices more than double the land values implied by prevailing DC rates.

Agreeing, Credo’s Ms Yong sees the islandwide increase in commercial DC rates around 5-15 per cent, with increases mostly outside the CBD.

Market watchers highlight the sharply different top bids for two white sites – with stipulated minimum office components – at Marina View in the CBD sold just three months apart late last year, reflecting how swiftly investor sentiment in the office market turned cautious.

JLL estimates industrial DC rates will appreciate around 30 per cent on average, compared with a 2.2 per cent increase last round. It also expects the average hotel DC rate to go up 30-35 per cent, after a 23 per cent hike last round, pointing out that hotel sites offered under the GLS programme at Upper Pickering Street and New Market Road/Merchant Road have been sold at premiums of 80 and 64 per cent respectively above prevailing DC rate based land values.

The coming round of DC rate revisions will have ‘minimum impact on the already slowing collective sales market’, according to Savills’ Mr Ming.

But for en bloc sites with a significant DC component, and where the reserve price has been fixed by owners, a substantial DC increase will make it even harder to find takers, says Credo’s Ms Yong.

JLL’s Dr Chua reckons owners of properties in fast-changing neighbourhoods like Buona Vista and Telok Blangah – and possibly Paya Lebar and Jurong East, which are earmarked by the government for development into business hubs – will be watching the coming DC rate changes as they may set the tone for potential change-of-use applications.

Potential bidders for reserve list sites under the GLS programme will also be watching the revisions to get a sense of the Chief Valuer’s sentiment before making any applications for these sites to be released, says Dr Chua.

 Source: Business Times 14 Feb 08

Some small property launches but most still hold back

Developers selling projects abroad first before launching them in Singapore

PROPERTY developers are starting to gingerly test the volatile market with a few launches now that the festive season is behind them.

Those dipping their toes into the choppy waters, however, are mostly offering smaller projects away from the prime areas, said property agents.

Home seekers may have to wait a bit longer for major launches, with the earliest set for next month or April.

Meanwhile, developers waiting for the market to regain momentum are selling Singapore projects overseas before launching them locally, said Mr Ku

Swee Yong, director of business development and marketing at Savills Singapore.

‘Developers are still waiting for the stock market here to settle down,’ said Mr Ku.

Savills is dispatching a large sales team to Dubai next week to market Skypark at St Thomas Walk, CapitaLand’s condo on the Silver Tower site in Cairnhill, and the units Kuwait Finance House bought in Reflections at Keppel Bay and Goodwood Residences last year.

For local buyers, one project likely to be launched within weeks is the 47-unit Cosmo at Guillemard Lane.

Prices could be $1,100 to $1,200 per sq ft (psf), said Mr Patrick Oei, associate group director for Huttons Real Estate, which is marketing the project.

Another upcoming launch is that of the 108-unit Verve Residences near Jalan Rajah, with prices likely to range from $900 to $1,100 psf.

These prices are similar to recent transactions in each area, showing that levels are still holding steady.

Homebuyers also picked up a few units in three freehold boutique projects launched in Telok Kurau recently.

One is the 28-unit Costa Este, which is selling at $663 to $980 psf. The others are Palm Galleria and Espira Spring, launched during the Chinese New Year weekend with average prices of $850 to $870 psf.

Generally, smaller projects have done well, even in shaky market conditions, said Mr Oei, citing Casa Fortuna in Balestier and Wilkie 80 in Wilkie Road. Both were sold out within three days of their launches late last year.

The 106-unit Casa Fortuna sold at about $1,000 psf, while Wilkie 80’s 50 units were taken up at $1,500 to almost $1,800 psf, Mr Oei said.

As for bigger projects, the first phase of Waterfront Waves at Bedok Reservoir will be officially launched this weekend. Prices for the 60-odd units still unsold will rise marginally from the current average of $750 psf, said Ms Kellie Liew, a project director at HSR Property Group.

The next brand-new launch may be Frasers Centrepoint’s Martin Place Residences in Kim Yam Road, due next month. Staff previews for the 302-unit condo started last month, at $1,800 to $2,300 psf.

Other launches to look out for include the delayed Marina Bay Suites and Ho Bee’s project at Dakota Crescent.

Not all industry players, though, have high hopes for upcoming launches. ‘The market is really quiet,’ said one agent. ‘Showflat crowds have thinned out to five or 10 people at a time. We’re still placing advertisements, but no telephone calls are coming in.’

 

Source: The Straits Times 13 Feb 08

Developer stocks may rise above flat property prices

Goldman says that physical market correction already priced in

(SINGAPORE) Goldman Sachs predicts that private home prices will remain flat this year, but is sticking to its view that Singapore’s strong structural story is driving a sustainable multi-year residential upswing.

The US bank does not expect a repeat of the mid-1996 (anti-speculation) regulatory measures that caused Singapore’s residential market downturn or an economic environment like in 1998, when property prices fell sharply amid negative economic growth and job creation, and an interest rate spike. Goldman Sachs has also upgraded CapitaLand from Neutral to Buy.

‘We argue that the share prices of developer stocks have priced in a severe physical market correction, which we believe is unwarranted.

‘Notwithstanding near- term headwinds, we recommend investors start accumulating Singapore property developer stocks. We believe developer stocks will start trending up to their RNAVs (Revalued Net Asset Values) once investors get comfortable that property markets in Singapore and China are not heading for a severe correction,’ Goldman Sachs said in a report dated Feb 8 and authored by its analyst Leslie Yee.

Even after lowering its RNAVs for Singapore developers, Goldman’s 12-month target prices (set at parity to 2008 Estimated RNAV) offer potential upside of around 28-37 per cent.

Goldman Sachs attributed its lowering of 12-month target prices and valuations to Singapore private home prices staying flat, lower values of listed investments and a lower multiple of 15x (from 20x) for asset management fees.

Although Goldman Sachs assumes zero growth in overall private home prices this year, it acknowledges that prices may increase in the second half of the year.

The property market is currently caught between the negatives of macro concerns over the fallout from a US-led recession on the Singapore economy and equity market weakness, and the positives of strong Singapore domestic growth drivers such as robust job creation and wage growth, Goldman’s report said.

‘We have greatest confidence in the private mid- to mass-market segment, based on our analysis of different key drivers, such as affordability, income growth, population growth, and HDB resale market trends, among others. We believe strong Singapore fundamentals support this segment, which is likely to benefit most from any reduction in mortgage rates.

‘In the prime residential segment, we see a dampener from a fall in speculative activity but would not underestimate the appetite of bulk buyers such as the Middle Eastern funds. We note affordability for the mass market remains strong, while the prime segment should benefit from the rise in the number of people with high incomes,’ it added. Besides the Singapore residential market, other key drivers for developer stocks are the performance of the Singapore office market, the Chinese residential and commercial markets, and real estate investment trusts, the US bank said.

It argues that new office supply here in 2011/2012 can be absorbed without significant negative impact on rental and occupancy rates, and expects capitalisation rates across various property asset classes in Singapore to remain stable.

Goldman Sachs also sees little downside for residential prices in the China market, and has a positive bias on the outlook for Beijing, Shanghai and selected second-tier cities.

As for Singapore Reits, Goldman sees their unit prices rising from current levels over the next six months – given firm property rentals and the possibility of the overhang from primary and secondary equity raisings being removed.

Goldman has lowered its 2008 estimated RNAV for City Developments from $15.80 to $14.70 and for CapitaLand from $8.30 to $7.70.

‘Amidst a more uncertain environment, our top pick is CapitaLand, which we upgrade to Buy from Neutral. With its multiple growth engines, highly regarded management team and low gearing, our Buy rating on CapitaLand is premised on its attractive and resilient valuation which performs well in various stress tests,’ Goldman said.

The US bank is maintaining its neutral rating for CityDev.

 

Source: Business Times 12 Feb 08

Rising cost of going en bloc adds to cooler market

New rules bump up lawyers’ fees, draw out collective sale process by months

GOING en bloc is now a more costly and time-consuming business for home owners because of a new set of stricter rules implemented last October.

The rules – aimed at making the process more regulated and transparent – have bumped up the price of organising a collective sale by about 20 per cent to 30 per cent and drawn out the process by a few months, say property consultants.

Most of the higher cost comes from rising lawyers’ fees, which have doubled or trebled to reflect a similar increase in workload.

According to one industry source, lawyers ‘previously charged maybe $2,000 per household, but now they can charge anything from $3,000 to $6,000′.

Among other things, the new rules now require a lawyer to be present whenever a resident signs a collective sale agreement and to explain the terms of the agreement to each resident during the signing process.

Lawyers may also have to assist the owners in vetting the minutes of sale committee meetings, as well as draft motions for the general meetings, said Ms Tng Peck Chin, the partner in charge of collective sales at law firm WongPartnership.

Another law firm, Rodyk & Davidson, said it has mostly tried to double its fees, although the actual increase varies from estate to estate.

Rodyk partner Lee Liat Yeang said the new rules now double or treble the amount of time lawyers need to put in to get a collective sale going.

‘Also, looking at market conditions, prices are already quite high,’ he said. ‘Lawyers worry that a buyer cannot be found and nothing will materialise from all the effort they had to put in at the initial part.’

In addition to higher lawyers’ fees, owners now need to bear the cost of a valuation report for the estate, previously not a requirement, said Mr Karamjit Singh, the executive director of Credo Real Estate, which specialises in collective sales.

The report can cost between $100 and $300 per owner, depending on the size of the project, he said.

Some marketing agents have also raised their fees. Savills Singapore’s investment director, Mr Steven Ming, said the firm now charges about 15 per cent to 20 per cent more to make up for ‘the extra effort and time’.

Mr Shaun Poh, a senior director of investment advisory services at DTZ Debenham Tie Leung, said while there has been no ‘great jump’ in the fees his firm quotes, there is no longer any room for bargaining.

‘Previously, it was very competitive. We used to make our fee more negotiable,’ he said. ‘Now, if we quote a fee, we will stick to it.’

A big reason is that it takes much longer to get a collective sale going under the new rules.

One rule, for instance, provides for a five-day cooling-off period during which a home owner may still change his mind after he signs a collective sale agreement.

‘Last time, consultants would meet an owner, persuade him of the benefits of going en bloc, and he could just sign the agreement,’ said Savills’ Mr Ming.

‘Now, we have to meet them. After they agree to sign, we have to schedule another time for the lawyer to come down to witness the signing.

‘If it all goes well, that’s good, but if they change their mind later, we may have to go through the whole process a few times.’

In the four months since the rules were changed, not a single estate has gone up for sale under the new system.

And while the property boom last year owed much to an unprecedented collective sale frenzy, the almost silent collective sale market now is similarly contributing to the cooling property sector.

Marketing agents say plans for a sale are under way at several developments, although most are still in the preliminary stages.

 

Source: The Straits Times 9 Feb 08

Prime properties in for 5% fall in ‘08: UBS

Bank expects modest 0-5% growth in mass and mid-tier segments

ANALYSTS from Swiss bank UBS believe Singapore’s property market will ‘remain intact’, but they are nonetheless projecting a drop of 5 per cent in prime property prices for the year.

In the more affordable mass and mid-tier segments, where prices increased at a slower pace, UBS expects a modest growth of between 0-5 per cent in prices this year.

In its report on the Singapore property market, UBS says that in light of the uncertainty over the global economic outlook, buyers are likely to defer purchases of new property for at least six months. UBS said that demand ‘is highly dependent on the market’s outlook for the next three or four years, when the projects are completed’.

It added that with supply of new homes on the rise, there could be pressure on developers to reduce launch prices to ’stimulate demand’ – and some developers may start cutting prices as early as the second quarter of this year.

While the larger developers are expected to have more holding power, smaller ones could feel the strain of holding costs sooner. UBS estimates that of the units to be launched between this year and 2010, around 9 per cent are held by small, unlisted developers. Still, it said that there is little evidence to suggest that the market will be affected if small developers ‘capitulate and cut prices aggressively when holding costs build up’.

In its report on the current property market conditions, UBS made comparisons with the previous property slump of 1998. ‘Markets appear to be pricing a 70 per cent fall in Singapore residential prices, similar to 1998,’ it noted.

But UBS said: ‘We think the residential market in 2008 will not replicate the 1998 scenario where launch prices fell by 50 per cent in a year, and stock prices fell by 75 per cent.’

It added that expected GDP growth of 3.5 per cent should keep population inflow positive, which combined with negative real interest rates and low unemployment should underpin resale prices.

‘Even if job growth were to halve in 2008 to 90,000-100,000, this could still mean housing demand for at least around 15,000-18,000 units, assuming half the newly- weds (23,000 per annum) want to move out, and around 6,000 new households – of new permanent residents and expatriates – relocate to Singapore,’ UBS added. It pointed out that the figure is much higher than the expected number of home completions – 8,700 in 2008 and 16,000 in 2009.

As such UBS believes that current share prices for listed property developers have been ‘over-corrected’.

‘Allgreen’s price ($1.17 per share currently) attributes no value to its residential (portfolio), while City Development’s price ($12 per share currently) implies a 70 per cent writedown in unsold land,’ said UBS.

UBS said that it has adjusted the revalued net asset value and earnings per share for Allgreen, City Developments, CapitaLand and Keppel Land, and given current price levels ‘we have retained our Buy ratings on all these developers’.

 

Source: Business Times 5 Feb 08

Subsales may spike again as projects near completion

NEWS ANALYSIS

Prices could soften if ’specuvestors’ are forced to offload properties

(SINGAPORE) Speculative activity took a breather in Q4 last year as the number of subsales as well as their share of total private home deals were down sharply from the preceding two quarters of 2007. However, many in the industry are wondering whether subsales will again spike closer to the physical completion dates for some highprofile projects sold substantially on deferred payment (DP) schemes.

Among the projects that will be keenly watched are The Sail @ Marina Bay, The Coast (at Sentosa Cove), The Grange, and The Suites at Central in the Devonshire Road area, all of which were sold amidst much hype. The first two projects are scheduled to receive Temporary Occupation Permit (TOP) next year and the latter two, this year.

The coming wave of subsales – if there’s one – may not be so much a reflection of speculative froth in the market but rather of buyers seeking to offload their units before the DP expires.

Those who bought their properties on DP schemes would typically have paid 10 or 20 per cent of their purchase price to the developer with the next payment (of 75 per cent or 65 per cent, respectively) deferred till the project receives TOP. By TOP, the developer would collect 85 per cent of the sale price.

Such buyers can shop for a bank loan until closer to the project’s TOP date.

However, buyers who picked up multiple units in some of these developments on DP schemes and are still sitting on them may not be able to secure sufficient housing loans to foot the bills when the projects obtain TOP.

Banks may turn cautious over advancing loans for multiple property purchases. Some, for example, may only be prepared to lend up to 70 per cent – based on their credit assessment and servicing ability of the borrower – instead of 80-90 per cent, of the purchase price of the property or its current value, whichever is lower.

These ’specuvestors’ may find that it makes more sense to sell their units in the subsale market before they receive a big bill from developers.

Such subsales, while apparently ‘forced’ by the difficulty of finding enough housing loans, could still yield handsome gains for such investors – given the huge rise in upmarket home prices.

However, if a sizeable number of such properties come on the subsale market, some sellers may be willing to accept below-market values. This will clip developers’ pricing power when they sell new projects in nearby locations.

Already, BT understands that some individual investors, anticipating ‘dumping’ from speculators, are teaming up to snap up some of these units at below-market prices.

Jones Lang LaSalle’s head of research (South-east Asia) Chua Yang Liang reckoned that some buyers who purchased units on DP during the initial launches may begin to review their options around five to six months ahead of TOP. ‘Supply of such properties in the subsale market could potentially increase from the latter half of this year, which could potentially see prices easing,’ Dr Chua said.

Of course, it may be a different story altogether if sentiment in the high-end market picks up again.

A lot will also depend on the holding power of those who still have units they’ve bought from developers. Some may not face problems getting housing loans, because they have the ability to service them. Such buyers may just go ahead and pay that big instalment when the project receives TOP.

Another factor that will bear on the extent of ‘forced’ subsales is the profile of buyers in each project – the mix of those who bought units with a view to living in them, and those who purchased with an eye on flipping before the project’s completion.

A seasoned property agent told BT that a condo in the East Coast area receiving TOP soon recently saw several buyers offering their units at prices considerably below what was being achieved just a few weeks ago – before the stock market plunge.

Then there’s another theory. While we may see a flurry of subsales for projects sold in the past on DP, it will be a different story going ahead.

With no new projects approved by the authorities for DP schemes since DP was scrapped in late October 2007, new launches going ahead will attract fewer potential speculators. This is because those who buy into projects without DP schemes know they will have to make regular progress payments to the developer and in all likelihood have to obtain housing loans.

‘You’ll see more genuine buyers in the market,’ as ERA Realty Network divisional director Andrew Soh said.

‘Developers may still be able to maintain current prices, or even achieve higher prices. But instead of weeks, it may take them months, or even years, to sell out projects.’

‘As new project launches attract fewer speculators, I may have to sell physical homes and not just paper (options),’ he quipped.

 

Source: Business Times 5 Feb 08

Private homes losing speculative froth

Subsale activity slowed in Q4; rising rents defined 2007

(SINGAPORE) The level of speculative activity in the private property market, as measured by the extent of subsales, slowed considerably in Q4 last year, especially in the Core Central Region (CCR), according to the latest official data.

Islandwide, subsales as a percentage of total private housing sales fell from 14.4 per cent in Q3 last year to 10.7 per cent in Q4, while in the CCR, the hotbed of speculation, the subsale percentage fell from 24.8 per cent to 18.6 per cent over the same period. Property consultants attributed the drop to uncertainty about the financial markets as well as the withdrawal of the deferred payment scheme in October 2007.

Reflecting the current housing shortage, the stock of completed private homes increased by just 1,448 units last year – the smallest rise in at least 12 years. The stock had increased by 4,008 units in 2006, 7,453 units in 2005, and 10,969 units in 2004.

Rents of condos and apartments rose significantly last year – by 42.3 per cent in CCR (comprising the prime districts 9, 10, 11, Downtown Core and Sentosa), an even higher 47 per cent in the Rest of Central Region (RCR), and 41.9 per cent in Outside Central Region (OCR).

‘Looking back at 2003/2004, developers were cautious and there were not many housing starts. So three or four years down the road, we’re seeing a fall in terms of new home completions,’ DTZ executive director Ong Choon Fah explains. ‘Of course there have also been a lot of en-bloc sales in the past two years and some of these properties have been demolished,’ she adds.

‘The situation is even more severe in the prime areas, and we’ve been seeing a lot of expats fanning out from the prime districts to RCR, to rent private homes, which probably explains why the increase in non-landed rents was steeper in RCR compared to the CCR,’ Mrs Ong explains.

With many private residential projects likely to be completed only in late 2008 and 2009, property consultants including Knight Frank managing director Tan Tiong Cheng expect rentals for non-landed properties to increase further this year. The rise could be less steep – perhaps 20 per cent, or around half the rate of increase for last year.

Yesterday’s data on the private property market by Urban Redevelopment Authority showed that the overall price index for private homes rose 6.8 per cent in Q4 over the preceding quarter, slower than the 8.3 per cent hike in Q3.

For the full year, the index was up 31.2 per cent, three times the 10.2 per cent rise in 2006.

In terms of regions, the price index for non-landed private homes in CCR rose 7.5 per cent in Q4, more measured than the 8.3 per cent gain in Q3.

Price indices for RCR and OCR advanced 7.7 per cent and 7 per cent respectively in Q4, slightly more modestly than in Q3.

For the whole of last year, the non-landed home price index for CCR rose 32.7 per cent, while RCR and OCR indices were up 30.4 per cent and 26.4 per cent respectively.

Developers sold a record 14,811 private homes last year, surpassing the previous high in 2006 by 32.9 per cent.

They launched a total of 14,016 units in 2007, 26.6 per cent above the 2006 figure and also a new high.

Knight Frank director (research and consultancy) Nicholas Mak predicts that URA’s overall private residential property price index will rise at a more sluggish pace – around 10-15 per cent – this year, as buyers become more prudent.

Colliers International director (research and consultancy) Tay Huey Ying reckons that subsales as a percentage of total private homes sales islandwide will continue trending down in the coming months, to average about 8 per cent for the whole year, as the market moves to a ‘healthier and more sustainable set of fundamentals’.

Less speculation could also slow the hike in home prices, she says. ‘As a result, developers are less likely to bid aggressively for development sites and this will affect the success rates of collective sales,’ she adds.

Some seasoned market players are predicting that home prices in CCR could take a hit of up to 10 per cent this year; those in RCR will be flat, perhaps rising slightly; while OCR will post the biggest gains of about 10-15 per cent.

‘There’s significant supply of projects for launch in CCR, and that will weigh down on prices. Foreign buying will thin because of the financial market turmoil which is hitting high-net-worth bankers and others,’ a veteran industry observer suggests.

BT learnt yesterday that the release of the high-profile Marina Bay Suites, which was initially slated for the end of this month, has been delayed till after the Chinese New Year festivities – by which time the Budget should also be announced and hopefully lift sentiment.

 

Source: Business Times 26 Jan 08

Home prices on city fringe, suburbs still rising strongly

PRICE increases for high-end homes in the central areas may be easing, but not so for homes on the city fringe and suburban apartments – where prices are still rising strongly.

Urban Redeveloment Authority figures showed growth in the prices of uncompleted apartments in the central areas slid from 7.8 per cent to 7.6 per cent from October to December. Price increases for city fringe units, on the other hand, rose from 7.6 per cent to 8.3 per cent.

Growth in the prices of uncompleted apartments in suburban areas also crept up to 9.2 per cent from 9.1 per cent.

Dr Chua Yang Liang, head of research, South-east Asia, at Jones Lang LaSalle, said home prices in the suburbs would keep growing by 24 per cent to 26 per cent this year. This would be supported by home owners looking for new homes after being disloged by collective sales.

Last year, 14,811 new homes were sold.

Mr Li Hiaw Ho, executive director of research at CB Richard Ellis, meanwhile, expects price rises and sales volume to moderate this year.

‘Luxury prices are likely to stabilise at current levels, while mid-tier and mass market prices may have the potential to rise by 10 per cent to 15 per cent,’ he said.

 

Source: The Straits Times 26 Jan 08

Growth in rents of private homes beginning to ease up

Jan 26, 2008

EXPATRIATES and other tenants in private apartments can finally start to breathe easier. Data from the Urban Redevelopment Authority released yesterday showed a subsiding of the sharp rise in rentals for condos in key areas.

Rentals for non-landed property in the coveted core central region, which covers Tanglin and Bukit Timah, for instance, grew just 5.3 per cent, less than half the rate of 12.2 per cent achieved in the third quarter.

The drop in rental growth was not as dramatic for the rest of the central region, though, which slid from 11.9 per cent to 8.8 per cent, and outside the central region – from 11.8 per cent to 8.5 per cent. Overall rents of private homes grew 6.8 per cent from October to December, slowing from an 11.4 per cent rise in the previous period. For the whole of last year, private home rentals surged 41.2 per cent.

Mr Nicholas Mak, the head of research and consultancy at Knight Frank, expects private homes rentals to rise in a more ‘tamed manner’ of 10 per cent to 15 per cent this year.

Still, Ms Tay Huey Ying, director for research and consultancy at Colliers International, reckons rentals of luxury homes will rise by 25 per cent to 30 per cent this year.

Meanwhile, rentals for the HDB market continued to grow strongly.

The median rent for a four-room flat rose from $1,400 to $1,500 in the fourth quarter, while that for a fiveroom unit also grew $100 to hit $1,700.

From October to December, 3,300 flat owners were given approval to rent out their flats. The total number of flats being rented out rose 7 per cent to 17,400 in that period.

The chief executive of property agency PropNex, Mr Mohamed Ismail, expects rentals to rise by 15 per cent to 20 per cent for the whole of this year, as expats pushed out by high rentals for condo units look for cheaper options.

Regent Garden en bloc sale contested

(SINGAPORE) Allgreen Properties’ purchase of Regent Garden via a collective sale is now being contested by the majority sellers of the property, the company said in a filing to the Singapore Exchange yesterday.

BT understands that the majority owners, who together own 25 of the 31 units and over 80 per cent of the share value in Regent Garden, are saying that the sale price of $34 million was agreed to as a result of a mistake regarding the development charge.

Based on subsequent valuation reports – they claim that the true market value of Regent Garden should be between $39.7 million and $42 million.

BT understands that Regent Garden’s sales committee did not officially ascertain the development charge before entering into the agreement with Allgreen.

There is also some unhappiness at the higher prices the minority owners walked away with.

The majority owners now want the High Court to declare that the collective sale is no longer binding.

Alternatively, they are asking that they be paid an additional sum of $5.7-$6.7 million, ‘be placed in the same position’ as the minority owners of the property’, or be paid damages, according to Allgreen’s statement.

Allgreen said that it intends to ‘vigorously’ contest the claims. ‘The company’s position is that the agreement is and remains valid and binding at the original sale price of $34 million,’ it said.

Regent Garden’s sales committee filed the originating summons in the High Court on Jan 10. Allgreen was served with the summons on Jan 14.

Allgreen had previously obtained unanimous consent to the sale of Regent Garden, it said.

Allgreen also said that it commenced legal proceedings in the High Court yesterday for an order that the majority sellers complete the transaction in accordance with the terms of the agreement. The minority owners, who have agreed to complete the transaction, have joined these proceedings ‘because they have an interest in the matter’, Allgreen said.

Allgreen is being represented by Davinder Singh of Drew & Napier, while the minority sellers are represented by Ang Cheng Hock of Allen & Gledhill.

The majority owners are being represented by Molly Lim of Wong Tan & Molly Lim LLC.

 

Source: Business Times 19 Jan 08

Home prices stay firm even as property stocks retreat

Amid weak sentiment in a quiet market, many players are adopting a wait-and-see attitude

SINGAPORE’S property stocks have been taking a hammering lately but the property market has so far remained unscathed.

After riding the boom to dizzy heights, property counters have now dropped by up to 60 per cent or so from their high points over the past 12 months. Home prices, on the other hand, have not softened noticeably, if at all, although the number of transactions has shrunk significantly.

The share price of Wheelock Properties, for instance, closed at $1.87 yesterday, down 48.9 per cent from its one-year high on Nov 4.

But caveats lodged with the Urban Redevelopment Authority and anecdotes of more recent transactions showed no evidence of property sellers lowering their prices.

‘The stock market must fall convincingly before property prices will be hit,’ said DMG & Partners Securities head of research (retail) Terence Wong, explaining the apparent disconnect between physical properties and stock prices.

Stock investors’ worries stem from serious trouble in another housing market – the United States, which is currently embroiled in a sub-prime mortgage crisis. Fears are growing that the US is headed for recession.

In Singapore, while property buying sentiment is weakening as liquidity dries up, prices are not likely to head south any time soon, analysts said.

They say that is because most potential buyers are believed to be taking a breather for now and watching to see what comes next.

If and when these would-be buyers believe the worst of the current financial worries are over, they are set to jump back into the market, they said.

Mr Ku Swee Yong, director of Savills Residential, said: ‘Asia is still very strong and so is the Singdollar.’

‘The problem is not bad enough that expatriates have to be repatriated. Our finance industry is still growing and the expats are still renting.’

But things could get worse in the US and that would hit the general investment mood. ‘Sub-prime is but the tip of the iceberg,’ said Mr Ku.

Knight Frank managing director Tan Tiong Cheng said: ‘A prolonged US recession could contain any price increases in the property market this year. But the property market is fundamentally sound and there are buyers on the sidelines.’

Prices of upcoming launches are expected to remain firm, analysts say.

‘I believe the major developers will hold as their pockets are deep enough,’ said DMG’s Mr Wong.

Favourable interest rates will enable them to hold for a longer period, analysts say.

While launch prices are not likely to be hit, resale prices could fall, one analyst said.

Still, analysts believe many people bought properties at high prices in the past year or so and are unlikely to dump them now. Many of them are believed to have strong holding power.

Mr Ku said buyers who made use of the deferred payment scheme before it was scrapped will not be worrying about their buys for several years.

But analysts think some speculators who bought high, hoping to make a quick buck from high-end properties in Sentosa Cove, Marina Bay and the Orchard Road area, are now panicking.

High-end homes have crossed the $5,000 per sq ft mark – more than double the record price in the last peak in 1996.

The days of making quick money from the high-end property market are likely over. ‘The clock is running and there would be some speculators out there who cannot service the loans on their property,’ said one analyst.

Even so, speculators do not form a large part of the market, analysts say.

With buyers adopting a wait-and- see attitude given the current uncertainty, the market is expected to remain quiet for a while.

 

Source: The Straits Times 18 Jan 08

Marina Bay Suites priced around $3,000 psf

Over 600 potential buyers, half foreigners, have registered interest to buy units in 221-unit project

 

AT around $3,000 psf, the next luxury development to go on sale – Marina Bay Suites – looks like it could actually be quite reasonably priced, especially as luxury home prices have trended towards the $4,000 psf range.

Revealing the estimated selling price at a press conference for the upcoming sales preview of Marina Bay Suites, slated to be before Chinese New Year, Marina Bay Financial Centre (MBFC) head of residential marketing Kan Kum Wah said: ‘As a developer, we believe in leaving something behind for capital appreciation.’

Asked if this meant giving speculators more incentive to buy, Mr Kan said he doubts there will be speculative activity, but added that several investors have already expressed their interest in the development.

Marina Bay Suites is part of Marina Bay Financial Centre, being developed by joint venture (JV) partners Cheung Kong Holdings/Hutchinson Whampoa, Hongkong Land and Keppel Land.

So far, over 600 potential buyers (of whom half are foreigners) have registered their interest to buy into the 221- unit Marina Bay Suites. Mr Kan added that over 100 of these potential buyers already own a unit at the JV’s earlier launched development, Marina Bay Residences.

On the projected pricing, Mr Kan cited some sub-sale transactions for Marina Bay Residences at above $3,000.

Mr Kan also said that Marina Bay Suites will have only 218 three- and four-bedroom units ranging between 1,600 and 2,700 sq ft in size. This means units could cost in the range of $5 million to $8 million, putting them out of reach of the average property speculator. DTZ Debenham Tie Leung (DTZ) executive director Ong Choon Fah added: ‘At this price range, it will attract the investors.’

These investors will be looking for capital appreciation.

Joseph Tan, executive director (residential) at CB Richard Ellis (CBRE), which is marketing the development together with DTZ, said that capital appreciation for developments in the vicinity has been between 35 and 75 per cent in the previous two years. ‘Some have even seen 100 per cent gains,’ he added.

But news of a possible US recession does seem to have affected market confidence.

According to caveats lodged, a unit at Marina Bay Residences (excluding penthouses) did cross the $3,000-level last August. However, sub-sale caveats lodged in December show transactions at between $2,400 and $2,700 psf.

Marina Bay Suites will be initially sold through private previews.

 

Source: Business Times 17 Jan 08

For Sale!!! Enjoy Spacious Living in Tanjong Rhu!!!

Enjoy Spacious Living in Tanjong Rhu!!!

 

Check out this extremely rare unit in Tanjong Rhu….

 

Introducing….

THE WATERSIDE

 

-      FREEHOLD …

The ONE AND ONLY FREEHOLD in Tanjong Rhu Facing East Coast Park)

 

-         2,142 sqft…

The ONE AND ONLY FREEHOLD AND 2000+sqft in Tanjong Rhu

 

Owner-Occupied Unit!

 

The best thing?

 

With the Integrated Resort located so close buy,

 The Investment Potential is there!!!

 

For more information, click here!

 OR

Call me @ (+65)9831 6938

OR

Email me @

jarene_chuang@yahoo.com

INVESTOR’S CHOICE UNIT! 40 SECS to HOLLAND VILLAGE!!!

INVESTOR’S CHOICE UNIT!!!

 

 

Check out this unit!

The location is a no-brainer!

Located just NEXT to Holland Village - you just need a 40 SECONDS STROLL!

 

It’s so precious – Just beside the GOOD CLASS BUNGALOWS!

And ONLY 85 units!

 

To give you an idea of how quickly the unit is sold:

It was sold within 1/2 hour when it was launched!!!

 

The investment potential? ANOTHER NO-BRAINER QUESTION!!!

Do I really need to tell you? Make an appointment with me! Let me show you instead!!!

The unit itself?

One of the larger studio units @ 549 sqft!

The price:

Click here to find out!

 

Need more information?

Call me @

(+65) 9831 6938

or email me @

jarene_chuang@yahoo.com

TODAY!!!!

Telok Blangah, HarbourFront set to get more waterfront homes

But areas closest to Mt Faber unlikely to achieve much higher plot ratios: JLL

(SINGAPORE) More waterfront homes, some tucked into the lower part of Mount Faber, could spring up in the Telok Blangah and HarbourFront precincts under Master Plan 2008, according to a recent study by Jones Lang LaSalle.

The impetus for more intensive use of residential land in these locations – which include a few sites currently occupied by Housing and Development Board flats – is the improved accessibility these precincts will enjoy because of the new Circle Line.

Another factor is a spillover of the hype from nearby developments like VivoCity, the nightspot at the restored St James Power Station, Reflections at Keppel Bay condo and Resorts World at Sentosa.

However, the areas closest to Mount Faber are unlikely to see much intensification in land use as they are part of a proposal to connect the ridges from Mount Faber to West Coast Park under the Urban Redevelopment Authority’s 2002 Identity Plan study, JLL reckons.

‘The recent market interest and demand for waterfront housing is likely to give planners the confidence to embark on more bold plans to capitalise on these features – hills overlooking the waters – around these two precincts but careful not to impinge on the natural landscape,’ says JLL’s head of research (South-east Asia) Chua Yang Liang.

‘Hence we can expect higher plot ratios but with urban control, that is, height limit. The likes of Mediterraneanstyle waterfront housing tucked into the hills is not difficult to imagine.’

Generally, JLL expects sites closer to the sea or near Mount Faber to be accorded low plot ratios – of 1.4 and 1.6 respectively – with accompanying height limits of five storeys and 12 storeys respectively. This is to ensure that residential developments further inland will be able to enjoy the water views, and that similarly, the view of Mount Faber from Sentosa will not be obstructed.

Most of these seafronting and foothills sites identified in JLL’s study are owned by the state and are either vacant or being used for car parks, a bus terminus and a food centre. They are all zoned for residential use under the existing Master Plan 2003 but without any plot ratios specified as they are subject to detailed planning.

However, JLL also highlighted four sites further away from Mount Faber and the waterways which it said stood a chance of being accorded higher plot ratios, ranging from 2.8 to 3.5, because of their proximity to the new Telok Blangah Station on the Circle Line. Two of these sites are now occupied by HDB flats while the other two are vacant state sites which could be suitable for sale to developers for residential projects, JLL suggests.

However, another plot flanked by Morse and Wishart roads and comprising vacant state land and private shophouses – currently zoned for residential use, without any plot ratio specified – is likely to be accorded a plot ratio of only 1.4 and a five-storey height limit, JLL reckons. This is to ensure that any new developments there will not block the views of colonial black-and-white houses and other buildings along and on the apex of Mount Faber, JLL argues.

The government last year ruled out major across-the-board plot ratio increases in the upcoming Master Plan 2008 – a pronouncement that some property market watchers say may have been aimed at avoiding fanning the en bloc fever at the time. But JLL has argued for selective plot ratio increases under MP 2008, mostly for vacant state land near Circle Line stations, especially at intersections with other MRT lines.

It even suggests that a site close to the new Telok Blangah MRT Station currently occupied by two private condos – Fairways and Harbour View Towers – could see its plot ratio raised from the present 2.1 to 2.8, because the site is close to the new station.

‘However, bearing in mind that these two developments are on private land, the plot ratio is not likely to be increased to as high as the 3.5 designated for some surrounding residential sites (occupied by HDB flats) to ensure that windfall gains from intensifying land use are socially equitable and not excessively accorded to a few private individuals/landowners,’ JLL added.

‘Historically, the districts along Singapore’s western coastline were dotted with exclusive homes – sitting on a hill and overlooking the sea – until port activities were extended to Pasir Panjang,’ Dr Chua notes. ‘Nevertheless, the intrinsic attractions of this location remain; and the transformation of the area has already begun with the new developments in the HarbourFront location and Sentosa. It may take more time before gentrification spreads to the Pasir Panjang area, but Telok Blangah and HarbourFront are definitely two precincts that are ripe for this transformation.’

 

Source: Business Times 15 Jan 08

Converting hotels into condos just got harder

Rules to ensure that sites zoned as hotels are not switched to other uses

(SINGAPORE) Redevelopment plans involving the likes of Four Seasons Hotel along Orchard Boulevard and Negara on Claymore may have to go back to the drawing board after the government tightened hotel conversion rules yesterday. If the owners of these properties had visions of converting them to other uses – including residential – they may have to think again.

The tightened rules will put a dampener over possible conversion plans. At the same time they will ensure that there is sufficient supply of hotel rooms in key tourist districts like Orchard Road, amidst the tourism boom.

As a general rule, hotels located on sites zoned for hotel use under the Master Plan will not be allowed to convert to other uses. The same goes for hotels that are located within zones for other uses but where there is a specific planning or sales requirement for a minimum hotel quantum to be provided, Urban Redevelopment Authority and Singapore Tourism Board said in a joint release yesterday evening.

‘The revised approach to evaluating hotel conversion applications will ensure that the location and number of hotel rooms safeguarded are in line with planning intentions and strategic planning objectives,’ the two government bodies said.

This supersedes a policy revision announced in 2002 when 19 hotels which had been previously safeguarded for hotel use under an earlier 1997 ruling were removed from the safeguard list. This meant that their owners could apply to convert the properties to other uses.

However, owners of 18 of these 19 hotels will now not be allowed to convert their sites to other uses such as residential, since these sites are zoned for hotel use under the current Master Plan 2003.

Apart from Four Seasons and Negara on Claymore, the affected hotels include York Hotel along Mount Elizabeth, Hotel Grand Central, Hotel Supreme and Holiday Inn Parkview – all in the Kramat/Cavenagh roads vicinity.

These are all prime district locations and their owners could have had aspirations to convert them to other uses, especially residential, to optimise their land values.

Hotel Properties Ltd has long-standing plans to redevelop Four Seasons Hotel, along with its other three neighbouring properties – Hilton Hotel, Forum and HPL House – into a mega project along Orchard Road.

In 2006, UOL Group gained control of Hotel Negara Ltd, eyeing its key asset, the hotel that it has since renamed Negara on Claymore.

Market watchers had expected UOL to redevelop the property into a residential project or a small office, home office (Soho) development in the longer term.

The list of 19 hotels removed from the hotel safeguard list in 2002 and which are zoned for hotel use under Master Plan 2003 also include a string of hotels in the Bencoolen/ Waterloo/Victoria streets area such as Allson, City Bayview and Strand hotels.

Yesterday’s changes also affect non-hotel developments currently on sites that are zoned for hotel use: these properties will only be allowed to be redeveloped into hotel uses, in line with the Master Plan intention.

URA said it will take a case-by-case approach to any applications for exceptions to these latest rules, factoring in the land use and planning intention for the area, as well as ensuring sufficient supply of hotel rooms to meet Singapore’s tourism needs.

Elaborating on the rationale for the changes, a URA spokeswoman pointed to record visitor arrivals and tourism receipts as well as high hotel occupancies and revenues. Demand is high for hotels, especially in the key tourist belts like Orchard Road and Singapore River.

However, these areas are already largely built up, leaving limited state land that can be made available for new hotel developments.

‘Hence, the loss of hotels within the key tourist districts is irreversible and even the conversion of just a few of the existing hotels would significantly impact the critical mass of hotel rooms within these areas,’ the URA spokeswoman added.

The presence of hotels in major tourist areas contributes to the mix of uses that is critical to the vibrancy and character of these areas as Singapore shapes up as a global city, she added.

With a decision on whether a hotel site can be converted to other uses now based on the plot’s Master Plan zoning, ‘the change puts the land use regulatory framework for hotels in line with other uses’, URA said.

 

Source: Business Times 15 Jan 08

Govt to check hotel conversions islandwide

THE Government has made a key policy change regarding land set aside for hotels at a time of heightened concern over the supply of rooms during the tourism boom.

It has discontinued the hotel safeguarding policy, so developers with land designated for hotels may find it harder to convert the site for other uses, such as apartments.

Applications will now be considered based on the need to ensure sufficient hotel facilities and must be in line with the Master Plan, a broad blueprint outlining Singapore’s development. The plan is up for review this year.

The new guidelines represent a key shift from the existing policy. Hotel safeguarding allowed the Government to stop hotel sites from being converted for other uses but was restricted to core areas like the Orchard Road corridor.

But now hotel sites across the country will be under the spotlight. And all conversion applications will be assessed the same way, said the Singapore Tourism Board and the Urban Redevelopment Authority (URA) yesterday.

Hotel conversion applications will generally not be allowed if the area is zoned for hotel use or needs of a certain level of rooms.

‘Instead of just safeguarding the hotels in core areas, they are now effectively safeguarding all hotels – on land with hotel zoning – across Singapore,’ said Knight Frank director of research and consultancy Nicholas Mak.

‘It gives the Government more flexibility to regulate hotel supply in the future.’

The change reflects how the Singapore market has altered, particularly for hotels. The hotel safeguarding policy was introduced in 1997 to check the trend of hotels being converted to condominiums. The Seaview and ANA hotels were turned into residential sites in recent years.

Having sufficient hotel rooms is critical given the aim to attract 17 million visitors to Singapore and $30 billion in tourism receipts by 2015. The 10-millionth visitor landed on Dec 22 last year and in November the average hotel room rate in Singapore reached a record $226.

Demand for hotels within key tourist districts such as Orchard Road and Singapore River is high, but these areas are already largely built up.

The URA said: ‘Hence, the loss of hotels within the key tourist districts is irreversible and even the conversion of just a few of the existing hotels within the key tourist districts would significantly impact the critical mass of hotel rooms within these areas.’

Last year, a few hotels opened, bringing the total number to 227. Typically, it takes about three years to build one. If an existing hotel is converted to other uses, it will take that long for a new one to replace it.

‘Such lead time can affect the available room supply to meet the growing demand as well as the landscape and the attractiveness of the district as a whole,’ said the URA.

 

Source: The Straits Times 15 Jan 08

Pearlbank Apartments up for collective sale at $750m

THE 38-year-old Pearlbank Apartments development at Pearl’s Hill has been put up for collective sale at an indicative price of $750 million.

Marketing agent Knight Frank says that with a lease upgrading premium estimated at $143.3 million, the unit rate works out to be $1,456 per square foot per plot ratio (psf ppr), assuming the buyer can fully develop the site to baseline gross floor area of 56,998.8 square metres.

Knight Frank executive director Nicholas Wong said the site was put on the market last August. There were four expressions of interest but negotiations fizzled out in the wake of the US sub-prime crisis.

Pearlbank Apartments, which comprises 280 apartments and eight commercial units, was the first allhousing project constructed on a URA site. Some architects reckon the building has merit worth preserving, but it is not gazetted for conservation.

Mr Wong said more than 80 per cent of the owners have already agreed to go down the en bloc route.

Based on the indicative asking price, he estimates most of them stand to collect 60-70 per cent more through a collective sale than they would individually.

Under the 2003 Master Plan, the site is designated for residential development at a plot ratio of 7.2.

However, according to URA, the baseline gross floor area is 56,998.8 sq m. This is equivalent to a plot ratio of 7.447 on the land area of 7,653 sq m.

Based on an average unit size of 1,200 sq ft, 500 new apartments can be built on the site. There is also opportunity for the developer to integrate Pearl’s Hill City Park into the redevelopment, Mr Wong said.

 

Source: Business Times 10 Jan 08

High-density homes may complement Paya Lebar hub

Study says they may come up on sites that are currently industrial estates

(SINGAPORE) The development of vacant state sites already zoned for commercial use immediately around Paya Lebar MRT Station will spearhead the transformation of the area into a commercial hub.

More interestingly, however, high-density homes may also come up slightly further away on sites currently occupied by industrial estates to support an expected influx of population as Paya Lebar shapes up as a subregional centre.

Jones Lang LaSalle (JLL), in a recent study of likely changes in the upcoming Master Plan 2008, identified three sites – two currently part of Eunos industrial estate owned by the Housing and Development Board (HDB) and the third also in an industrial estate but privately owned – that could be developed into high-rise homes, whether public or private. Despite the fact that the three plots are currently being used as industrial facilities, two of these sites are actually zoned for residential use under the existing Master Plan 2003, while the third is slated for reserve use.

The need to inject a bigger live-in population to complement the development of Paya Lebar as a sub-regional centre may see HDB offering the three sites for development into housing, especially if the plots are accorded relatively high plot ratios of 3.5 to 4.0 to optimise their proximity to Paya Lebar MRT Station, which will be an interchange station, at the cross section of the new Circle Line and existing East-West Line.

JLL argued these plot ratios – which reflect the ratio of maximum potential gross floor area to land area – are similar to the plot ratios granted for housing projects in the Tiong Bahru vicinity. ‘Injecting more homes in the Paya Lebar area will help maintain a balance between residential and commercial uses in the location,’ JLL said.

And with the increased live-in population will arise the need for having more schools, which can be developed on a plot already zoned for education under the current master plan, JLL’s study suggests.

The property consultancy also suggests that two sites currently zoned for Business 1 (suitable for clean and light industrial/ warehouse use) – one each in Aljunied and Eunos industrial estates – are likely to be rezoned to Business Park or Logistics Park to better complement the proposed commercial developments that will be built closer to Paya Lebar MRT Station.

The plot ratios of these two sites are also likely to be raised from 2.5 currently to 2.5 to 2.8, JLL said.

‘The improved accessibility of the Paya Lebar location that will result from the area serving as an interchange between two MRT lines will boost the location’s image and attractiveness as an alternative office location in the longer term,’ JLL said.

The property consultancy does not envisage a plot ratio increase for the vacant state sites currently zoned for commercial use immediately around Paya Lebar MRT Station, as their existing 4.2 plot ratios are in sync with the Tampines Finance Park.

Last year, the government said Paya Lebar will be developed into a business hub to provide space for Singapore’s continued growth as a global business centre. Plans for its transformation are expected to be fleshed out in Master Plan 2008, which will be ready later this year.

National Development Minister Mah Bow Tan in June last year ruled out massive, across-the-board hikes in plot ratios islandwide in Master Plan 2008.

 

Source: Business Times 8 Jan 08

YOUR PERSONAL ADVISER: FINANCE

How can landlord reclaim house when tenant fails to pay rent?

Q MY FRIEND’S three-room terrace house in Singapore was rented out to a divorcee and her daughter. The tenant put down a total deposit of $1,200, consisting of one month’s rental of $1,000 and $200 for utility bills.

The tenant last paid rent in April last year. She owes four months’ rent, or $4,000. Before that, she had been late in making payments for several months. Unpaid bills for utilities add up to about $100.

The landlord has chased the tenant for rental payment since June. At first, the tenant gave many excuses and promises, but they all turned out to be false.

Since late July, the tenant has stopped answering the landlord’s calls to her mobile phone and has also not returned any SMSes. She and her daughter were hardly ever at home.

In late July, the landlord locked the front and back gates of the house with extra padlocks but did not enter the house. The tenant’s possessions are still in the house. The tenant did not attempt to enter the house or contact the landlord.

The landlord made a police report that the tenant owed money and could not be contacted. The landlord’s primary goal is to reclaim the house and rent it to someone else. The money owed is secondary.

A notice containing details of the amount owed and of the police report that had been made was posted on the front door of the house. The same notice was circulated to neighbours.

The tenant’s furnishings were bought from a furniture company on instalment.

My questions are:

a) Does the landlord have the right to lock up the front and back gates of the house without entering the house?

b) What are the landlord’s liabilities if he enters the house and then sells the tenant’s possessions to reclaim part of the money owed?

c) What are the landlord’s liabilities if he enters the house, takes photos of the interior of the house with all the tenant’s possessions, for documentation purposes, and then moves the possessions into a storage room?

After that, can the landlord rent out the house to another tenant but keep the storage room for his own use in order to store the previous tenant’s possessions?

d) If the tenant makes a police report that the landlord entered the house and took her possessions, can the police arrest the landlord?

e) Can the furniture company make a claim against the landlord for selling the furnishings that are still being paid for by instalment?

f) What is the best method to evict the tenant in my friend’s case?

A WHEN a tenant fails to pay rent, the landlord may of course sue the tenant for the arrears of rent, just as he could with any other debt due and owing.

The action must be brought within six years of the date that the arrears became due.

However, the landlord has two other specific remedies, namely, distress under the Distress Act and forfeiture of the lease.

Distress is an ancient remedy that is quite similar to seizure and sale – that is, the tenant’s goods are seized and sold, and the rent owing must not exceed 12 months of the tenancy.

Such an action may be brought if the tenant is still in occupation or has his goods or belongings on the property. The procedure starts with the filing of a writ of distress that is addressed to the sheriff. The sheriff will seize the goods, and make an inventory and a valuation. He will also give the tenant a notice of the seizure, informing him of the rent owed and that the goods seized will be sold at a stated place and time.

Such a notice may be pasted in a conspicuous place on the premises. The tenant has five days to pay up from the date of notice or to apply to court for an order to stop the sale.

On the tenant’s application, the court may order that the goods be released unconditionally, direct that an issue be tried and so suspend the writ, or hold that the goods may be sold.

Of course, if no application is made, the goods will be sold and the proceeds applied first to pay the sheriff’s costs and then to satisfy the outstanding rent. The balance, if any, would be returned to the tenant.

Certain items cannot be distrained, such as things in actual use in the hands of the tenant, tools and implements, and his necessary clothes and bedding for himself and his family.

Only movable items may be seized, so fixtures are excluded. It is also common for most hire-purchase companies to expressly provide in the hire-purchase agreement that the hiring shall automatically terminate if the hirer’s landlord takes any steps to levy distress. Therefore, such goods cannot be seized and, if seized, would be released by the court.

Where the tenant has abandoned the premises and there is insufficient property for distress, then if (a) the rent is not less than 75 per cent of the annual value of the property and (b) the rent has been in arrears for at least two months, the landlord may apply to court to enter and take possession of the premises.

The sheriff will paste a notice informing the tenant that possession will be given to the landlord unless the tenant applies within 10 days, or the court orders otherwise, on the application of the tenant or some other interested party.

If the distress action is brought after bankruptcy proceedings have started against the tenant, then only three months of arrears of rent are recoverable against him. The landlord may also file a proof of debt with the Official Assignee against the bankrupt tenant, just as he could with any other unsecured creditor.

The landlord may also apply for forfeiture of the lease, which would effectively bring the lease to an end. This is usually an action for possession, and a well-drafted agreement will usually contain a clause for re-entry in the event of the tenant’s failure to pay rent.

However, the tenant may apply to court before judgment for relief from forfeiture by paying into court all the arrears of rent and costs, in which case the tenant would be able to continue with the lease and not have to enter into a new lease.

Even after judgment for possession, the tenant is still entitled to relief if he pays up the judgment sum with costs within four weeks of the judgment. The law is not explicit about whether relief is still available to the tenant where the landlord has entered into possession peaceably and changed the locks. While the court might still be able to grant relief, it would, however, take into account the lapse of time as it would not be fair to the landlord if the tenant were to appear out of the blue and pay the arrears to reclaim the lease. The tenant’s significantly long absence could well be read as an implied surrender of the lease.

In your friend’s case, it appears that he has entered into possession peaceably and that has effectively brought the lease to an end.

However, your friend should be mindful of the tenant’s right to apply for relief. The tenant’s right to relief is extinguished only if your friend issued and served proceedings for possession, obtained judgment and then entered the premises on the strength of that judgment.

As for the tenant’s goods, it is prudent and best to apply for a court order as the tenant might make all sorts of allegations that his property had not been properly valued or had been sold at an undervalued price.

The police usually treat disputes between landlord and tenant as a commercial matter.

 

Source: The Sunday Times 6 Jan 08

PROPERTY: Are condo-like HDB flats good value?

They might come with fancy trappings but can’t be bought and sold freely like private condos

THE high-end HDB flats launched yesterday at Boon Keng are the talk of the town.

Styled to look like private condominiums, the flats in City View @ Boon Keng will boast timber flooring and large bay windows, as well as built-in wardrobes and kitchen cabinets.

These more luxurious HDB flats, built under the Design, Build and Sell Scheme, are being snapped up by homebuyers. Even before the project’s launch, more than 1,000 inquiries had been made. But these trappings come at a price: The 714 flats in the project will be offered for an average price of $520 per sq ft (psf).

While this makes them significantly cheaper than actual condos in the area, the prices are a cut above those for regular HDB flats. City View’s three-room flats will go for between $349,000 and $394,000 – about double what similar flats in the vicinity cost.

The five-room flats will range from $536,000 to $727,000, which also makes them far pricier than nearby flats. The average price of a five-room flat in Boon Keng is about $450,000, said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.

As a result, even as would-be buyers form long queues for City View, property experts are divided as to whether the project is really worth its heftier price tag.

The main point of contention is what City View, and projects like it, should be compared to as a baseline: HDB flats, executive condos or private condos.

City View is only the second public housing project to be built by a private developer – in this case, Hoi Hup Sunway. The first, The Premiere @ Tampines, is being built by Sim Lian Land.

Property agents believe City View should be compared to condos. They highlight the premium finishings and central location, and the fact that the flats are much cheaper than condos in the area. ‘The furnishings, design and layout are comparable to those of private properties,’ said Mr Mohamed Ismail, the chief executive of property agency PropNex.

‘I think the price is worth it, especially if you’re talking about a three- or four-room flat for $300,000-plus in such a location.’

He noted that a three-room flat in the Rochor area that is over 30 years old can command $80,000 to $100,000 over valuation.

He added: ‘In eight years, City View will still be half the cost of private property and I’m very sure it will be able to find buyers. It will be a golden investment then.’

HSR Property Group, which is marketing City View, pointed to the strong demand for the project even before its launch.

‘The resale value will be there because consumers will pay for the convenience and rarity,’ said Ms Kellie Liew, a project director at HSR. ‘When you look at private condos, you can’t get this price.’

In contrast, property consultants said City View flats were more readily comparable to other types of HDB flats than to condos. They lack the security and amenities provided in condos and cannot be resold to foreigners, said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore.

‘The project is more expensive than HDB, but you still have HDB rules and HDB guidelines for ownership,’ said one consultant who asked not to be named. ‘The better location doesn’t justify the higher price tag – it’s supposed to be public housing!’ City View flats are sold under the same rules that apply to new HDB flats. Buyers qualify only if they fall under an approved family nucleus scheme, among other things. Mr Mak noted that the flats cannot be resold for the first five years. ‘This sort of thing tends to be a consumer item – you buy, you use, and if you make money from it, you’re lucky,’ he said.

‘If you buy direct from HDB at a subsidised rate, it’s a better investment as there’s more room for capital appreciation. But if you buy the flat at a high price to begin with, the upside is limited.’

Even owners of executive condos – which have condo facilities and can be resold to foreigners after 10 years – are finding it difficult to make a profit on their homes, added Mr Mak.

 

Source: The Sunday Times 6 Jan 08

HORIZON TOWERS COURT CASE: Minority owners want High Court to overturn STB decision

This again throws successful completion of en bloc sale in doubt

(SINGAPORE) The Horizon Towers saga is far from over. In fact, it’s starting anew. Disgruntled minority owners have banded together to appeal against a decision by the Strata Titles Board (STB) last month to approve the enbloc sale of the development.

All nine of the minority owners who originally opposed the collective sale have appealed to the High Court to overturn STB’s decision – doing so yesterday, on the last possible day.

What this means is, the successful completion of the collective sale of Horizon Towers is again in doubt, pending the outcome of the appeal.

The High Court is scheduled to hear the minorities’ objections on Feb 1.

STB’s approval of the en bloc sale was delivered on Dec 7, just days before a Dec 11 deadline for which the sale had to be finalised. The entire sale process is expected to be completed in March.

Lawyers for the minority owners have told BT they will consider applying for a stay of conveyancing proceedings – that is, delaying the completion of the sale – if the outcome of their appeal is not known by then.

The grounds of the appeal filed by the minority owners yesterday are similar to their original objections, heard by STB last year.

The minority owners are appealing against STB’s decision on the grounds that the board erred in law by approving the sale and ordering minority owners to be bound by a sale and purchase agreement signed by the majority owners.

The minorities contend that the en bloc sale was conducted in bad faith and prejudiced their interests. They say the then-sales committee had failed to do its duty to ensure the best price was obtained – by failing to ensure the property was properly marketed and failing to ensure the best offer was procured.

The Horizon Towers sales committee agreed to sell the Leonie Hill development to a consortium led by Hotel Properties Ltd (HPL) for $500 million in February last year. The minorities argue that this price is too low, saying property prices had already begun to climb significantly at the time the deal was inked and there had been other offers, above $500 million, for the development.

They said this was a breach of duty, a result of conflicts of interest on the part of some of the sales committee members, lawyers and sales agents who handled the deal.

The minorities also argue that STB prevented them from fully presenting their case when it refused to subpoena former sales committee chairman, Arjun Samtani. The minorities say Mr Samtani acted in bad faith and influenced the sales committee’s decisions. They say he was motivated by self-interest because he bought an additional unit in Horizon Towers during the initial stages of the collective sale talks.

Six of the nine minority owners objecting to the en bloc sale are represented by Senior Counsel Michael Hwang and SK Phang. The remaining three are represented by Harry Elias Partnership (HEP).

HEP is appealing on grounds similar to those put by Mr Hwang and Dr Phang – but it is also arguing that there was no fair hearing by the STB, in that the board rushed the hearing and failed to give adequate reasons for its decision on Dec 7.

STB only said then that it had been guided by recent case law and parliamentary debates on rules governing collective sales, and that the minorities had failed to prove their claim that the transaction was carried out in bad faith. The board will release the detailed grounds of its decision later.

HEP partner Philip Fong told BT: ‘It’s an unfortunate situation the minorities have found themselves in – in which one is deprived of one’s rights to one’s home, having been told to give up one’s home without being told exactly what the reasons are for such a decision.’

The Horizon Towers case has dragged on for almost a year – and is the most closely watched collective sale transaction ever in Singapore, given its dramatic twists and turns.

The majority owners – some of whom were said to have aligned themselves with the minorities when property prices started climbing – have been accused of trying to renege on their agreement with HPL and its partners, and face a potential $1 billion lawsuit from the buyers.

 

Source: Business Times 5 Jan 08

Circle Line key to higher plot ratios: JLL

Study looks at how Master Plan 2008 could change landscape, usher in new initiatives

(SINGAPORE) When Master Plan 2008 is unveiled sometime this year, certain areas are likely to see an increase in plot ratios. A study by Jones Lang LaSalle has tried to zero in on which areas could be allowed more intensive use of land.

Its conclusion: Look out for undeveloped state sites within walking distance of Circle Line MRT stations, particularly those that intersect with existing MRT lines. They are the top candidates for higher plot ratios.

The property consulting group specifically highlighted the areas near Paya Lebar MRT Station, Buona Vista MRT Station (which will see the Circle Line intersecting with the existing East-West Line) and HarbourFront MRT Station (Circle Line crosses North-East Line). Also, while Buona Vista is shaping into an R&D/commercial hub, the HarbourFront district’s redevelopment potential is increasing because of projects in Sentosa and Keppel Bay nearby.

Another promising area is in the vicinity of the Circle Line Station at Telok Blangah. Although it does not intersect with an existing MRT line, it will benefit from a spillover  from the ongoing redevelopment in Sentosa and HarbourFront.

JLL does not see major, across-the-board increases in plot ratios in MP 2008. But it argues that intensifying land use for undeveloped state plots along these stations will spread social benefits from the government’s investment in the Circle Line to more people and also improve accessibility.

Raising plot ratios (ratio of maximum potential gross floor area to land area) will also address the issue of rising demand for Singapore’s properties and prevent overcrowding in specific areas such as the central and CBD regions.

Although the Circle Line also touches locations near Dhoby Ghaut and Bishan MRT stations, JLL excludes them as these areas already have high plot ratios.

The study also suggests that white sites – with a range of uses and change in use mix allowed – will be more readily available islandwide instead of being confined largely to the CBD. ‘It further promotes creativity in future projects,’ says JLL’s head of research (South-east Asia) Chua Yang Liang.

He also sees the Urban Redevelopment Authority introducing more mixed use, rather than traditional single-use zones, to ‘further provide the flexibility needed to accommodate changing demand patterns as a result of shifting demographics’. MP 2008 could also be more tolerant of non-traditional types of residences. For instance, obsolete industrial buildings could be re-modelled along the lines of New York’s Manhattan lofts. ‘This will accommodate shifting market forces and tastes,’ Dr Chua argues.

JLL also suggests that URA may realign traditional industrial estates to support demand needs of the knowledgebased economy or rezone them for other uses. ‘For example, industrial areas within housing estates such as those found in Jalan Pemimpin could potentially be rezoned to residential or possibly an education hub,’ it said. After all, the area is near Raffles Institution and Raffles Junior College.

MP 2008 could also extend the ‘work, live and play’ concept beyond Marina Bay into the suburbs as Singapore cannot live by its business image alone, JLL predicts. ‘We can expect to see more areas designed for cultural developments, for example, the civic, cultural and retail complex in Buona Vista, and new conservation areas that serve to retain the fabric of the collective memory,’ Dr Chua said.

JLL also expects to see many more recreational zones across Singapore. ‘The likes of the recent Punggol announcement will be more common,’ the study said.

On the back of Sentosa Cove’s success, JLL expects other islets around Singapore like Southern Islands and Pulau Ubin to be put for waterfront residential use.

In the existing CBD, JLL suggests that Shenton Way will see a further shift towards a mixed-use (including residential) district, once the current office supply crunch eases. In May last year, URA announced a temporary ban on conversion of office use in the central area, including the CBD, to other uses until end-2009.

Last year, the government identified Jurong East and Paya Lebar for development into business hubs. Dr Chua says land around Paya Lebar MRT Station will be intensified in line with government plans to transform it into a subregional centre and that the location will be ideal for cost-conscious office tenants.

However, Dr Chua suggests that the area around Jurong East MRT Station is more suited for research and development because of its proximity to universities, the Science Park and one-north rather than as an alternative backoffice hub along the lines of Tampines.

National Development Minister Mah Bow Tan last year also ruled out massive, across-the-board islandwide increases in plot ratios for MP 2008 to cope with a higher population target of 6.5 million. The Master Plan, a detailed land use plan that guides Singapore’s medium-term physical development, is reviewed every five years.

 

Source: Business Times 4 Jan 08

Condo-like flats in Boon Keng going on sale

Hot demand expected for second lot of public housing offered by private developers

A FLURRY of applications is expected for the latest batch of flats that look like condominiums but sell for just about two-thirds the price of condo units in the same area.

The second batch of public housing being offered by private developers goes on sale tomorrow, one year after the first lot was launched to overwhelming demand.

Like the first project in Tampines, the latest 714-unit project in Boon Keng, to be ready in September 2011, offers condo-like trappings such as timber flooring, built-in wardrobes and kitchen cabinets, and airconditioning.

In fact, some boast features condo owners would love.

Some flats will have wall-to-wall balconies in living rooms and master bedrooms that look out onto the Kallang River and beyond.

Large bay windows will extend to all bedrooms – and even the shower stalls in the bathrooms. And lift lobbies will come equipped with a card access system.

Giving a sneak peak of showflats at the development called City View @ Boon Keng yesterday, developer Hoi Hup Sunway Development said it is offering 72 three-room flats, 168 four-room flats, and 474 five-room flats – housed in three 40-storey blocks.

Under this programme, private developers are given a free rein over the design, pricing and sale of the homes, as long as they adhere to the general rules of public housing.

For the Boon Keng development, three-room flats units are priced at $349,000 to $394,000; four-room units at $523,000 to $597,000; five-room units at $536,000 to $727,000. On average, they are going for $520 psf.

Their prices are wedged between those of resale Housing Board flats and private 99-year leasehold condos in the same area.

A five-room, 11-year-old HDB flat near the project site changed hands for $545,000 in November, for example, while units at private condo Kerrisdale in Sturdee Road sold for $731 psf to $786 psf late last year.

Property agency chief Chris Koh, from Dennis Wee Properties, expects demand to be good. He said that the prices are ‘very reasonable’, considering the flats are near central Singapore and owners of HDB flats in the area are asking for $50,000 to $70,000 above the valuation of their properties, even if they are more than 10 years old.

Potential buyers are also watching closely. Hoi Hup Sunway has received about 1,000 inquiries in the past month. Those who sign up for a unit face a computer ballot to decide who books a unit.

The 616-unit project in Tampines attracted nearly 6,000 applications – just before the property market recorded a huge upswing. Last month, 316 surplus flats offered by the HDB in the outlying towns of Hougang, Sengkang and Punggol attracted a staggering 5,147 applications.

Competition for these Boon Keng flats is expected to be intense. Businesswoman Serene Sia, 38, wants a unit ‘badly’ as she thinks private property is out of her reach. Asked what she thought her chances would be, she said: ‘I seriously don’t know.’

Those interested can apply online at www.hoihup.com from 9am tomorrow. Applications close on Jan 16.

Other similar developments – which could house about 2,500 more units – are being planned for Ang Mo Kio, Bishan, Toa Payoh, Simei and Bedok.

But Hoi Hup Sunway spokesman Wong Chee Herng does not think it will dent the response to his project. ‘The demand is still very much greater than supply,’ he said.

 

Source: The Straits Times 4 Jan 08

Home prices feel pull of gravity after 31% rise

Q4 tempers spectacular growth of 2007; mass market may shine this year

(SINGAPORE) Private home prices rose 31.0 per cent in 2007 – the biggest year-on-year jump since 1999 – despite a slowdown in the fourth quarter caused by the withdrawal of the Deferred Payment Scheme (DPS) and sub-prime woes, flash estimates show.

HDB resale prices also climbed some 17.4 per cent last year – the fastest growth seen since 1996 – as private home price gains filtered down. But HDB resale prices also saw a slowdown in growth in the fourth quarter.

At a doorstop yesterday, Minister for National Development Mah Bow Tan said that over the last few months, the government had taken several steps to try and cool down speculative activity in the property market. However, the market is also being affected by external factors beyond the authorities’ control, he said.

‘For Singapore, we are optimistic that we will continue to do well but there are many things beyond our control,’ Mr Mah said. ‘It is up to us to keep a close eye on the market and be able to tweak those policy levers that we can in order to keep property prices stable.’

Private home prices rose 6.6 per cent in the fourth quarter – down from the 8.3 per cent growth seen in the third quarter.

Similarly, HDB resale prices grew 5.6 per cent in the fourth quarter of 2007 – down from the 6.6 per cent rise for the previous quarter.

Experts said that the slowdown was brought on by both poor global market conditions as well as the removal of the DPS scheme.

Knight Frank managing director Tan Tiong Cheng said that the fourth-quarter slowdown was not surprising considering the sub-prime crisis in the United States.

‘People are still waiting for signs as to how bad the sub-prime situation will turn out,’ Mr Tan said. ‘It affects the whole outlook; people are uncertain.’

Demand could also be muted as lending by banks in the US, UK and Europe has been tremendously curtailed since the crisis, he said.

On the other hand, OCBC Investment Research analyst Winston Liew believes that the bigger culprit is the withdrawal of the DPS. ‘After the DPS was withdrawn, the whole market went down – the resale market, new launches and the stock market,’ he said. He has a ‘neutral’ rating on the Singapore property sector.

For the HDB resale market, the slowdown could also be attributed to buyers holding back in the face of rapidly increasing asking prices, said ERA assistant vice-president Eugene Lim.

‘The slowdown in price increase was largely expected as the market hit resistance level in the light of unrealistic sellers demanding for high cash-over-valuation (COV) transactions – particularly for the five-room and executive flat-types,’ said Mr Lim.

The slowdown in price growth, experts said, will continue in the first quarter of this year.

‘It is unlikely that there will be much activity in January or February,’ said Knight Frank’s Mr Tan. Agreed OCBC’s Mr Liew: ‘I would expect the rate of growth to slow down.’

CB Richard Ellis (CBRE), for example, expects the take-up of new homes to be between 9,000 and 11,000 units for 2008. By comparison, the property firm estimated that a record 15,000 new homes were sold in 2007, 34.5 per cent more than the 11,147 new homes sold in 2006.

This year, the property market will be driven by mid-end and mass-market homes, experts said. Prices and take-up of luxury homes are expected to moderate.

In the fourth quarter of 2007, the price increase was led by non-landed homes in outside central region (OCR) where the index showed an increase of 7.5 per cent.

The strong showing, CBRE said, could be attributed to new project launches during the quarter, such as Park Natura and Hillvista. Prices in the core central region and rest of central region rose by 7.0 per cent and 7.3 per cent respectively.

For 2008, ‘we expect a moderate rise in overall prices as luxury prices are likely to firm up at current levels while mid-tier and mass-market prices have the potential to rise by about 10-15 per cent’, said Li Hiaw Ho, executive director for research at CBRE.

Others were more bullish about the mass market. Ku Swee Yong, director of marketing and business development at Savills Singapore, predicts that mass-market prices will climb by 30-50 per cent this year.

In response to a question about the rapidly climbing prices in the mass market, Mr Mah told reporters that the government is watching the segment closely and will take action if necessary.

‘People who can’t afford the central region to buy or to rent are starting to look outside, which I think is the sensible thing to do,’ he said. ‘We will continue to keep an eye. We’re watching it every day. If necessary, we’ll do something, if not necessary we’ll just let it be.’

The overall price index for private homes could climb by anywhere between 10 per cent and 25 per cent this year, depending on how quickly the market recovers, experts said.

And for the HDB resale market, prices could climb by between 10 and 15 per cent, they said.

‘With the buoyant economy and expected positive market sentiment in 2008, the HDB property market in Singapore is likely to enjoy a double-digit growth in the 10-11 per cent range,’ said Mohamed Ismail, chief executive of property agency PropNex.

 

Source: Business Times 3 Jan 08

High rentals don’t worry some MNCs

They are still expanding their premises: C&W report

RISING office rents may have forced some businesses to adopt a wait-and-see approach on expansion here but others are expanding anyway.

A report by Cushman & Wakefield (C&W) reveals that key leasing transactions in December 2007 include Swiss wealth manager Julius Baer taking up 26,000 sq ft of office space at HarbourFront Tower 1, US-based global engineering, construction and diversified services company Flour Daniel leasing 15,000 sq ft at 80 Robinson Road, and US-based drug development services company PharmaNet relocating to 5,000 sq ft premises at Springleaf Tower.

Bank Julius Baer was the fastest growing company in the finance and banking services sector in 2007 and its spokeswoman Lim Li Koon said that leasing the HarbourFront premises is part of its ‘business continuity plan’ strategy. Ms Lim also said that it would continue to operate out of its office at One George Street.

C&W managing director Donald Han said that the office market is experiencing a ‘flight to availability of space for expansion’ with tenants also hoping to take advantage of lower rents in the office sub-markets.

According to C&W, latest data showed that prime office net effective rents were at an average of $14.30 psf per month in November 2007, an increase of 3.5 per cent over October 2007.

Similarly net effective rents for the Top 25 Grade A office buildings rents rose to an average of $16.02 psf per month in November 2007 from $15.54 psf per month in October 2007.

Mr Han said many businesses in Grade A areas like Raffles Place, where occupancy is close to 100 per cent, are currently negotiating to renew their leases. ‘Companies that need to be located close to their clients cannot move far from this comfort zone,’ he said.

Those that can are looking outside the CBD. Average rents for the office sub-market in areas like Beach Road and HarbourFront are around $10-$11 psf per month.

‘The secondary (sub) market is becoming the primary target for tenants looking to relocate at the moment,’ Mr Han said.

 

Source: Business Times 3 Jan 08

Back lane in Balestier up for sale

Other properties up for auction include Changi bungalow, studio apartment

THE Official Receiver is auctioning off a back lane at Jalan Bunga Raya in the Balestier Road/Irrawaddy Road area.

The freehold strip of land, with a land area of 3,331 sq ft, is behind a row of seven terrace houses which are part of a set of 15 terrace homes at Jalan Bunga Raya which have been bought by a consortium involving a Chinese developer and some local partners.

Knight Frank is auctioning the back lane on Jan 10 on behalf of the Official Receiver. The plot is understood to have been owned by a now-defunct company, Bag Transpack Investment Co Pte Ltd.

Market watchers reckon the consortium that bought the 15 homes at Jalan Bunga Raya will be the most natural contender for the back lane, although BT understands that a party who owns a pair of semi-detached houses on the other side of the backlane is also a potential buyer.

Knight Frank has indicated a price of about $750,000 to $800,000 for the back lane, which works out to $80 to $86 per square foot of potential gross floor area.

The 15 neighbouring terrace houses were sold recently for $61 million or an all-in unit land price of $739 psf per plot ratio.

Knight Frank’s auction, which will be held at Amara Hotel, will also see several other properties going under the hammer.

These include two bungalows – one a Good Class Bungalow at 10 Swiss Club Lane with an indicative price of $18 million or $1,025 psf based on its 17,557 sq ft land area, while the other, at 18 Toh Close in the Changi area, has a $2.8 million to $3 million indicative price range, which works out to $420-450 psf.

The Toh Close bungalow has a 6,669 sq ft land area. Both bungalows are freehold and are being sold by their respective Singaporean owners.

Other properties in the auction include a 23rd level studio apartment at The Metz at Devonshire Road, a semidetached house at Jalan Ishak in the Eunos area, a three-storey shophouse at Craig Road in the Tanjong Pagar area and a two-bedroom apartment on the 26th level of High Street Centre.

 

Source: Business Times 3 Jan 08

Private home prices up 31% last year

But fourth-quarter figures show signs of slower growth; HDB resale prices up 17.4%

 

HOME hunters can ring in the new year with some cheer – the roaring property market is finally showing signs of slowing.

Prices of all categories of homes grew at a lower rate at the end of last year, after months of climbing at a breakneck pace.

Growth braked the most at the highest end of the market, allowing cheaper suburban homes to lead the price rises for the first time in years.

Even with the slowdown, private home prices still beat most forecasts by shooting up 31 per cent for the whole year – triple that of 2006 and the most since 1999.

HDB resale prices climbed 17.4 per cent – the highest rise in a decade – up from only 2 per cent the year before.

‘It’s a spectacular rise,’ declared Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Mr Li Hiaw Ho of property consultancy CB Richard Ellis (CBRE) estimated that developers sold a record 15,000 new homes last year, up from 11,147 in 2006.

Most property experts are unfazed by the smaller price rises in the last quarter, saying that the deceleration was ‘expected’ and ‘healthier’.

Growth in home prices slowed across the board from October to December, according to estimates released by the Government yesterday. The official figures will be out on Jan 25.

Overall, private home prices rose 6.6 per cent in the period, less than the 8.3 per cent in the previous three months.

At the top end, prices of homes in central areas such as Orchard, Cairnhill and Tanglin rose 7 per cent, down from 8.3 per cent growth in the July to September period.

City-fringe homes, such as in Marine Parade and Bishan, rose in price by 7.3 per cent, from 7.9 per cent earlier.

Suburban properties were the quarter’s star, thanks to new projects launched at benchmark prices, said Mr Li.

Homes in areas such as Bukit Batok and Choa Chu Kang saw prices rise 7.5 per cent, just below the 7.9 per cent previously.

As for HDB resale flats, prices grew 5.6 per cent, a tad lower than the 6.6 per cent in the previous three months.

The lower price rises ‘may indicate that buyers are turning cautious in view of events in the fourth quarter,’ said Mr Eugene Lim, assistant vice-president of property firm ERA Singapore.

These include the global fallout from the United States sub-prime mortgage crisis and concerns over a possible US recession, which could have hurt investor confidence.

Yesterday, Minister for National Development Mah Bow Tan told reporters that while such ‘external factors’ are beyond the Government’s control, it will ‘keep a very close eye’ on the property market.

‘It’s really up to us…to tweak those policy levers’ to keep property prices stable or let them move in tandem with economic fundamentals, he said.

Already, the Government’s scrapping of the deferred payment plan in October may have cooled sentiment, especially for luxury homes.

But despite these pressures on demand, developers are not cutting prices, said Mr Lim. ‘We are seeing a situation where prices are not coming down, but neither are they going up.’

For this year, some buyers expect a market correction, as more homes come on stream.

But experts said home demand is set to stay strong this year on the back of a growing economy and population.

CBRE’s Mr Li expects luxury home prices to stay at current levels and cheaper homes to grow in price by 10 to 15 per cent. More bullishly, Mr Ku Swee Yong of Savills Singapore predicts suburban home prices will rise by 30 to 50 per cent.

 

Source: The Straits Times 3 Jan 08

Strong showing in some suburban areas and projects

Bukit Batok home prices soar 43% but other districts drop as much as 20%

PRIVATE homes in some suburban areas proved the most resilient amid a general slowing in price rises across the board, the latest government figures show.

Some suburban areas performed very strongly, but others showed uneven price growth.

Data from Savills Singapore showed that prices in districts 23 and 24 – which include areas such as Bukit Batok, Choa Chu Kang and Hillview – rose 21 per cent to $694 per sq ft (psf) in the fourth quarter.

Within that overall region, average prices in Bukit Batok soared 43 per cent in the fourth quarter to reach $795 psf. But other districts, such as 16, 17, 18 and 19, paled in comparison.

In fact, some districts saw significant price dips. For instance, prices in districts 21 and 22, which include Clementi and Jurong, fell about 20 per cent to $737 psf in the fourth quarter.

Overall, fourth-quarter prices of non-landed homes outside the central region rose 7.5 per cent, according to initial estimates released yesterday by the Urban Redevelopment Authority.

Although that figure is below the 7.9 per cent rise in the third quarter, it is nonetheless higher than the 7.3 per cent fourth quarter rise in the rest of the central region and the 7 per cent rise in the core central region covering Orchard Road and Sentosa Cove.

While these are preliminary estimates, they lend support to a theory put forward by some property analysts – that mass market home prices will rise more than those of high-end and, possibly, mid-end homes.

The fourth-quarter price rise of homes outside the central region was largely supported by resale deals, considering there were few launches, said Savills Singapore director of marketing and business development Ku Swee Yong.

Existing projects, such as the 99-year leasehold Sun Plaza in Sembawang Drive, saw a 39 per cent rise in average price to $595 psf in the fourth quarter.

The only notable launch was the freehold 192-unit Park Natura across the road from Bukit Batok Nature Park.

Buyers picked up 152 units in October and November at a median price of $945 psf.

Mr Ku is sticking to his earlier forecast for a rise of between 30 per cent and 50 per cent for mass market homes this year, which could send the current average mass market price of $730 psf to as much as $950 psf.

However, growth in the private mass market sector – which has the closest correlation to the HDB market – may be weighed down by the public housing resale market, said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Initial estimates showed that fourth-quarter HDB resale prices rose 5.6 per cent, which placed the full-year rise at 17.4 per cent.

‘I don’t think HDB resale flat prices can keep growing at this rate for a year or so, because this group of buyers has a natural resistance to too much of an increase,’ said Mr Mak.

Besides, the Government will step in if HDB prices are growing too fast, he said.

Mass market launches expected this year include four projects on the former Waterfront View estate in Bedok Reservoir Road. Of the four, the 405-unit Waterfront Waves is expected to be launched in the first quarter.

 

Source: The Straits Times 3 Jan 08

Second batch of condo-like flats to go on sale

A FLURRY of applications is expected for the latest batch of flats that look like condominiums but sell for just about two-thirds the price of condo units in the same area.

The second batch of public housing being offered by private developers goes on sale on Saturday, one year after the first lot was launched to overwhelming demand.

Like the first project in Tampines, the latest 714-unit project in Boon Keng offers condo-like trappings such as timber flooring, built-in wardrobes and kitchen cabinets, and air-conditioning.

In fact, some boast features condo owners would love.

Some flats will have wall-to-wall balconies in living rooms and master bedrooms that look out onto the Kallang River and beyond.

Large bay windows will extend to all bedrooms – and even the shower stalls in the bathrooms.

And lift lobbies will come equipped with a card access system to keep out intruders.

Giving a sneak peak of showflats at the development called City View @ Boon Keng on Thursday, developer Hoi Hup Sunway Development said it was offering 72 three-room flats, 168 four-room flats, and 474 fiveroom flats – housed in three 40 storey blocks.

Under this programme, private developers are given a free rein over the design, pricing and sale of the homes, as long as they adhere to the general rules of public housing.

For the Boon Keng development, three-room flats units are priced at $349,000 to $394,000; four-room units at $523,000 to $597,000. Five-room flats will be offered at $536,000 to $727,000. On average, they are going for $520psf.

Their prices are wedged between those of resale Housing Board flats and those of private 99-year leasehold condos in the same area.

A five-room, 11-year-old HDB flat near the project site changed hands for $545,000 in November, for example, while units at private condo Kerrisdale in Sturdee Road sold for $731 psf to $786 psf late last year.

Potential buyers are also watching closely. Hoi Hup Sunway has received about 1,000 inquiries in the past month. Those who sign up for a unit face a computer ballot to decide who books a unit.

Those interested can apply online at www.hoihup.com from 9am on Jan 5. Applications close Jan 16.

Other similar developments – which could house about 2,500 more units – are being planned for Ang Mo Kio, Bishan, Toa Payoh, Simei and Bedok.

 

Source: The Straits Times 3 Jan 08

Private home sales inch up; prices remain firm

URA data shows 4,000 units in 70 developments with pre-requisites for sale as at end-Nov

(SINGAPORE) The number of private homes sold by developers inched up 4.7 per cent to 593 units in November, up from 566 units in October.

The Urban Redevelopment Authority (URA) also revealed monthly property market data of transacted benchmark prices as well as median prices. During the month, a significant number of transactions were seen at Amber Residences, which sold 85 units at the median price of $1,392 psf, and Casa Fortuna which sold 103 units at $1,009 psf.

CBRE Research executive director Li Hiaw Ho also noted that 20 units at 8 Napier were sold at a median price of $3,557 psf and pointed out that these were likely to have been made by a single buyer.

On the performance in November, Mr Li said: ‘Overall, prices are firming. Sales volume and prices in December should remain at the same levels as October and November.’

Indeed, developers told BT that launch prices are being maintained even though buyers are now a bit more ‘cautious’.

UIC Ltd’s 192-unit Park Natura, across from Bukit Batok Nature Park, saw 56 units sold in the month at a median price of $945 psf. The price was slightly lower than the October median price of $1,022 but UIC group general manager Vito Koh explained that this was because units sold in November included those with private enclosed spaces like roof terraces.

Mr Koh said that the withdrawal of the Deferred Payment Scheme (DPS) have made buyers more cautious but added that he believes developers are not lowering prices to move units. ‘Prices are not coming down, but they are not going up either,’ he said.

A comparison of the median price of Amber Residence ($1,392 psf) and the reported average selling price ($1,650 psf) does appear to show that prices may have softened a little.

According to the URA data, 68 units were sold in the $1,000-$1,500 psf bracket with 16 units sold in the $1,500-$2,000 psf bracket. One unit was sold at between $2,000-$2,500 psf.

Jones Lang LaSalle head of research and consultancy Chua Yang Liang noted that launches declined significantly in the Core Central Region (CCR) by 43 per cent from the 166 in October to only 95 in November. ‘The take-up or demand further reflects this softer market with 130 units absorbed – a marginal drop of 4 per cent month-on-month (MoM),’ he said.

Similarly, demand in the Outside Central Region (OCR) also weakened with a 33 per cent MoM decline or only 173 units absorbed compared to 259 in October. Dr Chua pointed out that this was on the back of a larger supply of 221 units or a 28 per cent increase in the number of units launched.

‘The decline in demand in OCR is a likely result of the removal of the DPS,’ he explained.

In contrast, the demand in Rest of Central Region (RCR) remained strong. In November, the take-up increased by 57 per cent MoM.

Most of the transactions in the RCR were in District 15. ‘Take-up in this segment is largely driven by foreign occupiers that has spilled over from the CCR,’ Dr Chua added.

According to the URA data, there are over 4,000 units in 70 developments with pre-requisites for sale as at end-November. This includes mass-market offerings at Bedok Resevoir as well as high-end developments at Cairnhill.

While developers are not ‘panicking’ at the possibility of a slowdown in the economy, Cushman & Wakefield managing director Donald Han believes more will be ‘repositioning’ their launches and going directly to foreign buyers in the Middle East and North Asia.

Mr Han, who expects the total volume of transactions in Q4 2007 to be below 2,000 units, added: ‘Some developers were already marketing their high-end products at the recent Mipim exhibition in Hong Kong to reach an international market.’

It is a strategy that appears to be working.

Savills Singapore director of marketing and business development Ku Swee Yong said he was pleasantly surprised at some of the benchmark prices reached in the high-end sector, with the highest price for the 40-unit Sui Generis at Balmoral Crescent increasing from $2,578 in October to $2,713 psf in November. Six units were transacted in November and the median price rose from $2,406 to $2,474 psf.

Saying that he believes that this end of the market would continue to be driven by international high net worth individuals, he revealed: ‘We had a client who insisted on being first in queue for The Ritz Carlton Residence.’ The client later set a new benchmark price of $4,515 psf for the Cairnhill area.

 

Source: Business Times 18 Dec 07

URA awards Boon Lay site to Frasers Centrepoint

THE Urban Redevelopment Authority (URA) yesterday awarded a residential site at Boon Lay to Frasers Centrepoint, which put in the higher bid of $205.6 million – or $248 per sq ft per plot ratio (psf ppr) – after the tender closed last week with just two bids.

The weak response to the 99-year leasehold site caught industry watchers by surprise as mass market homes are expected to see good demand next year. Property analysts say that prices of mass market private homes could climb by about 15 per cent next year.

The site, which is bounded by Boon Lay Way and Lakeside Drive, had attracted only two bids – Frasers Centrepoint’s $205.6 million ($248 psf ppr) and GuocoLand’s $191 million ($230 psf ppr).

Both bids are below earlier market expectations of about $300 to $375 psf ppr, which were indicated in October when the tender for the site was first launched.

Despite this, market watchers predicted that URA will award the site as the government is committed to its aim of increasing housing supply.

The site, which has a gross floor area of 828,600 sq ft, is just five minutes from Lakeside MRT station.

Frasers Centrepoint plans to build an 18-storey development comprising three blocks, with a total of 600-plus apartments based on an average size of 1,300 sq ft each.

When the tender closed last week, a spokeswoman for Frasers Centrepoint described the group’s bid price as ‘conservative’. She said that the price reflects a breakeven cost of about $550 psf. ‘We would be looking at an average selling price of at least $700 psf,’ she added.

 

Source: Business Times 18 Dec 07

No takers for many collective sale sites as market cools

Quiet end to record year where $12.5b worth of estates were sold en bloc

MOST collective sale sites put up for tender in recent weeks have closed without any bids.

About 40 estates have been launched for sale since October, but just eight deals were sealed between October and last month, said property firm CB Richard Ellis (CBRE).

‘The end of the year has come early,’ said CBRE executive director Jeremy Lake.

This market cooling comes after a record of about $12.5 billion of collective sales was notched up this year.

That was more than 50 per cent up on last year’s $8.2 billion, CBRE said yesterday.

But developers have become more cautious about buying new sites, amid slowing home sales in Singapore and worries over the United States sub-prime mortgage crisis, property analysts say.

While there is no shortage of home owners keen to go en bloc for the sort of record prices seen for most of this year, the number of sites that have successfully been sold has dropped off significantly in recent weeks – coinciding with slower private home sales.

Figures released yesterday by the Urban Redevelopment Authority showed that 611 new units were sold last month, just a tad more than the 590 new units in October.

That compares with a much higher 1,731 units sold in August, for instance.

Said CBRE Research executive director Li Hiaw Ho: ‘Clearly, buyers have become more cautious in view of the volatility in global stock markets resulting from the sub-prime problems in the US, the smaller number of new launches…and tightened en bloc sales rules.’

A new set of collective sale rules kicked in on Oct 4.

In the weeks before that, a wave of potential sellers rushed to go en bloc to avoid the more time-consuming rules. But even some who managed to launch sales under the old rules have not succeeded in closing deals.

Big sites such as Spanish Village in Farrer Road, Villa delle Rose off Holland Road and Elizabeth Towers in Mount Elizabeth all had no takers at the close of their tenders recently. Their indicative prices were $878 million, $700 million and $673 million respectively.

The tender for former Housing and Urban Development Company estate Chancery Court on Dunearn Road also closed earlier this month without any bids. It had an indicative price of $468 million.

The freehold Royalville off Sixth Avenue – with a guidance price of up to $350 million – also failed to attract bidders. Others with unsuccessful tenders include Dunearn Gardens, Cavenagh Gardens, The Village, Amber Glades, Grange Heights and Thomson View Condominium.

‘There are developers who still want to buy but the problem is that some owners are expecting obscene, skyhigh prices,’ said an industry observer.

‘The lull may continue for a while into the first quarter,’ said Credo Real Estate managing director Karamjit Singh.

He said developers have already acquired quite a lot of sites. ‘They don’t need to take extra risks by buying at today’s level unless they believe that there is further upside at current levels.’

Knight Frank’s managing director Tan Tiong Cheng said: ‘Singapore definitely looks very positive… But this external sub-prime problem will affect local and foreign buying so everyone will exercise caution.’

‘Long-term fundamentals still look good… Buying interest should return from mid-January when people return from their holidays,’ said Mr Ku Swee Yong of Savills Singapore.

Others, such as Mr Tan and Mr Lake, believe activity will pick up after Chinese New Year in February.

 

Source: The Straits Times 18 Dec 07

New launches to slow till next year

With a still uncertain market, quiet times in property sector may continue till after Chinese New Year

THE frantic property market is taking a breather, as buyers adopt a wait-and-see approach.

Property launches have been scarce in the past month, and that will continue now that the holiday season is here.

If you are one of the few home hunters still keen on checking out show-flats, you may have to wait till the new year – or even later. ‘Most show-flats are expected to close during this festive season until early January 2008,’ said a DTZ spokesman.

Traditionally, December is a relatively quiet month, but not so in the past three years.

Last December, buyers jostling to buy a unit at Marina Bay Residences formed long queues and crowded into its show-flat.

A year earlier, the launch of the second tower of The Sail @ Marina Bay sparked strong interest. Back in 2004, the launch of the very first condominiums in both Marina Bay and Sentosa Cove caused excitement.

Things are different this year, though. There is the added pressure of an uncertain market, largely caused by the United States sub-prime mortgage crisis. Private home sales in the fourth quarter could add up to just $4.5 billion, well down from about $15 billion in the third quarter, according to an industry observer.

‘Most buyers are adopting a wait-and-see attitude to see which way the market is heading,’ said the DTZ spokesman.

While some developers may want to launch their properties in the short January window, consultants say the quiet times are likely to continue until the Chinese New Year celebrations in early February are over.

Developers have a pipeline of new properties set for launch. But, given the weak market sentiment now, most developers will still postpone the official launch of their properties, said Knight Frank executive director Peter Ow.

‘If the stock market improves, they are likely to launch after the Chinese New Year.’

Possible launches in the first quarter include the 77-unit Shelford Suites off Dunearn Road, the 428-unit Marina Bay Suites in the Marina Bay area, the 405-unit Waterfront Waves on part of the former Waterfront View site in Bedok Reservoir and the 302-unit Martin Place Residences in Kim Yam Road.

Industry sources say Far East Organization could soon launch Silversea on the site of the former Amberville on Amber Road.

The developer, they say, is hoping for prices of at least $1,700 to more than $2,000 per sq ft (psf), relatively high for the Amber Road area.

If you can’t wait, projects that have started sales in the past two to three weeks ago include Allgeen Properties’ D’Lotus project and Hayden Properties’ ritzy 58-unit Ritz Carlton Residences.

Asking prices for the top floors of the 36-storey Ritz Carlton Residences are said to have crossed $5,500 psf, nearly a record property price in Singapore. Sales at Far East Organization’s 99-year leasehold, 140-unit Jardine in Dunearn Road were also said to have started.

Allgreen Properties has also sold 186 out of 536 units at The Cascadia in Bukit Timah Road at a median price of $1,618 psf. The bulk of the freehold property, which has been launched in Hong Kong, or 162 units, were sold to an overseas fund at a median price of $1,527 psf.

If a spectacular view of the sea is what you are after, there is one newly-available, high-end project – Lippo Group’s 124-unit Marina Collection – in the high-profile Sentosa Cove residential enclave.

It was opened to invited guests earlier this month, and Lippo off-loaded about 40 units of the 64 units it released for the preview.

Sale prices were at an average of around $2,800 psf, according to the group.

 

Source: The Sunday Times 16 Dec 07

High-end home launches to take a breather

The frenzy of 2007 is expected to give way to a more sedate pace, slower price rises

(SINGAPORE) Launches of high-end homes are set to shrink in the coming year – even though developers will push more units across Singapore.

The Core Central Region (CCR) – which comprises prime districts 9, 10 and 11, Sentosa and the Downtown Core (which includes the existing financial district and Marina Bay locale) – could see only 4,600 private homes being launched next year.

This is just 26 per cent of the total 17,800 private homes expected to hit the market islandwide.

In contrast, this year saw 5,700 private homes being launched in the CCR, according to CB Richard Ellis (CBRE).

This works out to 38 per cent of the total 15,000 homes launched by developers in 2007.

Market watchers like Knight Frank managing director Tan Tiong Cheng feel that the dwindling new supply in the CCR could provide price support to the high-end market, which has soared steeply but is expected to hit a blip next year.

Developers and property consultants polled by BT earlier this month had expected high-end home prices to appreciate by less than 10 per cent in 2008 compared to mass-market homes – which they thought could climb between 10 and 20 per cent.

In contrast, CBRE estimated that high-end home prices have risen nearly 50 per cent in 2007, while the massmarket segment appreciated only by around 25 per cent.

Among the high-end projects expected to be launched next year are Marina Bay Suites, Sentosa Quayside, Goodwood Residence in Bukit Timah and The Hamilton at Scotts Road.

Still, DTZ Debenham Tie Leung executive director Ong Choon Fah did not expect developers to be in any hurry to push out high-end launches in 2008, given the substantial price rise in this segment this year.

‘The high-end market is very exclusive. Very often, sales take place by invitation and viewings by appointment.

Developers will not flood the market with upmarket projects. They will want to manage their supply pipeline for the high-end very carefully,’ she said.

‘I suppose also that for developers, their view is that with the opening of the integrated resorts in 2009/2010, there is perhaps an opportunity for them to sell their projects at that stage.’

Market watchers said that the supply of prime district residential sites emanating from collective sales may slow down next year as recent changes to en bloc rules could lengthen the time it takes to launch a sale.

Developers, too, are in no hurry. Riding on the high-end boom of the last couple of years, many of them have built up enough financial muscle to be able to hold back launches.

Even if they do go ahead with their launches, some developers have taken to holding back some units from sale for longer-term investment. This is what City Developments announced last month, when it partnered US-based Wachovia Development Corporation to buy two blocks at CityDev’s Cliveden at Grange.

The slowdown in the high-end market could touch not just launches but also actual sales. This year, CBRE estimated that 29 per cent, or 4,458 of the 15,500-odd private homes sold came from the high-end segment.

Next year, not only are developers’ islandwide sales expected to shrink to between just 10,000 and 13,000 private homes, but the CCR could account for an even smaller slice of the primary market sales, market watchers reckoned.

‘Going forward, with a lower economic growth forecast of 4.5 per cent to 6.5 per cent in 2008 and a likely credit crunch arising from the sub-prime mortgage problems in the US, we expect the pace of sales and price hike in the residential market to slow down in 2008,’ CBRE’s executive director Li Hiaw Ho said.

Analysts said that some potential buyers may also find themselves being priced out of the market.

The sales volume of high-end homes will depend partly on whether those who have sold their homes in en bloc deals buy their replacement property in the high-end market, said Knight Frank’s Mr Tan.

For foreign buyers, ‘if they see nervousness in key markets like London and New York, they may pick Singapore instead,’ he added.

CBRE expected the official Urban Redevelopment Authority’s price index for private homes to rise 8-10 per cent next year, after jumping by an estimated 25-29 per cent for full-year 2007.

Soaring rentals, too, could moderate. CBRE estimated that URA’s overall private residential rental index will appreciate 40 per cent this year but the pace could slow to 8-10 per cent next year.

 

Source: Business Times 14 Dec 07

Sentosa Cove condo plot draws 3 bids

Tender for Boon Lay condo site attracts just 2 bids that are below expectations

A TENDER for the last condo plot at Sentosa Cove – named The Pinnacle Collection – is said to have attracted three bids when it closed yesterday, including a joint bid by Ho Bee Investment and Malaysia’s IOI Group. The other two bidders are said to include foreign players/funds.

Sentosa Cove Pte Ltd (SCPL) declined to reveal the names of the bidders or their bid prices ahead of an evaluation process that will be based on both design concept and price. ‘We expect the site to be awarded by early January,’ an SCPL spokeswoman said.

The plum 99-year leasehold condo site, gracing the entrance to Sentosa Cove’s marina basin, has a reserve price of $963.8 million or $1,600 psf per plot ratio, although top bids were expected to be above $2,000 psf, which would suggest an absolute amount of at least $1.2 billion. However, the deal clincher for the winning bidder may be its design concept, rather than how much it bid, market watchers observed.

The 99-year leasehold site can be developed into a 20-storey condo (this will make it the tallest project in the upscale waterfront housing precinct) with up to 357 apartments.

Over in the Jurong/Boon Lay area, an Urban Redevelopment Authority tender for a condo site next to Lakeside MRT Station drew just two bids – $205.56 million or $248 psf per plot ratio from Frasers Centrepoint and $191 million or $230.44 psf ppr from GuocoLand.

Both bids are below earlier market expectations of about $300 to $375 psf ppr indicated in October. Nonetheless, market watchers expect the site to be awarded. CB Richard Ellis observed that the higher bid yesterday of $248 psf ppr is 26 per cent above the $197 psf ppr achieved for The Lakeshore condo plot back in August 2002.

A spokeswoman for Frasers Centrepoint described the group’s bid price as ‘conservative’, adding that it would reflect a breakeven cost of about $550 psf. ‘We would be looking at an average selling price of at least $700 psf,’ she added.

The group’s scheme is for an 18-storey development comprising three blocks, with a total of 600-plus apartments based on an average size of 1,300 sq ft. ‘We’re bullish about the mid-market and upgrader segment in 2008,’ she added.

CBRE said that units at The Lakeshore near the latest site are being marketed at around $800 psf by its developer.

In the subsale market, Lakeshore units have changed hands in recent months at $650-750 psf, while units at The Centris, one MRT station away, have been changing hands lately at $600-650 psf.

 

Source: Business Times 13 Dec 07

RESIDENTIAL PLOT: Boon Lay site draws lukewarm response

A WEAK response to a residential site tender at Lakeside has caught the industry by surprise – given that suburban centres have been touted as the next property hot zones.

The 99-year leasehold site bounded by Boon Lay Way and Lakeside Drive had attracted only two bids by the time of the tender’s close yesterday, said the Urban Redevelopment Authority (URA).

The top bid was put in by Frasers Centrepoint at $205.6 million – or $248 per sq ft per plot ratio (psf ppr) – for the 236,731 sq ft site. First Capital Holdings put in the other bid at $191 million or $230 psf ppr.

The site, with a gross floor area of 828,552 sq ft, is just five minutes from the Lakeside MRT station, with views of the Chinese Gardens and Japanese Gardens next door.

With its convenient location and future URA plans for Jurong East to become a regional hub for the west of Singapore, ‘it is surprising that there were so few bids’, said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong.

A possible reason for the lukewarm response could be rising building costs, he said. ‘For mass market homes, if construction costs escalate, the profit margin shrinks and the project becomes very unattractive.’

CBRE Research executive director Li Hiaw Ho said the new site is likely to break even at about $600 psf, and may sell for between $700 psf and $800 psf.

 

Source: The Straits Times 13 Dec 07

Celebrity plans to open piano bar, reflexology business, offices

Jackie Chan pays $11m for Jinriksha Station at 1 Neil Road

HONG KONG movie superstar Jackie Chan’s love affair with Singapore property continues with his latest purchase – the former Jinriksha Station at 1 Neil Road.

He fell in love with the historic building – once the central depot for rickshaw drivers in Singapore – and bought it for $11 million.

The three-storey corner building in Tanjong Pagar now houses a music lounge called EZ50 on the ground floor. Its sale price works out to $818 per sq ft (psf).

‘It’s a good price because the individual shophouses there are about $1,000 over psf on average,’ said Mr Simon Kwan, who helped broker the deal about a fortnight back. ‘As long as he purchases it at or below the market price, he will be comfortable,’ he said, of Chan.

Mr Kwan, who is the star’s property agent, also runs EZ50 and The 50s pubs, as well as the recently opened Jackie Chan’s Cafe Coffee and Tea at 1 Nassim Road.

The star purchased 1 Neil Road from a firm owned by Mr S. L. Cheong, which also owns the 1 Nassim Road property leased to Chan.

Mr Cheong, the uncle of SC Global chief Simon Cheong, also sold Chan The 50s entertainment complex on Tanjong Pagar Road for $8.8 million in 1996.

Both the Tanjong Pagar buildings are in the Neil Road conservation area.

‘You can’t find buildings like this anywhere else,’ said Mr Kwan. ‘These are the two most outstanding buildings in Tanjong Pagar.’

The former Jinriksha station was built in 1903.

It is a commercial building with space for rent. The One Family KTV karaoke lounge used to occupy the second and third floors, but it had since closed down, according to Mr Kwan, who is managing the building on behalf of Chan.

Mr Kwan has plans for a piano bar, a foot reflexology business or offices for the 8,500 sq ft of space on the second and third floors.

‘The highest possibility is to have offices,’ he said, explaining that this plan would leave him time to concentrate on running Chan’s new restaurant business in Singapore.

Also, office rents are currently strong, supported by tight supply.

Rents at the nearby Red Dot Traffic Building are at $6 psf a month, while those at International Plaza next to the Tanjong Pagar MRT station are going for $7.50 to $8 psf.

Mr Kwan said they could have seven to eight office units.

A decision will be made after a trip to Hong Kong to meet up with Chan and firm up plans, he said.

Apart from commercial buildings, the movie star also owns a few condominium units in the Orchard Road area, including a three-bedroom unit in The Grangeford condo on Leonie Hill Road.

The 99-year leasehold Grangeford is by now known for the property that sold en bloc for more than half of Horizon Towers’ price on a psf basis.

Chan bought his Grangeford apartment, which is being rented out, for only $1.3 million back in 1996.

He will stand to reap about $3.4 million from the collective sale, which he was originally not keen on joining.

Another Hong Kong superstar, Andy Lau, also used to own an apartment at Grangeford, as well as a unit at the UE Square condo.

Mr Kwan said he had since sold these off for Andy Lau. He also used to manage the Singapore properties of the late Teresa Teng and Anita Mui.

Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said there would be more celebrities entering Singapore’s property market.

‘For one, the Formula One event will bring in a lot of celebrities.’

 

Source: The Straits Times 12 Dec 07

Dubai World’s Limitless sets up office here

S’pore base will look for investments in the region

DUBAI World’s real estate arm, Limitless LLC, officially started operations at it new regional office here at UOB Plaza yesterday. It will use Singapore as a base to look for new investment opportunities here and in the region.

On route to Hanoi for the ground-breaking ceremony of its US$220 million Halong Star mixed development project in Vietnam, Limitless CEO Saeed Ahmed Saeed said yesterday: ‘Without doubt, South-east Asia is one of the most exciting and dynamic regions for Limitless. Its fast-growing economy presents us with endless opportunities to demonstrate our core skills of master planning large-scale, balanced projects and waterfront development.’

To date, Limitless, which was established in July 2005, has a portfolio of five real estate projects worth about US $100 billion. Three are in the Middle East, with the others in India and Vietnam.

Limitless has considered development sites in Singapore, including the first parcel at Marina View, although it decided not to put in a bid eventually.

‘We took strategic position on Marina View and decided it was not the right time to tender for it,’ said Philip Atkinson, regional director (South-east Asia) at Limitless.

Mr Atkinson added: ‘The Singapore market now is buoyant and fast paced, and we would take a cautionary view.’

Dubai World, through its subsidiary Istithmar, has however, recently acquired a one-third stake in the government land sales development site now known as South Beach, which is estimated to cost a total of $2.5 billion.

Mr Saeed would not say what its expected target rate of returns would be for its projects but added: ‘Different countries have different hurdle rates.’

Like its parent company, Limitless will mostly fund its investment with equity but Mr Saeed said that it could also raise debt from the capital markets.

Limitless is also likely to be looking at emerging markets around the world as this is where large-scale projects that can leverage on its town-planning skills will be.

Particularly bullish on the two huge markets, Mr Saeed said: ‘India and China will probably need new homes for the next 100 years.’

 

Source: Business Times 11 Dec 07

Ascott signs India serviced residence JV

(SINGAPORE) The Ascott Group said yesterday that it has signed a joint venture agreement with the Rattha Group to acquire its fifth serviced residence in India.

The 218-unit property, to be named Citadines Hyderabad Hitec City, is Ascott’s first serviced residence in Hyderabad. the group will pay about S$15 million for a 49 per cent stake in the property. Indian partner Rattha will hold the remaining majority stake.

Ascott said that the deal is part of a master development agreement it signed with Rattha in August 2006.

The aim of the agreement is to acquire and develop seven serviced residences with a total of at least 1,000 units in India by 2010.

Ascott president and chief executive Jennie Chua said: ‘The addition of Citadines Hyderabad Hitec City puts the group ahead of the target set out under the agreement with Rattha. Ascott now has five properties with more than 1,100 units under development in Bangalore, Chennai and Hyderabad.’

The group will continue to seek business opportunities in other cities including New Delhi and Mumbai, she said.

The proposed Citadines Hyderabad Hitec City is in the heart of Hitec City, a major high-tech township where the Hyderabad International Convention Centre is located.

When completed, the serviced residence will cater to the business traveller market, particularly people from the IT and biotechnology industries. The opening is scheduled for the first half of 2010.

With this latest addition, Ascott now has 1,178 serviced residence units in five properties under development in India. The other four properties are in Bangalore and Chennai, and are slated to open between 2008 and 2009.

 

Source: Business Times 11 Dec 07

STB approves sale of Farrer Court

(SINGAPORE) The Strata Titles Board (STB) has given the go-ahead for the sale of Farrer Court to a CapitaLand-led consortium.

At a price tag of $1.34 billion, it is the largest amount ever fetched for a collective sale. The approval was granted last Saturday.

The consortium – comprising CapitaLand, Hotel Properties and US-based Wachovia Development Corporation – said in June that they would pay a record-setting $1.34 billion for the 618-unit development.

This beat the reserve price of $1.2 billion but is still lower than the owners’ asking price of $1.5 billion.

Farrer Court owners had upped their reserve price from $700 million to $840 million at the start of the year, and then increased it to $1.2 billion in March.

The unit land cost to the developers for the leasehold District 10 site works out to $762 to $783 psf of potential gross floor area.

BT understands that owners of two units objected to the sale, on grounds that the price was not high enough.

The privatised HUDC estate has 618 existing apartments of two sizes – 1,615 sq ft and 1,453 sq ft – and their owners will get $2.238 million and $2.122 million per unit, respectively. Based on the apartments’ existing strata areas, the proceeds to owners work out to $1,386 psf and $1,460 psf, respectively.

Credo Real Estate brokered the sale, and law firm Rodyk & Davidson represented the majority owners.

CapitaLand wants to turn the site into a new 36-storey condominium with about 1,500 apartments, likely to be ready for launch in the first half of 2009.

 

Source: Business Times 10 Dec 07

Rents for state-owned homes rise

(SINGAPORE) Now, you too can live like the colonial sahibs of old, as long as you are prepared to make the highest offer for monthly rental in an open bid.

But be warned, rents of homes under the Singapore Land Authority’s (SLA) first bidding exercise held recently, increased by between 40 to 230 per cent over previous rents.

Before the open bidding system, the allocation of homes was done through a balloting exercise or on a first-come-first-serve basis.

But in October and November, SLA piloted the new open bidding system of allocating homes to make the process fairer and more transparent with five homes awarded so far. One of these, a bungalow on a 2,687 sq m site at King Albert Park, also set a new benchmark rent of $23,222 a month for a state-owned residential property.

On the new system, SLA deputy director of land lease private Teo Cher Hian said: ‘This way, market forces decide the rental that can be fetched for the state properties.’

The new system appears to be popular with 84 bids received for the first five properties. Of these bidders, 64.3 per cent were locals, with companies and foreigners making up 22.6 per cent and 13.1 per cent of the bids respectively.

Mr Teo also said that many of the bids were higher than the guide rents set by SLA.

Although the widely held perception is that these state-owned properties are cheap to rent, SLA says that guide rents are determined by an independent valuer based on the size, condition, location and proposed tenure of each property.

The properties are also let in their existing condition, usually unfurnished with rents starting as low as $400 per month for a small flat. Enhancement of these properties is also not a primary objective as some of these units sit on sites that could eventually be redeveloped.

SLA has a total stock of 2,360 homes comprising landed and non-landed properties, representing about 19 per cent of the total estimated gross floor area of state properties it manages.

SLA’s rental homes have an occupancy rate of about 91 per cent. But existing tenants are usually allowed to directly renew their leases although the rents may be increased.

In its last financial year (April 1, 2006 – March 31, 2007) SLA says that its residential rental revenue was $78 million, up 2.6 per cent or $2 million from the previous year. SLA added that rents increased by an average of 5 per cent in this period with the highest increase of 23 per cent recorded for just one property.

Previously, rents for apartments ranged between $400-$3,800. Terrace, semi-detached and bungalow rents ranged between $600-$3,333, $800- $11,500, and $1,100- $23,222 respectively.

But the impact of the new bidding system to SLA’s rental revenue is, however, not likely to show any immediate significant increase, as so few of these properties actually come up for rent. For the first half 2008, SLA expects only about 36 homes to be made available for rent – upon being vacated – with six homes expected in January followed by seven in February and six in March.

Those interested in bidding for these can submit their bids to SLA at a stipulated time and date. The bidding period will be six days. More details will be available on SLA’s website www.spio.sla.gov.sg from Dec 14.

But do take note that for a bid to qualify, the bidder’s average monthly income has to generally be at least three times the monthly rental bid so only those earning over $60,000 a month need bother looking at those grand old black and white bungalows.

 

Source: Business Times 10 Dec 07

Ion Orchard plans to kick off ad campaign in Q108

(SINGAPORE) Ion Orchard intends to launch an advertising campaign to promote the mall in the first quarter of next year – almost a whole year before the Orchard Road mall opens its doors to shoppers in end-2008.

For starters, the mall will run a print ad campaign in selected international publications such as the Wall Street Journal Asia and the Financial Times.

Designed to convey a mood of luxury and sophistication, the campaign will feature international models dressed in specially produced couture outfits and accessories whose design inspiration comes from the mall itself – or rather, the mall’s facade which aims to light up the building once it is up. Closer to the day of the mall’s opening, ads will also run in the local newspapers.

The mall is owned by a joint venture (JV) between Singapore-listed CapitaLand and Hong Kong’s Sun Hung Kai Properties.

‘Our new marketing campaign reflects our vision to be a world-class retail destination that will bring a truly unique retail experience to shoppers,’ said Soon Su Lin, chief executive of the JV company. ‘Even though Ion Orchard is still under construction, we are happy to be adding to the vibrancy of Orchard Road, and look forward to delighting shoppers in the near future.’

The mall also unveiled four-metre high hoardings last week at the site.

The campaign account was won by marketing communications agency DDB after its contest against six agencies.

‘I think Ion Orchard will light up Orchard Road in a bold and fashionable way,’ said David Tang, chief executive of DDB Group Singapore. ‘The campaign will have to be just as bold and fashionable.’

Ion Orchard is part of a retail-cum-residential development located at the heart of Orchard Road. When opened in end-2008, the mall will offer some 400 retail, F&B and entertainment stores. Marketing for the retail space has already begun, BT understands.

 

Source: Business Times 10 Dec 07

En bloc deals top $13b but pace is slowing

Sales in H2 account for only $2.8b as price gap between owners, developers surfaces

(SINGAPORE) It was the best of times, it was the worst of times.

With 82 en bloc deals worth $10.49 billion transacted in the first-half, and just 27 sites worth $2.81 billion transacted in the second-half so far, ‘2007 has been a ‘tale of two halves’ for the collective sales market,’ says CB Richard Ellis executive director Jeremy Lake.

Nonetheless, the year- to-date tally for 2007 – 109 deals done at $13.3 billion – is a whopping jump from the 79 deals amounting to $8.2 billion transacted for the whole of last year.

‘A price gap (between what owners were asking and what developers were prepared to pay) that was not there between January to June this year began to surface in July, so owners’ price expectations had overshot, and this was compounded by the sub-prime crisis. By September/Octo-ber, developers took a back seat when it came to bidding for land,’ Mr Lake said.

As for next year, CBRE’s view is that the total value of en bloc sales for 2008 may not be as high as this year’s all time record.

A major highlight on the collective sale calendar this year was the introduction of new legislation in October which put in place more processes and safeguards to ensure the entire en bloc process is more transparent for all owners.

This led to a rush to sign collective sale agreements before the onset of the legislation – everything otherwise would be unwound and the process have to be restarted under the new law. As a result there was a flurry of en bloc sale tenders launched between September and November.

However, in the longer term, the new rules and procedures – which include how sales committees are formed and how they conduct their business – mean it could take a longer time to launch collective sale sites for sale.

As for next year, CBRE reckons ‘developers will still remain interested in acquiring development sites, although they are likely to be much more selective and focus on acquiring reasonably-priced sites in good locations’.

Industry observers also predict the pace at which developers acquire more collective sale sites will be a function of how well their residential projects sell.

The top buyers of collective sale sites so far this year have been companies linked to banker Wee Cho Yaw (UOL Group, Kheng Leong, United Industrial Corp and Singapore Land), which collectively bought six collective sale sites for a total of $1.6 billion.

This was followed by Malaysian tycoon Quek Leng Chan’s GuocoLand, which bought three sites (Leedon Heights, Palm Beach Garden in the East Coast area and Toho Garden at Yio Chu Kang Road) for a combined $972.5 million.

Property giant CapitaLand was in third position, with stakes in three sites (Char Yong Gardens, Gillman Heights and Farrer Court) purchased for a combined $953 million.

Up-and-coming property player, Bravo Building Construction, snapped up $824.5 million worth of en bloc sales deals.

The Kwek family’s listed City Developments and privately-held Hong Leong Holdings have picked up a total of $672 million of collective sale sites.

Other sizeable buyers this year include Hotel Properties (about $640 million) and Lippo Group and its listed unit Overseas Union Enterprise ($681 million).

Property magnate Ng Teng Fong’s Far East Organization has invested in about $400 million of collective sale sites so far this year, after buying close to $1 billion worth of such properties last year.

CBRE’s analysis also shows that a total of 142 collective sale launches have been advertised so far this year, of which about half or 69 sites have been sold. The other 40 deals struck this year involved either sites launched prior to 2007 or sites whose launches were not advertised.

 

Source: Business Times 10 Dec 07

Beach Road could be next prime hot spot

Set for a snazzy makeover, boasts a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor

FORGET the Central Business District. Property investors priced out of prime zones but still hunting for a good buy should look to downtown’s upcoming hot spot – the Beach Road, Ophir-Rochor district.

This hotchpotch of an area – with old shophouses dotting its landscape, juxtaposed with towering modern office blocks – is set for a snazzy makeover, as announced by the Government this week.

Already, property experts have identified strong potential upside for properties in the district.

Minister of State for National Development Grace Fu said it would be ‘an extension of Bugis’, complementing the Marina Bay financial district.

Although most major buildings, including The Gateway, Shaw Towers and the Bugis Junction office tower, are owned by single developers, there is a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor.

The 101, Premier Centre and The Plaza, for example, are all strata-titled properties with a mix of commercial and residential units.

One shop owner, Mr Thomas Tan, who purchased a 1,300 sq ft unit on the ground floor of The 101 for $1.4 million – or $1,077 per sq ft (psf) – in April, told The Sunday Times he was glad he had taken the bold move to buy earlier this year.

The same unit now costs more than $2 million – or $1,539 psf – on the market, said the 61-year-old retiree.

Over at The Plaza, residential units are currently priced at around $933 to $1,222 psf.

While Singapore’s property bull run seems to be taking a breather, prices in the Beach Road, Ophir-Rochor area are likely to stay strong and move upwards in the long run with new developments, said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong.

Beach Road already has its own crown jewel in South Beach – an eco-friendly, $2.5 billion mixed project developed by a City Developments consortium. By 2012, South Beach will boast two towers of up to 45 storeys, two luxury hotels, service apartments and conserved military buildings of the old Beach Road camp.

On Thursday, the Government said it would release one more 2.74ha plot – between Rochor and Ophir Roads, surrounding Parkview Square – as a multi-use ‘white site’ next year, yielding 495 hotel rooms and 139,740 sq m of commercial space.

CBRE Research executive director Li Hiaw Ho said the new projects would complement each other and add much vibrancy to the area.

‘A mini-Raffles City on the white site is likely to do very well,’ added Mr Ku.

Shophouses are now particularly attractive, especially those facing the new plot, he said.

Currently, trendy eateries and drinking spots occupy shop houses along Haji Lane and Tan Quee Lan Street.

The area, with its proximity to Bugis Junction, has, in recent years, developed into a fashionable hang-out famed for good food and cheap beer.

Shophouses in the area have been going for $800 to $1,000 psf, and other surrounding commercial units have been sold for about $1,600 psf, said Mr Ku.

Considering that just across the street, Suntec is commanding up to $2,500 psf, there is much potential for capital values of properties in the area to appreciate.

Still, before that can happen, certain parts of the district have to be ’spruced up’ and polished, added Mr Ku.

Some small commercial buildings, shophouses and independent hotels there are old and shoddy and will need facelifts to match the area’s new trendy image.

Although the area does not command Grade A rents or tenants, it still gets a good mix of quality tenants with occupancy rates at a high 95 per cent, Savills director of commercial services June Chua said.

Office rents are now in the range of $9 to $11 psf a month, up from $4 to $5 psf more than a year ago. This translates into good rental yields for owners.

Mr James Smith, managing director of a media company based at the Evershine & Century Complex, is one tenant who has had his rent doubled in the last six months, and he may consider investing.

While the latest news will likely translate into higher rents in the future, Mr Smith says the upside is that more quality offices will sprout in the area, and this will have a good ‘trickle-down effect’.

‘This district will remain attractive, especially to us, as it’s a creative hub with lots of knowledge-driven businesses and schools in the vicinity,’ he said. ‘It’s got a good vibe.’

Mr Tan recalled that the old Beach Road, in the 1950s to 1960s, was ‘the’ entertainment hub, with good food from the old Satay Club, and two cinema houses lining the road.

‘Perhaps in the next decade, the hustle and bustle of the old Beach Road will be revived and it will regain its old glory,’ he said.

 

Source: The Sunday Times 9 Dec 07

Want to rent this? Make a bid for it

New allocation system for select state-owned homes expected to cut long waiting lists

RENTERS who have long hankered after that state-owned black-and-white colonial bungalow but are put off by the long waiting list can now bid for their dream home.

State landlord Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.

Currently, tenants check SLA’s portal www.spio.sla.gov.sg for information on available properties and then register their interest with SLA-appointed agents.

There is usually a long waiting list for these properties as demand is high. State properties can be 5 to 50 per cent cheaper than properties in the private market.

Renters have said that getting one is like winning the lottery – a tenant is selected either on a first-come, firstserved basis or through a balloting exercise when a property is released.

Under the new scheme, anyone interested in these properties will be invited to view them during open houses.

They then have up to one week to submit a private bid to the SLA. Bidding will close the following Friday and results will be announced the same day.

The new system will allow these buildings to be secured within a week or so of their being made available.

All in, SLA has 2,360 units available for rent and the occupancy rate is 91 per cent. However, not all of them will come under the bidding scheme.

An SLA spokesman said the new method ‘encourages a fairer allocation process’. The bidding system also allows market forces to decide the value of the properties, ensuring a ‘more accurate market value’.

At least 36 houses in popular locations – ranging from terraced and semi-detached houses to bungalows – will be open for bidding in the first half of next year.

Mr Kevin Barrios, 29, a postgraduate student from the United States due to start work in Singapore, expressed concern that the new procedure will drive up rents. He pays $700 for a one-bedroom apartment in the Portsdown Road area.

But Mr Eric Cheng, executive director of property agency HSR Property Group, said the bidding system is fairer.

He said many of his clients faced months, or even years, of waiting for such properties to become available.

‘If someone really needs a house and is willing to pay for it, it’s fair that he should get it,’ said Mr Cheng.

SLA held a pilot bidding exercise for five of its properties last month and Belgian pilot Bernard Latierre was one of the successful bidders.

The price he paid – $6,550 a month for a semi-detached house in Seletar with a land area of 738 sq m – is reasonable, he said.

He had waited more than eight months for it. ‘It’s near my children’s school, has lush greenery and lovely architecture. We wouldn’t have got to live here if not for this new bidding system,’ he said.

SLA said properties that have a two-year tenure and are in popular locations will be selected for bidding.

Wherever possible, SLA will also allow existing tenants to renew their tenancies directly, provided the rental is adjusted to the market rate.

The SLA manages more than 2,300 residential state properties and has a 91 per cent occupancy rate.

Range of properties:

• Flat/Apartment – 1,090 units; rental from $400-$3,800

• Terrace – 340 units; rental from $600-$3,333

• Semi-detached – 390 units; rental from $800-$11,500

• Bungalow – 540 units; rental from $1,100-$23,222

Some of their locations:

• Alexandra Park

• Seletar Airbase

• Telok Blangah

• Scotts Road

• Malcolm Park

• Medway Park

• Goodwood Hill

• Bukit Timah

• Woodleigh Park

  Most of the black-and-white bungalows are in Sembawang, Alexandra Park and Adams Park.

  The next list of properties available for rental will be on the SLA portal, www.spio.sla.gov.sg, from Dec 14.

  They include a bungalow in Hyderabad Road, three two-room apartments in Clemenceau Avenue North and a two-storey bungalow in Maidstone Road.

Source: The Sunday Times 9 Dec 07

Lippo’s Sentosa condo at about $2,750-2,900 psf

LIPPO Group is said to have priced its Marina Collection condo, a 99-year leasehold project on Sentosa Cove, at about $2,750-2,900 psf on average.

Over the past few days, the group, controlled by Indonesia’s Riady family, is said to have sold about half of the 60 or so units it has released so far in the 124-unit, four-storey development next to the One Degree 15 Marina Club. The development comprises three blocks.

Lippo is developing the condo jointly with the Marina Club, OCBC and Austria’s Raiffeisen Zentralbank (RZB).

Buyers will be given a free membership at One Degree 15 Marina Club for each unit of Marina Collection they purchase. The memberships are currently said to be going for above $40,000 each.

Lippo’s price appears to be slightly higher than the $2,600 psf net average achieved for the previous condo launch at Sentosa Cove – Ho Bee’s Turquoise.

The project was released in September and to date, Ho Bee is said to have sold 45 out of the 60 units it has released so far out of 91 units in the six-storey condo.

Marina Collection comprises three-, four-, and five-bedroom apartments as well as penthouses. Three bedder units cost about $5.4 million while penthouses are priced at $10 million and above.

The 30 or so units Lippo has sold so far include five penthouses.

There are about 30 penthouses altogether.

The Lippo-led consortium is developing Marina Collection on a plot that it bagged at a tender that closed in September last year for $234.7 million or $818 psf per plot ratio (ppr).

Lippo’s pricing for its Marina Collection will no doubt be used by property developers to peg their bids at next week’s tender for the Pinnacle Collection – the last condo plot at Sentosa Cove.

The plot, which has a choice location at the entrance to the precinct’s marina basin, has a reserve price of $963.8 million or $1,600 psf ppr.

 

Source: Business Times 8 Dec 07

STB approves en bloc sale of Horizon Towers

But it may not spell end of saga as minority owners who oppose sale may still appeal

(SINGAPORE) Almost a year of wrangling and millions of dollars in legal fees later, the controversial en bloc sale of Horizon Towers was eventually approved yesterday by the Strata Titles Board (STB).

Still, the board’s verdict by no means spells the end of the long-running saga – minority owners who oppose the sale could still appeal. That would put the sale on hold, and could mean another round of protracted legal disputes.

The STB’s much-awaited decision on Horizon Towers was delivered before a packed room in the board’s Maxwell Road headquarters. Tribunal chairman Philip Chan read out the prepared statement solemnly, before four teams of lawyers and some 70 owners, curious onlookers and the media.

Acknowledging that this collective sale ‘lasted longer than most other en bloc (sales)’ that have come before the STB, Mr Chan said that his tribunal eventually decided to grant the application for the collective sale of Horizon Towers, after considering the various merits of the case.

He said that the board had been ‘particularly guided’ by the recent decision reached in the Phoenix Court en bloc sale and the parliamentary debates on recent amendments to the legislation governing en bloc sales.

In the Phoenix Court case, Justice Andrew Ang threw out the sole minority owner’s objection to the collective sale of the freehold apartment block at St Thomas Walk. Justice Ang determined that it was important to look at the purposive nature of the law governing collective sales, which requires that 80 per cent of owners have to agree to the sale before it can go through. As the requisite majority was obtained in the Phoenix Court case, Justice Ang ruled that the transaction was not prejudicial to the minority – as the law had intended.

A similar stance was adopted by Senior Minister of State for Law, Associate Professor Ho Peng Kee, and Deputy Prime Minister and Law Minister S Jayakumar in the recent parliamentary debates on amendments to the Land Titles (Strata) Bill.

Prof Ho had said requiring 100 per cent consent among owners for an en bloc sale was untenable, as it would cause delays in any sale, acrimony and incur costs. He said that amendments to the law would provide adequate safeguards to protect minority interests and that the existing 80 per cent or 90 per cent majority required – depending on the age of the development – was satisfactory. DPM Jayakumar agreed that amendments to the Bill would provide more safeguards and transparency for all owners.

Tribunal chairman Mr Chan also said yesterday that the minority owners who opposed the sale had failed to prove their case that the transaction had been carried out in bad faith. The minorities had alleged, among other things, that the sales committee and its sales agent had not worked hard enough to get the best price possible for the development.

The tribunal will issue detailed grounds for its decision at a later date. It ruled yesterday that no order would be made for costs, meaning that the minority would not have to bear any portion of the costs of the proceedings.

The gallery’s reaction to the tribunal’s decision was muted – surprising for a case that has caused much emotional upheaval for its owners. Owners received the verdict quietly and shuffled out of the room.

The minority owners, who feel they will lose their homes with this sale, were accepting of the verdict. ‘The decision was not unexpected. We have done and will do what is principally correct,’ said Jasmine Tan, who declined to comment at this point on whether she would appeal against the STB’s decision.

And, expectedly, the majority owners – the over-80 per cent who agreed to the collective sale – were relieved with the STB’s decision. They face the threat of being sued for up to $1 billion by the buyers, Hotel Properties (HPL) and its partners, if the deal falls through.

Said a group of some 80 majority owners: ‘We are happy with the decision and very pleased that the en bloc is going through. We look forward to the buyers confirming that they will proceed with the deal and withdrawing the legal suits they have started against some owners.’

HPL and its partners, for their part, have expressed their happiness with STB’s decision – but have held back on any decision on the lawsuit, pending the actual completion of the sale.

‘We are pleased that the STB has allowed the collective sale and rejected the objectors’ case, including their allegations of bad faith,’ said HPL executive director Christopher Lim.

The buyers’ lawyer, Senior Counsel K Shanmugam of Allen & Gledhill, added: ‘Our client entered into the transaction in good faith and paid what was then a record price for the property. The application should therefore have proceeded smoothly, but the market changed. As a result, the case went through a number of critical junctures. We are, however, happy that the end result is that the tribunal has ruled that the sale should now go ahead.’

 

Source: Business Times 8 Dec 07

Finally, Horizon Towers en bloc sale gets go-ahead

Strata Titles Board rejects objections from minority owners, who have a month to appeal

AFTER months of sometimes bitter wrangling, the collective sale of Horizon Towers looks set to go ahead.

The latest chapter of the saga drew to a close yesterday when the Strata Titles Board (STB) granted an order for the $500 million sale to proceed.

This is in time for the sale of the 99-year leasehold Leonie Hill estate to be wrapped up before a Dec 11 deadline.

The buyers are Hotel Properties (HPL) and partners Morgan Stanley Real Estate and Qatar Investment Authority.

The minority owners objecting to the sale have one month to appeal against the decision. They have yet to indicate if they will do so.

The Horizon Towers saga started earlier this year because several owners were unhappy with the sale price given that prices had surged by the time the HPL-led consortium bought the site at the $500 million reserve price.

The buyers, who had earlier filed a lawsuit against the majority owners for alleged breach of contract, are maintaining their right to sue until the sale is complete.

HPL director Christopher Lim yesterday said: ‘We are pleased that the STB has allowed the collective sale and rejected the objectors’ case, including their allegations of bad faith.’

More than 60 people turned up for the STB decision. The STB tribunal’s chairman Philip Chan announced that the application had been granted. The grounds of decision will be out in due course.

He said the board rejected various points put forward in opposition to the sale. One, a constitutional point, involved a few objectors arguing that en bloc rules infringed fundamental rights.

Other points involved whether the requisite 80 per cent minimum approval level had been obtained and procedural requirements met.

The STB tribunal said it had been guided by the Phoenix Court case. The collective sale of the St Thomas Walk pro- perty was approved. An objecting couple appealed against the STB decision, but the High Court upheld the STB order on Nov 9.

Another point dealt with whether the deal was done in good faith, including the sale price and proposed method of distribution of funds.

The tribunal said one key issue was the purpose of the en bloc rules – to facilitate such sales.

An industry observer said: ‘Generally, there has been a paradigm shift in the approach to interpreting collective sale rules, from a literal manner to a purposive way.’

Mr K Shanmugam of Allen & Gledhill, representing the buyers, said: ‘Our client entered into the transaction in good faith and paid what was then a record price for the property.’

‘The application should therefore have proceeded smoothly, but the market changed. As a result, the case went through a number of critical junctures,’ he said.

They are, however, happy with the end result, he added.

The consortium bought Horizon Towers back in January. The sale application was thrown out by the same STB tribunal in early August because of three missing pages.

The buyers then took out the lawsuit, filed an appeal with the High Court and had the sale deadline extended by four months to Dec 11, as allowed by the contract.

In October, the High Court sent the case back to STB.

Recently, two collective sale applications were rejected by the STB – Airview Towers in St Thomas Walk and Finland Gardens in East Coast Terrace and Avenue.

 

Source: The Straits Times 8 Dec 07

Land sales programme for 1H08 draws good reviews

Large supply of mass market homes but govt holds back on office sites

THE government will release a batch of suburban residential land parcels in the first half of next year but property analysts are divided as to whether there will be enough takers for the homes coming up on the sites.

And on the back of reports that Singapore could see an oversupply of office space come 2010, the government is releasing just one site for office use in its confirmed list in its land sales programme for the first half of next year.

The 21 residential sites on the list will yield 8,250 private homes, including executive condos. This compares to a supply of 8,000 private homes for the second half of 2007.

Eight of these sites – with the capacity for 2,840 homes – are on the confirmed list. The other 13 sites are on the reserve list.

Market watchers said that the large number of suburban residential sites seems to imply that the government is aware that housing prices in popular non-prime locations have risen substantially, which has in turn priced out HDB upgraders.

‘By providing sites in suburban locations that are within or near HDB estates, the completed units are likely to be less pricey as their land costs would be lower,’ said Li Hiaw Ho, executive director for research at CB Richard Ellis (CBRE).

The homes could also be suitable for expats, who are increasingly coming to Singapore on local terms, said Ku Swee Yong, director of marketing and business development at Savills Singapore.

‘As Singapore looks to grow its population, more expats earning in the mid-income range will be coming in,’ Mr Ku said. ‘These expats might not be able to afford homes in the prime districts and so could look at mass market homes.’

Among the sites offered, those at Lorong 2 Toa Payoh, Woodleigh Close, Tanah Merah Kechil and Bishan Street 14 are perceived as the best of the crop. These sites could fetch between $400 and $600 per square foot per plot ratio (psf ppr), CBRE’s Mr Li said.

However, others said that it might have been more prudent of the government to put more sites on the reserve list instead of the confirmed list.

‘The market can be very fickle,’ said Nicholas Mak, director of research and consultancy at Knight Frank. There is good demand for mass market homes at the moment, but this might not be the case in a few months, he said.

On the other hand, the government’s decision to hold off releasing more office sites was well received. In recent weeks, experts have said that Singapore could see a glut of office space after 2010 when several big projects – such as the Marina Bay Financial Centre and the redeveloped Ocean Building – come up.

Yesterday, the government said that it is only releasing one new white site on the confirmed list – bound by Rochor, North Bridge, Ophir and Beach roads and next to Parkview Square – for office and hotel use.

The white site can yield about 1.5 million sq ft of commercial space. Experts said that the site could go for $750-$1,000 psf ppr.

The only other new commercial site, located at North Buona Vista Drive, will be released on the reserve list. An estimated 1.3 million sq ft of commercial space can be developed on the land parcel.

The proximity of the site to one-north will likely see space there being sought after by the research institutes in one north, said Mr Li of CBRE.

 

Source: Business Times 7 Dec 07

Govt’s slate of land sales seen as prudent

List for H1 next year is roughly similar in scale to that for H2 this year

(SINGAPORE) The Ministry of National Development is adopting a measured strategy in its Government Land Sales (GLS) Programme, offering up a slate for the first-half of next year that’s roughly similar in scale to the offerings for H2 2007. Noting that the government is taking a “prudent approach”, some market watchers said the ministry is factoring in the recent caution in the property market triggered by the subprime crisis, but is not dumping land to ease a short-term supply crunch in, for instance, the office market.

“It’s not so bad, just 11 sites in all on the confirmed list. And of these, the eight private residential sites are in suburban locations like Choa Chu Kang, Tampines and Yishun, to cater to upgrader demand,” said a developer of yesterday’s GLS announcement.

For the first half of next year, the government is offering a total of 37 sites in H1 2008 – 11 in the confirmed list (down from 14 for the current H2 2007 programme) and 26 in the reserve list (one site fewer than in the current list).

The latest sites will yield about 8,250 private homes including executive condos (ECs), 4.4 million sq ft in gross floor area of commercial space and 5,850 hotel rooms. This is similar to the 8,000 private homes, 3.8 million sq ft commercial GFA and 6,500 hotel rooms supply for H2 2007.

And reflecting a market-led approach, the bulk of the supply for H1 2008 will continue to come from the reserve list, where sites are launched for tender only upon application by developers.

The latest confirmed list – where sites are released according to a stated schedule regardless of demand – will yield about 3,000 private homes, 1.6 million sq ft of commercial GFA and 1,670 hotel rooms – again close to the 3,000 private homes, 1.78 million sq ft commercial GFA and 1,810 hotel rooms in the current slate.

In all, MND has introduced 17 new sites, six in the confirmed list and 11 through the reserve list.

None of the two new sites with substantial office components are in the financial district, including the sizzling Marina Bay area.

Instead, one site – in the confirmed list – engulfs the Parkview Square development and is bound by Rochor, North Bridge, Ophir and Beach roads, and the other, a reserve-list site, is at one north, next to Buona Vista MRT Station.

“The authorities are adopting a more cautious approach on CBD office supply, despite an immediate supply crunch, because the sub-prime crisis is expected to lead international banks to downsize and scale down their office space requirements,” the developer suggested.

CB Richard Ellis executive director Li Hiaw Ho also described the government’s tack as prudent.

“The current office crunch is a short-term problem. There’s over 10 million sq ft of supply on the horizon, most of which will be completed in 2010 and beyond; so in the mid-term there will be sufficient supply. There’s no point for the government to dump 99-year office sites now as the supply will only be completed in the mid-term because of construction time.

“That’s why government is pushing for conversion of state properties and transitional, 15-year lease sites to address the office shortage in the short- term.”

A seasoned market watcher observed a similarly measured strategy for the residential market, where the high-end segment is now taking a breather after runaway prices fuelled by speculators and specu-vestors earlier.

“MND’s focus is on ensuring there’s sufficient supply in the mid-tier and mass-market private housing segments.

It’s offering a spread of suburban sites for upgrader private condos as well as four EC sites (through the reserve list), to make sure such homes are within the reach of genuine home buyers,” he added.

Three of the four EC sites are new additions – in Yishun, Jurong West and Sengkang East Avenue.

A developer welcomed the government’s decision to include, among its slate of eight residential sites on the latest confirmed list, two landed housing plots – at Westwood Avenue in Jurong West, and Sembawang Greenvale (Phase 2). “There’s really a shortage of landed housing sites,” he added.

He also viewed positively the fact that both hotel sites on the confirmed list – at Race Course Road in the Little India area and Balestier/Ah Hood roads – are in locations suitable for three- and four-star hotels, which are witnessing strong demand from the India and China markets in particular.

MND also highlighted additional sources of space the government will make available in H1 2008 – including about 1.3 million sq ft of commercial GFA from sources like interim use of vacant state buildings and transitional office sites; about 110 private homes including 90 serviced apartments at one north; and 780 hotel rooms.

MND said that 9.5 million sq ft GFA of offices, 4 million sq ft of business park space, 5.6 million sq ft of shops and 8,850 hotel rooms are expected to be completed by 2010.

For the private housing sector, about 44,500 new private homes are slated for completion by 2010, of which 40 per cent or 17,800 units will be in the Core Central Region, which includes all the high-end locations.

On the Singapore Exchange yesterday, the All Singapore Equities (Property) Index ended 12.09 points higher at 1,391.57.

“They are not releasing that many sites. They are calibrating supply very carefully in response to the economy,” the developer said.

 

Source: Business Times 7 Dec 07

Property players likely to zoom in on central locations

Topping the list is multi-use ‘white site’ not far from Bugis MRT

DEVELOPERS, and eventually homebuyers, can take their pick from 21 plots that the Government will release for private housing between now and June.

Property players, however, are likely to zoom straight in on the handful of land parcels that are more centrally located, industry experts say.

At the top of the list is the multi-use ‘white site’ bounded by Ophir Road, Beach Road and Rochor Road. The property sits next to Parkview Square and is a stone’s throw from Raffles Hospital and the Bugis MRT Station.

The sale of this 2.74ha plot will ‘kick-start the development of the… Rochor Road/ Ophir Road corridor’, linking Marina Centre to the Bugis area, the Ministry of National Development (MND) said yesterday.

The site, which will be launched for sale in June, must have some area set aside for offices and hotels, but the rest of the space can be put to other uses such as residential.

Bids will likely come in at $750 to $850 per sq ft per plot ratio (psf ppr) for this site, said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.

Apart from this plum plot, there are a few other attractive residential sites, consultants say.

One is a new site at the corner of Woodleigh Close and Upper Serangoon Road, next to the Blossoms@Woodleigh condominium. It is near the yet-to-be-opened Woodleigh MRT Station on the North-East Line.

About 270 homes can be built on the 1.07ha plot, to be launched for sale in April.

Another choice site is at the junction of Lorong 2 Toa Payoh and Lorong 3 Toa Payoh, within walking distance of the Braddell MRT Station.

This 1.4ha site can host 535 homes and will be put up for sale in February. It was previously on the reserve list for developers to indicate interest, but it saw no takers. It has now been moved to the confirmed list to be launched at a fixed date.

Mr Li Hiaw Ho, the executive director of CB Richard Ellis research, picked out two more sites as being among the ‘best of the crop’.

The first, at Bishan Street 14, has an area of 1.2ha and can host a 535-unit project.

The other is a 1.19ha site at New Upper Changi Road.

These four residential sites may fetch prices in the range of $400 to $600 psf of potential gross floor area, Mr Li estimated.

Mr Mak has noted, however, that apart from the Woodleigh Close site, which is new, the other plots have been available for some time on the Government’s reserve list.

Reserve list plots will not be launched for sale unless a developer comes forward to bid for them. Usually, choice plots on the reserve list will move quickly.

Those that remain to be ‘recycled’ for the next round of land sales are generally less attractive.

This time, however, the ‘recycled’ plots are quite plum, said Mr Mak.

If even these sites cannot find takers, ‘maybe developers already have enough on their plates’, he said.

In that case, perhaps the Government is offering more sites than the market is ready to absorb, he suggested.

For private housing alone, the MND has added 12 new sites to its land sales programme, including the Woodleigh Close plot.

Others include sites at Choa Chu Kang Drive, Tampines Avenue 1, Upper Changi Road North, Chestnut Avenue, Upper Thomson Road, Sengkang West Avenue and Sembawang Road.

There are also three executive condo sites, as well as a plot for landed homes at Sembawang Greenvale Phase 2. This landed parcel will be put up for auction in February to cater to smaller investors.

Outside land sales, the Government will also offer about 110 private housing units, including 90 service apartments at one-north. It will also provide 120,000 sq m of commercial space.

 

Source: The Straits Times 7 Dec 07

More land for mass market private homes released

The 21 residential sites will help meet demand and avert sharp price increases

PRIVATE home buyers look set to be spoilt for choice after the Government unveiled an expansive programme of land sales for the first half of next year.

The big winners will be mass market buyers, who include home buyers upgrading from HDB flats.

A total of 21 residential sites – mainly mass market ones – feature in the programme including new plots at Choa Chu Kang, Tampines and Sengkang.

Industry observers say the move could help soak up strong demand for these homes and avert potentially sharp mass market price rises.

Counting commercial and hotel sites, the programme comprises 37 sites, after the Government released its largest-ever land package of 41 sites six months ago for the current second half year.

There are three commercial sites, two ‘white’ multi-use sites, one commercial-cum-residential site and 10 hotel sites – yielding about 8,250 homes, 410,000 sq m gross floor area of commercial space, and 5,850 hotel rooms.

‘This supply will be sufficient to meet the demand for the various properties over the medium-term and support the continued growth of our economy,’ said the National Development Ministry in a statement yesterday.

Industry observers say the programme comes as sentiment in the local property market has weakened due to the United States sub-prime mortgage crisis, high oil prices and a possible US economic slowdown.

Developers have also recently said it is difficult to micro-manage the market, which has taken almost a decade to turn around. Owing to this uncertainty, some consultants worry the mass market home supply may be a tad too much for the market.

‘This package comes across as fairly aggressive in addressing supply shortages because we still have the subprime problems, which remain very uncertain,’ said Chesterton International’s head of research and consultancy Colin Tan. ‘If the US economy is affected, Singapore’s real estate sector will surely be hit in some way.’

The land sales programme includes 17 new sites for sale, up from 15 this half year.

There are 11 confirmed sites – those that will be put up for sale on scheduled dates. Eight of these are residential, mostly in suburban areas such as West Coast Crescent, Yishun and Sembawang.

CBRE research executive director Li Hiaw Ho said the release of several suburban plots suggests the Government is aware that prices in popular non-prime locations have risen substantially – pricing out potential HDB upgraders.

The latest programme has 26 reserve-list sites, including five new residential sites in areas such as Chestnut Avenue, as well as three executive condominium sites that were recently announced.

Reserve-list sites are put up for sale only when a developer commits to bid a minimum price.

This time round, there are fewer commercial sites, with just one white site – a coveted plot in the soon-torevamped Ophir/Rochor area – up for confirmed sale. Consultants said this bodes well for the market as supply will come onstream from 2009.

 

Source: The Straits Times 7 Dec 07

Hong Fok’s Orchard site plans

It plans to develop International Bldg site with $62m state plot it is buying

HONG FOK Corporation yesterday gave a glimpse of its plans for a commercial development on the combined site of its International Building property at Orchard Road and an adjoining 9,023 square feet plot along Claymore Hill that it plans to buy from the state for $62.35 million.

Based on earlier reports, International Building, inclusive of a surface carpark at the rear, has a total land area of 45,467 sq ft. In its statement to the Singapore Exchange, Hong Fok said that unless prior written permission of the government is given, the land it plans to purchase from the state will be used together with its International Building site for the purpose of commercial development with a gross plot ratio not exceeding 6.16.

Market watchers said that based on this plot ratio, the combined 54,490 sq ft site – comprising International Building, including its surface carpark, and the state plot Hong Fok plans to buy – can be developed into a commercial project with 335,660 sq ft maximum gross floor area (GFA). Assuming an 80 per cent efficiency, the net lettable area would work out to about 268,530 sq ft.

Hong Fok did not elaborate on its plans for International Building, but market watchers said that it has a few options. One would be to do a full redevelopment on the enlarged site (including the state plot being purchased), involving tearing down the present 12-storey retail and office block.

Another option would be to spruce up the old block and connect it to a new extension that could be developed on the new site alone, or on the new site as well as the carpark.

Market watchers said that based on a full redevelopment scheme and assuming a 335,660 sq ft maximum GFA, the construction costs, fees and interest would easily amount to about $170 million. They also reckoned that Hong Fok may have to pay a development charge to the state for building a bigger project.

In its release yesterday, Hong Fok said that it has accepted an offer by the Singapore Land Authority to alienate the state land on a freehold basis for $62.35 million.

The offer was made following an application by Hong Fok to buy the land, and the proposed alienation is subject to several terms and conditions. Hong Fok will fund the purchase by bank borrowings.

Hong Fok also owns The Concourse at Beach Road, where it is expected to develop apartments for sale.

On the stock market yesterday, Hong Fok ended six cents higher at $1.33.

 

Source: Business Times 6 Dec 07

Sky@eleven will boost SPH earnings: Tony Tan

Analysts estimate project to yield up to $450m profit

SINGAPORE Press Holdings is expecting a significant boost to its profits for this financial year and the next – from its Sky@eleven condominium project. In his speech at the media group’s annual general meeting yesterday, SPH chairman Tony Tan said: ‘On the property front, our launch of Sky@eleven, a luxury condominium project at

Thomson Road, was greeted with overwhelming response. All 273 units were sold out within hours of the soft launch in January 2007.

‘ SPH will enjoy a significant boost to its profits in the next two financial years from contributions from Sky@eleven.’

‘The last financial year has been a good year for SPH,’ said Dr Tan. ‘With group operating revenue of $1.16 billion, net profit attributable to shareholders crossed the half-billion mark to hit $506.2 million.’

The group’s $506.2 million net profit was 18.1 per cent higher than the previous year’s $428.5 million, which included an exceptional gain of $66.8 million.

The FY2007 results included a maiden profit recognition of $47.8 million from Sky@eleven. Profits from Sky@eleven are being recognised on a percentage-of-completion basis and temporary occupation permit (TOP) is expected in early 2010.

Analysts had estimated total profits from the project at $350 million to $450 million.

At yesterday’s AGM, some shareholders were concerned about the group’s core print business, citing trends of declining newspaper readership in other developed countries.

Another shareholder asked about generating more revenue from online media. Responding, Dr Tan said that the group is continuing to invest in other media platforms.

‘$100 million has been earmarked to invest in the Internet (business). So when the trends overseas come to Singapore, SPH will be prepared and be in a good position to exploit the online space.’

Like any new business venture, building revenue from online services will take time, he said.

Dr Tan also said that SPH is making further inroads into the online search business. Online search and directory services for the China and Singapore market are expected to be rolled out next year, as well as regional online classifieds, he said.

Both are part of the joint venture formed last year with Norwegian media group Schibsted ASA. ‘Online directory portals will be the future for SPH,’ Dr Tan said.

The traditional core newspaper and magazine business continued to make up the bulk of profits for the group, and investing in its current stable of papers continues.

Singapore’s first Chinese freesheet my paper will be revamped into a full-fledged bilingual newspaper early next year. It will have equal emphasis on the Chinese and English languages and will be expanded into a 48-page paper from its current 24-page format.

‘Circulation of our other newspapers, such as The Business Times, Berita Harian and Tamil Murasu, also registered creditable increases on the back of strong support from readers and advertisers,’ said Dr Tan.

SPH announced yesterday that directors Cheong Choong Kong and Lee Ek Tieng would step down. Dr Cheong was appointed a director of SPH in 1997. Mr Lee joined SPH as a director in 2001.

 

Source: Business Times 6 Dec 07

Simpler rules for deciding DC payment from Jan

URA will use only 2003 Master Plan to cap development baseline values

RULES on whether proposed building works will have to pay a Development Charge are to be simplified.

The DC, which can be payable when land is redeveloped more intensively, is at present calculated using baselines set in the 2003 Master Plan, or sometimes with the earlier MPs of 1958 or 1980. From January 1, the Urban Redevelopment Authority (URA) intends to use only the 2003 MP to cap development baseline values.

However, some existing developments will have their higher baseline values safeguarded, and will be exempt from paying a DC even if the site is redeveloped to a baseline value higher than MP 2003.

After the recent increase in DC rates, the charge can in some cases amount to more than $100 million, which is a hefty amount compared to the average of $250 million that the URA has collected annually in DCs for the last five years.

The URA said yesterday that only about 2 per cent of all existing private land lots (or about about 1,700 plots mostly in the Central Region) have high historical baselines and even fewer approved developments are built over the plot ratios stipulated in MP 2003.

One such development, which is currently up for collective sale, is Pacific Mansion in River Valley.

Marketed by Savills Singapore, its director of investment, Steven Ming, estimates that the 45-year-old Pacific Mansion is currently built up to a 3.84 plot ratio.

Under the MP 2003, the plot ratio for the area is only 2.8, but Mr Ming says that the URA will permit any new development built on the site to be built up to the present plot ratio of 3.84, making the site particularly attractive as no development charge will be payable.

Mr Ming says that if the URA had not honoured the existing built up plot ratio and not given a development charge exemption, and instead levied development charges based on the existing gross floor area, the development charge for a new development built up to a plot ratio of 3.84 would amount to around $112.8 million, based on the current DC rate of $9,100 psm for the area. This, incidentally is almost three times the DC rate at the end of 2003 when it was about $2,300 psm.

The savings from not having to pay a DC is ‘hypothetical’, as most developers would have factored this into the land value. But as DC rates rise, so does this hypothetical development charge. Mr Ming adds: ‘This is definitely a figure that a developer will consider when looking for a collective sale site.’

Another attractive site on the market is Elizabeth Towers at Mount Elizabeth which has an indicative price of $673 million or about $2,666 per square foot per plot ratio (psf ppr).

Marketed by Newman & Goh, its head of investment sales Jeffrey Goh estimates that the existing building is currently built up to a plot ratio of 4.65 while the plot ratio based on the MP 2003 is also 2.8.

And Mr Goh added: ‘With Westwood Apartments (off Orchard Boulevard) setting a new benchmark price, I expect DC rates to be revised upwards again.’

As with Pacific Mansion, a redeveloped Elizabeth Towers can be built up to the existing built up plot ratio. And the charge of about $110 million, based on the current DC rate of $11,900 psm for the area, is not payable.

But there are not many of such sites around.

Also up for sale with no DC payable is Grange Heights on Grange Road. It is marketed by Jones Lang LaSalle, whose regional director, Lui Seng Fatt, says that not all old developments see such huge figures in the exempted DC amount. ‘For many developments, it may be around $10 million,’ he said.

Indeed, for most developments on the collective sales market, there will be no DC payable because the existing development has not been built up to the current MP 2003 plot ratio.

Willyn Ville at Holland Village is currently built up to an estimated 1.3 plot ratio, even though the plot ratio based on earlier MPs was higher than the 1.4 stipulated in MP 2003.

The difference of course is that Willyn Ville was never built up to the old plot ratios. It is marketed by Chesterton International, whose associate director, Mark Yuen, said: ‘A development that has been built up over the existing MP 2003 is different because the government can’t take back what has already been paid for.’

The revised baseline definition was first announced in 2003. Before the change, development baselines were determined by the highest baseline in MP 1958 or 1980 or that of the approved development.

 

Source: Business Times 6 Dec 07

URA ends suspense with award of Marina View site

MGPA’s bid is about half the price it paid for plot next door

(SINGAPORE) The Urban Redevelopment Authority finally awarded Marina View Land Parcel B to Macquarie Global Property Advisors (MGPA) unit MGP Kimi Pte Ltd yesterday, about three weeks after the tender for the 99- year leasehold site closed.

The longer-than-usual time to evaluate the tender, which was based solely on price, had led market watchers to speculate the state’s reserve price for the confirmed list site might not have been met. The reserve price for confirmed list sites is confidential, the URA said yesterday, when asked by BT.

The tender for the plot had attracted just two bids, and the higher offer, by MGP Kimi, of $779.42 psf ppr, was less than most market watchers had expected, even after factoring in a minimum hotel component stipulated for the plot.

MGPA’s bid for Land Parcel B was about half the $1,409 psf ppr it paid for the next door Land Parcel A in September. However, the earlier site does not have any requirement for hotel use. Hotel land values are significantly lower than office values and this partly accounted for the lower bid for Land Parcel B, analysts have said.

Another factor was new caution that has set in among developers following the sub-prime lending crisis in the US.

Office investors are especially wary, as the sub-prime lending worries may directly clip demand by big banks for Singapore office space. An extra concern is that the government has been stating that it will boost supply of office land in the next few years to alleviate the current shortage.

Notwithstanding all these factors, some market watchers had suspected that the top bid for Land Parcel B could have been below the state’s reserve price and that it may not be awarded. And the long evaluation time added fuel to the speculation.

In the past, the government has indicated that its guideline is to award sites if the top bids are at least 85 per cent of the market value assessed by the Chief Valuer (CV). However, bids below the 85 per cent guideline may be accepted if there is ample evidence from recent property transactions of a market downturn, according to past government statements.

When quizzed on the 85 per cent guideline yesterday, the URA said: ‘The Chief Valuer’s estimated market value serves as a guide in evaluating tenders. However, the government reserves the right to reject any tender, regardless of the bid price. Tenders are evaluated taking into consideration all relevant factors, including CV’s estimated market value.’

The authority said the tender evaluation for every state site, including Marina View Land Parcel B, involves a Tender Evaluation Committee comprising officials from a few government agencies including the URA, the Singapore Land Authority, and the CV’s Office, who make their recommendation, which is then reviewed by a committee made up of the Ministers for National Development, Law, Finance and Trade and Industry. ‘Sometimes the evaluation is more complex and can take more time,’ it said.

Some market observers are wondering if longer tender evaluation periods will be a more normal occurrence if the government pumps up its land sales under the confirmed list for the first six months of next year, assuming that developers’ cautious mood lingers for a while.

 

Source: Business Times 6 Dec 07

China developer buys Sentosa Cove plot

Firm pays $216m, plans ultra-posh marina enclave with jumbo units

A CHINA developer has ventured overseas for the first time and paid a higher-than-expected $216 million for a landed plot on Pearl Island in Sentosa Cove.

The deal is another indication that, while Singapore developers are taking a cautious approach in the wake of the sub-prime crisis, foreign firms are happy to muscle in.

Ximeng Land beat six other bidders, which were not named, to the 14,840 sq m plot, which has a maximum gross floor area (GFA) of 11,872 sq m and can accommodate 19 villas.

It paid about $1,350 per sq ft (psf) for the plot. This is more than double the prices chalked up on the nearby Sandy Island but still below those paid for some individual seafront bungalow plots, which have sold for as much as $1,696 psf.

In September, a landed plot was sold to a developer for $1,099 psf of potential GFA.

Ximeng Land is owned by the majority shareholders of Ximeng Asset Holdings, the parent company of luxury developer Beijing Ximeng Real Estate. The company has built projects in Beijing and two other mainland cities, Yantai and Jinan.

The foreign factor also cropped up late last month when Malaysia’s YTL Corp bought Westwood Apartments in Orchard Boulevard for $435 million. The $2,525 psf per plot ratio (psf ppr) price was a record for a collective sale.

‘These foreign developers have displayed great confidence in the strength of the property market in Singapore,’ said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

While up to 19 villa units with private berths can be built on the Pearl Island plot, Ximeng said it might build just nine large bungalows, which it expects to fetch record prices.

Property consultants said the nine houses would each be at least 14,000 sq ft, a size not yet available in Sentosa Cove. For the project to be viable, each would need to sell for at least $30 million.

A Ximeng spokesman said it was attracted by the success of Sentosa Cove and its own success in Singapore will provide a springboard for expansion in the region and beyond.

It wants to develop Pearl Island into an ‘ultra-luxurious, world-class marina enclave for the privileged few’ and therefore plans to retain an internationally renowned architect for the project.

Pearl Island is the last of five island sites in Sentosa Cove, all slated for landed homes. There is just one condo plot left – the tender closes next Wednesday; the results are expected to come out early next year – and two individual sea-facing bungalow sites.

Prices at the 99-year leasehold Sentosa Cove have climbed significantly since sales began in 2003, when the property market was still in a slump.

Last month, two seafront bungalow plots were sold at a high of $1,696 psf, said master planner Sentosa Cove.

Some bungalow owners are now asking $1,800 to $2,000 psf when some freehold good-class bungalows sell for only half that price.

 

Source: The Straits Times 6 Dec 07

South Beach project to cost $2.5b: CityDev

(SINGAPORE) City Developments’ upcoming mixed-use project along Beach Road will cost some $2.5 billion in all – including the land cost of some $1.69 billion – the company’s chairman Kwek Leng Beng said yesterday.

Mr Kwek was speaking to reporters after signing the building agreement for the site.

CityDev, together with its partners Istithmar (part of the Dubai World Group) and US-based Elad Group, secured the 3.5-hectare site in a government land tender in September. The three partners hold a one-third stake each in the project.

The development, which will be called South Beach, is set to become a ‘revolutionary New Eco-Quarter in Singapore’ when it is completed by 2012, CityDev said. Construction will start next year.

South Beach will have premium office space, luxury hotels, residential apartments and retail space with a total gross floor area (GFA) of some 1.6 million square feet, CityDev said.

The partners are required to set aside at least 40 per cent of the total GFA for office use, and another minimum 30 per cent of the total GFA for hotel use.

In line with this, the consortium is planning two luxury hotels. One of the hotels will be a high-end boutique hotel with about 250 rooms, while the other will be a five-star hotel with about 450 rooms, CityDev said. The partners intend to bring in upmarket hotel brands for both hotels.

The partners are also looking to bring in branded residences for the luxury apartments they will be building on the site – such as The Plaza in New York, which is owned by Elad.

Looking ahead, Mr Kwek said he believed that the property market in Singapore is in a period of ‘consolidation’ brought on by the sub-prime mortgage crisis in the US. ‘In 2008, a lot will depend on how much the sub-prime recovers and whether the US will go into a deep recession,’ he said. ‘2008 will have a little storm here and there, but Asia Pacific will grow.’

For Singapore, Mr Kwek said that there is still a potential upside for mid-range home prices, which are still below their historical peaks.

 

Source: Business Times 5 Dec 07

Govt sees potential in Rochor area remake

Plans not firm but it intends the area to complement Marina Bay development

(SINGAPORE) The government intends to remake the Ophir Road/Rochor Road corridor into a commercial centre that will complement the Marina Bay area, Minister of State for National Development Grace Fu said yesterday.

‘This area could be developed as a mixed-use corridor featuring offices, hotels and other supporting uses, connecting the established commercial node at Marina Centre to the Bugis area,’ Ms Fu said. ‘The corridor will inject vibrancy and activities into this part of the city.’

Ms Fu was speaking at the signing of the building agreement for a 3.5-hectare mixed-use site along Beach Road.

The Urban Redevelopment Authority (URA) awarded the site to Singapore-listed City Developments and its foreign partners Istithmar (part of the Dubai World Group) and Elad Group in September for some $1.69 billion.

‘The government intends to build on the momentum by developing the land parcels along Beach Road and at the Ophir Road/Rochor Road corridor,’ Ms Fu said.

The URA will release more details of the plans for the Beach Road/Ophir Road corridor early next year, Ms Fu said, but she did not provide a timeline for the development of the area.

The authorities could partner both local and foreign developers to draw up development plans, she said.

In fact, there is increasing foreign interest in real estate investment in Singapore, Ms Fu said.

Foreign real estate investment in Singapore has come to about $8.8 billion for the year-to-date, Ms Fu said. The amount is an increase of 66 per cent over the 2006 total of $5.3 billion.

The amount also represents a huge jump over the amount of foreign real estate investments seen in 2005 and 2004.

For 2005, foreign investment came to $4.1 billion and in 2004, the figure was only $800 million.

‘This dramatic increase reflects the optimistic economic outlook and development potential in Singapore,’ Ms Fu said.

The Beach Road project marks the first participation of Istithmar and Elad, two major international investors, in a government land tender in Singapore.

Dubai World – which is the investment holding firm of the Dubai government – and Elad Group each have a one third stake in the Beach Road project.

Together with CityDev, the consortium will invest some $2.5 billion in all to build the project, CityDev said yesterday. The amount includes the land cost of $1.69 billion.

Dubai World is merging its two subsidiaries Nakheel and Istithmar Real Estate into a single unit as it looks to increase its property portfolio in Asia, Yu Lai Boon, the group’s chief investment officer, said. He added that the group hopes to invest some US$50 billion in Asia over the next 10 to 15 years.

Dubai World is set to raise $300 million with its first listed property trust by June next year.

The real estate investment trust, which will be based on Dubai World’s residential properties in the United Arab Emirates, will be listed in Dubai and have a secondary listing in either London or Singapore.

 

Source: Business Times 5 Dec 07

2008 seen as year of mass market homes

Developers, consultants predict 10-20% hikes for this segment in 2008, high-end gains seen tapering to 0-10%

(SINGAPORE) As the year draws to a close, developers and property consultants are cautiously optimistic about prospects for the Singapore property market next year despite the US sub-prime mortgage crisis and rising oil prices.

For the residential sector, they expect the action to be concentrated in the mass market next year, after the stellar increases in high-end home prices this year.

They also generally expect the authorities to adopt a more measured approach to the Government Land Sales programme in the first half of next year, given the relatively thin bidding seen for most state sites recently.

CB Richard Ellis chairman (Asia) Willy Shee predicts high-end home prices will likely remain more or less at current levels next year – after a nearly 50 per cent price gain this year – on the back of new supply coming into the market. Prices of mass-market private homes are likely to appreciate 10 to 15 per cent in 2008, after rising about 25 per cent this year, he added. ‘I think building costs have already gone up over 30 per cent so far this year,’ he says.

Similarly, Ho Bee Investment executive director Ong Chong Hua says: ‘We cannot see the same magnitude of price growth in 2008 that we’ve seen in the past two years. It’s not sustainable. We’ll see more steady growth next year.’

Overseas Union Enterprise chief executive officer Thio Gim Hock says: ‘High-end prices will at least maintain or go up by 5 to 10 per cent, while the mass market will rise between 10 and 20 per cent in 2008.

‘By next year, sub-prime will be behind us and confidence will recover again.’

Mr Ong predicts a 10 per cent price gain for both upmarket and mass-market homes next year. ‘The increase in mass market home prices will be very measured until the sub-prime cloud clears,’ he says.

Knight Frank managing director Tan Tiong Cheng expects the fate of the high-end market to be determined by foreign investors (and their reading of the global economic outlook) as well as the extent to which those who’ve sold their prime district homes through en bloc sales buy replacement homes in the high-end of the market.

Hong Leong Group executive chairman Kwek Leng Beng says: ‘Even in a period of consolidation, the market will come back. The fundamentals of real estate in Singapore are still very good. There’s still upside for mid-range home prices, which are still below their peaks.’

Knight Frank’s Mr Tan said: ‘Fundamentally, Singapore is in a very sound position, property-wise. But what will determine the state of the market will be external events, especially sub-prime, oil prices and the US economy. If the external forces turn out to be quite benign, the Singapore property market recovery will continue. But if the external forces turn out to be malignant, then all bets are off.’

Mr Kwek stresses that because developers have enjoyed good profit margins over the past three to four years, they are now in a strong financial position and can afford to take longer to sell their projects.

After the current lull, Knight Frank’s Mr Tan expects developers to resume launches next year when the market’s direction becomes clearer. ‘They’re likely to start launching closer to Budget time, when the Government gives its official reading of the Singapore economy,’ he says.

Chesterton International’s head of research and consultancy, Colin Tan, reckons that high-end residential property will weather any market downturn better than the mass market, as luxury homes typically offer a more resilient long-term investment proposition because of their superior location. ‘Someone who buys a high-end home can always rent it out, even if he has to accept a lower rent,’ he says.

Market expectations have been running so high that the authorities will step up the Government Land Sales Programme to stem rising property prices and rents. However, some property players suggest the uncertainty may make the authorities think again. ‘Supply will continue to be released mostly through the reserve list, but some new housing sites in the city may be introduced in the confirmed list, as developing the Marina Bay area and rejuvenating the existing CBD seem to be a priority,’ Knight Frank’s Mr Tan suggests.

At Ho Bee, Mr Ong says that recent bidding at state tenders shows ‘developers are re-calculating the risk premium because of uncertainty created by sub-prime’.

‘(The) government will be careful about the confirmed list,’ he says.

 

Source: Business Times 5 Dec 07

Easing in property rally can be good: Developers

PROPERTY developers are so rushed off their feet that they say the idea of the United States sub-prime crisis taking some froth out of the exuberant market can only be good.

CapitaLand’s chief executive, Mr Liew Mun Leong, said in Ho Chi Minh City yesterday that market confidence has been affected a little by the sub-prime issue but a slowdown may not be bad.

‘If the economy moderates, the property market will moderate… It is not necessarily a bad thing,’ he said.

‘Sometimes you need a little bit of slowdown,’ he added. This is so that businesses can be sustained.

Mr Liew also said that developers will probably not pay bumper high prices for collective sale sites and that supply volume may slip.

However, prices have been holding and he does not see them falling next year.

A similar note was struck by Mr Simon Cheong, the president of the Real Estate Developers’ Association (Redas).

He told the Association’s 48th anniversary dinner last night that the build-up of new projects has left the industry a little breathless.

‘We are now the victims of our own success. Our biggest worry is now rising costs, shortage of construction materials and inadequate skilled labour,’ said Mr Cheong at the Ritz-Carlton Millenia Singapore hotel.

He added that developers share the Government’s concerns about rising exuberance in the market and backed its efforts to apply a touch of the brakes.

Mr Cheong was also quick to add that it has taken almost 10 years for the property market to turn around.

‘Redas is of the view that it is difficult to micro-manage, especially in a global context where the flow of funds into Singapore property is driven by a bigger picture than just short-term opportunistic buy-ins,’ he said.

Singapore is no different from other major gateway cities, where prime real estate commands premium rents, he added.

Trade and Industry Minister Lim Hng Kiang, who was the guest-of-honour, said rising costs are a challenge that accompanies the growth in all parts of the property market.

The Government, he reiterated, is ensuring there will be a sufficient supply of office, residential and hotel space.

Mr Cheong also said that Redas has created a foreign investment committee, to be chaired by Hongkong Land director Robert Garman, to encourage foreign companies to come to Singapore and stay invested.

He warned that developers should take stock of the storm brewing globally as they respond to local opportunities.

‘Rising oil prices, a weakening US dollar, the sub-prime crisis and occasional shocks in the supply of construction materials cannot be taken too lightly.’

 

Source: The Straits Times 5 Dec 07

Three of Asia’s biggest deals done in S’pore

Value of the 3 total US$1.77b, or about 20% of the Top-10 transactions

(SINGAPORE) The Top-10 real estate investment deals in Asia in the third quarter of 2007 amounted to US$9.3 billion, and three of those deals concerned Singapore properties.

A report by CB Richard Ellis (CBRE) shows that two of the Singapore deals involved stakes in One Raffles Quay while the third involved the sale of Chevron House. The total value of these deals came to US$1.77 billion or about 20 per cent of the value of the Top-10 deals.

CBRE also said that foreign investors have shown no sign of scaling back Asian real estate investment activity, ‘especially given the relative scarcity of investment grade properties’.

As a general guide, investors will look at property yields when shopping for real estate and the 4.3 per cent yield for office property here is competitive with cities like Hong Kong where the yield is 4.5 per cent.

Cities like Manila and Jakarta do offer the potential of higher yields of around 11 per cent but as CBRE executive director Jeremy Lake notes: ‘Yields reflect many factors, including risks.’

Mr Lake explains that these ‘risks’ usually include aspects of a country’s legal, political and fiscal policies.

Singapore is more likely to attract investors seeking lower risk and and perhaps lower yields, Mr Lake added.

A low-risk/low-yield dictum may not be a bad thing in volatile times.

CBRE notes that some foreign capital is being redirected to Asian property markets, seeking to benefit not merely from the natural appreciation of real estate in dynamic economies, but also from appreciation of Asian currencies against the US dollar, particularly the Chinese renminbi.

Mr Lake also pointed out that investors are drawn to markets where the cost of borrowing is lower than the property yield, explaining why Tokyo saw the largest real estate investment deals in the quarter, with the Top-three commercial real estate deals totalling US$3.95 billion.

 

Source: Business Times 4 Dec 07

Keppel Land markets India projects here

The company is also looking to expand to other Indian cities

(SINGAPORE) Keppel Land is looking to sell its residential properties in India to Indians based in Singapore, the developer told BT.

‘In Singapore we see a growing non-resident Indian (NRI) market,’ said Ang Wee Gee, KepLand’s director of regional investments.

‘In the past we have not been selling in Singapore. But now – with more Indian professionals coming here to work and live – we have decided to.’

KepLand showcased its India properties in Singapore last weekend.

About 300 people visited the company’s booth and about 40 of them are ’serious buyers’ the developer will follow up with, Mr Ang said.

KepLand is now marketing two projects in India – the 1,573-unit Elita Promenade in Bangalore and the 1,376-unit Elita Garden Vista in Kolkata.

It also has another project – the 1,168-unit Elita Horizon in Bangalore. The project is expected to be launched soon.

KepLand has so far sold 86 per cent of 1,340 units launched at Elita Promenade. Units went for between 3,000-3,400 rupees per square foot – a jump of more than 30 per cent since the project was first launched in 2005.

At Elita Garden Vista, the company has sold about 60 per cent of the 250 units launched. Prices were 2,600-3,000 rupees psf, Mr Ang said. The project was launched a few months ago.

About 15 per cent of all the units sold at both projects were bought by NRIs, Mr Ang said.

But most of these people are not from Singapore – they are from places such as the US, the UK and Hong Kong.

However, this is set to change as KepLand is seeing more interest among NRIs based here. ‘We have an advantage here – they know us and can see the projects we have launched here,’ Mr Ang said.

KepLand is upbeat about its future in India, where it has had a presence since 2003. More residential projects are planned there. ‘Definitely, we would want to expand,’ said Mr Ang.

‘Apart from Bangalore and Kolkata we are also looking in Hyderabad, Chennai and the gateway cities of Mumbai and New Delhi.’

 

Source: Business Times 4 Dec 07

Fewer sub-sales but value hits all-time high

Median Q3 sub-sale prices also hit record of $1,246 psf, up 25% year-on-year

(SINGAPORE) The level of sub-sale activity may be just about half of what it was in 1995 but the value of subsale apartments transacted in the first three quarters of this year is already at an all-time annual high of $6.7 billion.

An analysis of data by DTZ Debenham Tie Leung reveals that although the number of sub-sale transactions actually fell to 1,374 in the third quarter of this year – representing a quarter-on-quarter (qoq) decline of 23 per cent – sub-sales made up 19 per cent of the volume, up from 16 per cent in the second quarter.

Equally significant is the fact that median sub-sale prices also hit a new record high of $1,246 psf, a qoq increase of 13.6 per cent and a year-on-year increase of 25 per cent.

The value per transaction of sub-sale apartments is also at a record high this year at $1.71 million per transaction.

But while the level of sub-sale activity can sometimes be an indicator of market bullishness, DTZ executive director Ong Choon Fah points out that factors driving up numbers in the third quarter may have more to do with real demand in the light of short supply and with various new developments becoming available for immediate occupation.

The Icon for instance, has consistently been one of the top two developments in terms of sub-sales this year with its median sub-sale price increasing 26 per cent qoq to $1,495 in Q3. But as Mrs Ong notes, Icon has recently received its temporary occupation permit (TOP), and other attributes like its inner-city location and the affordability of its small units do make it popular.

Another popular development among sub-sellers is The Sail @ Marina Bay which increased 21 per cent qoq in terms of median sub-sale price in Q3 to hit $2,093 psf.

Interestingly, according to DTZ’s analysis, the number of units at The Sail and Icon that have been sub-sold is now 512 and 370 units respectively. And assuming that units were not repeatedly sub-sold, DTZ suggests that almost half of the units in these developments have changed hands already.

More telling perhaps is that of the recent launches, only The Lakeshore, which has received TOP for some phases, and One-north Residences registered a significant number of sub-sales.

The number of sub-sale apartments in the luxury band fell 41 per cent to 317 transactions but it still makes up 45 per cent of sub-sale transactions.

DTZ believes that while the sub-sale market is increasingly competitive and sub-sale activity is not likely to accelerate further, the overall value of sub-sale apartments in 2007 is expected to increase further, backed by potential price increases.

And foreigners could be helping to boost the sub-sale market. DTZ’s report reveals that although the number of foreigners buying sub-sale apartments in Q3 fell by 20 per cent qoq to 460 transactions, this number exceeds that of apartments bought directly from developers.

Indonesians made up 38 per cent of these buyers, followed by Malaysians and Koreans who made up 15 per cent and 9 per cent respectively.

Again, The Sail and Icon proved to be the most popular with these buyers with foreigners buying 26 and 25 units (41 and 36 per cent) respectively in the quarter.

DTZ believes the sub-sale market will continue to receive interest from buyers seeking immediate occupation with some investors looking to realise returns earlier by tapping on the buoyant leasing market. But with the withdrawal of the Deferred Payment Scheme, sub-sale activity may slow and deals look set to be more sustainable.

 

Source: Business Times 4 Dec 07

Fewer homes worth less than remaining loans as prices rise

Owners no longer in negative equity may be tempted to sell and cash in

THE number of home owners in negative equity – where the property is worth less than the loan taken to buy it – has been slashed due to soaring real estate prices.

Four years ago, about 13.7 per cent of owners with home loans were in negative equity but that has now fallen to just 2.5 per cent, said the Monetary Authority of Singapore (MAS).

The proportion a year earlier was 5.1 per cent.

In terms of the total value of outstanding home loans, only 2.4 per cent were in negative equity in September – down from 4.7 per cent a year ago and 14.1 per cent in 2003.

Property experts tip that the significant shift into ‘positive equity’ will tempt some owners, particularly investors, to sell and cash in.

Owner-occupiers may refinance – taking out a new mortgage at a lower rate – while others will wait for prices to rise even more before selling.

The MAS figures, contained in its latest Financial Stability Review, came from a survey of six banks, which account for almost the entire home loan market.

OCBC Bank’s head of consumer secured lending, Mr Gregory Chan, said: ‘In line with the healthy economic growth, we observe that home loans taken on properties bought in the mid-1990s have been steadily recovering from their negative equity positions since 2004.

‘We have also noted an increased trend of consumers selling their properties for a profit.’

The number of requests for loan refinancing has also gone up in the past three months.A local bank executive believes positive equity is one of the reasons for this.

Home owners who wanted to sell their properties while in negative equity would have had to pay the bank the difference between the outstanding mortgage and the sale price. But those who held on may now be willing to sell, said property consultants.

‘Singaporeans are quite averse to selling things – especially big-ticket items – at a loss,’ said Mr Nicholas Mak of property consultancy Knight Frank.

Mr Eric Cheng, executive director of property agency HSR, recalled one owner who bought a Mandarin Gardens unit for $950,000 in 1996, only to see its value drop to about $600,000 around 2001.

After holding out for more than a decade, he finally managed to sell his unit for $1.08 million earlier this year.

For such sellers who have had the distressing experience of being in negative equity, cashing out with a profit at the earliest chance is a must. ‘They don’t want to experience another slump, which may last for another eight to 10 years,’ said Mr Cheng.

Owners might also be tempted to get out while the going is good, given recent government steps to cool the market, said a banker. Stricter collective sale rules, hikes in development fees and the axing of deferred payments would moderate price rises.

But there will be others who will hang on, waiting for home prices to rise further.

Mr Geoffrey Ying of financial advisory firm New Independent said: ‘It’s human psychology: since they have waited so long, what’s a few more months or years?’

The MAS also said that the banking system’s overall property exposure has gone up further as the boom spreads to the mass market. While the rise in banks’ property exposure has been driven mainly by loans to property-related firms, loans to individual investors have also risen of late.

 

Source: The Straits Times 4 Dec 07

Property sales set for big drop in Q4

Early numbers show Q4 private property deals at $2.9b, nowhere near Q3’s $15.6b

(SINGAPORE) Weakening market sentiment could have a bigger impact on property sales if early numbers for the Q4 2007 transactions are anything to go by.

In a preliminary analysis of caveats lodged by DTZ Debenham Tie Leung (DTZ), the value of all private property transactions for Q4 to date is about $2.9 billion.

This figure does not represent the full fourth quarter. There is also a time lag between a transaction and the lodgement of a caveat. Still, doubling or even tripling this figure will not bring it close to Q3’s figure of $15.6 billion and Q2’s record breaking figure of $24.2 billion.

DTZ executive director Ong Choon Fah also pointed out that apart from the continuing effects of the US sub-prime crisis, the property market was also jolted by the withdrawal of the deferred payment scheme in October. ‘It made people understand that there were risks involved,’ she added.

Signs of poorer market conditions were already apparent in the third quarter. In DTZ’s analysis for Q3, transactions for all private homes fell 36 per cent to 8,416 units. But this was attributed to seasonal market activity marked by the Hungry Ghost Month, as well as the reduced number of developer launches.

Mrs Ong believes that fewer launches in Q4 could be the culprit if sales do fall.

According to its report, the number of developer sales in Q3 reflected a 41 per cent quarter-on-quarter (q-o-q) drop to just 1,956 transactions with developers apparently monitoring the market for possible sub-prime impact.

Now, well into the fourth quarter, new launches still appear to be on hold. Mrs Ong believes that there are ‘genuine buyers’ in the market but developers could nevertheless be choosing to take their time to decide on pricing, or, launch developments in phases to test the market.

But she said that there is no evidence that developers or sellers are prepared to accept lower prices. ‘Prices are still inching up even though the activity level has dropped,’ she added.

Mrs Ong said that the recent strong performance of the private residential market has allowed many developers to accumulate financial reserves and most are not in need of immediate revenue. ‘Developers don’t feel the need to launch immediately. They can still launch next year, while some may even be considering waiting until the opening of the integrated resorts creates more buzz,’ she added.

The number of transactions in Q3 was bolstered by the high number of deals in the secondary market which saw 6,434 homes change hands. This represents a q-o-q drop of 34 per cent, but the decrease is of a lesser magnitude compared with that of developer sales.

And although collective sales slowed in Q3, DTZ says apartments in the secondary market in the prime districts continued to perform, largely due to price increases.

The number of secondary market apartments sold in Q3 fell 33 per cent q-o-q to about 5,300 units with foreigners accounting for 1,590 or 30 per cent of these transactions. DTZ noted that this was among the highest since 1995.

The strength of the secondary market was partly due to the buoyant leasing market which also encouraged foreigners to buy homes ready for immediate occupancy.

Bucking the downward trend of all category of buyers were corporate or institutional buyers.

In Q3, transactions attributed to companies actually rose by 11 per cent with 958 homes changing hands. DTZ said this was the largest number of units purchased in a quarter.

Apart from the reported acquisition of a block at Costa Del Sol by the Ong Beng Seng family, DTZ highlighted the sale of 49 out of 58 units in Duchess Crest, registered as company transactions. DTZ executive director (residential) Margaret Thean added that unlike the bulk sale at Costa Del Sol, the Duchess Crest transactions were not done by a single company either.

She added: ‘This reflects that foreign investors and property funds still have confidence in the Singapore market.’

Ms Thean also said: ‘With the sub-prime crisis in the US, some of these funds may also be increasingly looking outside the US to invest.’

 

Source: Business Times 3 Dec 07

Transformed Mt Faber eyes MICE business

It hopes to double capacity before Sentosa facilities come onstream

AFTER a major revamp in 2004 that saw Mount Faber transforming from a cable car station to Singapore’s second most visited paid tourist attraction, Mount Faber is now eyeing the meetings, incentives, conventions and exhibitions (MICE) business.

Before the MICE facilities in the integrated resort at Sentosa are up and running, Mount Faber hopes to double its own MICE capacity. Its facilities can currently hold 1,200 persons at any one time.

‘We have been working with the relevant authorities for land space,’ Mount Faber Leisure Group CEO Susan Teh told BT. ‘We are still in talks to see how we can expand.’

The existing MICE facilities are already fully utilised during peak season and 80 per cent booked during off-peak period, she said.

From a low base, revenue from the MICE segment has grown by a staggering 290 per cent since Ms Teh took office in 2004, and has become a significant growth driver for the group.

Ms Teh now hopes to position Mount Faber as a ‘total solutions’ for MICE events, given the unique offering of conference venue amid the lush flora and fauna, attractions, food and beverage (F&B), business centre service and coach transport that enables visitors to arrive in style.

Some major institutions and corporations that have already tapped Mount Faber’s MICE facilities include the International Monetary Fund, Citibank Singapore, UBS and Singapore Telecommunications.

Confident that Mount Faber offers a unique hilltop experience not seen in other parts of Singapore, Ms Teh reckoned that the MICE facilities at Resorts World at Sentosa would be complementary rather than competitive.

‘As the government is targeting 17 million (visitors by 2015), there will definitely be spillovers and everyone can have a piece of the pie,’ Ms Teh said.

With companies increasingly looking for unique places to hold corporate functions, Mount Faber now has an event management team that helps to plan corporate events such as dinner and dance parties and product launches.

Since Mount Faber’s revamp in 2004 that saw the group embark on a strategy of diversification, significant improvements have been seen not just in its facade, but also translating to headline numbers.

Its profit has doubled from 2004 while its revenue has tripled over the same period. The revenue mix has shifted from predominantly cable car receipts to an even contribution from F&B, MICE, cable car rides, attractions and wholesaling.

Mount Faber now serves a broad target group by providing casual to formal dining, family attractions to venues for corporate events, and has seen a mingling of tourists and locals.

The revamped Mount Faber also saw an increase in visitor arrivals from 1.2 million in 2004 to 1.8 million year-todate.

‘We are targeting two million visitors, an all-time high, and we are on track by the end of this year,’ Ms Teh said.

The icon of the revamped Mount Faber – Jewel Box – which houses its MICE facilities and F&B outlets, sits on the hilltop which was previously only used for the cable car station.

Other selling points of Mount Faber stem from its ‘four seasons’ campaign, which changes the design and colours of the facade at Jewel Box every quarter, including touch points like menu and cocktails, offering a different experience each time.

‘You can’t find another attraction in a hill environment. The Jewel Box itself has already started to benefit from the brand and this is what we will leverage on going forward,’ she added.

Ahead of the opening of the Sentosa IR, other non-MICE facilities at Mount Faber will also get a facelift to cater to the sophisticated and discerning visitors that the IR is expected to attract.

This would include upgrading the F&B area which comprises Altivo, Glass Bar, Faber Rock and Faber Hill Bistro, and increasing retail outlets, Ms Teh said.

‘We are working with the relevant authorities to improve the accessibility here,’ she added.

Without letting on whether a tram line is in the pipeline, Ms Teh said that the authorities will look at improving accessibility in the southern precinct in general and can be expected to talk to various stakeholders to achieve this.

 

Source: Business Times 3 Dec 07

Few landed collective sales done even in boom times

Experts say the selling process for houses is trickier than for condos

COLLECTIVE sales were all the rage for a large part of this year – but few were for landed homes.

They are not the easiest of deals to close, but DTZ Debenham Tie Leung managed it two weeks ago when it brokered the sale of 15 houses in the Balestier area for $61 million, a record price for the area.

The houses lined both sides of a road, which was also proposed as part of the sale. The entire area will give a sizeable combined site of 32,978 sq ft.

But such large tracts with a high redevelopment potential are hard to come by, say property consultants.

Also, for landed homes to go en bloc, every owner must agree to the sale. This is unlike strata-titled condominiums, where a collective sale requires the consent of up to only 90 per cent of the owners.

Getting 100 per cent approval for landed homes, as consultants will tell you, is not easy.

‘The risk is there because you need to have contiguous support,’ said Savills Singapore’s director of investment, Mr Steven Ming. ‘You may work on a row of houses only to find that one or two houses in the middle refuse to sell.’

Another dampener is that many landed sites come with a development potential of only 1.4 times their size.

This means that they cannot be redeveloped into large properties, limiting a developer’s potential profit.

Even if a large development is allowed, the developer would likely need to pay a large fee to the Government in order to proceed.

‘This takes out some of the gains for the owners,’ said an industry observer, ‘and, thus, it is often not worthwhile for consultants to work on the sale.’ Hence, some of these sales are done by individuals or smalltime developers, he said.

Mr Michael French, the managing director of Asia Premier Property Consultants, says it is sometimes easier to sell landed homes en bloc because there are simply fewer owners to deal with than in a condo.

But some owners just refuse to sell. Homemaker S. Tan, who lives in a semi-detached house in Telok Kurau, says she has been approached by agents asking her and her three neighbours to sell collectively.

She is not keen, unless all her neighbours agree. ‘We like this place… It is convenient for my children.’

Replacement cost is also an issue. ‘Even if they pay a bit higher, we can’t buy another house with the same location and size,’ she added.

In Prome Road is an example of what happens when not everyone agrees to sell. A row of houses has been sold en bloc, but a few others will be left standing.

An 80-year-old retired teacher who lives in a three-storey terrace house with her family is staying put.

She did not participate in the August collective sale of a stretch of old, single-storey houses in the street because she did not think the apportionment of proceeds was fair. ‘I paid a lot of money to build this house. It’s much bigger inside, so we should get more money than the rest,’ she said.

When confronted with owners such as these, developers tend to build around or next to these houses. That can leave a single house standing, incongruously, next to a five-storey development.

 

Source: The Straits Times 3 Dec 07

Meet the man who paid $435m for an Orchard condo

Billionaire tycoon Francis Yeoh, the man behind YTL Corporation, opens up about his life and loves

WHILE his pals were off sightseeing during the school holidays, Malaysian tycoon Francis Yeoh was doing his own brand of ’site’-seeing: checking out the building sites run by his father’s construction firm.

It was no holiday. Mr Yeoh stayed and worked on rough terrain with the people who helped to build YTL Corporation.

Given that he now has a personal fortune well in excess of US$1 billion (S$1.4 billion), a private island and two helicopters for his personal use, you would have to say it was time well spent.

Mr Yeoh has overseen the remarkable transformation of YTL from a tiddler worth $200,000 to a $13 billion conglomerate, with interests in construction, property, hotels and utilities.

Its latest move made headlines here last week when YTL paid an eye-popping $435 million for Westwood Apartments (above), a 30-year-old condominium in Orchard Boulevard.

It raised the usual questions that often follow one of the firm’s coups: ‘What is YTL and who is Francis Yeoh?’

While relatively unknown here, YTL is a household name across the Causeway.

Founded in 1955 by Mr Yeoh’s father, Tan Sri Yeoh Tiong Lay, whose initials inspired the firm’s name, YTL began life in a two-storey shophouse in Kuala Lumpur’s Jalan Bukit Bintang.

Its first two decades were successful, but then came the 1970s oil crisis.

‘It was a turbulent time,’ Mr Yeoh, 53, told The Sunday Times this week. ‘Two generations of savings were wiped out.’

Despite this, his father managed to scrape together enough money to send Mr Yeoh, the eldest son in a family of seven children, abroad to get a degree. ‘He wanted me to come back and change the way we do things.’

He earned a civil engineering degree, found a fresh perspective on business management and came home to revolutionise YTL, turning its fortunes around in 1978, when he took over the reins at 24.

Its aggressive expansion has seen profits grow every year for the last decade.

YTL moved into the utilities industry, becoming Malaysia’s first independent power producer and listed on the Malaysian bourse in 1985.

It ventured overseas, buying a stake in one of the biggest power distribution companies in Australia and a part of Indonesia’s second largest power generator.

It also bought English utility firm Wessex Water, a bold £1.2 billion (S$3.6 billion) swoop that prompted Britain’s Daily Telegraph to ask in a headline: ‘Who the hell are YTL?’

Many might regard the firm, with its surprising moves on the international stage, as a bit of a dark horse, but the same cannot be said of Mr Yeoh, for whom the phrase ‘flamboyant entrepreneur’ seems to have been invented.

He has an abiding love for the arts, especially opera, and counted the late Luciano Pavarotti as a good friend.

On one occasion, Mr Yeoh flew 200 businessmen, politicians and celebrities to his private island – Pangkor Luat, off Malaysia’s east coast – for a Pavarotti concert.

He is also a keen buyer of art and fine wine and loves golf, skiing and the rarefied sport of flying helicopters.

That’s why he has two.

Mr Yeoh is also an arts patron and funded KL’s new Performing Arts Centre.

His philosophy, for business and life, is ‘go for the best of the best’.

That approach can be seen at YTL’s Starhill Gallery in KL, a vast retail space with blue chip brands such as Louis Vuitton and Fendi.

This is also YTL’s approach to its next gambit: real estate in Asia, starting here in Singapore.

YTL owns majority stakes in two Sentosa Cove projects – Sandy Island and the Lakefront – and is planning luxury villas designed by Claudio Silverstrin, the architect behind Armani stores worldwide.

As gilded as his life has been, Mr Yeoh was touched by tragedy when his wife Rosaline died after a seven-year battle with breast cancer.

It had been love at first sight, with Mr Yeoh proposing to Rosaline, then a Hong Kong actress and TV star, within two weeks of meeting. ‘Both our mothers cried with joy’ at the news, he said.

‘She was very courageous and uncompromising in quality. If I did something wrong, she’d prod me. She always told me to go for the best.’

Mr Yeoh said that after her death, he felt like ‘a bit of my flesh was torn away from me’, but added that he was happy that she was in heaven.

Mr Yeoh, a born-again Christian, credits his success to God, and said: ‘I don’t fear death. Because I know I’ll go to a better place. And I… will see my wife again.’

His children, aged 15 to 26, are all Christians and named after Biblical characters: Ruth, Jacob, Joseph, Joshua and Rebekah.

It is perhaps his robust belief that gives him his unshakeable business confidence. ‘People ask if YTL will be as big as General Electric some day. I think, why not? I don’t think there’s a limit to how much YTL can grow.’

 

Source: The Sunday Times 2 Dec 07

PROPERTY: Exec condos grow in appeal with age

Many resale units will reach the 10-year mark within the next three years, which means sale restrictions will be lifted and they can be marketed like any other private home

EXECUTIVE condominiums (ECs) are back in the spotlight these days as private property prices climb beyond the reach of many upgraders.

These ‘hybrid’ properties, which come with the type of facilities found in private condos but with sale restrictions, were introduced in 1995 to help higher-income couples who had been priced out of the then booming private property market.

These projects became rarer during the property slump that followed their introduction.

However, their popularity has been revived of late given the growing gap between the prices of private and public housing.

One EC site in Punggol is on the reserve list, while another three EC sites, in Yishun, Jurong and Sengkang, will be added in the first half of next year.

This means they will be put up for tender when a developer commits to bidding a minimum price that is acceptable to the Government.

The outlook for resale ECs seems just as bright as that for new ECs. The first crop of ECs is nearing the 10-year mark, and they are looking more appealing in terms of investment value.

This is because, while resale ECs are generally 10 to 15 per cent cheaper than their fully private counterparts, their values are expected to rise when they turn 10 years old.

This is the point at which restrictions will be completely lifted, so they can be bought by anyone, including foreigners, and can hence be sold like any other type of private home.

New ECs cannot be sold within the first five years. They can be sold after that but, until they turn 10, only to Singaporeans and permanent residents. This effectively places a cap on their sale prices; there is no such cap on private condo prices.

Six of the existing 23 EC projects – Eastvale in Pasir Ris, Westmere in Jurong East, Simei Green, Windermere in Choa Chu Kang, Chestervale in Bukit Panjang and Pinevale in Tampines – will turn 10 in 2009.

Another seven projects will ‘mature’ one year after that.

The director of research and consultancy at Colliers International, Ms Tay Huey Ying, said: ‘The investor is likely to enjoy some capital appreciation in the short to medium term, provided the upcycle for the residential property market is sustained till then.’

The locations of the older ECs are a major attraction. The managing director of C&H Realty, Mr Albert Lu, said: ‘All ECs within a 10-minute walk of MRT stations will be good buys. As more spaces near MRT stations are taken up, the value of nearby ECs will continue to rise.’

Many of the first few ECs, such as Westmere, Simei Green and Eastvale, are located within walking distance of MRT stations.

The rental yields are attractive too. The rents they fetch are comparable to those for private condos: They come with similar facilities, but their yields are higher because they cost less to buy in the first place. The chief executive of property agency PropNex, Mr Mohamed Ismail, estimated that ECs have rental yields of 5.5 to 6.5 per cent, compared with just 4 to 5 per cent for private condos.

Still, there is some downside to buying resale ECs. House hunters should not expect luxurious trimmings because new ECs can be bought only by households earning not more than $10,000 a month. Mr Colin Tan, the head of research and consultancy at Chesterton International, said: ‘To ensure a reasonable profit margin, developers might lower the quality.’

For home hunter Tan Song Teng, 43, the biggest pull factors for resale ECs are their location and price. The banker, who is looking to buy a three-bedroom unit in Simei Green, said he was attracted by the lower price and the proximity to Simei MRT station.

‘You won’t be overpaying,’ he noted, predicting that even if the value of the property does not rise, it will not drop below current levels.

 

Source: The Sunday Times 2 Dec 07

October property loan growth hits 8-year high

Bank lending to sector reaches $105.7b, up 18%

(SINGAPORE) Bank lending to the property sector continued to accelerate in October, growing at the fastest annual pace in eight years, according to new data from the Singapore central bank yesterday.

Overall loans growth in the banking sector also picked up in October, the latest estimates from the Monetary Authority of Singapore (MAS) show.

Loans to the broad property sector, comprising consumer home loans and business loans to the building and construction industry, reached $105.7 billion at end-October – up 18.1 per cent from a year ago.

The year-on-year expansion was the fastest since October 1999, when property-related lending grew by 19.5 per cent.

Over the month, property-related loans grew 3.2 per cent from $102.4 billion at end-September, the fastest monthly pace since Nov 1998.

Consumer home loans, which include mortgages as well as short-term ‘bridging loans’ offered by banks to buyers of new homes who are waiting to receive the cash from selling another property, grew 14.3 per cent from a year ago to $71.8 billion, the fastest since October 2004. Over the month, the growth was 1.9 per cent, slightly slower than the 2 per cent growth in September.

Much of the period covered by latest data precedes the government’s withdrawal on Oct 26 of the deferred payment scheme for private property purchases, which was aimed at discouraging speculative buying.

David Conner, chief executive of OCBC Bank, said at the release of the group’s third-quarter results on Nov 6 that he expects to see an increase in demand for mortgages over the next two years, partly due to the withdrawal of the scheme, as buyers of new private homes will now have to pay a larger portion of the cost of a property while it is being built instead of deferring payments until the building is completed.

Meanwhile, loans to businesses in the building and construction sector rose 27.1 per cent over the year – the fastest since December 1996 – and 6 per cent over the month to $33.9 billion at end-October.

Total customer deposits grew 20.8 per cent over the year to $311.9 billion at end-October, while total loans grew just 15.5 per cent to $224.1 billion.

On a monthly basis, however, loans growth has outpaced growth in deposits since June. Over the month of October, loans grew 2.4 per cent compared to 1 per cent for deposits.

With the rapid expansion in loans, the ratio of loans to deposits in the banking system has recovered slightly to 71.8 per cent at the end of October, after falling as low as 67.1 per cent at end-May – the lowest in the published MAS data series, which started in Jan 1991.

Overall, loans to businesses grew at a faster pace than consumer loans, both on a monthly basis and when compared to a year ago.

Loans to businesses grew 18.5 per cent over the year and 2.6 per cent over the month to $120.1 billion. Other than the building and construction industry, the rapid growth in business loans was mainly due to expansion in loans to financial institutions and to the transport, storage and communications sector.

Meanwhile, consumer loans expanded 12.2 per cent over the year and 2.2 per cent over the month to $103.9 billion, driven mainly by the surge in home loans. Share financing and credit card lending also continued to grow, although these account for less than 8 per cent of total consumer loans.

The number of credit cards in circulation grew 15.3 per cent over the year and 2.4 per cent over the month to 4.45 million at end-October, excluding supplementary cards. But the total credit card rollover balance – that portion of the credit card debt that is subject to interest charges – dipped slightly over the month to $2.85 billion.

 

Source: Business Times 1 Dec 07

Green living scores in design contest for homes in Marina South

URA selects 4 schemes out of 30 entries from S’pore, overseas architects

A LOW-RISE eco-village, canal streets, a coastal shopping promenade and terraced communal green roofs – coupled with dramatic views and contrasting skylines. This is the living environment suggested by the winning entrants in a competition to get ideas on how Marina Bay should look.

In September, the Urban Redevelopment Authority (URA) said it will set aside 60 hectares – the Marina South Residential District (MSRD) – for 11,000 homes.

A design competition to inspire innovative ideas to distinguish the area was announced at the same time.

When the competition closed on Nov 12, 30 entries had been received from local and overseas architects. Foreign submissions came from Hong Kong, Australia, Indonesia, India and the US.

Four schemes have been selected and another two received special mention. The winners are Hong Kong’s Compass Studio and Singapore’s Khoo Teik Rong, SKPS-Project and Surbana. Special mention was given to Australia’s Chor and Singapore’s ZONG Architects.

The four winners will get $10,000 and the two special mention schemes $5,000.

‘We are impressed with the numerous interesting and novel ideas from the competition,’ said URA’s director for urban planning and design Fun Siew Leng.

‘They will serve as a starting point to stimulate reflection and inspiration to develop Marina South into a distinctive waterfront garden district for generations to come.’

MSRD will also have 1.6 million sq ft set aside for hotel use and 678,000 sq ft of commercial space. The entire project will be developed over 15 to 20 years, once supporting infrastructure has been put in place.

 

Source: Business Times 1 Dec 07

Striking ideas thrown up for Marina South project

4 winners in design competition boast features such as terraced buildings, ‘floating’ blocks

IT’S been a hazy vision up to now but the first stunning proposals for the Marina South Residential District, unveiled yesterday, indicate that a design revolution is brewing on Singapore’s waterfront.

The four proposals – picked from a design competition that attracted 30 entries from India to Australia – promise an intoxicating cocktail of architectural flamboyance and ecological innovation in what has been touted as Singapore’s future No. 1 residential hot spot.

It is the first time a design competition has been held as part of the planning process for a residential district here.

And the ideas thrown up have not been seen here before: They include elevated condominiums, terraced buildings resembling cascading gardens, and ‘floating’ housing blocks with Amsterdam-style canals.

The winners, who each get $10,000, include local architecture firm Surbana, Hong Kong’s Compass Studio and national serviceman Khoo Teik Rong, an architecture graduate from Melbourne’s RMIT University.

The designs remain just suggestions at this stage and may not be part of the final plan, but they serve as a striking starting point for the ambitious project.

The Urban Redevelopment Authority (URA) will now compile a final plan for the 60ha site, which will be developed over 15 to 20 years and will have up to 11,000 homes.

The competition, organised by the Singapore Institute of Architects (SIA) and the URA, asked entrants to unscramble what amounted to a Rubik’s cube of design challenges.

At the basic level, 11,000 housing units had to be incorporated with commercial, hotel and community facilities on a prime site near the upcoming Gardens at Marina South and Marina Bay Sands integrated resort.

But proposals had to show how high-density living could be achieved while retaining the ambience of a waterfront garden.

The judges also looked for environmental sustainability and a sense of community, while calling for designs that would allow Marina South to showcase the City in a Garden vision.

Mr Khoo, 23, drew on inspiration from a visit to Amsterdam and opted for canals to run through the site to make the area more intimate.

‘I didn’t want a site that would have only large-scale buildings,’ he said.

The Surbana team had a ‘green and blue’ strategy. Green in the form of plants on the roofs of low-rise buildings, which would be terraced to give the appearance of gardens sloping to the marina.

Blue covered their housing idea – 30- to 50-storey-high blocks placed on shallow pools, making them appear to float on water.

Compass Studio, meanwhile, used hills as its inspiration – it wanted high-rise buildings to resemble hills that meet the lower plains. It also proposed a low-rise eco-village.

The fourth winner was SKPS-Project, a group of five architects, mostly from Singapore. They proposed lifting residential blocks 30m above the ground and planting trees underneath.

Reacting to the designs, Mr Mink Tan of Mink Architects said they were visually evocative, with ‘a mix of everything’. ‘If done successfully, this can be a…shining example of Asian urban living.’

Ex-SIA president John Ting of AIM & Associates was encouraged by the designs, but said more refinement was needed. He suggested the land can be split into smaller parcels and various architects let loose: ‘Then we can learn how to work the land better.’

Property developers and consultants were more hardheaded, telling The Straits Times that it was too early to judge if the designs were commercially viable.

The 30 entries are on display at City Hall until Dec 8.

 

Source: The Straits Times 1 Dec 07

STB rejects Finland Gardens’ collective sale

Lawyer says rare decision is based on sale price and less than 80% approval

THE Strata Titles Board (STB) threw out the collective sale application of Finland Gardens in Siglap after it failed to meet statutory requirements.

The rare decision to axe a bid for a sale en bloc followed five days of hearings that took place in July and early September.

The STB delivered its decision on Wednesday in an oral announcement but has yet to disclose the grounds for rejection. It may do so at a later date.

Mr Denis Tan, the lawyer for the owners objecting to the sale, heard the oral announcement. He said: ‘The board dismissed the application on the grounds that it found there was no 80 per cent majority and that the sale price was not obtained in good faith.’

The Finland Gardens sale required approval from at least 80 per cent of the owners.

Mainboard-listed company Sing Holdings bought the freehold 48-unit site in November last year for $49.5 million. The owners of each unit would stand to reap about $1 million to $1.27 million, depending on the size of the unit.

The owners of eight units objected to the sale; their grounds included not getting the best possible price for the estate.

In addition, they argued that a higher offer had come in after Sing Holdings’ offer, but the sale committee, instead of asking Sing Holdings to come up with a better price, had simply asked the company to match the later offer.

Clinic manager Valerie Chia, 46, said she and owners of the other seven units had objected to the sale from the start, more than a year ago.

The managing director of Sing Holdings, Mr Lee Sze Hao, said he would be asking the majority owners to file an appeal against the STB decision.

An industry observer said the ruling is significant because there is a general perception that collective sales are usually approved.

‘If you look at collective sale rules, their purpose is to facilitate such sales,’ he said.

Finland Gardens, located in the Siglap area at East Coast Avenue and East Coast Terrace, has a land area of 98,309 sq ft.

It comprises 48 units of walk-up apartments housed in two three-storey blocks.

Sing Holdings partnered Forum Asian Realty Income II to buy the estate. The United States-based fund holds a 30 per cent share of the joint venture.

In late October this year, the STB threw out the collective sale application for Airview Towers at St Thomas Walk.

Developer Bukit Sembawang, which had agreed to pay $202.17 million to buy the site in April, said recently that the application had been dismissed on a technicality. The sellers are planning to file an appeal, it added.

 

Source: The Straits Times 1 Dec 07

Westwood Apartments sold for $2,525 psf ppr

WESTWOOD Apartments at Orchard Boulevard has been sold for $435 million or a unit price of $2,525 per square foot per plot ratio (psf ppr), making it the most expensive site to be sold by collective sale to date.

In June, The Ardmore was sold for $262 million or $2,337 psf ppr.

The price achieved for Westwood Apartments is perhaps all the more remarkable as it comes after the US sub-prime crisis rocked markets around the world recently.

Sold to Malaysia’s YTL Corp, the deal was brokered by Savills Singapore. Savill’s director (Investment Sales) Steven Ming added: ‘It’s a good shot in the arm for the market as it has not been as hot as it was in the first half of the year.’

Mr Ming would only reveal that ‘a handful’ of bidders took part in the tender. But he added: ‘That the buyer is a foreign investor shows that foreigners are still optimistic on our market.’

Savills is also marketing another four to five collective sale sites, and Mr Ming says that ‘there is interest from both foreign and local buyers’.

Westwood Apartments did, however, sell for slightly under the indicative price of $2,800 psf ppr when it was put up for tender about two months ago.

Although investors were expected to bid cautiously, YTL group managing director Francis Yeoh said its bid reflects that YTL is ‘bullish on Singapore’.

‘I don’t think the bid was cautious,’ he added.

YTL, which is listed on the Malaysian stock exchange and has a market cap of about US$9 billion, ranks as one of Malaysia’s top 20 companies.

The conglomerate, whose businesses include construction, real estate and energy, has already acquired two Sentosa Cove sites.

The breakeven price for a new development at Westwood Apartments is estimated to be between $3,500 and $3,600 psf.

Mr Yeoh would not say what the expected launch price would be but cited the reported $5,000 psf for Ritz Carlton Residences at Cairnhill (RCR) as a possible benchmark.

YTL is the developer for RCR in Kuala Lumpur, and Mr Yeoh said that Westwood Apartments could also be a branded residence.

Mr Yeoh added that its Lakefront Collection development at Sentosa Cove would be branded as Armani Casa. He also did not rule out another Ritz Carlton Residences here. ‘There can be two in Singapore,’ he said.

The 30-year-old Westwood Apartments sits on a 62,179 sq ft site. It has a permissible plot ratio of 2.8 and has the potential to yield about 43 units of 4,000 sq ft apartments.

 

Source: Business Times 28 Nov 07

United Engineers makes top bid for AMK DBSS site

UNITED Engineers (UE) has emerged as the top bidder for HDB’s latest Design, Build and Sell Scheme (DBSS) site in Ang Mo Kio, the government agency said yesterday.

UE’s bid – which was the highest of five – came in at $134.2 million, or some $212 per square foot per plot ratio (psf ppr).

The amount was higher than analysts’ estimates, who said that the public housing site could fetch between $170 and $200 psf ppr when it was launched.

UE’s bid was 12.8 per cent higher than the second-highest bid of $118.9 million, or $188 psf ppr, which was put in by Chip Eng Seng.

UE’s bid was also 20.9 per cent higher than the lowest bid of $111 million, or $175 psf ppr, put in by Boon Keng Development.

The two other bidders were the Sim Lian Group and a partnership between Straits Construction subsidiary Hoi Hup Realty and Sunway Concrete Products, which is part of the consortium that won the DBSS site in Boon Keng Road earlier this year.

The Ang Mo Kio land parcel has a site area of 180,716 sq ft, with an allowable gross floor area of 632,506 sq ft. It is close to the Ang Mo Kio town centre with its MRT station, bus interchange and the AMK Hub.

The development will target HDB upgraders or en bloc sale downgraders, said analysts, who predict that the take-up for any project coming up on the site should be good because the stock of vacant HDB flats has fallen of late.

UE will be required to build a minimum of 30 per cent of the flats with a floor area of 95 sq m (1,023 sq ft) or less – equivalent to flats of four rooms or smaller.

CBRE Research estimated that the site can yield more than 500 units.

UE’s shares closed 10 cents down at $3.70 yesterday. The company’s stock has climbed 49.8 per cent since the start of the year.

 

Source: Business Times 28 Nov 07

EL Devt to build 200-unit condo in Woodlands

EL Development plans to build a 200-unit mass market condominium on the Woodlands site it won in a government tender, the company’s managing director Lim Yew Soon told BT yesterday.

The project, which will be launched in the third quarter of 2008, is expected to sell for about $600-$650 per square foot (psf), Mr Lim said.

EL Development, which is fully owned by Evan Lim & Co Pte Ltd, trumped seven other bidders for the 99-year leasehold residential site at Woodlands Avenue 2/Rosewood Drive after a government tender closed earlier this month.

The company’s bid was $56 million or $232 psf per plot ratio.

The Singapore Land Authority (SLA) yesterday announced that it is awarding the site to EL Development.

The 172,200 sq ft site has a 1.4 plot ratio, giving it a maximum gross floor area of 241,100 sq ft.

Mr Lim said that the project will consist of mostly 2-bedroom and 3-bedroom apartments. Prices, he said, will be kept ‘affordable’ to target the HDB-upgrader market.

‘We believe that the project will be for HDB upgraders and younger families,’ he said. The company will try to manage the construction costs as it is also a contractor, Mr Lim said.

EL Development also has two other residential sites in its landbank for launch soon – one along Devonshire Road and the other on Kampung Java Road. Both projects will be high-end developments and will be launched in the first quarter of next year, Mr Lim said. Prices for the two sites have not yet been fixed, he said.

 

Source: Business Times 28 Nov 07

Record property deals: $750,888 for 5-rm Marine Parade flat

IN FRESH signs the property market is still pretty hot, an HDB flat has sold for a record $750,888 – and a developer has paid a record price for a collective sale site.

A retired couple yesterday bought the 32-year-old recently renovated flat in Marine Parade. The couple, who declined to be named, have lots of time to enjoy the full 23rd storey sea view.

The wife said: ‘The view is not blocked. There is morning sun and it’s very near the underpass to East Coast Park.’

They have lived abroad, enjoying sea views in previous homes in Germany and Australia.

The last HDB record of $730,000 was set earlier this month – also for a five-room Marine Parade flat with a sea view. Both are on high floors and near East Coast Park with what agents call the ‘X-factor’. An executive HDB flat in Queenstown recently sold for $755,000, but it is newer and nearly 300 sq ft bigger than the record five-room Marine Parade flat. Executive flats are limited.

$435m for Orchard Boulevard condo

A 30-YEAR-OLD condominium at Orchard Boulevard has smashed the record for Singapore’s most expensive collective sale.

Westwood Apartments was sold yesterday for $435 million to Malaysian conglomerate YTL Corp. That is an eye-popping $2,525 per sq ft per plot ratio (psf ppr), including a $4.6 million development charge.

This beats record-holder The Ardmore, a 24-unit freehold property off Orchard Road – sold in June for $262 million, or $2,338 psf ppr.

Owners of the 50-unit condo will each get about $8 million. Owners of two penthouses will get about $17 million each, said deal broker Savills Singapore.

The deal caught the industry by surprise, given the lukewarm response to government land sales and a slowdown of collective sales, recently.

Hot 5-rm sales

$750,888

Marine Parade

$730,000

Marine Parade

$720,000

Kim Tian Place

$710,000

Marine Parade

$700,000

Mei Ling Street

 

Hot en bloc deals

$2,525 psf

Westwood Apartments

$2,338 psf

The Ardmore, Ardmore Park

$1,820 psf

The Grangeford, Leonie Hill

$1,788 psf

Char Yong Gardens, Cairnhill

$1,735 psf

The Parisian, Wheelock Place

 

 

Source: The Straits Times 28 Nov 07

RECORD PROPERTY DEAL NO. 2: High collective sale price catches analysts off guard

THE record collective sale price achieved by Westwood Apartments yesterday has put to rest industry concerns that the red-hot property market has cooled off.

Malaysian conglomerate YTL Corporation paid $435 million for the 30-year-old condominium in Orchard Boulevard, with an additional $4.6 million development charge.

This prices it at a startling $2,525 per sq ft per plot ratio (psf ppr), a level that trumps the freehold The Ardmore, a 24-unit property off Orchard Road that was sold to SC Global Developments in June for $262 million, or $2,338 psf ppr.

Westwood’s owners will each reap about $8 million, with the two penthouse owners getting about $17 million each.

The sale comes after recent government land sales received lukewarm responses, prompting experts to voice concerns of a souring in sentiment.

A condo plot in Enggor Street in Tanjong Pagar, for example, fetched a top bid of $180.8 million, or $717 psf ppr when it closed recently. This was well below the $852 psf ppr achieved by an adjacent plot.

Analysts told The Straits Times they were caught off guard by YTL’s bullish price but added that the prime Westwood location justified the high price tag.

The 62,179 sq ft condo, which has a plot ratio of 2.8 and a 20-storey restriction, could accommodate 43 luxury apartments of 4,000 sq ft each, said Savills Singapore, which brokered the deal.

Knight Frank director for research and consultancy Nicholas Mak said the sale was refreshing as the volatility in global stock markets, coupled with recent government measures to cool the market, have slowed sales.

Other analysts believe the sale is a one-off with demand for collective sales likely to be confined to prime areas such as District 9, 10 and 11.

Chesterton International Property Consultants’ head of research and consultancy, Mr Colin Tan, said negative sentiment is unlikely to affect prime sites.

‘Even if a developer overpaid, it has secured the site. In the long run, it is likely to be in their advantage,’ he said.

Malaysian tycoon Francis Yeoh, who helms YTL, told The Straits Times yesterday that he was in it for the longhaul.

Buying Westwood cements YTL’s entry into Singapore’s top-tier luxury property market.

YTL already owns Sandy Island and the Lakefront Collection at Sentosa Cove.

Dr Yeoh shrugs off the apparent recent real estate cool-down in Singapore, saying wealthy buyers will always demand quality homes, regardless of market sentiment.

‘The question of whether the price paid for the land is reasonable depends on what you do with it,’ he said.

‘There are many people who are still bullish about Singapore’s market.’

Westwood resident Richard Eu, who is also chief executive of the traditional Chinese medicine company Eu Yan Sang, said owners were ‘happy that we managed to get a good price given the recent slowdown’.

The deal took just seven months to complete and is the largest collective sale since new rules kicked in on Oct 4.

Westwood’s owners will each reap about $8 million, with the two penthouse owners getting $17 million each.

 

Source: The Straits Times 28 Nov 07

Expat cost of living in S’pore gaining on HK’s

S’pore and Chinese cities move up the ranks due to strong currencies, inflation

(SINGAPORE) The Republic is catching up with Asia’s leading cities in one area it probably does not wish to make strides in – expatriate cost of living.

While some of the region’s most pricey cities became relatively less expensive in the past year, Singapore, along with Beijing and Shanghai, have climbed the rungs in the latest cost of living survey by ECA International.

Singapore is listed as the ninth most expensive city in Asia – behind Seoul, Tokyo, Yokohama and Kobe, as well as Hong Kong, Taipei, Beijing and Shanghai. Worldwide, Singapore ranks 122nd, but that is 10 spots higher than in the 2006 survey.

In comparison, the Japanese cities and Taipei have all dropped in the global rankings in the past year, primarily due to a weaker currency, while Hong Kong stayed put at its 79th spot. This means that the gap is closing between the two ‘traditionally competitive’ locations, Singapore and Hong Kong, says ECA.

Conducted every March and September, the cost of living survey by the Hong Kong-based HR consultancy tracks a basket of 128 consumer goods and services commonly consumed by expatriates in more than 300 locations worldwide.

Multinational firms use the findings as a guide in determining expatriate remuneration packages and allowances.

But the survey excludes significant items such as housing, utilities, car purchases and school fees because, ECA says, expatriate packages usually include separate compensation for these.

Apart from the two-percentage-point hike in the Goods and Services Tax in July and overall rising inflation, the appreciating Singapore dollar is also driving up costs in Singapore ‘in a significant manner’, says Lee Quane, general manager of ECA.

‘While this is good news when sending international assignees from Singapore, those companies who need to send employees into Singapore will now have to apply higher cost of living indices to salaries to guarantee their personnel’s spending power when in Singapore.’

Seoul, Asia’s most expensive city, has climbed one rung in the global rankings to seventh in the latest findings.

Tokyo, on the other hand, has dropped out of the top 10 for the first time, moving from 10th to 13th.

A strengthening yuan against the US dollar, along with soaring oil, food and grain prices, have added to living costs in the Chinese cities, including ’second-tier’ ones. According to ECA, living costs for foreigners in Chongqing, for instance, have risen by 12 per cent, or twice as much as in Beijing.

Luanda in Angola emerged as the world’s most expensive city for expatriates. Two other African cities – Kinshasa and Libreville – also feature in the top 10. European cities, led by Oslo and Moscow, make up most of the top spots.

 

Source: Business Times 27 Nov 07

Riverwalk, Cairnhill Mansion and site next door up for sale

(SINGAPORE) Three prime sites – one zoned for commercial use and two for residential use – went on the market yesterday.

The Riverwalk near Clarke Quay is offered through a collective sale, said property firm Jones Lang LaSalle (JLL) which is marketing the project.

Market watchers reckon that the project could fetch about $700 million or $1,735 per square foot (psf).

The 82,317 sq ft site has a 4.9 plot ratio. It can be redeveloped into a commercial building with a gross floor area of 403,351 sq ft, subject to approval and payment of development charge (DC) of about $3 million and premium for topping up the lease.

The Riverwalk is now zoned for residential and commercial use. It comprises 181 commercial units ranging from 54 sq ft to 20,161 sq ft, 118 apartments ranging from 818 sq ft to 3,821 sq ft and 290 parking lots.

‘The potential purchaser may redevelop the property into a part commercial/part residential development or a Soho development,’ said JLL regional director Lui Seng Fatt. ‘The options available for this site are extensive.’

Elsewhere, Cairnhill Mansion and a separate adjoining site are being offered for sale. Cairnhill Mansion is being offered through a collective sale and the adjoining site is being offered by an individual owner, said Knight Frank, which is marketing both sites.

The guide price for Cairnhill Mansion is $443.6 million. As there is no DC payable, the price works out to $2,800 psf per plot ratio (ppr). The guide price for the adjoining site is $139.4 million. Including a DC of about $16 million, this works out to $2,800 psf ppr. Together, the sites add up to 62,903 sq ft.

The successful developer of the combined sites could build 100 units averaging 2,000 sq ft each, Knight Frank said.

‘Strong demand for high-end, luxury condominium developments coupled with the rosy outlook for the property market, should increase the site’s attractiveness to developers.’

The Cairnhill area, being a stone’s throw from Orchard Road, is attracting super-luxury developments like The Hamilton and Ritz Carlton Residences.

Selling prices for these projects are expected to start from at least $4,000 to $4,500 psf, said Knight Frank.

Recent launches like Hilltops are already achieving prices in the mid to high $4,000s psf, it said.

The tenders for both sites closes at 4pm on Jan 15 next year. The tender for The Riverwalk closes at 3pm on Jan 22.

 

Source: Business Time 27 Nov 07

S’pore launches pushed back as developers gauge sentiment

Some projects being launched overseas first, others struggle to finish showflats

(SINGAPORE) Developers here are holding back residential launches due to poor market sentiment – and in some cases are choosing to launch their projects overseas first as they wait for market sentiment here to recover.

Launches are also being held back as showflats are being delayed amidst a construction squeeze, market watchers said.

Major launches that can be expected over the next few months include City Developments’s Wilkie Studio and The Quayside Collection, Far East Organization’s Floridian and Cairnhill View, GuocoLand’s Goodwood Residences,

the Lippo Group’s Marina Collection and Wing Tai’s Belle Vue and L’VIV.

While several upcoming projects have most of the necessary approvals to launch in place, some of them are being held back in anticipation of a market recovery, BT understands.

‘Currently, we don’t know if Singaporeans will be willing to fork out that kind of money,’ said one developer who has yet to start selling the company’s project in Singapore. However, the luxury condominium in question is already being marketed abroad, with about half of the units sold to foreigners at prices exceeding $2,500 per square foot (psf).

In a recent report, UBS Investment Research also noted that several projects have obtained permission to launch in the past three months, but the launches were delayed due to the weak market sentiment.

‘Some projects with permits to launch in August and September have been held back due to weak sentiments,’ said the investment bank’s research unit in a recent note. ‘We expect these to be launched in late November or early 2008.’

Others point out that while some of the delays can be attributed to the poor market sentiment, showflats for some of the projects are not yet ready.

‘Sentiment is one reason for the quiet market,’ said Ku Swee Yong, director of marketing and business development at Savills Singapore. ‘But even if the market sentiment is good, some developers still can’t launch their projects because the showflats aren’t ready.’

One example is Lippo’s Marina Collection, Mr Ku said. The showflat for the 124-unit project is yet to be completed, he said. The project was supposed to have been launched last month.

Some developers are choosing to launch their projects overseas first. United Engineers, which is developing the 40-unit Sui Generis in the Balmoral area through a joint venture with Japan-based Kajima Corporation, recently said that it has sold 17 apartments via overseas previews in Indonesia and Hong Kong over the past two months.

The Singapore launch, on the other hand, is only planned for next year although the showflat is ready, BT understands.

Similarly, other developers are also waiting for next year to market their projects.

The weaker market sentiment also means that fewer projects are applying for permits to launch.

In October, for example, just three new projects received permits to launch, UBS said – City Developments’s Shelford Suites, Hayden Properties’ Ritz-Carlton Residences and a condominium at Kim Yam Road by Frasers Centrepoint.

However, industry players are confident that the market will recover soon – bringing with it a whole slew of project launches in the new year.

Some projects that went ahead with their planned launches recently did well. At Ritz-Carlton Residences, which started selling over the weekend, take-up was good and prices hit $5,000 psf, sources said.

 

Source: Business Times 27 Nov 07

Cairnhill Mansion up for collective sale

THE Cairnhill Mansion apartment block near the Goodwood Park Hotel, plus an adjoining site, have been put up for collective sale – a transaction that could total nearly $600 million.

The owners of Cairnhill Mansion, which is about 40 years old, want at least $443.6 million for their estate, comprising 60 apartments of 2,024 sq ft each and an 8,525 sq ft penthouse. The freehold block is on a site of 43,103 sq ft.

The adjoining site of 1,800 sq m has a guide price of about $139.4 million.

These price the land at about $2,800 per sq ft (psf) per plot ratio, inclusive of development charge, a level market observers feel may be too high for the area.

It suggests a break-even price of $3,500 psf to $3,600 psf. Last month, units at the luxury development Hilltops at Cairnhill Circle went for a median price of $3,711 psf.

Marketing agent Knight Frank said yesterday that Cairnhill Mansion, which has a plot ratio of 2.8, was earlier granted permission from the Government to raise the ratio to 3.675.

The adjoining site also has a plot ratio of 2.8.

Both sites will be sold by separate tenders, which will close on the same day – Jan 15.

Knight Frank said a developer buying both plots could expect to build about 100 apartments, each of about 2,000 sq ft. Future development there can go up to 36 storeys.

 

Source: The Straits Times 27 Nov 07

Koh Brothers buys 2 Shell kiosks for $19.6m

It aims to use one site for condo, other for hotel project

KOH Brothers has bought two petrol kiosks from Shell – one in Bukit Timah and the other in Changi – for close to $19.6 million.

The first site, at 383 Bukit Timah Road, is next to Koh Brothers’ freehold serviced apartment complex, Alocassia Apartment. The site has a strata land area of 13,500 square feet and cost Koh Brothers $13.3 million.

Singapore-listed Koh Brothers bought Alocassia Apartment – a residential and commercial site – in May last year for $30 million.

The company intends to convert the whole site to full residential use and launch a luxury condominium with about 50 units in the third quarter of next year, chief executive Francis Koh told BT.

With the new acquisition, the entire freehold site covers 44,900 sq ft and has a 1.4 plot ratio. The latest purchase brings the price paid by Koh Brothers for the site to $799 per square foot (psf) per plot ratio, including an estimated development charge of $6.9 million.

Mr Koh estimates the project could break-even around $1,250 psf since the company does not plan to tear down the whole building. Luxury apartments in the Bukit Timah area now go for about $1,800-$2,000 psf.

‘Given its prime location, freehold status, proximity to reputable schools and easy accessibility to the city centre, we are confident the site will appeal to home buyers who appreciate the exclusivity and prestige,’ Mr Koh said.

The second site bought by the company – at 80 Changi Road – adjoins its freehold Changi Hotel.

Bought for $6.3 million, the site has a strata area of 8,000 sq ft. The entire freehold Changi Road site now has a total area of 26,400 sq ft.

Mr Koh said the company will look to build a newer, larger hotel on the combined site. Changi Hotel is now a three-storey, 61-room hotel.

Shell’s general manager for retail, Henry Chu, said such sales allow the company to capitalise on the hot property market.

‘The timing of closure and sale of these sites is a commercial decision and is to allow us to take advantage of the buoyant property market to maximise our returns,’ he said.

 

Source: Business Times 23 Nov 07

Credo Real Estate sells 5 adjacent developments in en bloc package

Five developments with total site area of 74,355 sq ft sold to KSH for $120m

FIVE in one fell swoop – taking collective sales to the next level is Credo Real Estate, which has just managed to sell a package of five neighbouring residential developments to a single developer for $120 million.

The five developments, which are at Mergui Road, off Rangoon Road, are Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui.

With a total site area of 74,355 square feet and a plot ratio of 2.8, the $120 million price reflects a unit price of $580 per square foot per plot ratio (psf ppr).

It has been sold to KSH Holdings. The publicly listed construction, property development and property management company said in a statement released yesterday that the site has a potential to be developed into a 142-unit development with units averaging 1,250 sq ft.

KSH also said that the acquisition will be financed through internal funds and bank borrowings, and that it is currently negotiating with other investors to form a joint venture to develop the site.

On the challenge of bringing together the owners of five developments, Credo executive director Yong Choon Fah said that it had been looking at the possibility of a combined collective sale for several years.

She also explained that each development had different attributes and that only by combining them could a ‘winwin’ be achieved for all.

The five developments have land areas ranging from 10,061 sq ft to 18,524 sq ft and Ms Yong said that all the home owners have accepted the same unit price.

There are a total of 88 homes and the owners will receive between $906,856 and $1,908,491 each.

The site, which is considered to be in the ‘city fringe’, is estimated to have a breakeven price of about $1,000 psf.

In the immediate vicinity, Pristine Heights is currently selling for between $1,000 and $1,150 psf.

In 2006, Credo marketed Lock Cho Apartments, Comfort Mansion and a four-storey walk-up block for a combined collective sale. They were eventually sold to City Developments Ltd. The latest deal, however, is thought to be the only one to involve five developments.

 

Source: Business Times 22 Nov 07

Five estates sold to one buyer in collective deal

FIVE small adjoining freehold apartment blocks near Thomson Road have been sold en bloc to Kim Seng Heng Realty, a subsidiary of listed KSH Holdings, for $120 million.

The construction and property development group said yesterday that the combined site could be redeveloped into a high-rise residential block with about 142 luxury apartments of 1,250 sq ft on average.

It added that it is currently negotiating with other investors to form a joint venture to develop the site.

Credo Real Estate, which brokered the deal, said it is possibly the first time in Singapore that as many as five estates have been successfully combined and sold en bloc to one buyer.

The properties – Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui – are located near Rangoon Road and Moulmein Road.

They are single apartment blocks sitting on relatively small plots ranging from 10,061 sq ft to 18,524 sq ft.

When combined, they form a land area of 74,355 sq ft, which would permit a gross floor area of 208,196 sqft.

If small pieces of state land in between are thrown in, the developer will have a site of 87,092 sq ft, said Credo’s executive director, Ms Yong Choon Fah.

In any case, three of the developments could not have otherwise been redeveloped on their own. ‘They need each other because there’s a 30m buffer requirement from the expressway,’ said Ms Yong.

This Urban Redevelopment Authority rule would mean that it is impossible for Norfolk Court, Mergui Lodge and The Mergui to be redeveloped individually. But if combined with the other two sites, a bigger development that does not fall within the 30m buffer zone can be built.

The five estates have 88 units in total. Each unit owner will get between $906,856 and $1.91 million.

The $120 million price reflects a price of $580 per sq ft (psf) of potential gross floor area.

After factoring in the cost of the state land in between, the rate could come down to about $540 psf, said Ms Yong.

KSH Holdings’ recent projects include a construction contract for a luxury boutique hotel at Clifford Pier.

 

Source: The Straits Times 22 Nov 07

No resale levy for second-timers buying ECs

NEW executive condominiums (ECs) will be even more attractive now that the resale levy is no longer payable.

The Housing and Development Board imposes the levy on those who sell their first flat to buy another from the board. It is a fixed sum that ranges from $15,000 to $50,000 according to flat type, and $55,000 for ECs.

In a statement yesterday, HDB said: ‘To align the purchase of new ECs with the Design, Build and Sell Scheme (DBSS), second-timers buying a new EC unit from the developer will no longer have to pay the resale levy.’

HDB also said that previously, first-timers who bought new ECs were barred from buying another new EC, HDB or DBSS flat. This bar has now been lifted.

PropNex CEO Mohamed Ismail believes the change will give ‘greater incentive’ to HDB dwellers who aspire to a condominium lifestyle by way of an EC.

Mr Ismail reckons the dropping of the resale levy, coupled with rising HDB resale flat prices, could leave some second-time buyers with up to $100,000 to add to their housing budget, depending on the size of the flat they sell.

He also believes developers could be encouraged to bid for EC sites, as demand will grow.

The government has said it intends to release more EC sites.

The first to be released, after a gap of more than three years since the last EC site was sold in 2004, will be at Punggol Road/Punggol Field.

The 2.27ha site with a plot ratio of 3.0 was put on the reserve list of the Government Land Sales Programme yesterday. And with the dropping of the resale levy, consultants expect interest in the site to increase.

Cushman & Wakefield managing director Donald Han says the last EC site at Woodlands, where La Casa now stands, was sold for $150 per sq ft per plot ratio (psf ppr). Since then, two DBSS sites – launched at Tampines in October 2005 and Boon Keng Road in March 2007 – sold for $114 psf ppr and $234 psf ppr respectively.

Mr Han says EC sites typically fetch more than DBSS sites. And based on the last DBSS site price at Boon Keng Road, but factoring in Punggol’s location and EC site status, he expects the Punggol EC site to fetch $190-$220 psf ppr.

‘We expect strong interest from developers and contractors for this site due to revival of HDB market activity and recent price increases – supported mainly by HDB upgraders and new home buyers,’ he said.

‘In addition, the government has committed its resources to turning Punggol into a major waterfront township and Punggol itself has been a news focal point lately.’

 

Source: Business Times 21 Nov 07

Woodlands residential site surprises with 8 bids

Evan Lim’s top bid of $56m marginally higher than Frasers Centrepoint’s

A 99-year leasehold residential site in Woodlands was found to have drawn a surprising eight bidders when the government tender closed yesterday, with the top bid coming to some $56 million – or $232 per square foot per plot ratio (psf ppr).

Recent government land tenders have drawn only a few bidders each, which market watchers said was a sign of the property market cooling off.

For the 172,200 sq ft site at Woodlands Avenue 2/Rosewood Drive, the top bid was put in by Evan Lim & Co Pte Ltd.

The company just pipped second highest bidder Frasers Centrepoint, which offered $55.5 million – or $230 psf ppr.

Other bidders include Wing Tai and Sim Lian Land. The site has a 1.4 plot ratio – giving it a maximum gross floor area of 241,100 sq ft.

Nicholas Mak, director of research and consultancy at Knight Frank, said that the price was ‘realistic’, although it came in below prior market expectations of $250-$280 psf ppr.

The number of bids was impressive, considering the recent market turbulence, experts said. ‘The bids show that developers are confident of healthy suburban buyer demand,’ said Mr Mak.

Ku Swee Yong, Savills Singapore’s director of marketing and business development, said: ‘Developers still see that there is good demand from the mass market, arising from job growth and rising wages.’

With construction costs for mass market condos estimated at about $300 psf, the break-even price for the site could be around $530 psf, experts said.

This means that apartments in the project could eventually be launched at about $700 psf – higher than what private homes in Woodlands are fetching at the moment.

Separately, the Urban Redevelopment Authority (URA) on Monday awarded a transitional office site at Tampines to City Developments’ unit Glades Properties.

The developer had put in the only bid for the site, offering $10 million, or $81 psf ppr – lower than the $100 psf ppr that most property consultants had expected the 15-year leasehold site to fetch. This led to market talk that the site might not be awarded.

Yesterday, URA also said that an unnamed developer has entered a bid of $187 million for a 3.2ha, 99-year leasehold residential site at Simei Street 4, triggering a public tender which will be launched in two weeks’ time.

The price offered by the developer works out to $235 psf ppr. The site has a 2.3 plot ratio – giving it a maximum gross floor area of 797,400 sq ft.

Market watchers, however, reckon that the plot could fetch more.

‘I think the winning bid could come to $350 psf ppr,’ said Ho Eng Joo, Colliers  International’s executive director for investment sales. Apartments coming up on the site could be launched at about $800 psf, he said.

URA yesterday also awarded the tender for the 99-year leasehold condo site at Enggor Street (Land Parcel B) to Allgreen Properties, which had submitted the highest bid of $717 psf ppr in a public tender.

 

Source: Business Times 21 Nov 07

En bloc millionaires to drive market

If just two-thirds buy homes, they may spend $6b: Savills

(SINGAPORE) Around 5,700 homes were sold through collective sales in the first half of this year and the home owners who will have to look for replacement homes are expected to drive the property market.

A report by Savills Singapore estimates that if just two-thirds of those displaced by collective sales – about 3,900 of them – choose to buy replacement homes, their collective kitty could total $6 billion, representing the total payout to these en bloc millionaires.

Savills director (marketing and business development) Ku Swee Yong does not expect all $6 billion to be spent though. ‘About $4 billion could be channelled into new property acquisitions,’ he reckons.

And developments in the fringe and suburban areas such as Bukit Timah, Upper Bukit Timah, Clementi, Novena/ Thomson, and Upper East Coast will be their targets.

Savills projects that only two-thirds of the en bloc millionaires will be in the market for a new home because it believes many already own second homes, if not more.

Savills’ analysis reveals that of the 2,795 home owners affected by the collective sales in Q2 2007, up to 2,159 owned homes in the prime districts of District 9, 10 and 11.

And Mr Ku reckons that half of these home owners already own at least one other home.

Interestingly, Mr Ku believes that only 20 per cent of the displaced home owners from homes outside the prime districts have second homes. But the number of en bloc millionaires could taper off if collective sales continue to fall. In Q3 2007, only 13 en bloc deals worth about $1.1 billion were done, down from $6.4 billion for 45 sites in the previous quarter.

Yet, en bloc millionaires are also expected to support the already buoyant residential market.

Savills says that assuming that 30 per cent of owners (or their tenants) affected by collective sales require rental accommodation, 974 units would have been needed to meet the demand over the last nine months. Savills added that the situation is expected to worsen in 2008, with some 800 units needed per quarter to accommodate displaced owners (or their tenants).

Savills does expect most demand for rental units to come from an increase in the number of foreigners working here.

Its report highlighted that foreigners working here grew by 14.9 per cent, from 875,500 last year to just over one million thus far, representing the highest year-on-year growth in the last 10 years. ‘With a low unemployment rate and high job creation rate, the number of foreigners working in Singapore is expected to grow sharply,’ it added.

Its analysis of data reveals that average rents of all non-landed residential properties in the prime districts rose by 13 per cent to $3.70 per square foot (psf) a month between Q2 and Q3 in 2007, while high-end residential rents climbed even higher to $6 psf a month.

Savills also noted that rents in Districts 8 and 12, on the fringe of the city, have risen by 35 and 23 per cent respectively to about $1.90 psf a month.

 

Source: Business Times 21 Nov 07

Waterfront condos coming up at Bedok Reservoir

FOUR condominiums will be built where the former Waterfront View estate in Bedok Reservoir Road used to be.

The first will be launched in the first quarter of next year, said developers Frasers Centrepoint and Far East Organization yesterday.

It will be called Waterfront Waves and have 405 units, of which more than half will be three- and four bedroom apartments. More than 60 per cent of the units will also have reservoir views, the developers added.

The Straits Times understands that the other three condos will also have ‘Waterfront’ in their names and are likely to be of similar sizes.

Together known as the Waterfront collection, the four-condo development is the largest in the area to have a direct water frontage, the developers said. In all, it could have 1,600 units.

The developers are also in talks with the Public Utilities Board about ‘enhancing the neighbourhood’s communal parks and water bodies’.

Although property consultants will not disclose prices for Waterfront Waves, they believe prices may start from $700 per sq ft (psf).

Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, said units on lower floors with no water views could fetch that price.

On higher floors, prices could go up to $850 psf, he added.

Frasers Centrepoint and Far East jointly bought the former HUDC site last year for about $240 psf of gross floor area.

 

Source: The Straits Times 21 Nov 07

Woodlands condo plot draws 8 bids

EIGHT bidders have put in tenders for a residential site near the Singapore American School and right in the middle of the heartland, Singapore’s new real estate hot zone.

Bids for the plot – located between Woodlands Avenue 2 and Rosewood Drive – ranged from $36.4 million to $56 million.

EL Development, a unit of Evan Lim, lodged the top bid.

Frasers Centrepoint came in just behind with $55.5 million, according to a Singapore Land Authority (SLA) statement yesterday.

The narrow gap between the top two bidders reflects the keen interest in the 172,223 sq ft site, which is near the American international school and, thus, in an area popular with expatriate families, said Mr Lui Seng Fatt, regional director and head of investments at Jones Lang LaSalle.

A condominium of up to five storeys with a gross floor area of 241,112 sq ft can be built on the 99-year lease site, which has a gross plot ratio of 1.4, the SLA said. This works out to about $232 per sq ft (psf) per plot ratio, which can translate into a break-even price of about $400 psf for the project, said Mr Lui, adding ‘the project may be able to sell for about $500 psf, depending on the circumstances’.

Analysts noted that the competitive bidding for the Woodlands site contrasted sharply with the lacklustre response to recent public tenders for sites at Enggor Street and Marina View, both located in the more central parts of Singapore.

This confirms ‘the trend that the focus has shifted to the outlying areas, now that the prices in the central districts, including districts 9, 10, 11, have risen significantly’, said Mr Lui.

That theory will get a further test in two weeks, when the Urban Redevelopment Authority (URA) launches a tender for a reserve site at Simei Street 4, which has an area of 3.22ha and is earmarked for residential development with a maximum gross floor area of 74,084 sq m.

The call for bidders was triggered by an application made by a developer who committed to bid at least $187 million for the land parcel.

Also, the URA has awarded the tender for a transitional office site between Tampines Concourse and Tampines Avenue 5 to Glades Properties, the sole bidder with a price of $10 million.

This works out to $868 per sq m for a site with a gross floor area of 11,520 sq m. The land parcel has a 15-year lease.

 

Source: The Straits Times 21 Nov 07

First-time buyers get better shot at executive condos

FIRST-TIME home hunters will soon get increased priority to buy executive condominiums (ECs).

The Housing Board now requires EC developers to reserve at least 90 per cent of units for first-time buyers in the first month of sale. First-time buyers are those who have yet to receive a housing subsidy.

Until now, there was no such requirement.

In another change, families who have previously bought a new HDB flat will no longer have to pay a resale levy – ranging from $15,000 to $50,000 – when they buy a new EC flat.

Both new rules will apply first to ECs expected to be built in Punggol Field.

The Government made the 2.27ha plot available yesterday.

The plot, which can fit an estimated 620 homes, is now on the reserve list, which means that it will be put up for tender once a private developer commits to a minimum bid that meets the Government’s reserve price.

Property consultants say the latest moves by the HDB will raise demand for ECs, while addressing the housing needs of some newly-weds.

The EC scheme, introduced in 1995 to bridge the gap between public and private housing, allows families with monthly incomes of up to $10,000 to buy apartments similar to private condos.

Units come with facilities comparable to those of condos, such as swimming pools. But ownership restrictions apply within the first 10 years.

Eligible buyers can get a $30,000 housing grant for their EC, but they cannot sell it within the first five years, or let a foreigner buy it within the first 10 years.

Due to the restrictions, ECs were a less popular alternative to private housing to the extent that, for a while, the Government stopped offering this type of housing since the last one, La Casa, was launched in 2005 amid a property downturn.

But following a sharp run-up in property prices this year, the Government revived its EC programme to meet rising demands from Singaporeans.

New ECs typically cost 30 per cent less than full-fledged private condos, estimated Mr Lui Seng Fatt, regional director and head of investments at Jones Lang LaSalle.

Yesterday, the HDB also lifted the restriction on EC owners – who had received a housing subsidy – enjoying a second subsidised public housing unit, be it an EC, HDB flat or flat built and sold by private developers under the Design, Build and Sell Scheme (DBSS).

These EC owners can now buy another new EC, or a new flat built by the HDB or private developers, after a 30-month waiting period.

Those who used a housing grant for their first new EC will have to pay a resale levy of $55,000 on their original home if they move into a new HDB flat – to ensure a fair distribution of housing subsidies.

Previously, those who bought a new EC unit were barred permanently from buying a second new EC unit, HDB flat, or flat built and sold by private developers under the DBSS.

The change, with immediate effect, will put EC owners on an equal footing with owners of private properties, as the latter are allowed to buy new HDB dwellings after a 30-month wait from the time they dispose of their homes.

The HDB, in a statement yesterday, said the rule change was to ‘better meet the needs of EC buyers and align the EC policies more closely with public housing schemes’.

Property consultants say the changes are set to boost EC demand at a time when private home prices have quickly risen beyond the reach of many hoping to upgrade from HDB flats.

From January to September, private home prices shot up 22.9 per cent, more than twice the rate of resale HDB flats.

‘The EC will be quite a hot item now,’ said Mr Eugene Lim, ERA Singapore’s assistant vice-president.

Consultants do not expect the changes, alone, to make much of an impact on the current supply of lower cost housing, as there are no other EC plots on the market.

To date, 23 EC projects with about 10,400 homes have been developed and sold by the private sector.

 

Source: The Straits Times 21 Nov 07

Amber Residences condo a hit

70 units snapped up within hours during private preview at $1,650 psf average

MORE than 70 of the 114 units at Voda Land’s Amber Residences in Amber Road were snapped up within hours during a private preview on Sunday at an average price of $1,650 per square foot (psf), the agency marketing the project said yesterday.

And elsewhere, about 70 per cent of units released at Sui Generis – a condominium in the Balmoral area being jointly developed by Singapore-listed United Engineers (UE) and Japan-based Kajima Corporation – have been sold at an average price of $2,500 per square foot (psf), UE said yesterday.

At the 40-unit Sui Generis, 17 units of the 23 released were sold through overseas previews during the past two months, UE said.

Prices fetched ranged from $2,300 psf to $2,580 psf. About 90 per cent of the units were bought by foreigners during roadshows in Indonesia and Hong Kong, UE said.

‘Given the continued foreign interest in Singapore properties, Sui Generis will tour various cities including Jakarta and Hong Kong,’ said Joseph Tan, executive director of residential at CB Richard Ellis (CBRE), which is marketing the project. Sui Generis will be launched in Singapore early next year.

CBRE said the average price of $2,500 psf is a benchmark for the Balmoral area.

‘Buyers are drawn by the good unit layout and quality of finishes, which explains why the project has achieved a benchmark sale price,’ Mr Tan said.

Sui Generis comprises mostly three and four-bedroom apartments. There are also four penthouses. The project’s name is a Latin expression that means ‘a person or thing that is unique and in a class of its own’.

At Amber Residences, the average price per unit came to $1,650 psf, with choice high-floor units being sold for more than $1,800 psf, said Savills Singapore, which is marketing the project.

‘Following the overwhelming success and strong demand for this unique development, we plan to release a few more units for this coming Sunday’s preview,’ said Phylicia Ang, senior associate director of Savills’ residential division. ‘It will then be followed by an official launch for the remaining units – including choice units – from Dec 1.’

The sales were done by private invitation only and most of the buyers were locals, Savills said.

Amber Residences is made up of a single 21-storey block with mostly two, three and four-bedroom apartments. There are also six penthouses.

The project is possibly the first on the East Coast where all units have a premium finish and fittings usually associated with high-end condominiums, Ms Ang said.

 

Source: Business Times 20 Nov 07

HORIZON TOWERS HEARING – Majority owners fault sales committee

It should have reverted to them before closing deal at just reserve price

MORE displeasure was expressed at the Strata Titles Board (STB) hearing into the Horizon Towers sale yesterday – this time, not from the minority owners who opposed an en bloc sale but the majority owners who agreed to it.

They found fault with the sales committee’s efforts, particularly, its failure to consult owners about going ahead with an offer from Hotel Properties Ltd (HPL) and its partners, which just met the reserve price of $500 million, set months before property prices started surging.

Majority owner Poonam Harilela, whose family owns several units in the development, said that they agreed to the en bloc sale in April 2006 because they were told by the sales committee they would get an 80 per cent premium if they sold their units collectively rather than individually.

But by January 2007 – around the time the sales committee signed the deal with HPL and its partners – that premium had dwindled significantly.

Ms Harilela said that her father’s unit attracted an offer of more than $2 million in December 2006 – close to what it would get in a collective deal – so it did not make sense to sell it en bloc. She conceded that the quantum of the premium was not guaranteed by the sales committee.

‘But the reason we went for the en bloc was the premium, because it could better our lives,’ she said. ‘The main reason why we wanted to sell was to upgrade our lives, not to downgrade and have nowhere to live. ‘We’re not talking about the stock market, we’re talking about a home. And at that point in January 2007, the prices were so high we couldn’t get a replacement unit. And that’s the point,’ said Ms Harilela, who has lived in Horizon Towers for 17 years.

She acknowledged that the collective sale agreement signed by the consenting owners was legal and binding and gave authority to the sales committee to sell the development as long as the reserve price of $500 million was met.

She said that this was why she approached sales committee chairman Arjun Samtani – before the deal was sealed – to ask if the committee could reconsider selling the development en bloc. A second witness yesterday, Mohinder Kalra Singh, testified in his affidavit that the sales committee failed to go back to the consenting owners to ask them whether they wanted to proceed with the HPL offer.

The hearing before STB was concluded yesterday. The various parties have until Nov 23 to make their closing submissions to the tribunal and until Nov 30 to make their replies.

The STB tribunal will then deliberate and announce its decision by Dec 7 – just before the sale completion deadline of Dec 11.

If the tribunal approves the sale and grants Horizon Towers a collective sale order, the minorities still have the right to appeal against that decision.

If the STB decides not to grant an order and the sale falls through, HPL may go ahead with the lawsuit it has filed against the majority owners for breach of the sale and purchase agreement.

 

Source: Business Times 16 Nov 07

Home sales dive in upmarket core, pick up elsewhere

Bourse turmoil, sub-prime problems cited for foreign investors’ caution

 

(SINGAPORE) The private housing momentum is shifting decisively as sales and launches flag in the Core Central Region (where upmarket homes are located) but appear to be picking up in other areas.

In the so-called Outside Central Region – which includes suburban mass-market housing locales like Jurong, Woodlands and Bukit Batok – developers sold some 259 homes in October. The sales here were more than in both other regions in the Urban Redevelopment Authority’s geographical classification, according to Jones Lang LaSalle’s analysis and represented a 72 per cent jump over September.

The Rest of Central Region, which includes locations like Amber Road, Rochor, Geylang, Toa Payoh and Bishan, also saw a 123 per cent month-on-month rise in developer sales to 196 homes in October, according to Jones Lang LaSalle’s analysis.

In contrast, demand in the Core Central Region was shrinking sharply. Just 135 homes were sold there in October, compared to 290 units in September and 583 in August, when the market was rollicking.

JLL also noted that the number of new homes launched by private developers dropped 55 per cent month-on-month in October for the Core Central Region, but jumped 299 per cent and 30 per cent respectively in the Rest of Central Region and Outside Central Region.

Knight Frank, which made a similar analysis, attributed the lower sales volumes in Core Central Region to the stock market turbulence causing local buyers to be more cautious while the US subprime problems and credit crunch have also dented sentiment among foreign investors.

Islandwide, developers launched 629 homes in October, up 10.4 per cent from 570 units in September. The number of homes they sold also increased 11.5 per cent from 529 in September to 590 in October.

JLL pointed out that the average gap between the highest and lowest prices achieved for projects in the Outside Central Region widened to 25.7 per cent in October, from 14.8 per cent in August and 18.7 per cent in September, which JLL suggests reflects more buoyancy in this segment. ‘Buyers are more optimistic and confident of this submarket,’ Dr Chua said.

‘However, this method does not account for the product differentiation or any other physical attributes that may have resulted in this gap. It is to be used only as an indication of buyers’ mood or confidence rather than to predict the market,’ he added.

Knight Frank’s analysis of URA’s data showed that, islandwide, the median transacted price increased 3.3 per cent from $960 psf in September to $992 psf in October. ‘The increase signifies that the market is on a path of modest and steady growth,’ the firm said.

It also noted that the impact of the withdrawal of the deferred payment scheme, which took effect on Oct 26 was yet to be reflected. ‘However, in subsequent months, buyers could adopt a more cautionary stance and although a significant drop is not expected, the number of units launched and sold will likely remain close to current levels,’ Knight Frank added.

CB Richard Ellis’ analysis shows that Park Natura in Bukit Batok chalked up the most primary market sales during October, at 101 units, followed by Aalto at Jalan Kechil (in the Amber Road/Peach Garden vicinity), with 49 units.

Two luxury projects that sold fairly well last month were Hilltops in the Cairnhill area, and Scotts Square, with 24 units and 33 units sold respectively.

Hilltops’ median transacted price was $3,711 psf, while that for Scotts Square was $4,005 psf. The developers of The Orchard Residences saw nine units being sold at a median price of $4,476 psf, with the highest price achieved of $5,600 psf setting a new record, as reported by BT earlier.

‘In the mid-range, new projects in the east such as Aalto, De Centurion, Suites @ Amber and The Seafront On Meyer achieved median prices ranging from about $1,300 to $1,600 psf. For suburban projects, Park Natura’s median transacted price was $1,022 psf,’ CBRE said.URA’s data also revealed that the first unit at Far East Organization’s Boulevard Vue at Angullia Park was sold in October for $3,900 psf. In the eastern part of Singapore, the first 20 units in the 28-unit Suites @ Amber were sold at between $1,224 psf and $1,440 psf.

CBRE predicts that developers will sell about 1,800-2,000 private homes in Q4 this year, bringing their full-year sales to 15,000-16,000 units – which will still be much higher than the 11,147 new private homes they sold for the whole of 2006.

The official URA private home price index, which has already risen 22.9 per cent in the first nine months of this year from end-2006, is likely to increase another 3 to 6 per cent in the final quarter, to achieve a full-year gain of 27-30 per cent.

 

Source: Business Times 16 Nov 07

Another CBD condo site draws weaker bids

Observers say developers hoping to pick up bargains and average down costs

(SINGAPORE) Some developers yesterday took advantage of the current dip in sentiment caused by the stockmarket turmoil to go fishing for land on the cheap. A state tender for a 99-year condo site at Enggor Street behind Icon drew a top bid of $717 per square foot per plot ratio (psf ppr) from Allgreen Properties – about 16 per cent lower than the $852 psf ppr that Far East Organization paid for the next-door parcel exactly two weeks ago.

Interestingly, Far East’s bid yesterday (it was second-highest tenderer) of $652 psf ppr was 24 per cent lower than its winning bid a fortnight ago. This probably reflected a strategy of attempting to average down its cost, market watchers say.

Yesterday’s tender also attracted one other contender, GuocoLand, whose $600 psf ppr bid was 9.1 per cent higher than the price it offered for the next-door plot earlier this month.

Allgreen, controlled by Malaysian tycoon Robert Kuok, is expected to develop a project about 50 storeys high with about 200 units. The ground level must be developed into commercial space.

‘Their breakeven cost will be about $1,200 psf. Going by current prices for units at Icon, Lumiere and The Clift of between $1,600 and $2,100 psf, Allgreen stands to enjoy a good profit margin when they launch their project,’ according to CB Richard Ellis executive director Li Hiaw Ho.

Market watchers said the lower top bid at yesterday’s tender reflected the erosion in sentiment over the past fortnight due to the stockmarket slide following massive writedowns by major American banks due to the US sub-prime crisis.

However, Mr Li reasoned that yesterday’s tender drawing three bids – against just two for the earlier plot – showed that developers are confident of the prospects for this site.

Agreeing, Knight Frank managing director Tan Tiong Cheng said: ‘Fundamentally, the property market is still sound, so there will be developers taking advantage of the current stock-market turmoil to go fishing. You never know; you may catch something at a reasonable price.’

The averaging down of cost strategy was also very much at play at another Urban Redevelopment Authority (URA) tender earlier this week: that of Marina View Land Parcel B. Macquarie Global Property Advisors’ top bid of $779 psf ppr was about 55 per cent of their winning bid in September for the adjacent plot, also slated for a predominantly office use.

But other factors were also at play in the tender that closed on Nov 13, including a minimum hotel component for the site, and office investors turning cautious as the outcome of the sub-prime crisis may have a direct impact on demand for Singapore office space if big international banks are hit.

The government has also expressly stated recently that it will boost the supply of office land in Singapore over the next few years to alleviate the current shortage.

Separately, URA also made available for application yesterday a 99-year condo site next to Tanah Merah MRT Station. The reserve-list site, with a land area of nearly one hectare, can be developed into a condo with about 250 units averaging 1,200 sq ft.

Jones Lang LaSalle’s head of research (South-east Asia) Chua Yang Liang notes that at the next-door Casa Merah project, seven units have changed hands in the subsale market since August this year, at an average price of $717 psf. ‘Assuming the latest site on offer receives a successful application from a developer this quarter and the new condo on the site is launched say around midyear 2008, we reckon it could sell for about $850-$950 psf on average.

‘Going by this assumption, the plot would fetch land bids of $425 to $470 psf ppr, translating to breakeven cost for a new condo of about $710 to $790 psf.’

Knight Frank director (consultancy and research) Nicholas Mak predicts a lower price, of $288 to $323 psf ppr, on the assumption that the proposed development will be launched in 12 to 18 months at $800-$850 psf.

Reserve-list sites are only launched for tender upon successful application by a developer who undertakes to offer a minimum bid acceptable to the state.

 

Source: Business Times 16 Nov 07

Horizon Towers hearing over, Strata Titles Board yet to rule

PUBLIC hearings on the hotly-disputed $500 million collective sale of Horizon Towers drew to a close at the Strata Titles Board (STB) yesterday.

But it is still unclear if the STB will hand down a result by Dec 11: the sale completion deadline for the 99- year leasehold property. Both sides – those for and against the sale – must file written closing submissions by Nov 23 and a reply by Nov 30. The STB said it will make a decision in due course, after considering the submissions. Sources said a ruling could come as soon as early December.

But even if that happened, the case could drag on if one side decided to appeal against the ruling. Already, this STB hearing is said to be the longest ever. The dispute stems from unhappiness among some owners who feel the $500 million price tag is unfair.

 The case went back to the STB last month after the High Court decided that the STB’s earlier decision to throw out the sale on technical grounds was wrong. The consenting owners had earlier extended the sale deadline to Dec 11 in a bid to avert a lawsuit brought

by developer Hotel Properties and its two partners for alleged breach of contract.

The STB had said during the hearing that it had no legal obligation to rule before the deadline. One of the objectors, Ms J. Tan, is optimistic about the outcome of the hearing. ‘We fought hard for our homes… We are confident that a case of bad faith has been made out.’

 She said the evidence suggests to them that the $500 million deal was inked this year even though the consenting owners would have objected to it, given that the premium had evaporated. After all, the premium was what had induced the consenting owners to sign the collective sale agreement, she said. Two consenting owners – Ms Poonam Harilela, a member of the Harilela family that owns Holiday Inn Park View Singapore, and Mr Mohinder Kalra, employed by the Harilela group for 32 years – gave evidence on that point yesterday.

Mr Kalra, who owns one unit, said that he had signed the agreement because of an expected 80 per cent premium, but that this premium had almost vanished by January. He told the board yesterday: ‘I thought to myself that if this unit has to be sold at $2.3 million, why do we need a collective sale?’ A unit was valued at $2.2 million in February.

 At $500 million, apartment owners would get about $2.3 million each, while penthouse owners would get at least $4 million each. 

Source: The Straits Times 16 Nov 07

Lower bids for Enggor St condo site could signal cooling market

Top offer a far cry from that for neighbouring parcel sold two weeks ago

A CONDOMINIUM site in Tanjong Pagar raised eyebrows yesterday when it drew lower bids than a neighbouring plot, which was sold just two weeks ago.

 

In a market that has been booming, this is the latest in a series of lukewarm responses to government land sales. Experts say it is further evidence that sentiment in the property market may be fast cooling.

 

The condo plot, along Enggor Street in Tanjong Pagar, fetched a top bid of $180.8 million when its tender closed yesterday. Allgreen Properties put in the highest offer, pipping bids by Far East Organization and GuocoLand.

 

Its price works out to $717 per sq ft per plot ratio (psf ppr) – well below the $852 psf ppr achieved by the plot just next to it, which drew only two offers when the tender closed. That prompted market watchers to warn that the mood might have changed. Even then, the high bid, from Far East, was some $70 million above yesterday’s top offer.

 

The two land parcels, which are located behind the Icon condominium and a stone’s throw from the Tanjong Pagar MRT Station, are of similar size. The situation mirrors that in Marina View. Two months ago, a site there fetched a record $2 billion bid – but a neighbouring plot managed only half that price when its tender closed on Tuesday.

 

Earlier this month, an office site in Tampines drew only one bid, at a lower price than most consultants had expected. These tepid sales come after the Government last month unexpectedly removed the deferred payment scheme for homebuyers in what was seen as a bid to curb speculation. Homebuyers can no longer postpone the bulk of their payments and must now pay progressively.

 Although the Government has since come out to say that it has no further plans to cool the property market, the once-powerful winds appear to have shifted. Yesterday’s tender is a reflection that ‘developers are turning cautious’, said Mr Ku Swee Yong, the director

of marketing and business development at Savills Singapore.

 

He offered several reasons for the lower bids. For one thing, construction costs are surging, but home prices are not rising as quickly, he said. This means developers have to find a way to lower their land costs.

 Luxury homes used to cost $300 psf to $350 psf to build, but this has now gone up to about $600 psf because of a construction squeeze, he explained. At the same time, there are plenty of freehold collective sale sites still on the market that have not found takers. Faced with many options for land, developers might be less attracted to 99-year leasehold sites

from the Government, suggested Mr Ku.

 

In any case, the Enggor Street plot was ‘not exactly a choice site’, he said, adding that it has ’small floor plates, its views are blocked and it is very close to the next building’. Partly because of this, the top bid for the site, while lower than that for the plot next door, is ‘reasonable’, he said.

 

With the developer’s breakeven cost estimated at around $1,200 psf or $1,300 psf, finished homes could sell for at least $1,700 psf. Mr Li Hiaw Ho, the executive director of CB Richard Ellis Research, said current prices at nearby projects such as Icon, Lumiere and The Clift are between $1,600 psf and $2,100 psf.

 

Despite the lower prices being paid for state land now, consultants think this will not translate into cheaper homes, thanks to rising construction costs and still-strong demand from homebuyers.

 But Mr Nicholas Mak, the director of research and consultancy at Knight Frank, warned that if the Government continues to release more land, it might result in a supply glut that could cause prices to plunge. ‘We are standing at the threshold of a glut, but it is still preventable,’ he said, adding that the low bids in recent state tenders will not affect existing projects, but will affect future land tenders. ‘If the Government pushes out more land parcels, and bids continue to slide downwards, some of the earlier buyers of state land are going to find it very challenging to sell their developed properties at a profitable rate.’

All eyes will now be on the government land sales programme for next year, which is due out next month. If the Government places many sites on the confirmed list, to be sold at a fixed date regardless of interest, this could lead to opportunistic bidding by developers and push down prices, consultants said.

 

Apart from the Enggor Street tender, Mr Mak said that the latest home sales data released by the Urban Redevelopment Authority yesterday also points to weaker sentiment. Homebuyers remained cautious last month, taking up only slightly more new homes than in September. They bought 590 new homes, up from 529 previously, but still a far cry from the 1,720 snapped up in August.

 

But while sales levels stayed low, home prices kept steady, even inching up for many projects. Homes sold last month were also pricier, with 63 units sold at between $3,500 psf and $4,500 psf, up from 28 in September.

 Cheaper condos did even better, said Mr Mak. In fact, the number of units sold in the core central region fell by 53 per cent last month from September, while the number of mid-tier units sold doubled.   Source: The Straits Times 16 Nov 07

Soilbuild buys site for condo project

(SINGAPORE) Listed developer Soilbuild Group Holdings yesterday said that it bought a landed site off Meyer Road which it plans to amalgamate with Margate Mansion for a small luxury condominium project.

The group’s latest purchase is 10 Margate Road. It paid $30.8 million for the 16,967 sq ft freehold site. Together with Margate Mansion, total land cost – including a development charge of about $18.4 million – works out to $88.8 million or $987 per sq ft (psf) per plot.

Soilbuild said that its purchase of Margate Mansion, a collective sale site, is still pending the Strata Titles Board’s approval.

The group bid $58 million, or about $882 psf per plot including an estimated development charge then of $6.5 million, for the 34,804 sq ft freehold site. Development charges have since been revised upwards.

The combined land area for the two sites is 51,771 sq ft. Based on a plot ratio of 2.1, gross floor area for the amalgamated site is 108,719 sq ft.

Assuming average unit sizes of between 1,500 and 2,000 sq ft, the site can be redeveloped into about 50 to 70 luxurious residential units.

The East Coast site, in district 15, has easy access to the East Coast Park Expressway and is about 10 minutes from Suntec City and the Central Business District.

Soilbuild said that the group’s latest purchase will be funded by internal resources and borrowings.

 

Source: Business Times 15 Nov 07

S’pore home price gains set to slow

Buyers holding back purchases on US sub-prime fears, says Frasers CEO

(SINGAPORE) Singapore’s home prices will probably increase at a slower pace as buyers hold back their purchases amid the US subprime crisis, said Lim Ee Seng, chief executive officer of Frasers Centrepoint Group.

Losses related to US housing mortgages have sapped consumer confidence, Mr Lim said. Some buyers returned apartment units bought at the Singapore-based company’s new project, Soleil@Sinaran near the city’s downtown, forfeiting initial deposits, he said in an interview late on Tuesday.

The outlook among homebuyers may also slow land purchases by developers including Frasers, one of the biggest buyers of older apartments in the city-state’s downtown, where they’re torn down for new home developments through so-called en bloc sales.

The developer is a unit of Fraser & Neave Ltd, the city’s biggest beverage maker.

‘The sub-prime crisis has shaken investors’ confidence,’ he said. ‘We are still looking to boost our land bank, but we are opportunistic and won’t pay current values because our costs would be too high,’ he added, referring to the purchase of existing apartment buildings to increase its land holdings.

Singapore’s home prices have climbed 14 consecutive quarters since 2004, soaring to a 10-year high this year as the island- state’s economy posted its longest economic expansion since 1991. The developer’s outlook for property sales also indicates its appetite may ease for new land purchases.

The price gain has helped the developer on earlier purchases of existing apartments, which are sold at a profit.

An example is the St Thomas Suites development in the city’s downtown, where apartments were recently sold at $2,189 a square foot.

For a 2,605-square-foot apartment, the latest sale recorded by the government, the price was $5.7 million.

‘We bought the site of St. Thomas Suites at $600 per square foot,’ Lim said. ‘But nearby properties put up for en bloc sales are asking over $1,800, and a developer has to sell at at least $2,500 to cover costs.’

‘The sub-prime crisis has shaken investors’ confidence. We are still looking to boost our land bank, but we are opportunistic and won’t pay current values because our costs would be too high.’ – Mr Lim

 

Source: Business Times 15 Nov 07

HORIZON TOWERS HEARING – ‘Penthouses cost $20m, $30m…where am I to go?’

Apportionment method is unfair, argue some penthouse owners

(SINGAPORE) The minority owners of Horizon Towers who are objecting to the en bloc sale of the development took the stand for the first time yesterday, putting forth their reasons as to why the collective sale should not go through.

Arguments on how the penthouse owners would be penalised by the apportionment method – and how the price they would receive would not get them similarly sized units in the same area – were just some of those presented to the Strata Titles Board (STB) tribunal.

Ng Eng Ghee, a penthouse owner who is objecting to the en bloc sale, pointed out that the apportionment of the proceeds was unfair to owners such as himself.

The apportionment method used by Horizon Towers will assign proceeds to units according to an equal mixture of land area and share value. But Mr Ng pointed out that the share value assigned to a penthouse is only seven, compared to a share value of five for the smaller units, even though his penthouse is almost double the size of the smaller apartments.

This would result in him getting a much lower price for his unit, on a per-square-foot basis, than the smaller units.

But Senior Counsel Chelva Rajah – who represents the majority owners – pointed out that Mr Ng also contributes to the maintenance of the condominium according to his share value.

Mr Ng then lamented that the $3.8 million that he would get for his over-5,000 sq ft penthouse would not enable him to buy another comparable unit in the Orchard Road area. He said in his affidavit that he has not seen another penthouse that would suit him and his family of five people and two large dogs more than his Horizon Towers unit, which even has a private rooftop pool.

“Penthouses in the area cost $20 million, $30 million, $15 million. I saved for all this time, so that I could retire at this point. Now, where am I going to go?’ he said.

The apportionment method used by Horizon Towers was also objected to by Ong Sioe Hong, the sister of Metro Holdings group managing director Jopie Ong.

She also expressed her displeasure with some of the sales committee members who bought extra units in the development at the time the committee was formed to explore the potential of an en bloc sale. She felt that this gave them a different ‘tolerance of pain’ as these extra units were investments to them, rather than homes.

But Mr Rajah then asked her whether, if the sales committee members had bought extra units for the purposes of making money in an en bloc sale, they would not then wish to get as high a price for Horizon Towers as possible.

Ms Ong said that she felt that their agenda was different.

It is the minorities’ case that the en bloc sale of Horizon Towers to Hotel Properties Ltd (HPL) and its partners was done in bad faith, as the sales committee had not followed due process in conducting the sale, such as by seeking out other more attractive offers for the development. Harry Elias Partnership, which represents one group of minorities, called the collective sale ‘a comedy of errors’.

The high-profile hearing is expected to end today, after which the STB tribunal will deliberate on whether to grant a collective sale order to Horizon Towers. But even this decision will not necessarily spell the end of this saga.

For one thing, the tribunal needs to grant the order before the sale completion deadline of Dec 11. Even if it does, the minorities can still appeal against that decision. And if the tribunal decides not to grant an order, there is the possibility that HPL will proceed with the lawsuit it has filed against the majority owners for breach of the sale and purchase agreement.

 

Source: Business Times 15 Nov 07

Modest bidding for CBD office site as caution sinks in

Top offer of $779.42 psf ppr half of next- door site’s recent bid

(SINGAPORE) The new-found caution surrounding the Singapore office market is now spilling over to the Central Business District.

Reflecting this, a site at Marina View diagonally behind One Shenton yesterday attracted a top bid from Macquarie Global Property Advisors (MGPA) of $779.42 psf per plot ratio – only about half of the group’s winning bid in September for the site next door.

Knight Frank managing director Tan Tiong Cheng acknowledged that office investors have turned cautious. ‘The outcome of the sub-prime episode may have an impact on demand for office space in Singapore, while the government has expressly stated recently it will boost supply of office land in the next few years to alleviate the current shortage,’ he said.

Another reason for the lower bid for the latest site – Marina View Land Parcel B – is that it has a minimum hotel component of at least 25 per cent of the site’s maximum gross floor area, property consultants said. ‘Hotel land values are a lot lower than office values,’ said Mr Tan.

‘The latest tender outcome is also a knee jerk-reaction to what has been happening lately in the US – the sub-prime crisis being worse than initially thought and big banks being affected. Banks are prime users of office space.’

The only other bid at yesterday’s tender came from units of CapitaLand, at $898 million or $734.52 psf ppr.

BT understands that CapitaLand was to team up with Thai tycoon Charoen Sirivadhanabhakdi’s privately held vehicle Pacific Coast Assets, had its bid been successful.

By most counts, the top bid at yesterday’s tender by MGPA unit MGP Kimi of $952.89 million or $779 psf ppr was lower than had been predicted.

CB Richard Ellis executive director Li Hiaw Ho had expected Marina View Land Parcel B to fetch about $1,200 to $1,300 psf ppr, lower than the $1,409 psf ppr that an MGPA unit paid in September for the next door Marina View Land Parcel A, considering the minimum hotel component for the latest plot. ‘There is a chance that the state’s reserve price may not have been met and that the latest site may not be awarded,’ Mr Li suggests.

However, other property consultants argued that the plot will be awarded.

Mr Tan said his firm, Knight Frank, predicted in late July projected that the site would attract bids of $1.1 billion to $1.3 billion, or $900-1,060 psf ppr. ‘Taking the mid point of $1.2 billion, the top bid was about 20 per cent lower than our projection. To me that is within range, and I would expect the site to be awarded,’ Mr Tan said. ‘The price is still substantially higher than other sites sold in the Marina Bay area in recent years.’

Jones Lang LaSalle’s Asia Capital Markets head Stuart Crow said: ‘The price seems fair going by recent land bids and taking into account the hotel component for this site.’

MGPA’s top bid at yesterday’s tender also ‘reinforces the foreign investor interest in the Singapore property market fundamentals’, he added. ‘In my view, the site will be awarded.’

Mr Crow estimates that MGPA’s bid price for Parcel B yesterday reflects a break-even cost of about $2,200 to $2,300 psf for the office component of a potential development on the site. As for the hotel component, market watchers estimate the break-even cost could be about $700,000 to $800,000 per room.

Marina View Land Parcel B has a site area of about 0.9 hectare and can be developed into a maximum gross floor area (GFA) of about 1.22 million sq ft, of which at least 60 per cent must be for offices and at least another 25 per cent for hotel use.

 

Source: Business Times 14 Nov 07

Interest-only loans: the pros and cons

They make sense to short-term investors and individuals who are high income earners and in high tax brackets, says BEN FOK

 CONSUMERS are constantly bombarded with offers of loans, overdrafts, credit cards and instalment plans that promise instant gratification.

We cannot avoid debt entirely, especially when it comes to acquiring the big ticket items, and not all debt is bad. But those who borrow must be prudent and know that they can make the repayments.

 Even high net worth individuals (HNWI) go to financial institutions for loans, which might seem strange since they are presumably cash-rich. But there are situations where it is worthwhile for the HNWI to borrow instead of paying with their own cash.

Some financial institutions offer interest-only loans targeted at the HNWIs. With such loans, you only repay the interest, not the principal, so the loan balance remains unchanged. Most interest-only loans offered by financial institutions are associated with the purchase of property.

Interest-only loans make sense to individuals who are high income earners and in high tax brackets.

The benefit comes from being able to save on tax on rental income. That’s because the interest portion of loan instalments for rental properties is tax deductible.

This package also works well for short-term investors. By repaying only the interest, investors fork out less cash each month, until they sell the property. As a result, they may be able to invest in two properties instead of one.

 

But interest-only loans are not for the long term, because at the end of the loan period, the payment is raised to the fully amortising level. If you’re still in your home at the end of the interest-only period, you’ll have to start paying off the principal. The payments will be considerably larger because they’ll be amortised over a shorter period. For example, if your interest-only option lasts for five years and you have a 30-year loan, your principal payments will be calculated on a 25-year term.

 Drawbacks of interest-only mortgages:

• You could experience payment shock. As mentioned earlier, your monthly payment will go up – sometimes by 30 per cent or more – when you start paying off the principal. And if the end of your interest-only period coincides with an upward adjustment in your mortgage rate, you could face an even sharper hike in monthly payments.

• You’re more vulnerable if your home value declines. Many borrowers with interest-only loans assume home price appreciation will help them build equity in their homes. In recent years, that’s been a good bet. But rising interest rates could deflate real estate values in some high-cost areas. It’s best to get a reputable financial institution to run the numbers for you and spell out the worst-case scenarios.

Equity provides a cushion against falling home values. Without it, you could find yourself owing more on your mortgage than your home is worth. If you sell, the proceeds won’t cover your loan balance, which means you’ll have to come up with money from another source. One way to avoid this problem is to make a good-sized downpayment on your mortgage.

 Advantages of interest-only mortgages:

• You have more flexibility. Some interest-only borrowers can afford a larger mortgage payment but their priority is to beef up their retirement nestegg or build up their emergency funds. Once they’ve accomplished those goals, they often decide to increase their mortgage payments.

Increasing your monthly payments will build equity and lessen payment shock when you’re required to start paying off the principal. If you’re interested in this option, make sure your loan doesn’t contain pre-payment penalties.

Interest-only mortgages are complicated, so make sure you understand the pitfalls before you sign anything.

And don’t rely on the financial institutions to figure out how much you can afford to borrow. A lender may not take into account all of your future expenses, such as child’s university fees or support of an elderly parent.

What worries me is Singaporeans taking two or more mortgages in a rising market. As property prices rise, the dollar amount also rises in line with higher selling prices. Affordability becomes an issue.

You’re in the best position to know what your financial obligations are, so get a mortgage you can afford. How much should one borrow? There are two ratios that financial advisers commonly use:

• Debt to asset ratio which is total debt/total assets. This ratio should be 50 per cent or less;

• Debt servicing ratio which is total monthly loan repayment/monthly take-home pay. This ratio should be 35 per cent or less.

After all, wealth equals assets less debt. It is built up over the years by accumulating assets and paying down debt, especially mortgage debt. When you pay down the balance of your mortgage, you are increasing your wealth by reducing debt. But an interest-only mortgage does not increase wealth in that way.

Of course, you may be increasing your wealth by accumulating assets instead. If that’s your plan and you have determined that it is more effective in building wealth during the interest-only period than paying down mortgage debt, fine. But paying down mortgage debt is the most effective way to build wealth, especially in today’s financial environment.

Four dangers related to borrowing too much:

• It can become a habit;

• It takes away money from other important needs;

• Your credit rating will be damaged if you don’t pay the bills;

• It can lead to high interest payments that are harder to make.

Three situations where it’s better to avoid borrowing:

• Paying your everyday expenses;

• Covering optional spending;

• Borrowing when you know you can’t afford the payments

It’s not a good idea to borrow a lot thinking that you will just pay the minimum back each month. It may take a long time to get out of debt and you’ll end up paying a lot of interest. Also, if you have one late payment, your credit rating may suffer and you’ll be charged penalties.

At the end of the day, paying down a loan is the best option, because once it’s paid it remains paid.

Ben Fok is CEO, Grandtag Financial Consultancy (Singapore) Pte Lt. He can be reached at ben.fok@grandtag.com  Source: Business Times 14 Nov 07 

Separate deals, but court rules it’s en bloc deal

UOL unit says 53 separate contracts signed; at stake is $286,200 in stamp duty

(SINGAPORE) En bloc sale or 53 separate contracts entered into by individual owners of the apartments to sell? That was the $286,000 question that emerged in the High Court in what can be described as a test case for property developers to get savings on stamp duty.

United Overseas Land subsidiary UOL Development Novena (UOLD) claimed that its purchase of 53 properties at Minbu Road for $61 million was not an en bloc sale but 53 separate contracts which it entered into with the individual owners.

At stake was $286,200 in stamp duty savings if it was found to have bought the 53 properties separately.

This is because under the Stamp Duties Act, stamp duty is charged at one per cent on the first $180,000 of purchase price, two per cent on the next $180,000 and three per cent on the balance of the purchase price that exceeds $360,000.

The way this works out is that stamp duty can be calculated simply by taking three per cent of the purchase price minus $5,400 – that being the sum of one per cent on $180,000 and two per cent on the next $180,000.

So if there was only one contract arising from an en bloc sale, the $5,400 could only be subtracted once.

But if there were 53 contracts, then $5,400 can be subtracted 53 times, resulting in savings of $286,200 for the property developer.

However, the High Court ruled last month that UOLD bought the 53 properties in an en bloc sale. The court said that the owners of the Minbu properties intended to sell their properties on the basis of an en bloc sale.

The invitation to tender issued by the owners said that they ‘collectively’ invite offers to buy their property on an ‘en bloc’ basis.

The court also found that there is no evidence that UOLD’s offer to buy the Minbu properties for $61 million was made on the basis that separate contracts were to be entered for each property.

And even though the owners sent 53 separate letters of acceptances to UOLD according to the developer’s request, the court found that the owners did not ‘give any thought’ to converting the en bloc sale to 53 separate contracts.

Justice Tan Lee Meng said that the case raises an interesting question as to how stamp duty is assessed on properties bought through en bloc sales.

However, he found that the plan for 53 separate contracts was mooted ‘for the sole purpose of lessening the stamp duty payable on the en bloc sale’.

BT understands from UOLD’s lawyers that the developer has not filed an appeal yet. It has until tomorrow to do so.

UOLD was represented by Tan Kay Kheng and Teo Lay Khoon from WongPartnership. Source: Business Times 14 Nov 07

Essential homework before taking loan

KEVIN LAM discusses five key areas that your home loan banker would be looking very closely at

THIS has been a special year for the property market. Not since the early 1990s has there been such euphoria about the property market – long queues at property launches, stories of someone we know making fast money by ‘flipping’ new property purchases in a matter of weeks, even days. Many people who have yet to join the party have been wondering if they should also jump on to the property bandwagon.

With the latest government measures to discontinue the deferred payment scheme, some measure of stability should return to the market such that even as prices continue to go up given our transformation into a global city, it would rise in a more measured manner.

For those who need to think very carefully about the finer details of taking out a loan with a bank to finance what would be one of the biggest financial commitments, you may want to consider some finer details as part of your overall decision-making process.

What should I consider about buying a house and financing it?

In Singapore, we have seen two boom-and-bust cycles of property price peaks and troughs in the past 17 years. While many people may think that we are currently in the midst of a boom, many others remain cautious and conservative about making a property financing commitment, and rightly so. The first and most important thing potential home owners should be looking at when they consider buying a house and taking up a mortgage to finance it is this – are you over-stretching yourself? To answer this, you have to look at five key areas that your banker would probably be also looking very closely at:

2. Quantum of financing: Since July 2005, the Monetary Authority of Singapore (MAS) has liberalised the quantum of financing for housing loans, up to 90 per cent loan-to-value (LTV). This means that as a home buyer, the minimum that one needs to raise is 10 per cent of the value of the property and the cash component can be a minimum 5 per cent with the balance of 5 per cent made up from the Central Provident Fund (CPF).

Typically, because the capital and credit cost associated with granting these higher quantum loans are higher, these loans come with higher interest rates when compared to 80 per cent LTV loans. In this market, a comfortable level for financing for banks would generally be at 80 per cent quantum of financing. This means that home buyers must have a minimum of 5 per cent cash and 15 per cent CPF lump-sum from their CPF Ordinary Account. For a $1 million property, this works out to $50,000 in cash and $150,000 in CPF OA monies, or if one prefers, this amount could be paid in cash.

With more cash upfront, this is generally viewed more favourably by the banker, that is, if you could use more than the minimum 5 per cent cash. For example, if there are two borrowers looking for 90 per cent financing, both of equal standing, the one who can put up the entire 10 per cent in cash downpayment, would be better positioned from a bank’s credit standpoint than the other who uses 5 per cent cash and 5 per cent CPF monies. More cash upfront shows more commitment from the potential customer, and this would generally put your financing request in a better light. Likewise, if a potential customer has the ability to fork out up to 30 per cent or more, cash or CPF down payment, and request only 70 per cent financing, he or she can be more confident of your request for financing.

3. Employment profile: The potential customer’s employment status is also one of the most important considerations to review when taking out a housing loan. He or she should consider the stability of his/her employment, regardless of whether the potential customer is a working employee or selfemployed.

Typically two years of qualified income coming from the same employer or same source of business should be a good indication of the borrower’s employment profile. On the other hand, if a borrower changes jobs frequently, even with higher income, it may be viewed by banks as being less secure and stable in employment.

4. Income and your CPF reserve: In home financing, one of the key commitments is to ensure that monthly housing loans instalments remain uninterrupted and consistent.

As a good rule-of-thumb, if housing loan instalments are kept to below 40 per cent of a person’s monthly income, the borrower would be better positioned in his/her monthly servicing ability. This is especially so if the borrower’s monthly CPF OA contribution is able to fund a good part of the housing loan instalment.

It would also be a prudent measure to have a reserve of at least six to 12 months of monthly instalments in the CPF OA. This provides more cushion should there be a change in a borrower’s employment status, and he/she needs time to find another job. This means that when one uses CPF for the initial downpayment, it is important to be conservative and keep a reserve, rather than using up all of one’s CPF for downpayment. As one goes through the sums for mortgage financing, one will realise that income, CPF resources, employment profile, and the quantum of financing are all interrelated.

Any home buyer should sit down and work out the numbers to ask the question: ‘Am I overstretching myself financially?’

5. Interest rate, monthly instalment and rental yields: One of the key considerations in taking a housing loan is interest rate. However, borrowers almost always ask the wrong question with regards to interest rate. ‘How low is your interest versus other banks?’ is the typical question.

Consider this alternative thinking; instead of asking how low a bank’s interest rates are, borrowers should seriously consider the exact opposite: ‘How high can interest rates be, while I can still afford the housing loan payment? Look at the accompanying table and consider various scenarios, such as a higher interest rate (note that the SGD mortgage interest rate is one of the lowest in the region) and whether a borrower can continue to service the loan, even if interest rate would double. Not possible?

Those of us who can remember the 1990s recall that housing loan rates were once at 8 per cent. These difficult economic periods when interest went up were often accompanied by periods where people found the stability of their income at risk. So, under such circumstances, if you were to lose your job, do you have sufficient reserves to last – and for how long?

This is where the difference of taking a fixed or a floating rate should be reviewed. Floating rates, while lower, do not have the stability of fixed rate loans. So a borrower may want to consider taking a two-in-one loan where a borrower can combine both fixed and floating rate loans in one mortgaged property. For example, the UOB two-in-one loan.

With rising rental yields, many are also thinking of buying a property as an investment which they intend to rent out to cover mortgage payments. Here. the question to ask would be: ‘Would I still be all right if rental should fall by half?’ Rents go up quickly due to shortage of housing, especially for foreigners with good housing budgets, but they can drop as quickly if there is a downturn.

In the current climate, these may seem faraway possibilities, but whether you are buying for your own stay, or for investment – consider the various scenarios and do your sums carefully.

Your credit performance: One of the other lesser known issues one should consider before taking up a housing loan is credit performance. In Singapore, all your credit performance in terms of number of loans applied for, whether for housing, cars, credit cards or other loans is stored in the Credit Bureau.

When you apply for a loan, you would have signed a consent for your bank to obtain a copy of your credit performance.

Some borrowers have been caught in a situation where they committed to a property by paying the option money, only to find that when they apply for a loan, their application is either turned down, or their request for financing reduced. This could be due the credit history, showing a habitual lateness for other loans. These information are transparent across banks, and a borrower would be advised to get a home financing in-principle approval before committing to a property. One of the ways to ensure that one is not ‘caught’ by credit performance is to ensure that payment is prompt in the borrower’s other loan repayments.

Many people think that housing loans are commodity products, but that cannot be further from the truth. In a very competitive market like Singapore where rates are so low, banks have learnt to compete not by price competition, but through value-added features.

All said, it is key for every potential home buyer to do some homework. Ask yourself if you have the resources both now and in the future to service the mortgage for the amount of loan you intend to take to buy that property. As daunting an exercise as this may be, it is one exercise that we must spend time pondering. At the end of the day, there is no free lunch.

Kevin Lam is head, loans division, United Overseas Bank

Surprisingly low bids for Marina View site

Top offer of $952m a sign that property investors could be turning cautious

BARELY two months after a site at Marina View fetched a record $2.02 billion, a similar plot next door has managed only half that price.

The unexpectedly low bids for the plot, which was seen as highly attractive, came on top of lukewarm response to other recent land sales. This is further proof that sentiment in the property market has started to cool, consultants warned.

The second Marina View plot drew only two bids when its tender closed yesterday. The top offer came in at $952.9 million – a far cry from the first site’s price and well below the experts’ predictions of up to $1.6 billion.

Both Marina View sites, which are located behind the One Shenton condominium, had the same high bidder: Macquarie Global Property Advisers (MGPA), a private equity real estate firm partly owned by Australia’s Macquarie Bank Group.

Property group CapitaLand also put in offers for both plots.

MGPA’s offer in September for the first site, which is slightly bigger, worked out to $1,409 per sq ft per plot ratio (psf ppr), almost double the $779 psf ppr bid it submitted for the second site.

The stark difference shows how much the mood in the market has shifted in just two months, said Knight Frank director of research and consultancy Nicholas Mak.

‘Clearly, they had a change of heart,’ he said. ‘The two sites are right next to each other, but the second bid is only 55 per cent of the previous bid.’

Mr Mak agreed that the price is ’still decent’, and that there was ‘a fair bit of exuberance in land tenders previously’.

But, in general, property investors are now turning more cautious, he said. This is due to stock market volatility, uncertainty over the global credit crunch and recent government measures in the property market.

The Government last month removed the deferred payment scheme for homebuyers in a surprise move that is being seen as an act to discourage speculation.

Mr Mak suggested, however, that this may have helped overcool the market.

Following the Government’s move, a residential land parcel on Enggor Street at Tanjong Pagar attracted only two offers when it went on sale, while an office site in Tampines found just one bidder.

This is despite these plots being fairly attractive, said Mr Mak.

‘If the Government throws in a site in Jurong, they may not get any bids at all.’

But while other consultants agreed that developers and investors are now more circumspect, some said the low Marina View bids could be an aberration.

‘The mood has changed somewhat, but it’s not as drastic as this. This is a bit of a flash in the pan,’ said Mr Li Hiaw Ho, CB Richard Ellis’ executive director.

He had expected bids for the second Marina View site to come in at a lower level because 25 per cent of the plot’s gross floor area must be used for hotel rooms, which have slightly lower land values.

Mr Li said, however, that the huge difference in bids was unexpected. He attributed it partly to the fact that there were only two bids: ‘This cannot draw out the most competitive offers.’

The Marina View site has a land area of about 0.9ha and a maximum floor area of 1.2 million sq ft. On top of the hotel use requirement, at least 60 per cent of the plot’s area must be given to offices.

If MGPA is awarded the second site, it could lower its average price for the two plots to about $1,100 psf ppr and combine them to form a mega commercial development, said Mr Donald Han, managing director of Cushman & Wakefield.

 

Source: The Straits Times 14 Nov 07

HORIZON TOWERS HEARING – DTZ: $500m was best en bloc price possible

Site unattractive; but ex-sales committee member says higher offers were received

$500 million – the amount it eventually attracted – was realistically the best price Horizon Towers could have fetched in an en bloc sale, DTZ Debenham Tie Leung director Tang Wei Leng told the Strata Titles Board (STB) yesterday.

She was one of several marketing agents invited in early 2006 to make a presentation on the en bloc sale potential of the development to its newly formed sales committee.

Ms Tang’s testimony to STB yesterday suggests the eventual price of $500 million obtained by the Horizon Towers sales committee was the highest it could have hoped for, given some of the development’s shortcomings.

Ms Tang said the Leonie Hill 99-year leasehold development was a challenge to market, compared with other sites in the area.

She described the site as unattractive because it had a limited view, was oddly shaped and impossible to subdivide.

She also said the two access roads leading to it were not an advantage.

She compared it to its neighbouring development The Grangeford, which she said had a regular shape, a full view of Orchard Road and a Grange Road address.

Her testimony comes in the face of some of the arguments put up by minority owners – those who did not agree to the en bloc sale.

It is the minorities’ case that the collective sale of Horizon Towers should not be allowed because the deal was done in bad faith – as the sales committee did not do its best to secure the highest possible price.

Still, the minorities’ case got support when former sales committee member Henry Lim returned to the stand later yesterday. He had first testified last Friday.

Yesterday, he said the sales committee received a higher offer than the $500 million from Hotel Properties (HPL) and its partners, which was eventually accepted by the bulk of the owners.

Mr Lim said Hong Kong developer Vinyard Holdings, through its Malaysian lawyers Chan & Shu, offered $510 million for Horizon Towers. He said he made attempts to contact them but was advised by lawyer David Ang of Drew & Napier not to pursue the offer as Chan & Shu was an ‘unknown name’.

Mr Limsaid last Friday that there were at least four offers comparable to or better than HPL’s $500 million bid. He said three out of nine of the sales committee members were happy with the HPL offer but rushed into the deal and had failed to consult the majority owners before accepting it.

The hearing continues today.

 

Source: Business Times 13 Nov 07

No plans for more measures to cool property market: Mah Bow Tan

(SINGAPORE) No further measures are planned to cool Singapore’s booming property market, the government said yesterday, following the end of the deferred payment scheme (DPS) for buying uncompleted private properties.

‘There is no need and there is no intention for us to take any further action,’ National Development Minister Mah Bow Tan said in Parliament yesterday.

The DPS allowed homebuyers to put down just a 10 per cent or 20 per cent of the price when purchasing a property, with the rest due only upon the project’s completion.

Critics said that this was fuelling speculative activity and driving up property prices – leading to the government’s Oct 26 announcement that it was withdrawing the scheme.

When asked in Parliament yesterday if the government would look at more measures – such as increasing interest rates – to rein in property prices, Mr Mah said that no further measures are planned. But the government, he said, will continue to monitor the property market closely to ensure that property prices are supported by economic fundamentals.

He added: ‘The government will make sure that there is sufficient supply to meet the demand of private housing.’ As at the end of September, there were about 65,000 units planned or under construction, he said. Private home prices in Singapore have climbed 22.9 per cent since the start of the year on the back of a supply crunch, official data shows.

The increase in property prices and rentals has contributed to inflation hitting a 12-year high of 2.9 per cent year-on-year in August – and the figure could rise further.

During Parliament yesterday, Trade and Industry Minister Lim Hng Kiang said that inflation could hit 5 per cent in the first quarter of next year.

Mr Mah told Parliament that while it is too early to ascertain the overall impact of withdrawing the DPS, he is confident that the move will pay off.

‘I believe that over time, the withdrawal will encourage homeowners to be more financially prudent and dampen some of the speculative activity in the market,’ he said.

In the longer term, the withdrawal will encourage the property market to grow in a healthier and more sustained manner, he added.

The DPS was introduced in 1997 when the economy was in recession and the property market was slow.

Before the end of the scheme, up to 90 per cent of buyers in some high-profile projects launched by Singaporean developers were opting for such payment schemes, reports have said.

The government said that ending the scheme would compel investors to have enough funds or bank loans available before they agree to buy properties.

 

Source: Business Times 13 Nov 07

3 Bukit Timah properties up for joint collective sale

THREE adjoining freehold properties at Robin Drive, off Bukit Timah Road, have been put up for joint collective sale.

Credo Real Estate, the marketing agent representing the majority owners of Robin Court and Robin Star and the sole owner of No 1 Robin Drive, has indicated a price range of $128-138 million for the combined plots, which have a total land area of 64,878 sq ft. This reflects a unit land price of about $1,500-1,600 psf of potential gross floor area inclusive of an estimated $8 million development charge.

Based on this, the breakeven cost for a new condo on the site works out to about $2,075-2,190 psf, Credo executive director Yong Choon Fah said. The combined site of the three properties is large enough for a condo with about 43 units averaging 2,000 sq ft.

The site is zoned for residential use with a 1.4 plot ratio (ratio of maximum potential gross floor area to land area) and a five-storey maximum height.

 

Robin Court comprises 15 apartments, Robin Star 10 apartments, and No 1 Robin Drive is a detached house with a pre-school operating on its site.

Owners controlling more than 80 per cent of share values in each of Robin Court and Robin Star, and the sole owner of No 1 Robin Drive have agreed to the sale, Credo said. The tender for the three properties closes on Dec 12. Source: Business Times 13 Nov 07

Property market: No further plans to cool it

Govt assurance dampens speculation on capital gains tax

 

THE Government is not planning any fresh measures to cool the property market for now, National Development Minister Mah Bow Tan said yesterday.

His statement effectively hosed down speculation that a capital gains tax might be reintroduced to stop people flipping units for quick gains.

The news brought some relief to players in the property market, which has been hit by uncertainty after the scrapping of the deferred payment scheme two weeks ago.

The 10-year-old scheme, allowing people to buy property with a downpayment but no further payments until the completion of the project, was abolished to curb speculation.

Now, buyers have to make progressive payments while their homes are being built.

The change spooked developers, and was seen as the reason why there were only two bids when the tender for a residential site in Enggor Street in Tanjong Pagar closed on Nov 1.

That followed a sizzling 22.9 per cent growth in private home prices in the first nine months this year.

Sub-sales, when uncompleted properties change hands, made up almost 22 per cent of total sales in central Singapore from July to September.

Addressing questions on the scrapping of the scheme in Parliament yesterday, Mr Mah said it was too early to ascertain its overall impact.

But he did not think genuine home buyers would be unduly affected because they could still get home loans from banks. Over time, the change will encourage the property market to grow in a ‘more healthy and sustained manner’, he said.

Responding to a question from MP Ho Geok Choo (West Coast GRC), he said the Government will closely monitor the market to ensure that prices are supported by economic fundamentals, and that there are sufficient private homes.

He said there is no need for any new measure, and that the Government is not considering any for the property market now. ‘Our bias is really not to over-regulate or to interfere in the market if we don’t have to,’ he said.

If a capital gains tax – which was introduced in 1996 but lifted in 2001 – was imposed again, it would dampen foreign investor sentiment, said the director of research and consultancy at Colliers International, Ms Tay Huey Ying. ‘This is good news for the market. It brings stability.’

Mr Mah stressed that there was no reason to panic over a perceived shortage of homes, as there was a stock of 65,000 private homes in the pipeline at the end of September this year.

About two-thirds are likely to be built and made available over the next three years.Still, househunters such as bank executive Luanne Lim were disappointed at the Government’s declaration.

The 33-year-old bank executive, who feels private homes have become ‘unaffordable’, said: ‘I think people can still afford to speculate without the deferred payment scheme.’

On the public housing front, Mr Mah said the Housing Board was ramping up its building programme to meet demand for new homes.

MP Cynthia Phua (Aljunied GRC) asked about the supply in the next three years, saying newly-weds found it harder to get new HDB flats.

But Mr Mah said about 4,000 flats will be launched under HDB’s build-to-order programme this half year. He did not think the HDB should meet all demand for new flats. If it did, it would be laying the groundwork for a future oversupply problem.

These same newly-weds would then find it hard to sell their homes if they wanted to upgrade. It was better to channel some of the demand for new flats to the resale market, he said. Source: The Straits Times 13 Nov 07

HORIZON TOWERS HEARING – HPL director’s words were in contempt of court: owners’ lawyers

Christopher Lim’s comment could imply buyers going ahead with $1b suit

(SINGAPORE) Lawyers for both the majority and minority owners of Horizon Towers have objected to recent comments made by Hotel Properties (HPL) group executive director Christopher Lim, and have accused him of being in contempt of court.

On Thursday, BT reported Mr Lim as saying that he was ‘concerned about’ the Strata Title Board’s (STB) view that it had no duty to make a ruling on the collective sale of Horizon Towers before the Dec 11 sale completion deadline. He said that such a stance could ‘potentially scuttle’ the deal.

The STB tribunal had taken this view on Wednesday, after both sets of owners agreed that the board did not have a legal obligation to make a decision by Dec 11.

This prompted Mr Lim to announce that the buyers, HPL and its partners, were ‘reviewing our position’. While he did not elaborate, BT understands that this could mean that the buyers will proceed with the $1 billion lawsuit they had earlier filed against the majority owners for breach of the sale and purchase agreement.

Lawyers for both sets of owners yesterday spoke out against the comment. KS Rajah of Harry Elias Partnership, which represents one group of minority owners, said that it was inappropriate for Mr Lim to comment on ongoing legal proceedings. He said that it was contempt that should be referred to the Attorney-General’s chambers.

‘Anybody who seeks to muddy the waters must be told to lay off or you will face the consequences,’ Mr Rajah said.

The STB tribunal’s chairman Philip Chan said that the board would deliberate on the matter.

News of the potential lawsuit also distressed a number of the majority owners of Horizon Towers. Sales committee chairman Lim Seng Hoo however sought to reassure the owners that they were not in breach of the sale and purchase agreement as the committee was continuing ‘to prosecute the present STB hearings expeditiously’.

He also said that their submission to the tribunal on whether it had a legal obligation to rule on or before Dec 11 merely explained that ‘timelines agreed to between the parties to a sale and purchase agreement do not impose legal obligations upon the board’.

The drama continued in the hearing before the STB, as a new witness – former sales committee member Henry Lim – took the stand.

Philip Fong of Harry Elias fired off a series of questions to Mr Lim, asking him if the sales committee recognised that allowing its sales agent, Alvin Er, to take his commission from the buyer posed a conflict of interest for Mr Er, as that may have stopped him from trying harder to find a better price for Horizon Towers after getting an offer from HPL that met the sellers’ minimum reserve price. Mr Lim did not answer the question, only saying that he had ‘no comment’.

Senior Counsel Michael Hwang, who represents another minority owner, asked Mr Lim why the sales committee did not consider other expressions of interest – there were at least four other parties which had indicated that they were prepared to pay a higher price than HPL.

Mr Hwang cited the example of an unnamed Hong Kong developer who had offered $510 million – above HPL’s offer of $500 million – for Horizon Towers. Mr Lim said that he had attempted to contact the developer but had failed to get in touch.

And it was during a tough session with a third counsel for the minorities, Kannan Ramesh of Tan Kok Quan Partnership, that Mr Lim revealed that he had been frustrated with the short amount of time the sales committee had unwittingly imposed on itself to consider HPL’s offer. He said that he felt that they could have succeeded in getting better offers if they had more time to do so.

After intense questioning, Mr Lim admitted that three of the nine former sales committee members, including himself, were not satisfied with HPL’s offer and had expressed their reservations about it.

Mr Lim also testified that the sales committee had rushed into the deal – and had failed to consult the majority owners before accepting HPL’s offer. He said that the sales committee feared that it would be sued by the majority owners if it had taken too long to revert to HPL and had lost the offer as a result. But he also admitted that the ‘prudent safe option’ for the sales committee would have been to consult the owners – except that their lawyers, Drew & Napier, had advised them otherwise.

Mr Lim was clearly uncomfortable with the unrelenting scrutiny, choosing to answer most of the questions posed to him with either ‘no comment’ or ‘I can’t recall’.

 

Source: Business Times 10 Nov 07

Successful application for Alexandra Rd condo site

Developer agrees to bid not less than $220.7m for the 99-yr leasehold plot

DEVELOPERS continue to trigger the release of sites from the Government Land Sales programme’s reserve list.

The Urban Redevelopment Authority (URA) yesterday announced a successful application for a 99-year leasehold condo site on Alexandra Road near Redhill MRT Station and next to CapitaLand’s Metropolitan project.

The developer who made the application – who was not identified – has agreed to bid not less than $220.7 million, or $489 per square foot (psf) of potential gross floor area.

The site will be launched for tender in about two weeks.

The 92,127-sq-ft plot can be developed into a new condo with about 400 units averaging 1,200 sq ft.

‘My take is that the site could fetch a premium of within 10 per cent of the reserve price,’ said CB Richard Ellis executive director Joseph Tan.

‘Even at the reserve price, the breakeven cost for a new condo would be close to the $850 psf average price at which units of The Metropolitan condo have been selling in recent months.’

A 10 per cent premium to the site’s $489 psf per plot ratio (ppr) reserve price works out to $540 psf ppr.

Savills Singapore’s director of marketing and business development Ku Swee Yong estimates the site will fetch $550-$600 psf ppr, reflecting a breakeven cost of $850-$900 psf.

He reckons a condo on it could command about $1,000 psf on average if launched in 12-15 months.

‘This is one of the better sites on the reserve list, near an MRT Station and on the fringe of the CBD,’ he said.

‘It should attract five to eight bids. We’re not going to see the one to two bids that some Government Land Sale sites have been attracting lately,’ he added.

CBRE’s Mr Tan predicts at least five or six bids.

‘This is in a sector of the market that lacks supply and developers will be keen to bid for it,’ he said.

Market watchers believe a new condo near Redhill MRT Station should be able to tap demand from HDB upgraders given the high value of HDB resale flats in the area.

So far this year, 10 reserve-list sites on the Ministry of National Development’s slate of private residential, commercial and hotel sites have been triggered for launch.

Separately, URA yesterday awarded a residential site at Enggor Street behind Icon to Far East Organization unit Bishan Properties.

The company was the higher of two bidders the 99-year leasehold plot attracted at a tender that closed on Nov 1.

Its bid of $233.8 million or $851.66 psf ppr was 55 per cent higher than the only other offer of $150.98 million or about $550 psf per plot ratio by Guoco-Land.

A tender for the residential site next door closes on Nov 15.

 

Source: Business Times 10 Nov 07

Successful application for Alexandra Rd condo site

Developer agrees to bid not less than $220.7m for the 99-yr leasehold plot

DEVELOPERS continue to trigger the release of sites from the Government Land Sales programme’s reserve list.

The Urban Redevelopment Authority (URA) yesterday announced a successful application for a 99-year leasehold condo site on Alexandra Road near Redhill MRT Station and next to CapitaLand’s Metropolitan project.

The developer who made the application – who was not identified – has agreed to bid not less than $220.7 million, or $489 per square foot (psf) of potential gross floor area.

The site will be launched for tender in about two weeks.

The 92,127-sq-ft plot can be developed into a new condo with about 400 units averaging 1,200 sq ft.

‘My take is that the site could fetch a premium of within 10 per cent of the reserve price,’ said CB Richard Ellis executive director Joseph Tan.

‘Even at the reserve price, the breakeven cost for a new condo would be close to the $850 psf average price at which units of The Metropolitan condo have been selling in recent months.’

A 10 per cent premium to the site’s $489 psf per plot ratio (ppr) reserve price works out to $540 psf ppr.

Savills Singapore’s director of marketing and business development Ku Swee Yong estimates the site will fetch $550-$600 psf ppr, reflecting a breakeven cost of $850-$900 psf.

He reckons a condo on it could command about $1,000 psf on average if launched in 12-15 months.

‘This is one of the better sites on the reserve list, near an MRT Station and on the fringe of the CBD,’ he said.

‘It should attract five to eight bids. We’re not going to see the one to two bids that some Government Land Sale sites have been attracting lately,’ he added.

CBRE’s Mr Tan predicts at least five or six bids.

‘This is in a sector of the market that lacks supply and developers will be keen to bid for it,’ he said.

Market watchers believe a new condo near Redhill MRT Station should be able to tap demand from HDB upgraders given the high value of HDB resale flats in the area.

So far this year, 10 reserve-list sites on the Ministry of National Development’s slate of private residential, commercial and hotel sites have been triggered for launch.

Separately, URA yesterday awarded a residential site at Enggor Street behind Icon to Far East Organization unit Bishan Properties.

The company was the higher of two bidders the 99-year leasehold plot attracted at a tender that closed on Nov 1.

Its bid of $233.8 million or $851.66 psf ppr was 55 per cent higher than the only other offer of $150.98 million or about $550 psf per plot ratio by Guoco-Land.

A tender for the residential site next door closes on Nov 15.

 

Source: Business Times 10 Nov 07

Alexandra housing plot up for tender soon

A DEVELOPER has agreed to pay at least $220.7 million for a residential site on Alexandra Road, in what is seen by some observers as a bullish move in light of recent property market caution.

This has triggered a tender for the 0.86ha plot, on which 360 to 400 homes can be built. It is a short walk from Redhill MRT station and the upcoming Metropolitan condominium.

The 99-year leasehold site has a maximum gross floor area of 451,428 sq ft and can hold a condominium of up to about 40 storeys high.

Under the reserve list system, a plot is put up for tender by the Government when a developer commits to bidding an acceptable minimum price.

In this case, the minimum bid price works out to about $448 per sq ft per plot ratio (psf ppr), considered a bullish bid by some analysts in view of the caution among developers, after the Government scrapped the deferred payment scheme recently.

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, said the trigger price was ‘quite aggressive’.

He estimated that the eventual winning bid for the plot would end up in the range of $500 to $600 psf ppr.

This will push selling prices of condo units there to between $1,000 psf and $1,050 psf.

The regional director and head of investments at Jones Lang LaSalle, Mr Lui Seng Fatt, expects an even higher winning bid of $650 to $800 psf ppr, which will work out to between $300 million and $380 million.

Meanwhile, the Urban Redevelopment Authority has awarded a 0.3ha residential plot in Enggor Street to Far East Organization’s Bishan Properties at a price of $233.8 million, or $852 psf ppr.

The tender, which closed on Nov 1, attracted only two bids. Far East is reportedly expected to build about 200 apartments at the location.

 

Source: The Straits Times 10 Nov 07

HPL remark on Horizon Towers decision ‘not fair’

A LAWYER for a group of minority owners opposed to the collective sale of Horizon Towers yesterday said that comments made by developer Hotel Properties (HPL) on the proceedings were not fair.

HPL had commented on the possibility of the tribunal decision coming too late.

The consenting and minority owners of Horizon Towers are now battling it out at the Strata Titles Board (STB).

HPL and its two partners have been trying to buy Horizon Towers en bloc for $500 million, a price they inked in January this year.

On Wednesday, the third day of the resumed STB hearing, tribunal chairman Philip Chan said the board was under no legal obligation to rule on whether to approve the collective sale on or before Dec 11 – the sale completion date.

HPL group executive director Christopher Lim then commented to the media that the firm was surprised that the tribunal took the view that it had no duty to make a ruling before Dec 11, as that may ‘potentially scuttle’ the deal.

Senior counsel K.S. Rajah of Harry Elias Partnership told the board yesterday that Mr Lim, an interested party, was not qualified to comment on the board’s decision when it is proceeding and ongoing.

He said the comment should be referred to the Attorney-General’s Chambers.

Anyone who seeks to ‘muddy the waters’ must be told to lay off or face the consequences, he said.

At yesterday’s hearing, sale committee member Henry Lim was cross-examined. He was asked questions that included whether sale committee chairman Arjun Samtani had disclosed his purchase of a second unit at Horizon Towers last March.

 

Source: The Straits Times 10 Nov 07

Horizon Towers sale could be timed out by tribunal decision

STB says it is not bound to rule by sale completion date; lawsuit looms

(SINGAPORE) The Strata Titles Board (STB) tribunal has delivered a startling decision that could spell the end of the en bloc sale of Horizon Towers. The ruling could in turn resurrect the $1 billion lawsuit filed by the buyers against the sellers.

Tribunal chairman Philip Chan announced yesterday that the board was under no legal obligation to rule on whether to approve the collective sale on or before Dec 11, the sale completion date.

This means, if the tribunal chooses to make a decision only after Dec 11, the sale agreement between the buyers and the sellers will lapse – and the en bloc sale will collapse.

The decision took many observers by surprise since a ruling after the sale completion deadline would effectively render the role of the tribunal pointless.

Mr Chan said yesterday the board made its decision after considering the submissions made by all the parties involved: the majority owners who have applied for a collective sale order, and the minority owners who are opposing the sale.

The would-be buyers – Hotel Properties (HPL) and its partners – were not permitted to be parties to this hearing, and could not make any submissions on the matter.

The tribunal on Tuesday asked the relevant parties to submit their arguments on whether the board had a legal obligation to make a decision on the collective sale order on or before Dec 11.

Mr Chan announced yesterday that, as all parties were in agreement that the board was under no such obligation, the tribunal would not be bound to make a decision by Dec 11.

The position seemingly runs counter to the one taken by the tribunal at an earlier Horizon Towers hearing in June, when Mr Chan agreed to bring forward the hearing dates – so as to allow the tribunal to make its decision before the earlier sale completion deadline of Aug 11.

Mr Chan said then, as grounds for doing so, that ‘courts do not sit for futility’, adding: ‘Courts are here to make sure that if we do give an order, that order must stick. The order must be put into operation; otherwise it would be unproductive. It may even be silly for a court to sit.’

The tribunal’s decision yesterday has not gone down well with HPL and its partners.

HPL group executive director Christopher Lim told BT: ‘We are very concerned about this development. It is surprising that the tribunal took the view that it had no duty to make a ruling before Dec 11, as that may potentially scuttle the transaction.’

He added: ‘We are also very disappointed that the majority sellers did not take the position that the matter be dealt with expeditiously and before Dec 11. During the earlier hearings, we had made it clear that such conduct by the majority sellers is in breach of contract.

‘As a result of these developments, we are currently reviewing our position.’

HPL and its partners have already sued the majority owners for breach of contract – claiming damages of up to $1 billion – but that suit has been stayed, pending the outcome of this STB hearing.

But HPL and its partners earlier also made it clear that they will consider resurrecting the legal claim against the majority owners if the en bloc sale ultimately falls through.

The dramatic reaction sparked by this one announcement was in marked contrast to the humdrum proceedings of the rest of the day. Former sales committee member Wee Hian Siew spent a second day on the stand, being grilled on whether he did his utmost to act in the owners’ best interests in the en bloc sale.

The session also saw a few laughs, as Mr Chan quipped that he would refrain from making any more jokes during the hearing – ‘in case I get reported’, he said. BT reported Mr Chan’s wisecrack about Mr Wee being a secretary ‘without a skirt’ yesterday.

The mood among the owners was generally upbeat, with some even distributing Deepavali sweets to those present.

 

Source: Business Times 8 Nov 07

Grange Heights tender opens

THE tender for the collective sale of Grange Heights has been launched. And sources say the reserve price could be around $845 million, or $2,200 psf per plot ratio (ppr).

No development charge is payable for the 136,678 sq ft freehold plot, according to marketing agent Jones Lang LaSalle.

Owners controlling more than 80 per cent of share values in the estate have signed the collective sale agreement. In March this year an expression of interest exercise was launched before the minimum consent level had been secured.

The price expectation then was ‘upwards of $1,700 psf ppr’, according to a BT report at the time.

Grange Heights has been zoned for ‘permanent residential’ use with a 2.8 maximum plot ratio and a height of up to 36 storeys. The current development has access from three entrances – Grange Road, River Valley Grove and St Thomas Walk. The existing development comprises three blocks with a total of 120 apartments. The tender closes on Nov 28.

 

Source: Business Times 7 Nov 07

Tampines office site attracts just one bid

Property consultants wonder if caution is creeping into this sector

(SINGAPORE) In a possible reflection that caution among developers may be extending to the office sector, a tender for a transitional office site in Tampines yesterday drew just one bid – from City Developments Ltd’s (CDL) unit Glades Properties.

And its bid of $10 million, which worked out to $80.65 psf per plot ratio (ppr), was lower than the $100 psf ppr region that most property consultants had expected the 15-year leasehold site to fetch.

The government has indicated recently that it will inject more office space into the market soon – a step that could cool prices. Some felt that yesterday’s bidding reflected caution on part of the developers while others suggested Tampines may not be a popular location among office investors.

They pointed out that the next-door 99-year leasehold office site offered through a tender that closed in May this year had also drawn just one bid, again from CityDev, although at a more substantial price of $622 psf ppr.

The maiden 15-year leasehold transitional office plot next to Newton MRT station attracted a whopping 11 bids with a top price of $219 psf ppr in August.

Whether the weaker sentiment among office investors is confined to Tampines or is spreading to the Central Business District (CBD) as well will be seen in a tender closing on Nov 13 for Marina View Land Parcel B, a 99-year leasehold site with stipulated minimum office and hotel components.

Property consultants polled by BT unanimously expect URA to award the 124,000 sq ft transitional office site at Tampines Ave 5 to CDL, despite its bid being the sole offer and that too at a price lower than expected.

‘Government should make the award since as a transitional office site, it is part of the interim solution to the acute office shortage here. Otherwise, the government objective would not be met,’ Knight Frank managing director Tan Tiong Cheng reasoned.

The Urban Redevelopment Authority said yesterday in response to a query by BT that ‘the government will continue to release more transitional office sites to meet business needs; details on these sites will be released shortly’.

Colliers International director (research and consultancy) Tay Huey Ying said: ‘If the government releases more transitional office sites in or near the CBD, I believe demand will be healthy.’

She reckons the thin bidding for the Tampines plot yesterday may be due to concern among developers that strong office demand currently outside the CBD is the result of an overflow of demand from the CBD.

‘There may be concern that post-2010, when there will be a large influx of new office space being completed within the CBD, the spillover demand for suburban offices may recede,’ she added.

‘Next week’s tender for Marina View Land Parcel B will be interesting to watch, to see whether developers are also concerned about office supply in the CBD itself,’ she added.

CB Richard Ellis executive director Li Hiaw Ho said: ‘That is a much better site (than today’s Tampines plot), although I do not expect a lot of bidders because it is a huge site with a substantial outlay.’

 

Source: Business Times 7 Nov 07

HORIZON TOWERS HEARING – ‘I don’t believe anything in the papers’

Sales committee member grilled on why he didn’t take heed of rising prices

(SINGAPORE) Suggestions that the Horizon Towers sales committee failed to act in owners’ best interests took centrestage when the Strata Titles Board (STB) hearing resumed yesterday.

The serious mien of the session was, however, periodically broken by moments of frivolity – some more tasteful than others.

Former sales committee secretary Wee Hian Siew spent a tough full day on the stand, as lawyers for the minority owners – those who didn’t agree to the collective sale – grilled him on how he and the sales committee handled the sale.

It is the minorities’ contention that the en bloc sale of Horizon Towers – to Hotel Properties and its partners for $500 million – was carried out in bad faith and should not be approved by the STB.

Philip Fong of Harry Elias Partnership questioned Mr Wee for almost three hours on the collective sale procedures carried out by the sales committee.

Mr Fong cited specific instances of when key procedures were not followed – such as when notices and circulars to owners on the collective sale were insufficient, untimely or inaccurate.

Mr Fong also asked why Mr Wee didn’t try to get a better sale price when it became known that residential property prices were beginning to soar; he referred Mr Wee to a Jan 11 Business Times article, ‘Developers revive interest in unsold collective sale sites’, reporting just such a surge in home prices.

Mr Wee’s response – ‘I don’t believe anything in the papers.’ – drew sniggers from the crowd.

When Mr Fong pressed on, saying that BT was ‘a respectable daily’, Mr Wee clarified his comment to mean that he felt ‘we should not take everything at face value’.

The protracted session, however, prompted several abrupt remarks from the tribunal’s chairman Philip Chan, who interrupted Mr Fong on more than one occasion – once, for an early lunch break and a second time to tell the senior lawyer that his allotted time was up.

Kannan Ramesh of Tan Kok Quan Partnership also subjected Mr Wee to a lengthy cross-examination.

He focused on the promise made to owners that they would get an 80 per cent premium if they sold their unit in an en bloc sale than if they were to sell them individually.

Referring again to the Jan 11 BT article – and the fact that neighbouring development, The Grangeford, had upped its minimum asking price by a quarter – Mr Ramesh said these should have alerted the Horizon Towers’ sales committee to the fact that property prices were rising, that the promised premium had been ’significantly eroded’ and that they should have done more to get a higher price.

Mr Wee said the sales committee did try but relied on the expert advice of their sales agent, Alvin Er, that $500 million was the best price they could get. He said it never occurred to him that he could seek advice from other experts.

The tribunal’s chairman, Mr Chan, then asked Mr Wee if he felt he had carried out the duties expected of a secretary of the sales committee.

That prompted Mr Wee to ask, ‘What do you mean by a secretary?’, to which Mr Chan retorted ‘without a skirt’ – a comment that drew an audible objection from some members of the viewing public.

The STB also rejected one majority owner’s application to have separate representation in this hearing.

Susanna Rusli had applied last week to participate in the hearing, separately from the other majority owners – but the board yesterday dismissed her arguments.

The hearing continues today with a second former sales committee member, Henry Lim, on the stand.

 

Source: Business Times 7 Nov 07

Horizon Towers owners renew objections to sale at hearing

THE home owners opposed to the $500 million collective sale of Horizon Towers have renewed their complaints that the sale was not handled properly, resulting in a price that was too low given a fast-rising market.

They were opening their case to stop the sale in front of the Strata Titles Board (STB) yesterday with a barrage of arguments.

They claimed that the sale committee and the property agent had mismanaged the sale process of the condominium.

It was the second day of the resumed STB hearing in which the majority owners are seeking approval to have the sale approved, after it was thrown out on a technicality in August.

They are battling it out with the minority owners who have filed objections to the sale. These objectors include three groups, each represented by different lawyers, along with two sets of owners representing themselves.

Hotel Properties (HPL) and its two partners have been trying to buy the 99-year leasehold Horizon Towers for $500 million, the estate’s reserve price that was set in April or May last year.

Opponents of the sale argued that by the time the deal was signed, that reserve price was too low, and out of date.

They said the $500 million price came with an 80 per cent premium – an inducement that had shrunk significantly by the time the estate was sold to the HPL consortium in January this year, due to a fast-rising market.

One witness, Mr Wee Hian Siew, who was the secretary of Horizon Towers’ first sale committee and one of the first to moot the idea of a sale, was called at the STB hearing yesterday.

He was asked numerous questions, including whether he knew about the rising market and why he did not ask for a fresh mandate for the $500 million offer from the owners, many of whom were said to have learnt of the sale via a newspaper report.

Mr Wee said he knew about the rising market and insisted that he was under the impression that the collective sale premium had slipped to about 40 per cent to 50 per cent, which he was happy with.

Earlier, one of the three minority owners’ lawyers, Mr Philip Fong of Harry Elias partnership, had asked if Mr Wee knew that Horizon Towers’ agent First Tree Properties was a tiny company with a paid-up capital of $50,000 for instance.

Also, he asked if he knew that the company had agreed to take a commission from the purchaser, instead of the owners as with usual practice. Mr Wee said he knew about it.

He later agreed that this would create a potential conflict but it was one that was not apparent to him when they were making the deal.

These were just some of the arguments brought up yesterday when the STB board also dismissed the case of a majority owner who wanted to participate in the hearing as an objector.

The hearing continues today.

 

Source: The Straits Times 7 Nov 07

CDL-Wachovia JV buying two blocks at Cliveden at Grange

CDL hints it may retain units in some future residential developments

A JOINT venture between City Developments Ltd (CDL) and US-based Wachovia Development Corporation is buying two blocks at CDL’s Cliveden at Grange condo for $432.4 million or an average price of about $3,750 per sq ft (psf).

And according CDL executive chairman Kwek Leng Beng, the deal attests to the freehold project’s ‘high investment potential’ and reflects CDL’s ‘business strategy of leveraging on the capital appreciation potential of our developments’.

In an interview with BT in May this year, Mr Kwek said he was considering retaining a portion of some new residential developments for rental income and capital appreciation.

At CDL’s Q2 results briefing in August, he said he was considering retaining two blocks at Cliveden.

A Hock Lock Siew column in BT later that month speculated on whether CDL was mulling a residential real estate investment trust (Reit) to which it could spin off apartments held for investment.

CDL was silent on this in its statement to the Singapore Exchange yesterday. But market watchers reckon a possible exit strategy for the CDL-Wachovia joint venture for their investment in the two Cliveden blocks would be to divest them to a residential Reit.

Without elaborating, a CDL spokesman said yesterday: ‘We will look into this business model of retaining units in some of our future residential developments.’

CDL is taking a 40 per cent stake in the joint venture company Grange 100 Pte Ltd that is buying the Cliveden blocks, comprising 44 apartments. Wachovia holds the majority 60 per cent.

The 44 units are three and four-bedders, and two penthouses. The prices at which they were bought range from $3,392 psf to $4,313 psf.

Before the deal was announced yesterday, CDL had sold 42 units at Cliveden at an average price of $3,690 psf since the project’s soft launch in June. More than 90 per cent of these units were bought by foreign buyers from the UK, Australia, Hong Kong, China, Taiwan, Indonesia, France, Korea and Japan.

After the latest deal, only 24 apartments will be left at the 110-unit Cliveden, which is coming up on the former Kim Lin Mansion site.

Last year, CDL bought the Lucky Tower site, diagonally opposite the Kim Lin plot, for $1,134 psf per plot ratio.

 

Source: Business Times 6 Nov 07

Horizon Towers: Seven vow to go all out to stop sale

$2m spent in fight to keep homes but they’re willing to pay more to win

SEVEN owners who opposed the collective sale of Horizon Towers from the word ‘go’ vowed last week to spend as much as it takes to keep their homes.

They have already spent nearly $2 million to fight the sale and may rack up double that by the time the saga is resolved.

‘We have no budget,’ said one, a retired former chief executive. ‘In life, not everything has to do with money. For us, this is our only home.’

These owners are locking horns with the majority owners – those who voted or the collective sale – at the Strata Titles Board (STB).

The hearing, with all the twists, turns and fighting over legal niceties that has marked it from day one, involves majority owners seeking STB approval for the original sale application rejected in August.

A number of minority owners – including the defiant seven who are split into two groups, each represented by different lawyers – oppose this, on a variety of grounds.

Disgruntled owners are becoming more common in Singapore. The property boom and the surge in collective sales have led to increasing numbers of people finding that rising replacement costs mean their bounty from selling en bloc counts for little.

One of the seven minority owners, who lives in a 5,000 sq ft penthouse, said: ‘There are seven people in my family, including the helper. You cannot expect us to downgrade to a 1,000 sq ft place.’

But the problems at Horizon Towers go deeper than that. The unhappiness over the sale of the 99-year leasehold estate started in January, said the seven minority owners.

It was then that they and many others learnt – via a newspaper report – that their 210-unit estate had been sold for $500 million to Hotel Properties and two partners.

The seven are among the 10 groups of owners who did not agree to sell and subsequently filed objections.

One has withdrawn his objections.

They say the $500 million price tag, which works out to $850 per sq ft, is an unfair sum because prices have risen considerably. Developments nearby sold for more than double the price per sq ft achieved at Horizon Towers this year.

The seven owners spoke freely about protecting their homes but were cagey about disclosing personal details.

Six of the seven refused to divulge full names, although they are listed in the STB affidavit.

They were also reluctant to reveal job details. One is a businessman, one runs her own company and there are at least three retirees – a lawyer, a chief executive and a property developer.

What unites them is the fight for their homes – something they say money cannot buy, and certainly not at last year’s prices.

Apart from their ability to spend hundreds of thousands of dollars to fight the sale, they are also clued-up about the law. ‘We are very different from other objectors,’ said Ms J. Tan, one of the seven. ‘We are very well-informed and very well-educated.’

A second owner, who was bemoaning the fact that every day of delay costs them about $100,000 in legal fees, said: ‘Every time someone makes a mistake, it becomes my problem.’

Said another: ‘If I don’t have grounds, I will not throw away my money. If I win, nobody will pay us back.’

 

Source: The Straits Times 6 Nov 07

CDL, US group to buy 44 units of Grange Road condo

PROPERTY giant City Developments (CDL) has teamed up with United States financial services group Wachovia to buy 44 homes in CDL’s freehold Grange Road project for $432.4 million.

Industry analysts suggest CDL might be preparing to list a real estate investment trust (Reit) using the properties. Knight Frank executive director Peter Ow said: ‘The only reason I can think of for this deal is so that they can put the apartments in a Reit in the future.’

CDL, however, declined to say if a Reit was in the pipeline, but it acknowledged it was studying this as well as other business models.

Under the deal, which works out to an average price of $3,750 per sq ft (psf), Wachovia’s real estate arm, Wachovia Development, will take a 60 per cent stake in the joint-venture company.

According to CDL, there are plans to rent out the 44 three- and four-bedroom apartments and penthouses – which take up two of the four towers at Cliveden at Grange – as well as possibly selling them off later if prices rise.

CDL executive chairman Kwek Leng Beng said yesterday: ‘The development has seen strong foreign interest from both individual buyers and retail investors since its launch… The deal is in line with our business strategy of leveraging on the capital appreciation potential of our developments.’

He had earlier indicated that CDL was considering keeping two blocks of homes at Cliveden instead of selling them off in a rush.

The deal could also mark the start of CDL’s preparation for a residential Reit, property analysts said.

The venture would mean that there are now just 24 units left for sale at Cliveden, which was launched for sale in July.

A total of 42 units were sold at an average price of $3,690 psf before the joint venture was announced yesterday. Many of the buyers are foreigners from Britain, Australia, Hong Kong, China, Taiwan and Indonesia, among other centres.

Wachovia is not new to the local real estate scene. It is also teaming up with CapitaLand to redevelop Char Yong Gardens and Farrer Court.

Mr Ow said the deal was positive for CDL due to the limited upside now for luxury homes. Putting the homes in a Reit, he said, would allow CDL to keep the apartments over a longer period of time, say three to seven years, and ride out any possible drop in prices in the near future.

 

Source: The Straits Times 6 Nov 07

$7M TO $12M PER UNIT – SC Global’s Hilltops sold for $3,900 psf

PRICES ranging from $7 million to $12 million have been racked up for each of the 28 units at the posh Hilltops condo.

The flats were sold for an average price of just over $3,900 per sq ft (psf), which has made the Cairnhill Circle estate one of the most expensive in town.

Sources said one unit in the SC Global Developments property had been sold for more than $4,800 psf. The lowest price fetched was $3,500 psf.

The three-bedroom units were believed to have commanded a price of nearly $7 million, while the four- to five-roomers went for up to $12 million.

About half of the buyers were foreigners, with the rest locals and permanent residents, said sources.

Most opted for the progressive payment scheme, instead of the deferred payment scheme that the Government recently axed, although it was still available for Hilltops.

The 28 units sold are among the 30 launched about a month ago. The freehold 20-storey condo has 240 flats, mostly three- and four-bedroom units.

Prices at Hilltops have pipped those at the nearby 140-unit Helios Residences, where 69 units were sold for an average of just over $3,000 psf each.

Values in the Cairnhill area have increased dramatically with new launches in recent months following a spate of collective sales in the area.

Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong, said developers with a solid product and a willingness to tolerate a slower pace of sales will be able to achieve relatively high prices.

‘While the market seems to be a bit quieter recently, there is still strong interest for luxurious properties, as more and more wealthy people park their funds in Singapore,’ he said.

 

Source: The Straits Times 5 Nov 07

Buying completed homes gives investors instant rental income

Such cash inflow can help to cover mortgage payments and lowers one’s portfolio risks

PROPERTY investors love new launches – they can get their hands on a unit fresh off the plans and hope for huge overnight gains.

But long-term investors would do well to also check out completed properties that can generate an immediate rental income.

‘Too many people are overweight in their investment portfolio in terms of new launches,’ says Savills Singapore director for marketing and business development, Mr Ku Swee Yong. ‘To lower one’s risks, part of the portfolio should be income-producing.’

That will give investors a certain amount of income from property even during a short-term market dip, he says.

Although Singapore’s market is currently buoyant, it has its ups and downs as any homebuyer over the past 10 years knows only too well.

For those buying on a progressive payment scheme, the instant income from a completed property could help cover mortgage payments.

This option has become more attractive with the recent axing of the deferred payment scheme, which puts buying a completed property on a level playing field with buying an uncompleted one.

Buyers will have to take out a loan sooner since they can no longer defer the bulk of the payment for an uncompleted property until completion.

When it comes to getting a mortgage, it may not necessarily be easier to get a loan for a completed property compared with an uncompleted one.

OCBC Bank says it does not differentiate between completed and uncompleted property.

Still, in line with the pickup in home prices, the rental market has shot up across the board, making the purchase of a completed property for rental gains more worthwhile.

Official data showed that rents of private homes rose by 11.4 per cent in the third quarter, making a 32.2 per cent rise between January and September.

Completed properties are generally more ‘reasonably priced’ compared with new launches, says one investor.

A recent Jones Lang LaSalle study found that the gap between new sale prices and resale prices is at a record high.

But this is likely to narrow as buyers find it less attractive to buy new developments when habitable resale homes at more affordable prices are readily available, it said.

A tip from a seasoned investor: Consider projects that will get their temporary occupation permit within the next three to six months.

‘These projects would have been launched about three years ago when prices were low,’ he says, so their subsale prices will usually be lower than those of new launches.

‘Another advantage is that you will be the first landlord and have the privilege of charging rental based on the current market rate,’ he adds.

‘There’s no point taking over a lease that has two years to go and that was based on old, lower rental rates.’

As a guide, properties offering a rental yield of at least 3 per cent are a safe bet, says Mr Ku. These can be found in completed properties in city fringes such as Siglap and Balestier.

Bargains are tougher to find in hot areas like Amber and Meyer roads where asking prices have risen so much that yields have fallen below 2.5 per cent, he says.

Some older properties may offer fairly high yields but investors must factor in maintenance costs, consultants say.

 

Source: The Sunday Times 4 Nov 07

Toa Payoh condo site available for application under reserve list

THE Housing & Development Board has made a 99-year leasehold condo site at the corner of Lorong 2/3 Toa Payoh available for application under the reserve list.

The 1.4-hectare plot can be developed into a project of about 530 units averaging 1,200 sq ft, property consultants say.

Market watchers suggest the site could attract bids ranging from $450 to $630 per sq ft per plot ratio – a spread that reflects uncertainty after recent market dynamics.

Last week’s withdrawal of the deferred payment scheme seems to have made developers cautious, as seen on Thursday when a state tender for a 99-year condo plot behind the Icon in Tanjong Pagar attracted just two bids.

But some observers say Far East Organization could submit a bid that matches the $601 psf per plot ratio it offered in September for a 99-year condo site next to Ang Mo Kio Hub. The $601 psf ppr was a record for suburban condo land.

Knight Frank managing director Tan Tiong Cheng believes a condo on the Toa Payoh site could sell for an average price of about $900 psf at most, considering it would be pitched mostly at HDB upgraders.

That works out to a land bid of about $450 psf ppr and a breakeven cost for the project of about $800 psf.

But Sim Lian Holdings director Ken Kuik believes a new condo on the site could sell for an average price of close to $1,000 psf, going by recent launches. He was alluding to strong sales last weekend of freehold Park Natura at Bukit Batok, much further from the city, at an average price of $1,000 psf. The project is being sold on a partial deferred payment scheme.

Mr Kuik reckons the Toa Payoh site could fetch $500 to $550 psf ppr, which would result in a breakeven cost of $850 to $900 psf ppr and a selling price for the new condo of about $950-$1,000 psf.

Another developer reckons Far East, controlled by tycoon Ng Teng Fong, will at least match the $601 psf ppr it offered for the Ang Mo Kio site. ‘My gut feel is Far East could bid $620-630 psf ppr this time,’ the developer said.

‘Because of its size it can get lower construction costs and its architects are known to maximise efficiency, so even at this bid price its breakeven cost may be just above $900 psf.’

The 150,211 sq ft Toa Payoh site is flanked by Kheng Cheng School and the Singapore Federation of Chinese Clan Associations Building. It is within walking distance from Braddell MRT Station. The site has a plot ratio of 4.2.

Sites on the reserve list under the Government Land Sales Programme are launched for tender only after an application by a developer who undertakes to pay a minimum price acceptable to the state.

 

Source: Business Times 3 Nov 07

SingLand, UIC profits up on higher rentals

A ROBUST property market lifted net profits at Singapore Land and its parent, United Industrial Corporation (UIC), in the third quarter.

SingLand said its earnings in the quarter rose 30 per cent to $30.1 million from $23.2 million a year earlier.

Revenue was up 27 per cent at $70.5 million.

It attributed the revenue jump for the three months ended Sept 30 to ‘the contribution from the Pan Pacific Singapore Hotel and higher rental income’.

The company acquired full ownership of the hotel in April.

Higher rental rates and improved occupancy lifted its rental income by $8.1 million, although it did not say where this increase came from.

Earnings per share in the third quarter came to 7.3 cents, up from 5.6 cents in the same period last year. Net asset value per share was $7.45, a slight dip from $7.50 as at Dec 31.

UIC had an even rosier story to report. Its earnings were up 43 per cent in the third quarter at $25.4 million from $17.8 million a year earlier on a 76 per cent surge in revenue to $134.8 million.

The higher revenue was due to stronger sales of residential properties, contributions from the Pan Pacific Singapore Hotel and increased rental income.

UIC named One Amber, the Grand Duchess at St Patrick’s and Northwood as the sites that had contributed $26.5 million to the company’s coffers.

It is bullish about its prospects, noting that with ‘Singapore’s economic growth and positive consumer sentiment, demand for office and retail space and private housing is expected to remain steady’.

Earnings per share stood at 1.8 cents, up from 1.3 cents. Net asset value was $1.78, down from $1.77 as at Dec 31.

 

Source: The Straits Times 3 Nov 07

Bravo buys Makeway View for $162.8m in en bloc sale

It plans to build about 70-80 loft apartments on the freehold site

BRAVO Building Construction group, which bought Tulip Garden and Pender Court a few months back, has now clinched Makeway View in the Newton area for $162.8 million through a collective sale.

The price works out to a land cost of $1,583 per square foot (psf) of potential gross floor area including an estimated $21.5 million development charge (DC).

The breakeven cost for a new project on the site will be about $2,100 psf, a Bravo spokeswoman said.

‘We’re planning about 70-80 loft apartments, with sizes ranging from 1,500 sq ft to 1,800 sq ft,’ she said. ‘The project, which could be about 23-24 storeys high, may be ready for launch around Q3 or Q4 next year.’

Makeway View is on a freehold site of 41,582 sq ft that is designated for residential use with a 2.8 plot ratio under Master Plan 2003.

Knight Frank brokered the sale through a private treaty after a tender that closed last month.

The deal is subject to approval by the Strata Titles Board.

The buyer is Makeway Residences Pte Ltd, which is related to Bravo Building Construction.

‘At the purchase price of $162.8 million, Makeway View owners will receive gross sale proceeds of about $3.7 million to $10.4 million per unit,’ Knight Frank said yesterday.

Makeway View’s existing 32 apartments and penthouses range in size from 1,442 sq ft to 5,307 sq ft.

Bravo’s spokeswoman also told BT the group plans to develop the freehold Pender Court site off West Coast Highway, which it bought in July, into 48 cluster terrace housing units.

‘We’re in discussions with an overseas fund which is keen on buying the entire development for about $180 million, or about $3.8 million per unit on average,’ she said. ‘Each house will come with a private pool.’

Bravo’s acquisition of Tulip Garden, also in July, was for $516 million or $1,018 psf per plot ratio. No DC is payable.

Bravo is a five-year-old property and construction outfit that has bought more than a dozen sites in Singapore since September last year, including Castle Court on Changi Road, Regent Court in Serangoon and Koon Seng House in the Still Road area.

 

Source: Business Times 2 Nov 07

Life after deferred payments starts with just 2 bids for site behind Icon

Developers could be turning cautious, say analysts

(SINGAPORE) In a sign that developers are turning cautious after the withdrawal of the deferred payment scheme, a state tender for a 99-year residential site at Enggor Street behind the Icon development drew just two bids yesterday.

The higher bid by Far East Organization was 55 per cent above the only other offer by GuocoLand.

Far East offered $233.8 million or about $852 per square foot of potential gross floor area for the 32,681 sq ft plot near Tanjong Pagar MRT Station. GuocoLand’s $150.98 million bid works out to around $550 psf per plot ratio.

All eyes are now on a tender for the residential site next-door closing on November 15.

Far East’s breakeven cost for a new condo project is understood to be in the $1,340 to $1,400 psf range. That still leaves it with a profit margin based on current prices being achieved at Icon.

Caveats show that mid-level units (on the 20th to 22nd levels) of Icon have been changing hands in recent months in the $1,500 to $1,600 psf range in the subsale market, although units above the 40th storey have been sold by Far East at above $2,000 psf.

The property giant is understood to have sold a penthouse on the 46th floor recently for about $2,300 psf. It is now left with about 30 units in the 646-unit project, and its prices range from $2,000 to $2,400 psf.

For the latest site, called Land Parcel A at Enggor Street, BT understands Far East’s scheme is for a 62-storey tower with about 200 apartments – likely to be a spread of unit types like Icon – and is targeting to launch the project around end-2008 or early 2009.

Far East will develop retail space on the project’s ground level to be linked to Icon Village, the street-level retail component of its earlier project.

While property market watchers attributed the thin participation at yesterday’s tender to developers turning cautious following the withdrawal of the DPS scheme, some were puzzled by the disparity between the two bids.

‘Far East has crunched their numbers and know what they are in for, based on their experience with selling Icon units,’ a seasoned property consultant said.

However, some analysts could not help but suggest that Far East’s significantly higher offer may also have been partly motivated by a need to support property prices, including the values of sites it bid earlier. In September, the property giant clinched a prime condo plot next to Ang Mo Kio Hub for $601 psf per plot ratio – a record for suburban 99-year leasehold condo land. That tender attracted a whopping 14 bids. Another state tender for a condo site next to Kovan MRT Station that closed in early October drew six bids.

‘Developers are a bit concerned after the DPS withdrawal. It looks like they’ve chickened out of this tender,’ a seasoned property consultant said, when explaining yesterday’s thin bidding.

However, another property consultant, CB Richard Ellis executive director Li Hiaw Ho suggested that another reason for the lukewarm response yesterday could be due to the site’s location.

‘It is behind Icon and is sandwiched between a commercial site that has been awarded and another residential site (Parcel B) whose tender will close on Nov 15. Nevertheless, the site is about five minutes’ walk from Tanjong Pagar MRT Station,’ he added.

 

Source: Business Times 2 Nov 07

Enggor St tender attracts only two bids

It is the first public tender to close since the deferred payment scheme was scrapped

A WEAK response to the tender for a residential site in Enggor Street suggests market sentiment might have turned cautious, analysts say.

The 99-year leasehold site at Tanjong Pagar had attracted only two bids by the time it closed yesterday, said the Urban Redevelopment Authority.

The top bid for the site was put in by Far East Organization’s Bishan Properties at $233.8 million, or $852 per sq ft per plot ratio (psf ppr).

The only other bid was almost half that – $151 million, or $550 psf ppr – and was tendered by First Capital Holdings.

This is the first public tender to close since the Government announced last week that it was scrapping the deferred payment scheme with immediate effect.

The scheme allowed buyers to fork out a down payment of only 10 or 20 per cent when purchasing a new home; the rest came due upon completion, which could sometimes be as long as three years later.

Analysts that The Straits Times spoke to said the Enggor Street bids reflected a more cautious attitude among developers.

Singapore’s spectacular property bull-run has, in recent times, seen up to 10 or more bids for public tenders.

‘The mood has turned cautious and the bids reflect this,’ said Chesterton International’s head of research and consultancy, Mr Colin Tan.

CB Richard Ellis (CBRE) Research executive director Li Hiaw Ho said this change could be due to the DPS announcement.

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, agreed.

He pointed to uncertainty in the market, and added that developers are monitoring the behaviour of homebuyers before committing to buying more government land.

However, another reason for the weak response could be the location.

The site, with a gross floor area of 274,522 sq ft, is behind Far East’s Icon condo, and is sandwiched between a commercial site and another residential site whose tender closes on Nov 15.

But as it is only a five-minute walk from the Tanjong Pagar MRT station – at the heart of the Central Business District – the site remains attractive, say analysts.

Estimates for the project, launched for sale on Sept 4, indicate that it could provide 330 to 360 small units and a handful of large four-bedroom units, said Mr Mak.

CBRE’s Mr Li said the top bid was ‘reasonable’ and should translate into a break-even price of $1,300 psf for the future project.

Its units are likely to be priced at $1,500 to $2,100 psf when launched for sale – similar to the prices fetched at Icon recently.

 

Source: The Straits Times 2 Nov 07

Brisk sales at newly-launched suburban projects

Analysts looking to see effect of scrapping of deferred payment

UIC Ltd is launching its 192-unit Park Natura development across from Bukit Batok Nature Park, and market watchers will be eager to see how sales will be affected by the US sub-prime mortgage crisis or by the withdrawal of the deferred payment scheme (DPS).

So far, sales look good. Priced at the higher end for a suburban condominium at an average of $1,000 psf, more than 100 units have already been sold at the private soft launch. UIC group general manager Vito Koh said: ‘The demand shows that the pricing is right.’

Mr Koh said he did not have a breakdown of the profile of buyers but added that Park Natura was not the type of development to attract speculators.

UIC received approval to offer deferred payment to buyers before the end of the DPS, but whether this alone is attracting buyers is hard to say.

Still, Mr Koh said that the withdrawal of DPS from future developments could affect buyers’ confidence, especially for HDB upgraders hoping to enter the private property market.

Mr Koh also pointed out that the withdrawal of the DPS has come at a time when prices in the high-end segment appeared to have levelled off. ‘Market prices have already adjusted themselves so withdrawing DPS is not necessary,’ he said.

Another development that was recently launched is the CGH Group’s 72-unit Esta Ruby in the Katong area.

Already, 25 per cent of the units have been sold at an average price of $1,160 psf.

CGH sales director Alex Chng said that recent events have affected the property market, with some potential buyers changing their minds. ‘But our feeling is that the buyers are still there.’ The good news seems to be that more foreigners and Singapore permanent residents appear to be buying units in suburban developments.

At Esta Ruby, Mr Chng estimated that 30 to 40 per cent of the buyers were non-Singaporean. ‘What is interesting is that the buyers are mainly from China, Indonesia and even Vietnam,’ he added. The remaining buyers are mainly those displaced by en-bloc sales, with 20 to 30 per cent of buyers being HDB upgraders.

Another development that has been selling through private previews is the 196-unit Aalto in the East Coast by Hong Leong Holdings. Units there are also selling fast with about 60 per cent – about 120 units – sold so far.

A spokesman for Hong Leong also said that transacted prices ranged from $1,500 to more than $2,500, or roughly the transacted prices for new developments in the area even before the US sub-prime mortgage crisis.

 

Source: Business Times 1 Nov 07

URA property auction attracts $37m of bids

Bidders included smaller developers, contractors and engineering firms

THE mood continued to be buoyant at two property auctions yesterday held by the Urban Redevelopment Authority (URA) and DTZ Debenham Tie Leung.

The URA auctioned 12 sub-divided landed housing plots near Sembawang Beach which can be developed into a total of 57 landed homes.

The auction fetched a total sum of $37.09 million, working out to about $285 per square foot of land area on an average basis.

The bidders included mostly smaller developers, contractors and engineering firms but also some individuals, like local advertising guru Lim Sau Hoong.

The chief executive of Singapore-based advertising agency 10AM Communications clinched the sole bungalow plot of 4,477 sq ft for $940,000.

Market watchers expect Ms Lim to spend a further $1.5 million on construction costs and fees, bringing her likely all-in investment for her bungalow at about $2.5 million.

Mecbonn Engineering, whose office is at International Plaza and which is controlled by a Tew family, walked away with the biggest plot, a 43,687 sq ft site slated for development into 23 terrace houses, for $14.3 million or $327.33 psf of land area.

The plot attracted a total of 107 bids from about eight parties.

A property consultant estimates Mecbonn’s break- even cost works out to about $1.3 million per terrace house.

The company also bought two smaller plots for semi-detached homes.

Fragrance Group unit Fragrance Homes bought two plots. It paid $9.2 million or $294 psf for a plot designated for 14 terrace houses and $1.76 million or $270 psf for a smaller plot for three terrace homes.

Fragrance Group boss Koh Wee Meng and his wife Lim Wan Looi too bought a semi-detached plot for $289 psf.

The 99-year leasehold land plots auctioned by the URA yesterday form the first phase of Sembawang Greenvale.

URA’s director of land administration, Choy Chan Pong, was pleased with the auction result, noting that it drew ‘wide participation and competitive bidding’.

‘We can consider releasing the next phase of Greenvale in the H1 2008 Government Land Sales Programme,’ he added.

DTZ Debenham Tie Leung’s auction at Amara Hotel saw a strong turnout of about 100, including spectators, with three mortgagee sale properties changing hands, including a ground floor shop unit at the freehold Grandlink Square at Guillemard Road selling for $226,000 or $1,102 psf of strata area.

The other two properties sold were a two-storey linked semi-D factory at 67E Tuas South Avenue 1, which fetched $1.3 million or about $139 psf of strata area, and a two-storey, freehold corner terrace house at 34 Maria Avenue in Opera Estate that was sold for $1.4 million, or $392 psf of land area.

 

Source: Business Times 31 Oct 07

HORIZON TOWERS SAGA – Majority owner raises fresh objections before STB

(SINGAPORE) If there’s one thing that has characterised the Horizon Towers saga, it’s the number of twists and turns that have emerged – and yesterday’s hearing before the Strata Titles Board (STB) was no exception.

The session marked the start of the resumption of a previous hearing, which had stalled on Aug 3 when STB decided Horizon Towers’ application for a collective sale order was defective. The High Court subsequently overturned the board’s decision and sent the application back to STB.

Yesterday’s sitting, however, was anything but a straightforward continuation of that earlier session.

Instead, it saw one majority owner, Susanna Rusli – represented by Cheong Yuen Hee from JS Yeh – raising fresh objections and saying she did not wish to be represented alongside the other majority owners, whose legal counsel are Tan Rajah & Cheah.

Mr Cheong, on behalf of his client, questioned the validity of Horizon Towers’ collective sale application after it was thrown out by STB on Aug 3.

He also argued that the sale & purchase (S&P) agreement – signed between Horizon Towers’ majority owners and the buyers, Hotel Properties and its partners – had expired, as it was not extended before the deadline.

After STB threw out their collective sale application, the majority owners did not extend the Aug 11 deadline for the S&P agreement – despite repeated requests by the buyers to do so – until Sept 24. Mr Cheong is arguing that this invalidates the S&P agreement.

It’s also a point taken up by some of the minority owners who are objecting to the sale. Tan Kok Quan Partnership – which represents one group of minorities – is arguing that STB does not have the jurisdiction to hear the application as a consequence of the majority owners’ failure to extend the S&P agreement.

BT understands the other minority owners objecting to the sale also intend to take up this argument.

Such a move will, however, run counter to what transpired in the High Court earlier this month – when the majority sellers appealed against STB’s dismissal of their application. In that session, the buyers’ lawyers – Allen & Gledhill (A&G) – argued that the appeal could be heard only if the S&P agreement was still in existence and the deadline extension was not disputed.

A&G Senior Counsel K Shanmugam asked the various parties to state before the court if they were challenging the existence of the contract, adding that they could not then go back to STB after the appeal and say the contract had expired. No one challenged the existence of the contract then.

Yesterday’s session before STB also saw the minorities raising queries over the role played by the sales agent for the en bloc deal, Alvin Er. They argued that Mr Er’s decision to accept a sales commission from the buyers for the deal posed a conflict of interest – in that he could have been motivated by the commission rather than the need to secure the best offer for Horizon Towers.

STB has asked the various parties to submit these applications over the next few days. The hearing will resume next Tuesday.

 

Source: Business Times 31 Oct 07

Analysts see no property bubble

They’re mum on whether it’s a good time to buy, but agree S’pore fundamentals are pretty robust.

PROPERTY: boom or bust? This was the intriguing question to which a capacity turnout of about 170 investors recently sought answers, at a dinner hosted by financial advisory firm ipac. The good news is that the experts at the evening’s panel do not foresee a bubble in the offing, based on three presentations – albeit with some concern expressed by Jones Lang LaSalle’s head of research, Chua Yang Liang.

The not-so-good news is that the experts shied away from the multi-million-dollar question of whether this was a good time to buy. What is more, over the past weekend, the surprise news of a halt to  the popular deferred payment scheme for uncompleted properties appears to have cast a cloud over residential property’s upward trajectory.

In a deferred payment scheme, developers effectively extend free financing to buyers of uncompleted properties.

Buyers need only pay an initial deposit of 10 to 20 per cent, with the balance due when the property is completed in a couple of years.

Thanks to this form of free credit, a sizeable number of speculators have rushed in to new home launches, as a rising market gives them a window to sell their units at a substantial profit in a short period.

The base case of one panellist, HSBC senior Asian economist Robert Prior-Wandesforde, is that there are few obvious triggers for a sharp deceleration in prices.

‘If we’re in a bubble, we’re in the early stages. The fundamentals are pretty robust. The mass market is just starting to see a recovery and that’s probably the safest area for investment,’ he told the audience. The supportive factors include the expected growth in employment and personal incomes. 

The cost of servicing mortgage debt also remains relatively low at just about 14 per cent of household income, compared to 50 per cent in mature markets like London.

Contacted yesterday, he said: ‘I think the measure (to halt deferred pricing) will take a little bit of froth out of the market, but with employment booming, wages soaring and the real mortgage rate at its lowest level since 1990, the outlook still looks very promising.

‘We should also bear in mind that valuations are still way below the levels of the previous boom. When adjusted for the growth in incomes, the private residential property price index is little more than half of what it was in 1996.’

At the discussion, Dr Chua of JLL expressed concern over the price gap between new and resale homes in the prime districts. The gap has widened sharply this year, reaching a peak of 60 per cent, against a medium to longterm premium gap of 32 to 38 per cent. The resale market, he says, reflects true demand better, as deferred payment schemes in the new home market have inflated prices.

In terms of rental yields, rentals in the luxury prime segment have edged below the 10-year Singapore bond yield.

The clampdown on deferred payment schemes should remove the speculative froth, he says. ‘Generally prices will take a breather in the next two to three years with the sheer volume of (new) stocks coming on stream. We expect some kind of softening, not a correction, but a softening.’

Sing Tien Foo, deputy head of the National University of Singapore’s department of real estate, pointed to property’s ability to help diversify a portfolio, thanks to a low correlation with stocks and bonds.

Prof Sing’s research has shown that property provided a positive hedge against inflation between 1992 and 2007, a period in which stocks and bonds did not provide such a hedge.

While all types of property offered a more-than perfect hedge against inflation, the best hedge was that offered by detached housing, followed by semi-detached homes.

Meanwhile, advisers are sounding caution. Roy Varghese of ipac says: ‘If you’re looking to invest, be very careful.

You need to have an investment objective and that includes looking into the IRR (internal rate of return). You should be able to hold it for seven to 10 years. If you bought your property at a peak, your IRR will be low.’

Joseph Chong of New Independent expects the price gap between new uncompleted homes and resale homes to narrow. ‘The market should see a more moderate ascent in prices – instead of 20 per cent, perhaps 10 per cent in line with nominal GDP.

‘You should see more upside…But if your portfolio is not big enough, I don’t think you should bet on investment property in Singapore.’

Those with modest resources are better off investing in a global property fund or Reit, he adds.

Analysts, however, remained mostly sanguine over the medium-term outlook. Merrill Lynch’s property team wrote in a paper market that sentiment will be weak over one to two months. ‘However, we are of the view that genuine buyers do not buy houses on innovative purchase schemes by developers alone. We believe the more important considerations will be where Singapore is heading, will they be able to keep their jobs or businesses and will their salaries/profits increase.’

The firm’s economics team recently wrote that Asian property prices were not high relative to per-capita income, and advances have been modest compared to those in the UK, the US and Australia. The drivers include low real interest rates and positive demographics.

Citigroup analyst Wendy Koh said that while sentiment will weaken in the short term, residential prices are supported by strong fundamentals. In a note on Friday, she said: ‘We believe the current price increase is well supported by strong fundamentals such as the extremely tight physical supply and economic and wage growth.

‘We maintain our view that rental rates for residential units will continue to climb on the back of the relative net increase in housing stock due to low completion and relatively high demolition due to en blocs. The rise in rental rates will likely continue to support further price appreciation.’

 

Source: Business Times 31 Oct 07

Horizon Towers sale: Battle resumes today at strata board hearing

Two-week session to give final word on en bloc sale application

(SINGAPORE) The Horizon Towers saga goes back on the boil today when the majority owners’ application for a collective sale is again heard by the Strata Titles Board (STB).

The hearing, scheduled for two weeks, will be the final word on whether the en bloc sale goes through – and on a battle of wills between the project’s majority and minority owners.

The minority owners will take this final opportunity to scuttle what they say is a deal done ‘in bad faith’.

Their lawyers have repeatedly said that they have plenty of objections to the sale that they have not yet aired. It is believed that these range from alleged non-compliance with the law governing en bloc sales to the sale being prejudicial to the minority owners.

‘We have quite a few arrows we still haven’t shot,’ lawyer SK Phang, who represents a minority owners, has said.

The minority owners’ objections have stalled the en bloc sale. On Aug 3, the STB dismissed the majority owners’ application on the grounds that it was incomplete and the accompanying statutory declaration false, because it was missing three signature pages. This was before the STB had heard the merits of the case.

The STB’s decision was then overruled by the High Court, which said this month that the missing pages did not constitute a substantial omission that prejudiced the minority owners. The court sent the application back to the STB.

Today’s STB hearing picks up where the previous hearing left off in August. Over the next fortnight, the parties will call witnesses and present evidence to support their opposing claims on whether the collective sale application complies in form and substance with the law and whether the sale was conducted in good faith.

But this time majority owners are unlikely to collaborate with minority owners. At the previous STB hearing, majority and minority owners were seen hugging one another and celebrating the board’s decision to dismiss the application.

Several majority owners – after signing the deal to sell Horizon Towers for $500 million in February – regretted their decision when neighbouring developments began fetching much higher prices. They circulated anonymous flyers to other majority owners, asking them to rescind the deal.

The move transformed what would have been a run-of-the-mill en bloc sale into the drawn-out battle it has become.

But this time around, it will be in the majority owners’ interests to push the collective sale through. The buyers – Hotel Properties and its partners – have slapped a $1 billion lawsuit on them.

Angered by some majority owners’ attempts to sink the sale, HPL and its partners filed a suit in the High Court claiming damages of up to $1 billion, saying that the sellers had failed to honour their part of the bargain.

The suit has been stayed until the STB hearing is concluded. But HPL and its partners have indicated that they could revive the proceedings if the collective sale falls through.

HPL and its partners have been excluded from the STB hearing, after their application to intervene was dismissed recently.

 

Source: Business Times 30 Oct 07

Five properties put up for en bloc sale

TENDERS for collective sales continue to be launched. The latest offerings include Dunearn Gardens near the Newton/ Scotts roads area, The Village in Pasir Panjang, and Riviera Point along River Valley Road.

CB Richard Ellis, which is marketing Dunearn Gardens, says the guide price for the 95,443 sq ft freehold site, is $578.5 million, which translates to about $2,288 per square foot per plot ratio, inclusive of an estimated $32.9 million development charge (DC). A new condo on the site would break even at about $2,900 to $3,000 psf, market watchers say.

The site is zoned for residential use with a 2.8 plot ratio (ratio of maximum potential gross floor area to land area). The maximum height allowed for the site is about 33 storeys. The plot can be redeveloped into a new condo with about 134 units averaging 2,000 sq ft each.

Credo Real Estate, the marketing agent for The Village, expects the freehold 102,642 sq ft site to fetch $75 million to $80 million. This reflects a unit land price of $646 to $680 psf per plot ratio, including an estimated DC of $17.75 million. Credo pointed to the possibility of the developer buying up to 20,000 sq ft of adjoining state land parcels, thus potentially enhancing the land size to 122,642 sq ft. In such a scenario, the developer’s unit land price would be lowered to $578 to $607 psf ppr – based on the $75 million-$80 million price tag set by The Village’s owners.

The site is zoned for residential use with a 1.4 plot ratio and five-storey maximum height.

Newman & Goh is marketing a few small sites. One of them is Riviera Point, a 14,580 sq ft plot at River Valley Road with a 2.8 plot ratio and 36-storey maximum height. Its owners are asking for $73.5 million, which works out to $1,800 psf ppr. No DC is payable.

Off Thomson Road, the property agent is marketing View Point and the nextdoor Shiba Apartments with asking prices of $20.5 million and $16.9 million respectively. These work out to around $792 psf ppr including DC.

 

Source: Business Times 30 Oct 07

7,750 homes could still be sold using deferred payments

Units are in projects that had approval; developers may opt not to do so though

UP TO 7,750 unsold homes could still be available for purchase under the deferred payment scheme, even though it was scrapped last week.

The Urban Redevelopment Authority (URA) said these units are in developments that already have approval for the scheme, but which have not sold out yet.

On Friday night, the Government scrapped deferred payments with immediate effect, saying it was no longer relevant given the now-buoyant property market.

The scheme was introduced 10 years ago when the market was down. It allowed homebuyers to defer the bulk of a home’s purchase price until it was completed, which could be up to a few years later.

But the scheme was seen as encouraging speculation, as buyers could profit by reselling their homes before completion without much capital outlay.

Now, buyers will have to make progressive payments as construction proceeds.

The ending of the scheme is seen as a way to cool the hot property market. All developments that had not obtained approval for the scheme by last Friday can no longer offer it.

As at last Friday, 320 out of 443 licensed developers had approval to offer deferred payments for their projects, said the URA yesterday.

And about 140 of these developers still have a total of 7,750 residential units left unsold, it added.

But it is now up to the developers if they want to offer homebuyers the option of using the scheme, URA said.

The units include some in Bukit Sembawang’s 102-unit Paterson Suites in Paterson Road and its 123-unit Vermont on Cairnhill. Ho Bee offers the scheme for the 51 unsold homes in Turquoise, its 91-unit project in Sentosa Cove.

Buyers can also look to CapitaLand’s 327-unit Seafront @ Meyer in Meyer Road, which has 68 units left.

Developers which have approval for the scheme but have yet to start sales include Voda Land, for its 114-unit Amber Residences in Amber Road.

Even before deferred payments were axed, some developers had already dropped it of their own accord or never offered it. Those that did usually added a premium of 3 to 5 per cent of a home’s price to purchases under the scheme.

Many property analysts believe the withdrawal of the deferred payment scheme is likely to hit sentiment only in the short term. They point to factors such as robust demand, low interest rates and favourable sales even when developers do not offer the scheme.

Citigroup economist Chua Hak Bin said ending the scheme seems justified on prudential grounds. ‘There are growing signs of speculation, price distortions and accelerating mortgage growth,’ he wrote in a report.

‘Risk of a property glut longer-term cannot be ruled out if the boom is left unchecked.’

 

Source: The Straits Times 30 Oct 07

No delaying payments, so home hunters turn cautious

Move may have initial dampening effect but experts say it will chase away only speculators

MARKETING manager Simon Loh has put an abrupt halt to his house hunting.

The 38-year-old had been looking for a new place for the last six months, but now that he cannot defer payments until the new apartment is ready, he has had to shelve his plans.

The Urban Redevelopment Authority announced on Friday that buyers of uncompleted private homes and offices will no longer have the option of using a deferred payment scheme.

This allowed home buyers to pay as little as 10 per cent of the purchase price upfront, footing the rest only when the property is ready.

All buyers now will have to use the progressive payment scheme where they pay between 5 per cent and 25 per cent of the purchase price every few months.

Mr Loh, who currently has to pay the bank a monthly mortgage of $1,300 on his condominium unit in Yio Chu Kang, cannot afford to take up another loan to buy a new home in town.

‘I’ll have to drop the idea, but I could have done it with the deferred payment scheme,’ he said.

Other house hunters are also thinking twice.

Sales manager Lawrence Chen, 35, who has been looking for a terrace house since last year, said he has to be ‘more conservative’ now.

Some buyers, though, are not affected by the change, saying they will just have to take up bank loans earlier.

IT manager Daniel Lim, 36, who was at a showflat in Paya Lebar, said: ‘You still have to pay for the property eventually.’

Typically, a buyer who chooses to take the deferred payment route is charged between 3 per cent and 5 per cent more than one under the progressive scheme. Still, property agents say up to 90 per cent of their buyers take up the deferred scheme.

They agree that removing the scheme will achieve the Government’s aim of driving away speculators. But the agents believe low-budget buyers could also be hit.

ERA Singapore assistant vice-president Eugene Lim said: ‘The mass market projects will be most affected because buyers there could need the three years’ construction time to build up their funds.’

But most agents believe the market will remain strong.

Property developers believe the move would have a slight initial dampening effect on sales, chasing away speculators but not buyers.

They are not taking measures, like lowering prices, to counter the new rule.

Singapore-based developer Chip Eng Seng, which will launch CityVista Residences in Peck Hay Road in about two weeks, said: ‘There are many genuine buyers and though they may be more cautious initially, the demand’s still strong.’

 

Source: The Sunday Times 28 Oct 07

Deferred payments scrapped in bid to cool property fever

Market players expect blip, not crash, to follow the exit of the buy-now-pay-later scheme

(SINGAPORE) In a surprise move yesterday, the government said that it was withdrawing the deferred payment scheme (DPS) for the sale of uncompleted private properties in a bid to discourage speculative buying and cool the property market.

Market players said that the move could unnerve some buyers in the short term – leading to a drop in demand. A crash, however, was unlikely as the recovery of the mid-tier and mass markets this year shows that there is strong underlying demand from non-speculators.

Developers will not be allowed to offer the DPS with immediate effect, but a developer that has already obtained approval to offer the scheme for a project may continue to do so.

The DPS allows buyers to buy a property by forking out only a 10 per cent or 20 per cent downpayment, with the rest due upon completion – sometimes as long as three years later.

The scheme was introduced at a time when the property market was lacklustre and the economy was in recession.

But with the property market now booming, critics have said that the scheme encourages speculation as some seek to resell their properties at a profit without immediately worrying about payments.

Announcing the scrapping of the DPS yesterday, the Urban Redevelopment Authority (URA) said that the scheme was no longer needed as the property market has recovered.

The Real Estate Developers’ Association of Singapore (Redas) agreed, saying that it understands the government’s decision to withdraw the DPS. ‘The need for this scheme has diminished with the strong market recovery over the last two years,’ Redas added.

A spokesman for City Developments (CDL) said that the move had been ‘expected’ for some time.

It is estimated that less than half of the buyers of CDL’s projects use the DPS. Said the spokesman: ‘We have been actively discouraging buyers from taking up DPS by way of a price differential.’

Lippo Group is one of the few developers that have not offered the DPS for any of its launches here. ‘I do not think it would affect the sales of our projects,’ Lippo executive director Thio Gim Hock said.

Lippo developments like The Trillium and Newton One have sold well. Mr Thio believes that Lippo’s buyers are not speculators. But he concedes that although the buyers may not flip properties immediately, some do sell after a few months.

The market could see an initial cooling in response to the government intervention, analysts said.

‘What will affect the market is the idea that the government is flexing its muscles,’ said Ku Swee Yong, Savills Singapore’s director of marketing and business development. ‘Frankly, how the signal is going to be interpreted or misinterpreted is going to decide the market’s reaction.’

Mr Ku also said that institutional funds that invest in property here could be unhappy as the government’s move adds volatility to the marketplace.

Looking at the other side of the issue, Lippo’s Mr Thio pointed out that with the DPS, banks, which lent money to developers for construction, had to bear greater risks. ‘In a rising market, banks are not worried to give loans,’ he said.

Citigroup economist Chua Hak Bin had raised the alarm in a report earlier this year when he pointed out that the estimated average debt-to-equity ratio at Singapore property developers with a market capitalisation of more than $1 billion rose to 61 per cent in the first quarter, from 50 per cent a year earlier.

However, Dr Chua believes the rationale for axing the DPS now has more to do with ‘taking away the froth at the high-end market’.

‘Banks have become more cautious anyway,’ he said.

United Overseas Bank (UOB) said that the move should help property prices stabilise. ‘That’s good news for the loans market as more property buyers would now be taking loans with banks,’ said Kevin Lam, the head of UOB’s loans division.

Property stocks are expected to fall on Monday when the market resumes trading. ‘It (the announcement) will affect market sentiment as it will have an impact on future demand,’ said David Lum, an analyst at the Daiwa Institute of Research. ‘The stock market always looks to future demand, and it is no secret that the scheme has been one of the major drivers of demand.’

 

Source: Business Times 27 Oct 07

Situation very different now: Mah

MINISTER for National Development Mah Bow Tan hopes that withdrawing the deferred payment scheme could cool the overheating market and discourage excessive speculation. Pointing out that the scheme was introduced in 1997 when property prices were depressed, he said that the situation was very different now.

The move could temper the market which ‘has shown signs of overheating’, he said. And while the government would prefer not to interfere, it is monitoring the market and would step in if necessary.

Its preference, he said, was to ensure that there was sufficient supply in the market and inject more, if necessary. ‘We want to make sure the market is a stable and healthy one,’ Mr Mah said.

The minister also said that he was not concerned about the rise in the HDB resale price index as it had been lagging behind the market for a while. ‘HDB flat owners can look forward to higher prices. They are holding a more valuable asset if they wanted to cash out or finance their retirement,’ he said.

 

Source: Business Times 27 Oct 07

Deferred payment scheme for homebuyers scrapped

THE Government last night scrapped the deferred payment scheme that allowed homebuyers to postpone payments on new property.

It said the strong economy and property market allowed it to axe the scheme. This would also deter speculators and force people to be more prudent when committing to pricey real estate.

It was a response to signs of overheating in the market, National Development Minister Mah Bow Tan said last night. ‘There’s a danger that we may feel over-exuberance in the market. There’s also a danger it may actually encourage excessive speculation,’ he said.

Buyers will now have to make progressive payments in step with the construction process, instead of deferring payment till the property is completed a few years later.

Experts say prices and sales will be hit, though the impact may not be significant, given the robust demand.

‘Now the property market is ‘red-hot’, maybe after withdrawing deferred payment it will just be ‘hot’,’ said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. ‘There is strong, genuine demand driving sales. Taking away this scheme will only spook speculators. It will take away the froth that is false demand.’

The deferred payment scheme was introduced in 1997, when the market was lacklustre. It is no longer relevant today, said Mr Mah.

Projects that have been approved can continue with deferred payments, but others – uncompleted private homes and commercial properties, including industrial ones – will be hit by the withdrawal, which took effect last night.

Some experts say deferred payment encouraged speculators – pushing up prices. ‘Once speculators find it riskier to go into the market, there will be less competition for homes,’ said an industry observer. ‘Developers may have to lower their prices, and prices may level off. It’s good to cool the market, so that you are in tune with the rest of the world.’

Progressive payments call on buyers to pay an amount varying from 5 per cent to 25 per cent of the purchase price at various stages of construction. A 10 per cent payment is required once foundation work is completed, which can be in as soon as six months after purchase or up to 18 months.

Luxury homes have continued soaring in price, while new Government figures show that speculation is becoming a market factor.

Sub-sales – owners selling uncompleted properties – in the core central region comprised 21.6 per cent of total sales in the three months ended Sept 30.

Overall, sub-sales accounted for 12.7 per cent of total deals. They accounted for 28 per cent of total deals in 1996, when speculation was rife.

‘Speculation has not reached the mid-1990s level, but at the rate it’s going, it could increase, so why not nip it in the bud?’ said Ms Tay Huey Ying, director of research and consultancy at Colliers International .

The Real Estate Developers’ Association of Singapore said: ‘The need for this scheme has diminished with the strong market recovery.’

Some experts say yesterday’s move may trigger fears of further Government intervention, which may then indirectly hit prices and sales.

Mr Mah did not rule out the possibility of further moves: ‘We are monitoring the market very closely.

Obviously, the objective is to make sure that our prices do not overrun, do not go beyond the fundamentals.

‘We want to make sure the market is a stable and healthy one.’

 

Source: The Straits Times Times 27 Oct 07

Rentals for private homes, HDB flats continue to soar

Private home rents jump 11% while HDB flat rents surge 21% on landlords’ increased expectations

TENANTS complaining about rising home rentals now have official figures to back them up.

Rents of private homes and HDB flats soared in the July to September period, according to the latest data released by the Government yesterday.

They climbed 11.4 per cent for private homes, on top of the 10.4 per cent increase in the previous three months.

This means that since January, private home rentals have already jumped by 32.2 per cent, compared with only 14.1 per cent for the whole of last year. They are now at their highest level in at least nine years.

As for HDB five-room flats, the overall median rental – the level at which half the rents are higher and half are lower – surged by 21.2 per cent in the third quarter.

One reason for the strong growth in rents could be the increased expectations of landlords, said Mr Leonard Tay, the director of research at consultancy CB Richard Ellis.

Rents are also being pushed up by an increasing demand for completed homes, and a shortfall in supply at the same time, he added.

A large number of collective sales in the last two years has led to the demolition of existing homes and has forced the sellers to become home seekers.

With no respite in sight – fewer homes are expected to be completed next year than average – rents will continue to surge, said Ms Tay Huey Ying, the director of research and consultancy at Colliers Internaitonal.

She said that according to yesterday’s data, only 5,541 homes are expected to be completed next year. This compares with a net average of 7,670 new homes between 2000 and 2004, before the collective sale fever set in.

‘If we take into consideration the withdrawal of units because of collective sales, there will probably be a net addition of only 3,500 to 4,000 homes next year,’ she said. Due to this acute shortage of completed homes ready for immediate occupation, Ms Tay expects rents to rise between 40 per cent and 43 per cent for the whole of this year.

But she also predicts that the rate of growth will moderate after that. Her forecast for next year: a rise of 30 per cent to 35 per cent.

‘We expect rents to continue to grow strongly, but we do expect growth to be slightly slower than it was this year,’ said Ms Tay.

‘This is partly because we are already coming from a high base. Also, we could be seeing resistance to higher rentals; people could be reconsidering Singapore as a place to live.’

Beyond that, she believes that home completions will shoot up in 2009, which may help to stabilise rents.

Yesterday’s figures showed that rents grew across the board for non-landed private properties.

They rose 12.2 per cent in the core central region, which covers Orchard, Holland, River Valley, Bukit Timah, Marina Bay and Sentosa.

In the rest of the central region – stretching to Marine Parade, Queenstown, Geylang and Bishan – rents increased 11.9 per cent. For the rest of the country, rents went up 11.8 per cent.

This even rate of growth is likely to be the trend ahead, said Colliers’ Ms Tay.

For HDB resale flats, median rents crossed the $2,000 mark for five-room flats in Bukit Merah and the Central area, as well as executive flats in Bishan, Kallang/ Whampoa, Clementi and Queenstown.

Overall, median rents were $1,200 for three-room units, $1,400 for four-room units, $1,600 for five-room flats and $1,700 for executive flats.

HIGH DEMAND, LOW SUPPLY

Rents of homes are also being pushed up by an increasing demand for completed homes, and a shortfall in supply at the same time, says

Mr Leonard Tay, director of research at consultancy CB Richard Ellis.

 

 

Source: The Straits Times 27 Oct 07

Court rejects plea against strata board decision on en bloc sale

THE High Court yesterday dismissed an appeal by a minority shareholder against a Strata Titles Board decision approving the en bloc sale of Holland Hills Mansion.

The dissenting owner, Dynamic Investments, had wanted the distribution of the $292 million sale proceeds to be based solely on floor area, or it would stand to lose about $2.4 million.

The 118-unit property on Holland Road had been sold en bloc to developer Calne Pte Ltd, a subsidiary of MCL Land, in November last year.

It is understood that the industry practice is to distribute the proceeds among the owners based on what was decided by them and the project consultants.

In this case, it had been proposed to share the proceeds by the 50:50 method, which is 50 per cent based on the share value and 50 per cent based on the floor area.

But Dynamic, which owned the largest unit on the block, had wanted the share of proceeds to be determined solely by floor area.

The 642 sq m penthouse it owned had a share value of six while the smallest unit, measuring about 57 sq m, had a share value of three.

The Strata Titles Board, in its decision in July, had acknowledged that the objector would have been paid more had the area method been used, but held that the method chosen was ‘not made in bad faith’.

Dynamic, through lawyers from Drew & Napier, had argued, among other things, that the Strata Titles Board had erred in law as the sale was not made in good faith given the distribution method adopted.

But Senior Counsel Deborah Barker argued this was a question of fact, not a point of law, and only issues concerning points of law could be brought up for appeal.

Together with lawyers Chia Ho Choon and Spring Tan from KhattarWong, she represented the majority owners.

Justice Andrew Ang agreed and accepted that the Strata Titles Board decision to approve the sale was made in good faith.

Dynamic’s lawyer Lawrence Tan said yesterday that he was reviewing the decision with his client and the instructing solicitor Clarence Tan from UniLegal before deciding whether a further appeal would be filed.

 

Source: The Straits Times 27 Oct 07

SLA puts up six residential sites for auction

THE Singapore Land Authority (SLA) will release six residential sites for sale by auction.

Two are in the Eng Neo Avenue good class bungalow (GCB) area in District 11 – the first GCB sites released by SLA for development. The other four are in Moonbeam Walk, Jalan Insaf, Bedok Close and Somme Road.

The plots are essentially in-fill sites – pockets of state land within established areas.

The assistant chief executive of SLA’s land operations group, Simon Ong, said the sale of the sites ‘will help meet current demand for high-quality residential property and allow individuals to build their dream homes’.

The auction will be conducted by Jones Lang LaSalle (JLL) on Nov 29, and the firm’s director and head of auctions and sales Mok Sze Sze reckons demand will be strong.

A total of 79 GCBs worth $959.4 million changed hands in the first half of the year, compared with 61 GCBs worth $627.9 million transacted in the same period a year earlier. ‘This translates to a 29.5 per cent increase in the number of units transacted and a 52.8 per cent increase in absolute value,’ Mr Mok said.

The GCB sites in Eng Neo Avenue are 29,201 sq ft and 16,689 sq ft. The other four sites are between 3,547 sq ft and 6,971 sq ft.

Douglas Wong, director of PropNex’s luxury home division, Grandeur Homes, thinks the GCB sites could fetch between $800 and $900 psf. This means bids for the smaller site could be around $13 million while the larger site could fetch around $23 million.

Mr Wong says that along with the rest of the market, prices of GCBs have been affected by the US subprime crisis. Nevertheless, new benchmarks for GCBs are still being set, with a house in the Nassim area going for over $1,500 psf.

A check of caveats on the SISV-Realink website also shows that a unit at The Residences at Barker has also been sold in the secondary market for almost $1,600 psf.

Still, as Mr Wong notes, prices are still way below those of luxury condos, which now go for $3,500-$4,000 psf. As he says, in a strange way other property is ’still affordable’.

 

Source: Business Times 26 Oct 07

Pasir Ris leasehold condo site launched for tender

A 99-YEAR leasehold site for private condo development at Elias Road in Pasir Ris has been launched for tender by the state.

CB Richard Ellis expects the 152,054 square foot site to fetch bids of between $260 and $300 per square foot of potential gross floor area, translating into a breakeven cost of about $620 to $660 psf for a new condo on the site. CBRE reckons that the future project would be able to sell for above $700 psf, assuming it is launched in the third quarter next year.

It noted that recent transactions for units in the freehold Ris Grandeur have been at $650-700 psf and those at Savannah CondoPark and Modena (both on 99-year leasehold sites) at above $650 psf.

Referring to the Elias Road site, CBRE executive director Li Hiaw Ho reckons that there may be a pool of HDB dwellers in the neighbourhood ready to upgrade to a new private condo. ‘Units in the new condo project will also have rental potential given the proximity to the beach and other recreational facilities, as well as Changi International Airport,’ he added.

Analysts estimate that the site offered by the Housing & Development Board can be developed into a condominium with about 380 units averaging 1,200 sq ft. The tender closes on Dec 18.

The plot is on the confirmed list of the Government Land Sales Programme for second-half 2007. Earlier this month, the state offered two other condo sites, also under the confirmed list. They are a 2.2-hectare plot next to Lakeside MRT Station in Jurong that can be developed into about 680 units, and a site at Woodlands Ave 2/ Rosewood Drive that can yield about 200 units.

 

Source: Business Times 25 Oct 07

Amber Glades up for en bloc sale at $145m

JUDGING by the asking prices of new collective-sale sites, it would seem there is no shortage of confidence in the property market.

Amber Glades, off Amber Road on the East Coast, has just been put up for collective sale at an indicative price in the region of $145 million. And the buyer can also expect to pay a development charge of about $9 million on top of that.

Amber Glades is on a 40,917 sq ft site with a 2.8 plot ratio. At the indicative price, the cost works out to $1,345 per square foot per plot ratio (psf ppr).

In August, a smaller site off Meyer Road sold for $58 million or an estimated unit land price of $882 psf per plot ratio including a development charge.

Marketed by Colliers International, the Amber Glades site can be redeveloped into 88 residential units of 1,300 sq ft each. Colliers executive director of investment sales Ho Eng Joo estimates that based on the indicative price, the breakeven price is about $1,700-$1,800 psf. This would put the launch price at over $2,000 psf.

But a selling price of $2,000 psf would not be a new benchmark for the East Coast area. Mr Ho believes some new developments have already been transacting at this price.

Market watchers claim that the Aalto on Meyer Road is one development achieving such prices – though a check of the latest data for on the Urban Redevelopment Authority’s website reveals that only one unit was sold in September and the transacted price was $1,570 psf. Whether subsequent sales have been done at a higher price will be known next month.

For now, according to caveats lodged, The Seafront on Meyer has had units transacted at over $2,000 psf but these have been penthouse units.

Closer to the Amber Glades site are the residential developments One Amber and The Esta. Recent transactions in these developments are in the range of $1,000 psf and $700 psf respectively.

 

Source: Business Times 24 Oct 07

Reserve site up for sale, sparked by $7.8m bid

Committed sum for 17conservation shophouses comes to just $460K each

With property prices hitting new peaks in recent times, it is rare to see a committed bid of just $7.8 million for a 15,200 sq ft site near the city centre.

Based on the committed bid received by the Urban Redevelopment Authority (URA), each of the 17 two-storey shophouses on this Jalan Sultan site could, theoretically, go for as little as $460,000 a unit.

The committed bid is not the transacted price for the reserve list site as it will now be put up for public tender. Still, it gives an indication of the range of bids that could eventually come in.

The 17 shophouses have been gazetted for conservation and the successful tenderer is required to restore and reconstruct these conservation shophouses in accordance with the tender conditions and the Urban Redevelopment Authority’s Conservation Guidelines for Historic District.

Zoned for commercial use, the shophouses could be used for office or even as hotels.

Colliers International executive director (investment sales) Ho Eng Joo believes the winning bid could be around $14 million or roughly $800,000 a unit. Add to this renovation and restoration costs of about $300,000 per unit and the potential winning bidder could be looking at spending about $1.1 million per unit.

But as Mr Ho notes: ‘The area is changing.’ Highlighting that KeyPoint, formerly known as Jalan Sultan Centre, was sold recently for $1,186 psf of net lettable area, Mr Ho believes the 17 shophouses could give an investor a yield of over 5 per cent if each unit is rented out for at least $5,000 a month.

‘Only the lack of carparking could be an issue,’ he added.

Over in Woodlands, the Singapore Land Authority has released a 172,223 sq ft residential development site at Woodlands Avenue 2/Rosewood Drive and developers could also be looking at a bargain.

Mr Ho reckons the site, which is on the confirmed list of the Government Land Sales programme, could go for between $250 – $280 psf ppr. With a plot ratio of 1.4, the gross floor area could be up to 241,112 sq ft, giving the site a price tag of between $60.2 million and $67.5 million.

The site may not be directly next to an MRT station but Mr Ho believes a future development would have good rental potential as it is close to the Singapore American School.

 

Source: Business Times 24 Oct 07

Govt puts residential site in Woodlands up for sale

THE Government has launched for sale a residential site in Woodlands, which has been enjoying a buoyant property market of late despite its far-flung location.

The Singapore Land Authority offered the 172,223 sq ft site in-between Woodlands Avenue 2 and Rosewood Drive in a tender that closes on Nov 20.

The site can accommodate a condo of up to five storeys with a gross floor area of 241,112 sq ft.

Mr Ho Eng Joo of marketing agent Colliers International said an apartment there could sell for more than $600 per sq ft (psf).

Already, some 20 units at Far East Organization’s executive condo, La Casa, were sold at a median price of $564 psf last month. La Casa was launched in 2005 at $380 psf on average.

While Woodlands may be far from town, properties there have registered rising rents, as the Singapore American School is in the vicinity, consultants say.

The Woodlands site comes under the Government’s confirmed list, where sites are put up for tender on a specific date.

The Government also sells sites on its reserve list, which are put up for tender only if a developer commits to submitting a minimum acceptable bid.

Yesterday, a developer did just that with a 99-year leasehold commercial site in Jalan Sultan involving the restoration of 17 two-storey conservation units.

The Urban Redevelopment Authority has an offer from a developer willing to bid at least $7.8 million for the 0.14ha site to be tendered out in two weeks.

In Amber Road, where property values continue to rise, a freehold site housing the 63-unit Amber Glades has been launched for sale at a guide price of $145 million. The tender for the 40,917 sq ft site closes on Dec 5.

 

Source: The Straits Times 24 Oct 07

Hiap Hoe SuperBowl JV buys The Aspine

It pays $138m for the Balmoral site; GuocoLand successfully bids $62.5m for Toho Garden

HIAP Hoe and sister company SuperBowl Holdings have jointly bought a freehold site at Balmoral Road for $138 million, the two companies said yesterday.

The price paid for The Aspine in a collective sale works out to $1,870 per square foot per plot ratio (psf ppr).

The site has a land area of 46,100 sq ft and a 1.6 plot ratio, giving it a potential gross floor area of 73,800 sq ft.

Hiap Hoe and SuperBowl are looking to build 39 luxurious boutique apartments averaging 1,800 sq ft to 2,000 sqft per unit, they said. Up to 12 storeys can be built.

The developers bought the site through their joint venture vehicle Hiap Hoe SuperBowl JV. Hiap Hoe and SuperBowl hold 60 per cent and 40 per cent of the JV company respectively.

Hiap Hoe and SuperBowl count Hiap Hoe Holdings Pte Ltd as a major shareholder. Hiap Hoe Holdings Pte Ltd held 73.6 per cent of Hiap Hoe and 69.6 per cent of SuperBowl as at March 12, 2007.

SuperBowl’s share of the tender price comes to $55.2 million and will be financed through internal resources and or borrowings, the company said.

This tender is the second successful joint bid between Hiap Hoe and SuperBowl. The two companies partnered each other in the past and won the tender for Goodluck View for $73.3 million about four months ago.

‘The Balmoral area is attractive for its close proximity to highly popular schools and Orchard Road, and we believe that there is still good upside for re-developed properties in this vicinity,’ said Hiap Hoe managing director Teo Ho Beng.

With this latest acquisition, Hiap Hoe’s land bank will increase to more than 600,000 sq ft of gross floor area.

Separately, GuocoLand said on Sunday that it has successfully tendered for the en bloc purchase of Toho Garden near the Serangoon Gardens area for $62.5 million.

The price works out to some $594 psf ppr including a development charge of $9.8 million.

The freehold Toho Garden has a land area of 86,900 sq ft and a 1.4 plot ratio, giving it a potential gross floor area of 121,600 sq ft.

The purchase marks GuocoLand’s fifth land acquisition since 2006. Together, the five sites will boost the developer’s land bank in Singapore to just under two million sq ft of gross floor area, it said.

For Toho Garden, GuocoLand proposes to develop a five-storey condominium with about 100 apartments.

Both projects were marketed by Newman & Goh.

 

Source: Business Times 23 Oct 07

Enjoying This View? 3+1 Casuarina Cove Available for Rent!!!

Are you Enjoying THIS VIEW!!!

Only Available In This Unit!!!

Check out the following details…

• Full BAY VIEW – From Kitchen, Living Room to ALL 3 BEDROOMS!!! 

• Extremely Spacious – 1593sqft

• VERY WELL-KEPT!!!

• WINDY & BRIGHT!

• Perfect for small families!

Interested? Call me – Jarene

@

(+65) 9831 6938

OR

Email me at: jarene_chuang@yahoo.com

TODAY!!!

GuocoLand buys condo plot in Serangoon for $63m

PROPERTY developer GuocoLand has bought Toho Garden, a condominium near Serangoon Gardens, for $62.5 million through a collective sale.

The acquisition price works out to $594 per sq ft per plot ratio, including a development charge of $9.8 million.

Toho Garden is located on Yio Chu Kang Road, near the junction of Ang Mo Kio Avenue 3 and Hougang Avenue 2.

It is the smallest of five major residential land purchases made in Singapore by GuocoLand in the past two years.

The purchase price comes below its March acquisition of Palm Beach Garden in the East Coast area for $75 million.

The company’s other land purchases are:

• The former Casa Rosita site on Bukit Timah Road, where the firm is building Goodwood Residence;

• Sophia Court, near the Dhoby Ghaut MRT Station; and

• Leedon Heights, off Holland Road.

  All five plots are freehold sites and bring GuocoLand’s land bank in Singapore to just below two million sq ft.

  They give GuocoLand ‘a strong and interesting pipeline of projects on freehold land’, said GuocoLand Singapore managing director Trina Loh.

  Toho Garden sits on a 86,900 sq ft plot and has a plot ratio of 1.4, giving it a gross floor area of 121,600 sq ft.

  GuocoLand plans to build a mid-range five-storey condominium comprising about 100 apartments on the site.

  The plot is located in an area of mostly landed properties and is near the Central and Seletar expressways.

  GuocoLand’s luxury condominium, Goodwood Residence – which has not been launched yet – recently won Singapore’s highest accolade for green buildings.

  The developer clinched the Building and Construction Authority’s Green Mark Platinum Award for its high environmental standards.

Shares of GuocoLand ended unchanged at $5.55 last Friday.

 

Source: The Straits Times 22 Oct 07

PROPERTY – 2,000 high-end homes may be launched soon

About 30 new condos may be launched by early next year, at least half of them in Orchard, Bukit Timah and Holland

SALES of new homes took a dive last month, but they might pick up soon as developers prepare to launch a string of projects over the next few months.

Almost 30 new condominiums could come on the market by early next year, said property consultancy Knight Frank.

‘Market sentiments are gradually picking up following the United States sub-prime crisis, and launches could also increase in tandem,’ said Mr Nicholas Mak, Knight Frank’s director of research and consultancy.

He estimates that more than half of the launches will be in the prime districts of 9, 10 and 11 – Orchard, Holland, Bukit Timah and Newton – as well as in luxury enclave Sentosa Cove.

If all these projects are launched as planned, about 2,000 high-end homes could flood the market over the next six months, added Mr Mak. Broadly speaking, these are properties that will cost at least $2,000 per sq ft (psf), with a three-bedroom unit going for at least $2.5 million, he said.

‘We are definitely counting on foreigners to come in and help absorb these homes, so we don’t end up with an oversupply problem in the top tier,’ he said.

Residential areas likely to be in the spotlight include Bukit Timah, Thomson, Holland Village and East Coast.

This is because prices in these areas have not moved as much as those in areas such as River Valley, Newton and Orchard.

Colliers International also predicted benchmark prices for two upcoming projects: the Ritz-Carlton Residences in Cairnhill and the development on the former Asia Hotel site. Prices at these projects could hit $4,500 psf on average, said Mr Vincent Chong, Colliers’ residential sales director.

Mr Mak believes there will be few launches in the closely-watched mass-market segment until the middle of next year because developers started acquiring sites only recently.

‘Most launches will come in nine to 18 months’ time, and they are likely to be priced on the high side at $800 to $900 psf,’ he said. ‘Until then, most activity will be in the resale market, where a lack of new launches could push prices up significantly.’

New Launches

 

Source: The Sunday Times 21 Oct 07

SLA offers property for rent; 2 freehold sites selling en bloc

THE Singapore Land Authority (SLA) has launched another site for short-term office use, a move aimed at relieving the supply crunch.

The property is the former Upper Aljunied Technical School on Upper Aljunied Road. It has a land area of 19,704 sq m and a gross floor area of 7,722 sq m.

It comes with a guide rental of $74,100 a month or $9.60 per sq m, with the tenancy renewable up to 2012.

The SLA says property and leasing companies have already expressed interest.

It has put out various state properties as interim sites this year, including former childcare centres, and more are being identified in suburban areas or away from the Central Business District.

This was a response to the tight office market and soaring rents in prime areas, which are driving some tenants to seek cheaper locations further from town.

In the residential market, two more collective sale sites have been put on the market.

The bigger plot is Cavenagh Gardens on Cavenagh Road, near the Istana. Owners at the estate, a 130,000 sq ft freehold site, want $619 million, or $2,308 per sq ft of potential gross floor area.

PropNex, which is marketing the site, has applied for permission to amalgamate a piece of state land.

If this is allowed, the combined site will cost $770 million, excluding about $72.8 million for the state land.

The cost will be higher in this case because whoever buys the combined site will be able to build a bigger project.

If the amalgamation is not allowed, developers will be restricted to a smaller project of up to seven storeys, said PropNex.

PropNex said the buyer could instead keep and revamp two existing blocks, which have 13 storeys each, but they would have to apply for permission to retain them. The tender closes on Nov 23.

The agent also put up the freehold Novena Hill in Novena for sale yesterday at a price of $56 million to $60 million, or up to $1,777 per sq ft of potential gross floor area. The tender closes on Nov 16.

 

Source: The Straits Times 20 Oct 07

Property booms, busts make economy vulnerable

SINGAPORE ECONOMIC POLICY CONFERENCE

Bubble cuts private spending, raises reliance on volatile foreign demand

PROPERTY price booms and busts make Singapore’s economic growth more vulnerable to volatile factors and should be prevented, an economist at a think-tank said here yesterday.

While the impact of a spike in property prices on overall GDP growth is ‘quite subdued’, a property price bubble causes private consumption expenditure to shrink, making the economy more dependent on foreign demand and business spending which are much more volatile, said Tilak Abeysinghe.

The deputy director of the Singapore Centre for Applied and Policy Economics (Scape) at the National University of Singapore, was speaking at the inaugural Singapore Economic Policy Conference organised by Scape at Four Seasons Hotel.

His team’s research found that while higher property prices spur construction investment, an accompanying dip in private consumption means overall economic growth does not change much as a direct result of property price inflation.

But the overall effect is still undesirable as it makes the economy far more dependent on business spending and foreign demand for its exports, both of which are more volatile than domestic consumption, he said.

The consumption expenditure share of Singapore’s GDP has fallen from more than two-thirds in 1997 to about 40 per cent today. ‘If consumption expenditure in Singapore falls further, GDP growth will be very vulnerable to external demand and investment demand,’ he said.

Research found that in contrast with economies such as the US, higher housing prices here do not seem to encourage more personal spending.

In Singapore, ‘housing wealth is relatively illiquid,’ he said. ‘You just can’t sell your house and move to a suburban house.’ This means the ‘wealth effect’ of housing price inflation seen in countries such as the US – when people spend more as the value of their homes rise – is much less noticeable in Singapore.

Also, ‘when housing prices go up, mortgage payments also increase, so people have less to spend on consumption,’ he said.

He believes policymakers here should ‘do their best’ to prevent a property price bubble because of its effect on private consumption spending and its tendency to widen the income gap between the rich and poor.

‘It should be possible’ to prevent another bubble from building by identifying the main cause of the recent run-up in property prices – likely to be people buying properties for investment rather than owner-occupiers – and introducing measures to dampen demand from this source, he said.

But he also cautioned against flooding the market with a vast supply of new homes, which could trigger a price crash and set the conditions for a new bubble.

 

Source: Business Times 19 Oct 07

No bubble in property market: NUS study

DESPITE Singapore’s red-hot property prices, no bubble is forming in the property market here, according to a study by National University of Singapore (NUS) economists.

In fact, the rise in home prices is below the market’s long-run ‘equilibrium’ level, based on factors such as income and property supply, preliminary findings of the ongoing study show.

In other words, the pace of housing price rises is still below the level that would be expected based on market fundamentals, according to the study conducted by a team led by Associate Professor Tilak Abeysinghe.

This is unlike the case in the early 1980s and mid-1990s, when property price inflation shot up above its longterm equilibrium levels, the study noted.

Early findings from the study, still a work-in-progress, was presented to a small audience at the Singapore Economic Policy conference yesterday.

House-price inflation is expected to hit 18 per cent this year, before easing to 13.7 per cent next year, and then to 3.2 per cent in 2009 and 3.4 per cent in 2010, the NUS team’s model predicted.

Factors used to determine the equilibrium price level include disposable income per person, housing stock and the new supply of property.

The study also found that it takes a long time for property price inflation to adjust to its long-run equilibrium.

And a rise in property price inflation would lead to a spike in construction investment a year or so down the road, but its effect fades after that.

The study concluded that price bubbles should be avoided, as they affect private consumption as well as income redistribution, among other things.

Prof Abeysinghe is the deputy director of the Singapore Centre for Applied and Policy Economics at the NUS, which organised yesterday’s meet.

The one-day conference also saw speakers examine issues ranging from fertility, migration and labour market trends, to CPF savings and the elderly.

The paper, entitled Singapore’s Property Market And The Macroeconomy, can be viewed at http://nt2.fas.nus.edu.sg/ecs/cent/ESU/conference.htm

 

Source: The Straits Times 19 Oct 07

Marina Bay’s key selling points

Its ‘live-work-play’ concept makes it an attractive location for home-buyers.

MARINA Bay is not just well on the way to becoming Singapore’s new financial hub, it is also shaping up as an attractive location for home-buyers.

Property analysts say that since the first residential project there – City Developments’ The Sail – was launched in late 2004, interest in the area has spiked, sending prices climbing.

Prices at The Sail averaged $970 per sq foot in 2004 after the project was launched in November that year.

But since then the average price – taking into account new sales, resales and sub-sales – climbed to $1,060 psf in 2005 and $1,300 psf in 2006, says Knight Frank’s director of research and consultancy Nicholas Mak.

And for the first nine months of 2007, units at The Sail went for an average of about $1,600 psf, he says.

He reckons prices could hit $1,800-$1,900 in about two years. The 1,111-unit development is fully sold.

‘The project was launched in 2004, which means it was just in time to rise on the property market upturn,’ he said.

Analysts say the upside for other residential projects in the area may not be as great because they were launched at higher prices. But they could still benefit from the ‘buzz’ now associated with the area.

Two projects have been launched since The Sail – Marina Bay Residences and One Shenton.

Marina Bay’s biggest selling point, analysts and developers agree, is its ‘live-work-play’ concept.

For one, office space there has been a huge hit with banking and financial institutions.

The top office draw at the moment is the massive Marina Bay Financial Centre (MBFC).

Two office towers in MBFC’s first phase will add about 1.7 million sq ft of lettable area when they come up in 2010. And the office tower in the second phase is expected to offer a further one million-plus sq ft of space.

Nearby One Raffles Quay, completed last year, has slightly over 1.3 million sq ft of office space.

In addition to this, the government has indicated that it intends to progressively release plots in the area.

Two parcels – known as Land Parcel A at Marina View and Land Parcel B at Marina View – will add at least 1.7 million sq ft of office space. Parcel A has been awarded, while the tender for Parcel B closes on Nov 13.

The authorities are also moving to increase the area’s vibrancy. And one eagerly anticipated project is Gardens by the Bay.

The waterfront is set to be home to three distinct gardens, each with its a unique look, the National Parks Board revealed last year.

The gardens will range in size from 10 to 54 hectares. It is estimated that $300 million-$400 million could be spent on them.

Perhaps most significantly, the $5.2 billion Marina Bay Sands integrated resort (IR) will come up in 2010 – significantly changing the look and feel of the place.

Besides drawing more tourists, the retail and F&B facilities at the IR could attract home buyers, market watchers say. All these goings-on have translated into greater local and foreign interest in homes in the area, analysts and developers point out.

‘We are seeing a keen appetite among investors confident in Singapore and interested in the live-work-play destination of Marina Bay,’ said Kan Kum Wah, head of residential marketing for Marina Bay Suites.

More residential projects are likely to be launched in the coming months.

For a start, Land Parcel A and Land Parcel B are ‘white’ sites, which means the successful bidders can use some of the gross floor area to build homes.

The Urban Redevelopment Authority is also setting aside some 60ha of land at Marina South for a landmark residential district.

Some 11,000 housing units are planned, with a mix of commercial, hotel and community facilities.

URA expects to start launching sites in the residential district within the next year, and interest is expected to be keen.

But the next project in the area to hit the market is likely to be Marina Bay Suites.

The 223-unit development, which is the second and last residential block at MBFC, will be launched early next year.

MBFC’s developers – Keppel Land, Cheung Kong Holdings/Hutchison Whampoa and Hongkong Land – expect strong interest in the project, as well as high prices, on the back of then-record prices achieved by Marina Bay Residences.

Last December, when Marina Bay Residences was launched, all 428 units were snapped up within days, with one penthouse fetching $3,450 per square foot (psf) – a record for private homes prices at the time.

‘Marina Bay Suites will be a fitting, even more upscale, sister development to the 428-unit Marina Bay Residences,’ said Mr Kan.

However, homes in the area still have some catching up to do before they reach the prices fetched by residential units in the traditional prime districts 9 and 10.

At Orchard Residences, CapitaLand and Sun Hung Kai Properties are said to have sold a penthouse on the 53rd storey for about $5,600 psf. In contrast, prices at Marina Bay have only hit $3,450 psf.

But home prices in the area could hit $3,500-$4,000, said Ku Swee Yong, Savills Singapore’s director of marketing and business development.

‘Once the casino is up – and perhaps with more traffic congestion due to the vibrant economy – younger high-flying execs in financial services, legal services, etc will come to appreciate inner-city living,’ Mr Ku said.

 

Source: Business Times 18 Oct 07

Sites in Jurong, Holland, Orchard up for sale

2 prime freehold sites could fetch $670-$700m each in collective sales

THREE sites for residential development were launched for tender yesterday – a 99-year leasehold, traditional suburban mass-market housing plot next to Lakeside MRT Station in the Jurong area, as well as two freehold, prime district sites offered through the collective sales of Villa delle Rose off Holland Road and Elizabeth Towers at Mount Elizabeth.

Villa delle Rose, with a land area of 297,132 sq ft, has a guide price of $700 million, which reflects a unit land price of $1,758 psf of potential gross floor area, inclusive of an estimated $31 million development charge. The site is zoned for residential use with a 1.4 plot ratio (ratio of maximum potential gross floor area to land area) and a four-storey maximum height under Master Plan 2003.

Its marketing agent CB Richard Ellis conducted an expression of interest for the property which ended in August and is said to have received offers of up to slightly over $1,600 psf per plot ratio (psf ppr). The EOI exercise had been launched before approval from majority owners was secured, which CBRE recently obtained.

CBRE executive director Jeremy Lake said in a news release yesterday that ‘a few parties have approached us with keen interest, but the owners would like a transparent public tender to achieve the best results’.

Villa delle Rose, developed by Pontiac Land and Keck Seng, comprises 104 units ranging from 2,800 sq ft to 3,200 sq ft. All but a handful of units are rented out, CBRE said.

Over in the Orchard Road area, Elizabeth Towers’ owners are looking at $673 million for their 54,318 sq ft site.

This works out to $2,666 psf ppr. No development charge is payable. Planning approval has been obtained from the Urban Redevelopment Authority to build up to a plot ratio of 4.647, translating to a maximum gross floor area of 252,416 sq ft.

In Jurong, URA has launched the tender for a 2.2-hectare site flanked by Lakeside MRT Station and LakeHolmz condo. Property consultants reckon the site can be developed into around 680 apartments averaging 1,200 sq ft.

CBRE executive director Li Hiaw Ho estimates the site to be worth about $300 psf ppr, translating to a breakeven cost for a new condo at about $650 psf and an average selling price of about $700-750 psf.

Knight Frank, which predicts the site will draw between four and eight bids, estimates the site’s land price at $325- $375 psf ppr, or a breakeven cost of around $650-$720 psf.

The firm’s managing director, Tan Tiong Cheng, said developers will take into account the fact that the ‘Jurong area has traditionally been a slower-moving market compared with other suburban/mass market locations’.

CBRE said that units in The Lakeshore condo a short distance away from the latest site are currently being marketed by its developer at around $800 psf.

In the subsale market, Lakeshore units have been sold recently at $650-750 psf, while apartments at The Centris one MRT station away have been changing hands at about $600-650 psf.

The Lakeholmz, a completed development, has been seeing sales in the $550-600 psf range, according to CBRE research.

 

Source: Business Times 18 Oct 07

Two collective sale sites eyeing high selling prices

THE collective sale frenzy may have cooled somewhat but a number of new sites have hit the market since new rules on these sales took effect earlier this month.

The latest are two sites in posh parts of town which were put up for sale yesterday – both are aiming for hefty sale prices.

One of them, Villa delle Rose, located off Holland Road, has an indicative price of $700 million.

Owners of the other site, Elizabeth Towers, in the more central location of Mount Elizabeth, are hoping for a price of $673 million.

In the past two weeks, a string of other collective sale sites have been put on the market, including Westwood Apartments on Orchard Boulevard, The Estoril on Holland Road and Royalville off Sixth Avenue.

Some of the latest sites for sale, such as Elizabeth Towers, still come under the old collective sale rules as the required minimum owner consent was obtained before Oct 4.

Property consultants have said that collective sale activity is likely to continue at a somewhat slower pace than the frenzy of sales seen earlier this year and last year.

They say there are several reasons, including the fact that the new rules will make the process more transparent and, as a result, probably more cumbersome.

Still, owners continue attempting to sell their estates en bloc.

Villa delle Rose’s guide price works out to $1,758 per sq ft of potential gross floor area. A development charge of about $31 million is payable.

The estimated breakdown is between $2,200 per sq ft (psf) and $2,300 psf.

Developers can expect to build 208 units, assuming an average size of  2,000 sq ft each, said CB Richard Ellis, which is marketing the site.

The 104-unit Villa delle Rose sits on 297,132 sq ft of land. Its sale tender closes on Nov 16.

In the Orchard area, Elizabeth Towers, a freehold 54,318 sq ft site, is up for sale at $2,666 psf of potential gross floor area. No development charge is payable.

The site can be built up to a plot ratio of 4.647, which would give it a gross floor area of 252,416 sq ft, said Newman & Goh, which is marketing the site.

Newman & Goh’s head of investment sales, Mr Jeffrey Goh, said the site can be redeveloped into 101 apartments with an average size of 2,500 sq ft each and could fetch well above $4,000 psf. This is because nearby developments such as Scotts Square and Hilltops are selling well at $4,200 psf and above, he said.

The tender for Elizabeth Towers closes on Nov 21.

 

Source: The Straits Times 18 Oct 07

URA launches tender for Boon Lay condo site

A PRIME residential site on Boon Lay Way has been released for sale, just days after news emerged that a nearby condominium unit had fetched a record price of $1,080 per sq ft (psf) last month.

Property pundits expect keen interest in the 2.2ha land parcel next to Lakeside MRT station. The Jurong West HDB estate and Jurong Point shopping mall are nearby.

The Urban Redevelopment Authority (URA) launched the 99-year leasehold site yesterday by public tender, stipulating that it has a maximum permissible gross floor area of 77,003 sq m.

CB Richard Ellis (CBRE) research executive director Li Hiaw Ho said the site is expected to attract significant attention. He noted: ‘Given recent signs of recovery in the suburban market, we expect developers to be keen to bid for this site to beef up their land bank. Demand is likely to be from HDB upgraders and people working in western Singapore.’

Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong, agreed the site would be popular. ‘It’s definitely quite attractive as there are quite a lot of things happening in the west. For example, the Canadian International School is going to move nearby soon.’

URA said this week that a unit in Far East Organization’s The Lakeshore, near the new site, had set a new benchmark of $1,080 psf last month – surprising most analysts as it had been on the market for more than two years.

CBRE’s Mr Li said the Lakeshore site had been purchased by the developer at $197 psf per plot ratio (psf ppr) in August 2002. He noted: ‘The subject site will be able to fetch bids around $300 psf ppr, which translates into a selling price of $700 to $750 psf for the new project on-site.’

Knight Frank’s director of consultancy and research, Mr Nicholas Mak, said about 660 to 700 units could be built on the site. ‘This site would be attractive to major developers such as Far East Organization, Frasers Centrepoint and other listed developers. The number of bids could range from four to eight.’

URA said that a tender period of about eight weeks will be allowed for the site. The tender will close at noon on Dec 12, and selection of the successful tenderer will be based on the tendered land price only.

 

Source: The Straits Times 18 Oct 07

JUSTED UPDATED!!! FOR RENT IN TANJONG RHU!!!

JUST UPDATED!!!

Tanjong Rhu Condominiums For Rent!!!

Stay in Resort Style Condominiums!!!

Bay View Units / Sea View Units AVAILABLE!!!

Within Mins to Suntec / Esplanade!!!

Only at Tanjong Rhu!!!

For More Information, Click here!!! 

 Interested? Contact me via:

Mobile: (+65)9831 6938

Email: jarene_chuang@yahoo.com

TODAY!!!!!

Horizon Towers’ STB hearing starts on Oct 30

HEARING dates, which should still allow enough time for the collective sale to go through before the Dec 11 deadline, have been set for the Horizon Towers case.

The Strata Titles Board (STB) will adjudicate in the contentious sale application starting on Oct 30 and running on selected days until Nov 15, if needed, said sources.

If the $500 million sale of the Leonie Hill estate is not completed before Dec 11, the deal could be off. The sale remains in limbo after the STB dismissed the initial application on a technical error in August. That ruling was overturned by the High Court last Thursday, sending the application back to the STB.

At the hearing starting this month, STB will hear from minority owners objecting to the sale and rule on whether it can go ahead.

Lawyers from Allen & Gledhill, which are representing the intended buyers, have applied to the STB to be a party at the hearing. A decision on this is expected next Monday. While the hearing dates have been set, the process could still be derailed if minority owners appeal against the High Court’s decision. They are believed to be considering the option.

Consenting owners at Horizon Towers also have another legal matter to deal with – a lawsuit from the intended buyers, headed by Hotel Properties. They claim that the owners breached their sale contract and are claiming up to $1 billion in lost profits. The suit has been put on hold but remains a threat to the owners.

 

Source: The Straits Times 17 Oct 07

FOCUS: PROPERTY – A sprinkling of new benchmark home prices

These include deals at Sentosa Cove, science hub one-north, Boon Lay

(SINGAPORE) Several new units sold by developers set record prices in various parts of Singapore last month, despite the overall lacklustre market, latest figures show.

Data released by the Urban Redevelopment Authority (URA) yesterday show that just 529 homes were sold in September, down from 1,731 in August and 1,381 in July.

However, despite the low volume, several of the units sold set new benchmarks in various parts of Singapore – including Sentosa Cove, science hub one-north and Boon Lay – analysts said.

They indicated that the high prices fetched, although only in some cases, show there is a strong, ‘genuine’ demand for new homes, despite September’s low take-up of new homes.

‘Even though the market is quiet, you still see these kinds of prices, which means that there are many serious buyers out there,’ said Savills Singapore’s director of marketing and business development, Ku Swee Yong.

A unit in Ho Bee’s Turquoise at Sentosa Cove was sold for $2,772 per square foot (psf), which analysts said is likely to be a new benchmark for Sentosa.

And over in the Newton area, a unit in Three Buckley went for $2,888 psf, a record for the area. In fact, all 11 units were sold at a median price of $2,853 psf, which is itself a new benchmark for the location, said Li Hiaw Ho, executive director of CBRE Research.

New benchmarks were also set in the suburbs.

In the west, a unit at United Engineers’ The Rochester went for $1,577 psf, a new record for the one-north vicinity.

And near Upper Bukit Timah, a unit in Far East Organization’s Gardenvista on Dunearn Road sold for $1,449 psf.

Mr Ku said that both prices were new highs in their respective areas.

Elsewhere, a unit in The Beacon Edge at Tembeling Road was sold at $1,327 psf while a unit of Vetro at Mar Thoma Road was sold for $1,044 psf. Both were new levels achieved at their respective locations, CBRE said.

But perhaps most unexpectedly, a unit in Far East Organization’s The Lakeshore in Boon Lay Way went for $1,080 psf – taking most property analysts by surprise, as the project in the far western part of Singapore has been on the market for more than two years.

 

Source: Business Times 16 Oct 07

The Estoril put up for collective sale at $208m

No DC payable; price works out to about $1,536 psf per plot ratio

THE Estoril on Holland Road has been put up for collective sale, and the indicative price is $208 million.

This works out to about $1,536 per square foot per plot ratio (psf ppr) for the 84,600 square feet site.

Marketed by CB Richard Ellis (CBRE), its executive director of investment, Jeremy Lake, said that no development charge (DC) is payable due to the high development baseline.

He also said that developers would not incur DC to build the additional 10 per cent gross floor area allowable for the provision of balconies.

Currently, there are 40 three-bedroom units and four penthouses on the site. Based on the indicative price, the three-bedroom units will receive $4.32 million each and the penthouses, $8.69 million or $8.78 million.

CBRE estimates that the developer can build about 75 units assuming an average size of 1,800 sq ft each. The estimated breakeven is around $2,000-$2,050 psf.

In July, Tulip Garden, also in the Holland Road area, was sold for $516 million or about $1,018 psf ppr.

A recent CBRE report did note that a ‘cautious mood’ is being felt in the private land sales market due to the global credit tightening, the higher price tags as well as the two rounds of revision to DC rates. Only 24 sites worth a total of $1.96 billion were sold in the third quarter of 2007 compared with 51 sites (worth $6.92 billion) in the previous quarter.

Separately, Colliers International noted that for the first time in at least the last two years, the residential sector did not take the top spot in investment sales in the third quarter.

In its report, Colliers noted that total sales of residential investment properties dived to $2.9 billion or 21.4 per cent of total sales.

‘This reflects a significant 68.3 per cent drop from last quarter’s record $9 billion which accounted for 82.7 per cent of total investment sales in Q2 ‘07,’ it reported. ‘The trend, where developers continued to land bank at record high prices in the previous quarters, was evidently not repeated in this quarter.’

Attention was shifted to bulk purchases of strata residential units, including those at Costa Del Sol, Reflections at Keppel Bay and M21.

 

Source: Business Times 16 Oct 07

URA to woo Mid-East investors at int’l event

It will sell S’pore as destination for real estate investments at Cityscape Dubai

THE Urban Redevelopment Authority (URA) will sell Singapore as a destination for real estate investments to Middle East investors at Cityscape Dubai, an international property event.

URA director of land administration Choy Chan Pong said that it was important for Singapore to participate in such events. As an example, Mr Choy highlighted the recent sale of a development site at Beach Road to a consortium which included Middle East-based Istithmar Group.

‘URA had met with Istithmar at last year’s Cityscape Dubai and presented them with the exciting investment opportunities we have in Singapore including the prominent Beach Road site,’ Mr Choy said.

The site in question was sold to Istithmar Group, El-Ad Group and City Developments Ltd for $1.7 billion last month.

Mr Choy said: ‘Singapore’s participation in Cityscape Dubai, hence, allows us to meet with potential investors and developers face-to-face, enabling them to better understand what Singapore has to offer.’

A Singapore Pavilion has been set up at the event for the first time.

The public and private sector organisations exhibiting in the Singapore Pavilion include the URA, Singapore Tourism Board (STB), Building and Construction Authority (BCA), Marina Bay Financial Centre, Lend Lease Retail, Ong & Ong Architects and the Singapore Institute of Architects (SIA).

The URA will showcase Marina Bay, an area which has already attracted around $15 billion worth of investments from international developers including the Marina Bay Sands Integrated Resort, prime commercial developments such as One Raffles Quay, Marina Bay Financial Centre as well as high-quality residential developments.

The STB will be showcasing some of the changes and transformation to the tourism landscape, highlighting tourism zones including Orchard Road and the Southern Waterfront.

BCA will exhibit its mission to develop a quality built environment in Singapore. BCA International, a consultancy company by BCA, will also be present to provide multi-disciplinary construction related consultancy to both public and private agencies in the Middle East.

Cityscape Dubai is being held from today to Thursday.

 

Source: Business Times 16 Oct 07

Home sales hit a wall as stock jitters spook buyers

Fewer launches add to September slowdown but analysts expect pick-up amid new benchmark prices

(SINGAPORE) Developer sales of new homes slowed to a crawl in September, hit by stock market jitters caused by sub-prime woes in the US.

Just some 529 new units were sold by developers last month, a sharp drop from the 1,731 units sold in August.

Property analysts said that September’s take-up rate for new homes could be the lowest monthly figure seen over the past four years.

The low sales were also caused, in part, by fewer launches.

Developers launched just 570 units in September, down from 1,885 units in August as many held back projects while waiting for the market to recover.

However, despite the low volume, new benchmark prices for private homes were set in several areas across Singapore – including Sentosa Cove, Boon Lay and science hub one-north – market observers pointed out. This means that genuine demand for homes still exists, they said.

The Urban Redevelopment Authority (URA) released its monthly update on private residential properties yesterday, showing that developer sales of new projects fell sharply last month.

‘The primary sales market was relatively quiet in the month of September,’ said Tay Huey Ying, Colliers International’s director for research and consultancy.

Like other analysts, Ms Tay attributed the low volumes to the global financial market turmoil as well as the traditionally quiet lunar seventh month.

Developers were also holding back projects, both due to market sentiment and because preparations for their launches could not be finished in time, others said.

‘A few developers’ projects have been held back because of contractors being delayed when it comes to getting the showflats ready,’ said Savills Singapore director of marketing and business development Ku Swee Yong.

The largest project launched during the month was the 163-unit Hillcrest Villa, a cluster housing project.

The poor market sentiment also affected sales at Frasers Centrepoint’s Soleil @ Sinaran as more than 10 per cent of buyers did not exercise their options to purchase their chosen units.

URA’s figures for August showed that 394 out of a total of 417 units launched in the development had been sold, but the number sold fell to 352 in September’s data. Frasers Centrepoint confirmed that 42 options were not exercised before their deadlines, but added that 12 of the units involved have since been resold. The total number of units sold in the project climbed to 395 as the market picked up in October, the developer said.

Analysts also noted that two other trends seen in July and August – the decline of speculative activity and the increased demand for mass market homes – continued into September.

‘Subsales of residential properties accounted for only a small 6.8 per cent of all transactions in the month of September compared to 9.4 per cent in August and 15.1 per cent in July,’ said Ms Tay. Subsale transactions are generally thought to be an indication of the level of speculative activity in the property market.

And in line with a recovering mass market, new units priced in the range of $751-$1,000 per square foot (psf) remained the most sought-after in the third quarter, accounting for 36 per cent of all units sold, Colliers analysis shows.

This was followed by units in the next price range of $1,001-$1,500 psf, which made up 26 per cent of all units sold. By contrast, luxury homes priced above $3,000 psf accounted for only 8 per cent of all new units sold in the quarter.

Analysts expect the property market to recover in the last quarter due to genuine buyer demand.

‘Going forward, we expect the sales momentum in the residential market to continue at a healthy pace against a backdrop of a strong economy,’ said Li Hiaw Ho, executive director at CBRE Research.

 

Source: Business Times 16 Oct 07

S’pore seeking property investments from Mid-East

SINGAPORE is wooing investments from the Middle East, as companies and individuals from the oil-rich region expand their presence in the Republic.

Government bodies such as the Urban Redevelopment Authority (URA), Singapore Tourism Board and the Building and Construction Authority have joined a host of other groups to showcase what Singapore has to offer at Cityscape Dubai, a major international real estate event starting today.

It will be the first time a Singapore pavilion has been set up at a top international property event in the Middle East.

The URA will speak about Singapore’s strong economic growth in various sectors, including real estate, real estate investment trusts and other investment opportunities.

There are more than 250 Middle East companies operating in Singapore, as well as an increasing number of individuals and equity funds from the region investing in mega development projects in the Republic.

Foreign direct investment from the Middle East grew from $5.8 billion in 2004 to $6.6 billion in 2005, the most recent year for data, according to the Statistics Department.

Based on caveats lodged, individual Middle East investors bought 34 homes worth $76 million in Singapore from 2004 to Sept 28. About 47 per cent of these deals were closed this year.

Meanwhile, Al-Nibras Islamic Real Estate Fund bought 56 homes in the Reflections at Keppel Bay project earlier this year.

The URA attended the Dubai event last year and pitched investment opportunities to investors, including the Istithmar Group. This is owned by Dubai World consortium, whose assets include the famed Palm in Dubai.

Istithmar has now teamed up with Singapore developer City Developments and the North American-based El-Ad Group to develop an office, hotel, retail and residential project worth an estimated $2.7 billion in Beach Road.

The URA said several Middle East investors had also indicated interest in sale sites that the agency has launched.

At the Dubai event, the URA will showcase Marina Bay, Singapore’s future downtown, which has attracted about $15 billion worth of international investment so far.

Other Singapore groups involved in the Singapore pavilion include the Ong & Ong architecture firm and the Singapore Institute of Architects, while upcoming developments Somerset Central and the Marina Bay Financial Centre will also be showcased.

 

Source: The Straits Times 16 Oct 07

Record prices for some properties despite sliding sales – Sentiment steady last month despite fears over impact of US credit crisis

PROPERTY sales slumped last month, as buyers stayed on the sidelines but there was a silver lining with prices at some projects hitting record levels.

The cause of the sales dip was clear – concerns in the United States over its subprime mortgage industry triggered meltdowns in share markets across the globe.

Many spooked buyers put purchases on hold but the fact that prices of the deals that were done stayed buoyant reflects the firm undertone for private residential properties.

Urban Redevelopment Authority (URA) data showed that the number of new homes sold last month fell nearly 70 per cent to just 529 units, from 1,731 in August. July sales amounted to 1,378.

Developers typically sell about 7,500 new homes a year, though the recent boom has lifted figures. The URA data is based on sale options given by developers to buyers.

With more sales in the lower price ranges, median transacted prices, or the mid-point in prices, fell 27.7 per cent, from $1,328 per sq ft (psf) in August to $960 psf last month.

And with the lunar seventh month barely over, there were only a few new launches. One of them was Hillcrest Villa, a cluster of 99-year leasehold terrace homes near Dunearn Road.

Yet MCL Land still sold 162 out of the 163 units with a median price at $865 psf – said to be fairly high for a landed project in the area.

‘The high sales volume in August has caused a bit of indigestion in the market,’ said Knight Frank director (research and consultancy) Nicholas Mak.

‘September’s figures can thus be viewed as a healthy breather before the market resumes its momentum.’

Mr Mak said monthly sales would gradually improve to 800 to 1,000 units.

Sub-sales of residential property accounted for 6.8 per cent of all transactions last month, compared with 9.4 per cent in August, according to Colliers International.

Prices in some projects managed to hit records.

In the high-end segment, Ho Bee sold 36 units of its latest Sentosa Cove project Turquoise. The 91-unit project’s median price hit $2,587 psf while the highest was $2,772 psf, a record for the Cove.

In Scotts Road, Wheelock Properties sold 27 units of Scotts Square, of which 12 were above $4,000 psf.

A high for the month of $4,359 psf was recorded, with the median price at $3,985. It was the only project to sell above $4,000 psf last month.

There were also a few record highs for suburban projects. Two units at the 318-unit Gardenvista in Dunearn Road were sold at $1,223 psf and a record high of $1,449.

Sales at The Lakeshore in Boon Lay Way ranged from $695 psf to a record $1,080.

‘These buyers could be buying for their own use because the properties have just obtained their temporary occupation permit,’ said Savills Singapore director of marketing and business development Ku Swee Yong.

New projects such as The Beacon Edge in Tembeling Road also did relatively well. Six of the 32 units sold at a median price of $1,306 psf, with a high of $1,327.

Achieving record highs in a slow month could mean there are serious buyers out there, said Mr Ku. ‘Right now, there is strong demand in the mid-tier and mass markets.’

These are homes costing $800 psf to $1,600 psf, he said.

Mr Ku said the market was doing better this month but sub-prime hangovers may keep activity slightly muted.

 

Source: The Straits Times 16 Oct 07

Tanjong Rhu Condominium FOR SALE!!!

Looking for Good Properties to Invest?

Look no further!

With the New Integrated Resort Coming Up,

the Potential IS HERE In Tanjong Rhu!!!

 

Interested? Click here for More Information!

Call Jarene

- Your Partner In Building Your Assets

@

(+65)9831 6938 or

jarene_chuang@yahoo.com

JUST UPDATED!!! Tanjong Rhu Condominiums For Rent!!!

JUST UPDATED!!!

Tanjong Rhu Condominiums For Rent!!!

Stay in Resort Style Condominiums!!!

Within Mins to Suntec / Esplanade!!!

Only at Tanjong Rhu!!!

For More Information, Click here!!! 

 Interested? Contact me via:

Mobile: (+65)9831 6938

Email: jarene_chuang@yahoo.com

TODAY!!!!!

Average capital value of luxury apartments tops ‘97 peak by 59%

THE average capital value of luxury apartments in Singapore has risen 43.5 per cent in the first nine months of this year since the fourth quarter of 2006. At $2,827 psf, the Q3 2007 average luxury apartment cap value has surpassed 1997’s peak level by 59 per cent, according to a report by Colliers International issued yesterday.

In the leasing market, average monthly gross rents of luxury apartments were up 27.9 per cent in the first nine months of the year. The increase was at a faster clip in the third quarter of this year, with a quarter-on quarter gain of 10.2 per cent to $6.86 per square foot a month. This was higher than earlier rises of 7.9 per cent and 7.6 per cent in Q2 and Q1.

‘The supply crunch, coupled with strong demand, continued to contribute to escalating rental growth, a growing concern among the expatriate population in the Republic and the government,’ Colliers noted.

The average cap value of luxury apartments rose 13.3 per cent in Q3 over the preceding quarter to $2,827 psf.

The property consultancy firm predicts that average capital values and monthly gross rents of luxury apartments will rise by up to 10 per cent in the final quarter of the year. But it acknowledged the downside risks in the coming months, including the negative spillover from the US housing market and potential negative oil supply shocks.

‘Nevertheless, the strong economic and demand fundamentals in the Singapore market, coupled with the continuing commitment of the government to maintain Singapore’s attractiveness as a stable market for investments, should lend support to the private residential property market amid cautious sentiments,’ the report added.

Colliers also highlighted the government’s assurance that it would continue to monitor the market and ensure that prices do not run ahead because of a shortage of supply.

Earlier this month, the Urban Redevelopment Authority said that it was reviewing the Government Land Sales programme for the first half of next year and that the government would make available more sites for private residential development through the GLS programme next year if the demand continues to remain strong.

 

Source: Business Times 13 Oct 07

$5,600 psf for penthouse new high in property price here

53rd-storey Orchard Residences unit fetches over $28m

A NEW record property price for Singapore has been set, even though fewer sales are being made in high-end residential projects since the time of the US sub-prime mortgage crisis.

CapitaLand and Sun Hung Kai Properties are said to have sold earlier this week a penthouse on the 53rd storey of The Orchard Residences for about $5,600 per square foot (psf), or over $28 million. This surpasses the previous benchmark of $5,500 psf set in August when a 54th storey penthouse fetched about $27.8 million.

This means that all four penthouses in the 99-year leasehold development are now sold.

The developers are said to have sold about 73 per cent of the total 175 units in the condo. The buyer of the final penthouse sold this week is believed to be a foreigner. The 5,048 sq ft unit has five bedrooms, a study and a family room.

A stone’s throw away, Wheelock Properties (Singapore) is said to have sold more than 30 apartments at its freehold Scotts Square since the official launch of the project on Sept 28.

The developer is said to have largely maintained its average price at around the $4,000 psf mark from its preview in July, when it sold about half of the project’s 338 apartments.

Over in Sentosa Cove, Ho Bee has sold 38 of the 50 units it has released so far in its 91-unit condo, Turquoise, since late September. The units have been sold at prices ranging from nearly $2,500 psf to $2,770 psf.

The average price is about $2,600 psf, Ho Bee Investment executive director Ong Chong Hua said when contacted by BT yesterday. Buyers of the 38 units – which include four penthouses – were an equal mix of foreigners and Singaporeans, he said.

Apartments at the 99-year leasehold Turquoise typically cost around $5.3 million for a three-bedroom unit, $6.4 million for a four-bedder and around $9.3 million for a penthouse.

DTZ Debenham Tie Leung executive director (residential) Margaret Thean acknowledges that buyers, both local and foreign, have been more cautious after the stock market setback at the time of the US sub-prime mortgage crisis.

‘But we still see activity going on. For the high-end projects, we’ve not noticed any withdrawal of liquidity. The only difference is that prospective buyers are more cautious, doing more calculations and being more selective in their choice of investment before making a commitment,’ she said.

Market watchers also say that the recovery in the stock market in recent weeks has led to a return of confidence in the property market, as seen in a pick-up in subsales activity lately.

Over in the Seletar Hills area, Tong Eng Brothers unit Fairview Developments is launching two landed developments. One is the freehold 8 @ Stratton, comprising eight cluster semi-detached houses priced at $1.98 million to $2.2 million.

The houses have built-up areas ranging from 3,595 sq ft to 3,649 sq ft and strata areas of 4,930 sq ft to 5,145 sq ft.

The second project is Nim Green, a collection of just three terrace houses – a corner unit with an asking price of $2.5 million and two intermediate units with a price tag of about $2 million.

 

Source: Business Times 12 Oct 07

High Court gives Horizon sale fresh lease of life

STB dismissal overturned, en bloc law clarified, but sale still faces uncertainties

(SINGAPORE) The High Court yesterday overturned the Strata Titles Board’s (STB) decision in August to dismiss Horizon Towers’ collective-sale application – and sent the matter back to the board for its continued deliberation.

This means that, barring any objection, Horizon Towers’ application will go back to the STB and will be heard from the point it was dismissed – giving the en bloc sale a chance to succeed.

What could block its path is an appeal filed by any of the minority owners against the High Court’s decision yesterday. The three groups of minority owners, however, told BT yesterday that they have yet to decide if they will file an appeal.

‘It’s something that we’ll need to sit down and discuss – we’ll need to read through the judgment carefully and weigh all our considerations before deciding how to proceed,’ said S K Phang, who represents one of the minorities.

The judgment was also significant for clarifying several aspects of the collective sales law, several players noted.

Justice Choo Han Teck, in his decision to overturn the board’s dismissal in August, ruled that the three missing pages in Horizon’s application to the STB did not constitute an ‘incurable defect’ as the board had alleged – as it wasn’t a substantial omission that prejudiced the minority owners.

He noted that the STB was notified of the missing pages, and provided with them during the hearing.

‘If (the error or omission) does not (cause prejudice to the minority), the board is, in my opinion, empowered to allow an amendment or correction so that the record is clear. If one takes the view that the board has no power to allow an amendment even for a typographical error, then an entire en bloc sale could be stalled by a comma in the wrong place. The law should not have such drastic consequences when there was otherwise no prejudice,’ Justice Choo said.

He also emphasised the purposive nature of the law and the need to apply it consistently. ‘Fairness requires that the law is applied consistently to everyone in similar circumstances. If the majority succeeds, it is because it is right, not because it is the majority. Likewise, if the minority succeeds, it is because it is right and not because it receives favours granted only to the underdog,’ Justice Choo ruled.

His judgment found favour with all parties involved, even the minority owners – who welcomed the clarity to en bloc rules it afforded. ‘It clarifies a lot of matters for us practitioners in the en bloc arena and is an authoritative ruling that has closed some gaps in interpretation right now,’ Dr Phang said.

Senior Counsel K Shanmugam of Allen & Gledhill, who represents the buyers – Hotel Properties Ltd (HPL) and its partners – also welcomed its guidance: ‘We now have a better idea of how the statutes should be interpreted and the guidance would be useful going forward.’

He added that the result was ‘exactly the result we wanted, what we argued for’ and it was a result which he knew a number of the majority sellers wanted – as they too want the sale to go through.

Lim Seng Hoo, current chairman of the Horizon Towers sales committee, said: ‘We are very grateful for the result. It shows we have not breached in the first place the contract with HPL (and its partners) as they have alleged.’

HPL and its partners have sued the majority owners for failing to do everything in their power to submit a proper application to STB. That suit has been temporarily stayed, but HPL is likely to still consider suing the owners for up to $1 billion in damages if the en bloc sale still falls through.

There are still hurdles to overcome. Even if the minorities decide not to appeal, there’s no guarantee the en bloc sale will go through. The STB’s calendar is believed to be bursting with appointments from other collective-sale applications to be heard.

The board was unable to revert to BT’s queries yesterday as to whether it would have a slot for Horizon Towers, but lawyers said it is likely that Horizon Towers’ application would be given priority, given its Dec 11 deal completion deadline.

But that’s not the only possible stumbling block: the STB will need to pick up from where it left off, that is continue hearing the minority owners’ objections to the sale and consider the merits of the sale, before deciding whether to grant the order needed for the completion of the collective sale.

And, as Dr Phang told BT, the minorities still have many objections to the en bloc sale which have not yet been heard. ‘We were only in the midst of questioning our first witness when the STB dismissed the entire application; when we go back to the board, it will have to hear our other objections. We have quite a few arrows in our quiver which we still haven’t shot,’ he said.

Philip Fong of Harry Elias partnership, who also represents several minority owners, added: ‘Our contention has been that this collective sale was done in bad faith – and that will remain our contention as we appear before the STB.’

The STB would, however, now need to view the minorities’ objections to the sale in the light of the judgment handed down by the High Court yesterday.

 

Source: Business Times 12 Oct 07

Investment property sales jump 94% to $15.7b

INVESTMENT property sales nearly doubled, touching $15.69 billion, in the third quarter, reflecting buoyant investor sentiment.

This was 93.9 per cent higher than the $8.09 billion recorded in the same period last year, a new report by property consultancy CB Richard Ellis (CBRE) showed yesterday.

Most investment sales – 64.3 per cent, or $10.1 billion – came from the private sector, while public sector land sales made up 35.7 per cent, or $5.6 billion.

For the first nine months, major property deals worth $40.95 billion already exceed last year’s full-year value by 34 per cent, said CBRE.

In the third quarter, the office sector was the top performer, accounting for 43.5 per cent, or $6.83 billion, of major property deals – more than quadruple the $1.37 billion in the previous quarter.

Prime office rents also topped the 1990 historical peak of $11.50 per sq ft (psf) per month to hit $12.60 psf per month, up 82.6 per cent year-on-year.

CBRE expects occupancy levels to stay in the range of 91 per cent to 95 per cent for the next five years, even as more office space is built.

The third quarter also saw a rise in industrial property rents, except for warehouses.

The office space crunch has led to more demand for high-tech space, which has risen 8.5 per cent to $2.55 psf, and is set to reach $2.75 psf by year- end, said CBRE.

Its rental statistics are based on a selected basket of prime office buildings.

The Urban Redevelopment Authority said yesterday that its third-quarter statistics will be released by monthend, and will be more comprehensive as it is based on the tax records of all rental transactions in the quarter.

CBRE has also forecast that a record $50 billion in investment property sales would be completed by year-end.

 

Source: The Straits Times 12 Oct 07

HORIZON TOWERS SAGA – Judge sends en bloc case back to Strata Titles Board

Court overturns board’s ruling, saying technical errors not sufficiently serious to halt sale

THE Horizon Towers sale is back on, after a landmark decision by the High Court yesterday overturned a Strata Titles Board (STB) ruling to abort the deal.

Justice Choo Han Teck ruled that the STB’s move in August to halt the sale based on technical errors in documents was wrong.

He said the errors were not sufficiently serious to prejudice minority owners opposing the $500 million sale of the Leonie Hill condo.

Lawyers said the ruling, which came after an at times hostile hearing last week, will improve the en bloc process for cases pending STB approval by establishing clear guidelines over how ‘paperwork errors’ can be dealt with.

Yesterday’s ruling was hailed by Senior Counsel K. Shanmugam from Allen & Gledhill, who was acting for the buyers: ‘This is exactly the result we wanted.’

The majority owners will now have to take the fractious case back to the STB.

Disgruntled minority owners have two options. They can go to the STB hearing and file their objections, which include disquiet over the price. But others may want to appeal against the High Court judgment.

STB threw out the estate’s sale application because three pages with consenting owners’ signatures were missing.

But Justice Choo said these were insufficient grounds: ‘If an error or omission had caused prejudice to the minority, the board may … dismiss the application.

‘If it does not, the board is … empowered to allow an amendment or correction so that the record is clear.’

Even without the three pages, the 80 per cent requirement for a collective sale had been satisfied, he said.

‘If one takes the view that the board has no power to allow an amendment even for a typographical error, then an entire en bloc sale could be stopped by a comma in the wrong place.’

The ruling has not ended the legal wrangling.

The buyers – Hotel Properties and two partners – are suing the majority owners for alleged breach of contract.

They claim the owners did not do their utmost to seal the sale at the price agreed to in February and want up to $1 billion in damages.

The owners, keen to keep that suit at bay, extended the sale deadline to Dec 11. HPL has put the suit on hold.

Mr Lim Seng Hoo, the estate’s sale committee chairman, said yesterday’s decision showed the owners had not breached their sale contract. ‘We will go back to the STB as soon as we can,’ he said.

Justice Choo’s judgment has wider implications as well in that it puts uncertainties over technical errors to rest.

New collective sale rules that kicked in on Oct 4 allow the STB to disregard technical irregularities that do not prejudice any owner’s interest. But this rule does not apply to applications that pre-date the Oct 4 change.

These applications waiting STB clearance now have clearer guidelines.

‘It is the first time a collective sale rule has been interpreted so clearly and in a purposive way,’ said a lawyer involved in collective sales.

‘It will affect other cases where an attempt to defeat a sale is going to be made on a literal reading of the rules.’

 

Source: The Straits Times 12 Oct 07

En bloc site goes on sale for $2,800 psf ppr

WESTWOOD Apartments, the first luxury collective sale site to be launched after the recent changes to collective sales rules and the US sub-prime crisis, has an indicative price tag of $488 million.

This works out to $2,800 per square foot per plot ratio (psf ppr) for the 62,179 sq ft site on Orchard Boulevard.

Marketed by Savills Singapore, its director of investment, Steven Ming, believes the price reflects the site’s proximity to Orchard Road and the surrounding luxury residences such as the St Regis Residences, Parkview Eclat, and Orchard Residences which have seen prices transacted in excess of $4,000 psf in recent months.

The site can be built up to 20 storeys and yield around 69 units of condominium apartments of 2,500 sq ft, added Mr Ming.

If the indicative price is achieved, Westwood Apartments could set a new benchmark price for collective sales here.

The present record holder is The Ardmore, acquired by SC Global in June for $262 million or $2,337 psf ppr.

Savills Singapore is also marketing Welkin Mansions in River Valley. Director of investment projects, Suzie Mok, expects the 26,000 sq ft site to fetch $1,800 psf ppr. This works out to be around $130 million.

The site can be built up to 36 storeys and yield about 48 units of around 1,500 sq ft.

Another unusual site that has been put up for sale is Northshore Bungalows in Ponggol.

The existing development comprises 20 units of bungalows and two plots of bungalow land with swimming pool and a clubhouse.

The 129,585 sq ft site has a plot ratio of 2.1 and is zoned for 2-storey bungalows.

Marketed by United Premas Ltd, Northshore Bungalows has an indicative price of $92.4 million, excluding development charges of $14 million.

United Premas reckons that the site can potentially accommodate about 72 units of resort-style strata titled bungalows which can be built up to two storeys with an attic, a basement and two basement car park lots.

 

Source: Business Times 11 Oct 07

World’s wealthy still eyeing property

They are undeterred by the market turmoil triggered by the US sub-prime crisis

(GENEVA) The wealthy have lost none of their appetite for property despite the market turmoil triggered by the sale of risky sub-prime mortgages in the US, according to some of the world’s top private bankers.

Clients of wealth managers are, however, on the lookout for the next big areas of growth and want products that will enable them to reduce their exposure to any one property or market.

‘We’re seeing heavy levels of investment in property in Hong Kong (and) throughout Asia,’ said Peter Flavel, global head of private banking at Standard Chartered. ‘You can’t get office space in Singapore, you can’t get it in Dubai.’

Speaking at the Reuters Wealth Management Summit, Mr Flavel said there was a ‘group of Asians that love real estate’ and that their ardour showed no sign of fading. ‘They’d see the situation in America as specific to America and the situation in the UK as specific to the UK,’ he added.

Samir Raslan, head of Citibank’s wealth management operations in central and eastern Europe, Middle East and Africa, said his clients also remained alive to potential opportunities in world real estate markets.

‘We haven’t seen any change in our clients,’ he told the summit held at Reuters offices here.

Nicolas Cagi Nicolau, global head of structured product solutions at SG Private Banking, said demand so far in 2007 had been particularly strong.

In Ireland, where fortunes have been made on the back of the country’s decade-long property boom, a fast-cooling domestic market and recent global market turmoil may have had a short-term impact, but investors’ love of property is intact.

‘All that we may be seeing is that people are just waiting to see what may well happen either domestically or internationally, but the appetite for further investment is undoubtedly there,’ said Mark Cunningham, managing director of Bank of Ireland Private Banking.

He said his main problem was persuading Ireland’s growing ranks of self-made millionaires to diversify into assets other than real estate. ‘The first love has always been property and will continue to be property for a lot of these people.’ In Spain, which like Ireland is experiencing a rapid cooling in its property market, the wealthy remain committed to real estate, although not necessarily in their own country.

Daniel de Fernando, head of asset management and private banking at Spain’s BBVA , said a new product offering clients a chance to invest in the Mexican property market had proved particularly popular. ‘People are asking us for more ideas on that front,’ he said of a fund bought into by 60 people within two weeks of its launch at a minimum investment of 2.5 million euros (S$5.2 million) each.

In the Netherlands, property also continues to be popular, according to Bernard Coucke, deputy chief of private banking at ING Groep. ‘On the contrary, more and more programmes are being set up, not only in residential but also commercial. Why? Because, for instance in the Netherlands, demand is high . . . and I think it will continue to go up.’

For some rich investors, however, there is a growing belief that other assets can offer better returns.

‘I think that the appetite for real estate is decreasing a lot,’ Paolo Molesini, head of private banking at Italy’s Intesa Sanpaolo said of a country where up until now the wealthy have held about 70 per cent of their assets in property.

‘Property costs a lot and gives you a very, very low revenue . . . There is no equilibrium from the price of the asset and the earnings that you can get out of it.’ Mr Molesini said his clients were looking to invest in foreign property, particularly in Germany, eastern Europe and Paris.

 

Source: Reuters (Business Times 11 Oct 07)

Marina Bay condo to be launched next year

Developers expect high prices, with smaller units costing at least $4m-$5m

MARINA Bay Suites, the second and last residential block at the Marina Bay Financial Centre, will be launched early next year, as prices in the area continue to climb.

The developers – Cheung Kong (Holdings)/Hutchison Whampoa, Hong Kong Land and Keppel Land – are expecting strong interest in the condo, as well as high prices.

Market estimates expect smaller units to fetch at least $4 million to $5 million.

Sales for Marina Bay Suites have yet to start, although the condo was marketed recently at a Shanghai property exhibition.

Clients from China and Hong Kong made up almost 20 per cent of those who bought units at the first Marina Bay Financial Centre condo.

Marina Bay Suites will be marketed in Dubai next week, and then in Hong Kong.

It will have 223 three- to four-bedroom apartments ranging in area from 1,500 sq ft to 2,500 sq ft – all with private lift lobbies.

There will be a single-level penthouse on the 65th floor, and two duplex penthouses on the 63rd.

‘Marina Bay Suites will be a fitting, even more upscale, sister development to the 428-unit Marina Bay Residences, which sold out in just three days in December last year,’ said the condo’s head of residential marketing, Mr Kan Kum Wah.

There is talk that the 65-storey Marina Bay Suites could be priced at an average of $3,000 per sq ft (psf).

Mr Kan said it was too early to decide on pricing, although the developers will take ‘close reference’ to subsale prices of Marina Bay Residences.

The highest sub-sale price recorded for Marina Bay Residences was $3,600 psf in June. This compared with the average apartment price of around $1,850 psf at last December’s launch, when penthouses sold for up to $3,450 psf.

Recent Marina Bay Residences deals in August ranged from $2,061 psf to $3,080 psf for the 732 sq ft to 1,981 sq ft apartments.

A unit at the popular The Sail@Marina Bay nearby went for as high as $3,301 psf in August.

In the same month, other deals for apartments as small as 667 sq ft were recorded at $1,300 psf to $2,999 psf.

Phase one of The Sail – the first condo in Marina Bay – was launched at below $1,000 psf in late 2004.

 

Source: The Straits Times 10 Oct 07

Subsales picking up after lull as sellers temper their demands

Lock in profit if margin is good, some agents advise

(SINGAPORE) After a lull of about six weeks, activity seems to be picking up in the subsale market on the back of the stock market rally and more reasonable demands from sellers.

‘It’s not as good as before sub-prime but much better than during the subprime, from mid-July to mid-August,’ said CB Richard Ellis executive director (residential) Joseph Tan.

‘There have been definitely more inquiries and there’s been more response to ads. Whether this will lead to more subsale volume is hard to say,’ he added.

Jerrytan Residential Pte Ltd executive director Jason Tan too has seen a ‘mild pick-up’ in subsales of condos in Districts 9 and 10 in the past couple of weeks or so ever since the stock markets in the US and Singapore started rising again.

ERA Realty Network divisional director Andrew Soh too has seen more subsale deals in the last two to three weeks in the Sentosa Cove and Marina Bay locations. A unit at Oceanfront condo at Sentosa Cove was sold for $2,550 per square foot in the subsale market two weeks ago, reaping the seller a handsome profit of over $2 million as he had purchased the unit (also in the subsale market) in September last year for $1,750 psf.

Jerrytan Residential’s Mr Tan says: ‘Sellers are lowering their expectations after the reality check provided by the sub-prime stock market crash. But they’re still making healthy profits as they may have bought the units a little while ago.’

For instance, the owner of a unit at The Grange recently sold his 2,300 sq ft apartment in the subsale market for about $2,500 psf or a total of about $5.76 million, against his original purchase price of about $1,450 psf from the developer around July 2005. His net profit after factoring in agents’ fees, stamp duty and legal fees would be around $2.2 million.

In some instances, the spur to sell in the subsale market and take a profit now is that the projects may be receiving Temporary Occupation Permit (TOP) within the next year and those who bought their units on deferred payment schemes from the developer, paying only 20 per cent of the purchase price so far, will soon have to pay up another 65 per cent of their purchase price.

‘Our advice to these investors is that if there is a good margin from their investment, they could lock in their profit now. They can always reinvest in another property,’ Mr Jason Tan says.

‘Buyers picking up units through the subsale market are also starting to feel more confident again, after the stock market’s recovery. They’re prepared to hold the properties as a mid- to long-term investment but are also eyeing the possibility of selling much sooner, when the projects receive TOP. The outlook is still good, as there will be limited supply of completed brand-new developments in Districts 9 and 10 over the next six to 12 months,’ he added.

However, ERA’s Mr Soh sounds more cautious. ‘Supply in the subsale market is more than demand. I may be wrong but I think the high-end residential property clock is at 9 o’clock. My advice is to take a profit now and not be too greedy. Supply in the subsale market is greater than demand. It’s tough to find buyers in the subsale market now, unless you go overseas.’

Colliers International’s analysis of caveats captured by the Urban Redevelopment Authority’s Realis system shows that the months of May, June and July saw the most subsale activity in the first eight months of 2007, with more than 600 such deals in each of these three months.

The Sail @ Marina Bay, Citylights, Icon and The Lakeshore, were the most widely traded projects in the subsale market in the May-July period with 151, 93, 90 and 68 transactions respectively.

However, subsales fell drastically by more than 50 per cent to just 299 transactions in August. ‘Usually, caveats are lodged upon the option being exercised, so a slowdown in subsales from mid-July would only be reflected in the caveats about two weeks later, starting August,’ says the firm’s director of research and consultancy Tay Huey Ying.

She forecasts that subsale activity will stage a rebound.

 

Source: Business Times 9 Oct 07

Spanish Village and Royalville up for en bloc sale

Indicative price for 331,457 sq ft Spanish Village is $878 million

COLLECTIVE sale sites continue to be launched for tender, with Spanish Village in Farrer Road and Royalville in Bukit Timah Road being among the latest offerings. Both are freehold.

Spanish Village, with a land area of 331,457 sq ft, has an ‘indicative guide price’ of $878 million or about $1,700 per sq ft of potential gross floor area, including an estimated $23 million development charge (DC), says Steven Ming of marketing agent Savills Singapore.

The tender for Spanish Village closes on Nov 13. The site, which is within walking distance of Farrer Road MRT on the new Circle Line, has a plot ratio of 1.6 and can be redeveloped into a new condominium of up to 12 storeys.

Royalville, off Sixth Avenue, is being marketed by Credo Real Estate, which expects the 174,176 sq ft site to fetch $330 million to $350 million, reflecting a unit land price of about $1,235 to $1,305 psf per plot ratio (psf ppr). This includes an estimated $1.1 million DC should the developer build an additional 10 per cent of balcony gross floor area above the allowable 1.4 plot ratio.

The tender for Royalville closes on Nov 9.

Over at Lorong 39 Geylang, PropNex is marketing Hong Thye House, with a price tag of $15-17 million. This reflects a unit land price of $438 to 489 psf ppr including an estimated $1.9 million DC. The 13,822 sq ft freehold site is designated for residential use with a 2.8 plot ratio. The tender closes on Nov 5.

 

Source: Business Times 9 Oct 07

Ang Mo Kio attracting many suitors, high prices

District now a top draw for its accessibility, amenities and job opportunities nearby

A RECENT battle over a condominium site should silence those who still doubt whether Ang Mo Kio is becoming a property hot spot.

The land attracted 14 suitors and eventually went for more than $200 million – probably a record bid for a suburban district plot.

Such is the growing appeal of the district. Homes in Ang Mo Kio, well positioned just north of central Singapore, command a premium compared to those further out.

Four-room resale flats sold at a median price of $260,000 in the April-June period, 30 per cent higher than those in Yishun.

ERA Singapore’s assistant vice-president, Mr Eugene Lim, estimates that prices of resale Housing Board (HDB) flats in Ang Mo Kio have grown 10 to 20 per cent so far this year.

Private housing is thriving as well.

Consultancy Knight Frank said prices at Castle Green condo along Yio Chu Kang Road grew 39 per cent this year to hit $584 per sq ft (psf) in the July-

September period, while Grandeur 8 in Ang Mo Kio Central 3 rose 26.8 per cent to $606 psf.

It is a sign of things to come, given the advantages Ang Mo Kio has to offer.

Key among these advantages is Ang Mo Kio Hub, a mall in the heart of town that is integrated with an airconditioned bus interchange. It was completed last year and sits just across the road from the Ang Mo Kio MRT station.

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, puts that development on par with major regional retail centres like Causeway Point, Tampines Mall and Jurong Point.

Ang Mo Kio Hub even has an edge over them, as it is far closer to the central business district – about 15 minutes by train from Orchard Road.

This means good demand from tenants wanting to be in flats close to the action. Four-room flats rented for a median $1,000 from April to June, while five-room units went for $1,300.

Upcoming developments may add more vibrancy to the area. The HDB last month put up for sale a plum 1.7ha plot along Ang Mo Kio Street 52, which private developers can use to build about 550 homes.

Private companies are being involved in designing, building and selling public housing in two other projects elsewhere in Singapore – and the idea looks a winner.

The first consisted of condominium-like flats in Tampines that sold like hot cakes last year, while the second, in Boon Keng, is expected to be equally well-received.

The Ang Mo Kio plot is expected to get just as enthusiastic a response.

Add to this the dogfight over a 0.6ha private condominium plot near Ang Mo Kio Hub along Ang Mo Kio Avenue 8.

Far East Organization trumped 13 rivals with a record bid of $202.9 million, or $601 psf per plot ratio.

Far East’s break-even cost is estimated to be around $900 to $1,000 psf, which means apartments will likely be priced at a record $1,100 to $1,200 psf.

Savills Singapore director of marketing and business development Ku Swee Yong believes this could lead to higher prices in the area if sellers use future condo units there as a pricing benchmark.

All in, Ang Mo Kio is ‘one of the few housing estates in Singapore’ that is accessible, has well-developed amenities and job opportunities in clean and well-organised industrial estates nearby, says Mr Mak.

PropNex senior associate manager Lester Tan and ERA’s Mr Lim expect HDB prices in the area to rise by 10 to 20 per cent by the end of next year.

Mr Mak, meanwhile, expects condo prices to grow by 25 to 30 per cent this year and by 15 to 20 per cent next year.

 

Source: The Sunday Times 7 Oct 07

Mad dash before new en bloc rules took effect

With just one day’s notice of the start of new rules, agents scrambled to secure last few owners’ signatures to seal collective sales

IT WAS real estate’s version of The Amazing Race: In just five frantic hours on Wednesday, Mr Jeffrey Goh had to convince eight people at three different properties to back a collective sale.

Fall short and months of hard slog by the head of investment sales at Newman & Goh would have been for nothing.

With the clock ticking down to midnight – when new collective-sale rules would be enforced requiring uncompleted sales to be restarted – Mr Goh and his team scrambled like fighter pilots.

Mr Goh worked the phones from the office, concentrating mainly on a conference call with an owner based in Shanghai, while his colleagues fanned out to the other locations on a charm offensive.

At 10.45pm, the last owner from a River Valley estate gave his consent.

At 11.30pm, the Newton Lodge owner in Shanghai faxed the collective-sale agreement with his signature on the dotted line.

There was still a hold-out at an Orchard Road estate but, finally, the word came through – it was a ‘yes’!

Said Mr Goh: ‘You won’t believe it, we got that signature at 11.35pm.’

By midnight, they had secured the required 80 per cent owners’ consent for all three properties.

The mad dash was triggered by the surprise announcement last Wednesday that new collective-sale rules, which were passed by Parliament two weeks ago, would take effect the next day.

The new rules make the collective-sale process more transparent. For example, members of a sale committee have to be elected at a general meeting, and the sale agreement must be signed by owners in the presence of a lawyer.

But it also meant that those who had not gathered consent from the required number of owners – 80 per cent of owners by share value, or 90 per cent for estates less than 10 years old – would have to restart the entire process.

The lack of much notice about the start date for the new rules caught out many in the industry.

‘It came as a total surprise,’ said Mr Goh, who found out only at 5pm on Wednesday about the new laws kicking in. ‘We thought it was going to be in mid- or late October.’

Marketing agents were knocking on doors, cajoling owners right up to the last minute.

‘We had to go over matters of apportionment again and slowly explain to owners why things were done in a certain way,’ said Mr Goh.

Credo managing director Karamjit Singh said: ‘For the last few signatures, it’s about going and reaching out on a personalised basis.’

His company was hoping to close six deals in the last few months. Four made the deadline.

Among them was Chestnut Ville in Upper Bukit Timah where the last signature was secured at 10pm on Wednesday.

Sale committee chairman Tan Bak Choon, 59, was relieved that they made it.

With the new rules, he said, ‘lawyers and agents are definitely going to charge more’.

Some estates, such as Robin Court in Bukit Timah, did not take any chances. Mr Ivan Chua, 36, chairman of its sale committee, said the last signature was secured on Sept 20, when the amendment Bill was being pushed through Parliament.

He had been working for two years to get the sale of the 15-unit estate through and reckons it was the impending change that finally tipped the scales.

The Sunday Times has learnt that at least five properties made the midnight deadline – but others fell short.

Mr Steven Ming, director of investment sales at Savills Singapore, said his team missed out on a couple of signatures for one development despite working up to midnight.

‘We were one or two units shy. It was very disappointing,’ he said. He declined to name the development.

But for Mr Goh, the adrenalin rush in the hour leading to midnight was one to savour: ‘It was nerve-wracking and exciting. Just like the last 50m dash in a race.’

That personal touch

‘For the last few signatures, it’s about going and reaching out on a personalised basis.’

MR KARAMJIT SINGH, managing director of Credo, which was hoping to close six deals in the last few months. Four made the deadline. The last signature was secured at 10pm on Wednesday Narrow miss

‘We were one or two units shy. It was very disappointing.’

MR STEVEN MING, director of investment sales at Savills Singapore, whose team missed out on a couple of signatures for one development despite working up to midnight

Source: The Sunday Times 7 Oct 07

Gap between new and resale homes at a high

But the difference is expected to narrow down the road, say analysts

(SINGAPORE) The gap between prices fetched by new and resale homes in the prime districts is now at a record high, an analysis of official data shows.

A preliminary analysis of caveats lodged in the third quarter of 2007 by Jones Lang LaSalle (JLL) shows that for new homes there was a record premium of over 60 per cent from July to September this year.

Since 2000, the average premium has been between 20 and 42 per cent, JLL said.

But strong demand for new luxury projects in the third quarter – such as for Scotts Square, Cliveden at Grange, Helios Residences and The Lumos – means that the price gap between new apartments and homes in the resale market has widened rapidly over the past year, said Chua Yang Liang, JLL’s head of research for South-east Asia.

In addition, prices of new homes could be climbing faster as buyers can use the deferred payment scheme for new projects, but not for resale units, said Knight Frank’s director of research and consultancy Nicholas Mak.

Resale transactions take into account sales of homes in completed developments, while sales of new units are in projects that have been launched, but are yet to be built.

However, JLL added that gap is likely to narrow as prices of resale homes will look more attractive.

‘Buyers will find it increasingly less attractive to purchase new developments when perfectly habitable resale dwellings at much more affordable price range are readily available,’ Dr Chua said.

The preliminary average selling price for new sales – based on caveats lodged in the prime districts – is estimated to be around $2,500 per square foot (psf) in the third quarter, JLL said.

In comparison, amidst the continuous strong interest in new sales, prices in the resale market rose to close at an average of $1,220 psf for the same three months, albeit during a traditionally seasonal weaker period.

This puts the price gap at around 105 per cent, but JLL’s Dr Chua says that once more caveats are lodged for third quarter transactions, the gap will come to ‘more than 60 per cent’.

In the short term, the high premium gap seen in the third quarter is unlikely to be sustained, experts said.

JLL, for one, estimates that the price gap will stabilise to between 32 per cent and 38 per cent over the next three to five years.

But with the gap narrowing, the collective sales market can be expected to slow down, JLL said.

‘The attractiveness and success of en bloc transactions depends largely on this premium gap. The wider the gap, the more attractive is the market for collective sales,’ the property firm said.

Dr Chua reckons that the collective sales market is likely to slow down in the medium term, given that growth in new sales prices are likely to decline over the same period.

As the premium gap narrows, en bloc activities should slow down as developers find it increasingly less attractive to undertake such redevelopments, especially in light of diminishing returns and impending changes to the Strata Titles Act.

 

Source: Business Times 5 Oct 07

Sales of state land fetch $6.3b for year to March

Bulk of bumper takings comes from sales to private sector for $3.55b

THE government collected $6.3 billion selling state land during the year ended March 31, up from $5.5 billion in the preceding year – but still shy of the record $14 billion for the year ended March 31, 1998.

The bulk of the latest year’s bumper takings came from selling land to the private sector for a total of $3.55 billion, up from the previous year’s $3.3 billion, according to the Singapore Land Authority’s latest annual report.

The SLA also sold $2.75 billion of land to statutory boards such as Singapore Tourism Board, Sentosa Development Corporation and JTC Corp under public sector sales in the latest year, higher than the previous year’s $2.2 billion.

Rental collections for state land and properties (including Temporary Occupation Licence fees) amounted to $514.3 million for the year ended March 31, 2007, up from $387.3 million in the preceding year.

The SLA reported a 39 per cent increase in net surplus to $13.67 million, on the back of a 9.7 per cent improvement in total income to $88.6 million. Operating income from land sales agency fees as well as title registration and related fees went up 10 per cent.

To meet competing demands for space for office, business, educational and commercial uses during the past year, the SLA stepped up to meet increased demand for state properties. In January to September, 13 state properties were turned into dedicated office space to help ease the supply crunch in this market.

The occupancy rate of state properties managed by SLA rose to 86 per cent in the latest year, up from 82 per cent in the preceding year, while the utilisation rate of state land managed by the SLA rose to 77.8 per cent from 76 per cent previously.

As custodian of state land and properties, the SLA manages about 14,000 hectares of state land and about 5,000 state buildings that have been put to use as offices, education centres, restaurants, recreational, retail and hospitality space. Its stock of buildings includes about 700 colonial ‘black and white’ residential bungalows.

 

Source: Business Times 4 Oct 07

Stockbroker team eyeing more deals

David Loh, Han Seng Juan who won Kovan site may also rope in partners

THE ‘David and Han Team’ of top stockbrokers that has been awarded a condo site in Kovan for $290.02 million, is looking at more property ventures in Singapore and the region across various sectors, including residential, office and hotels.

The Kovan condo will be the duo’s maiden property development project, and they are expected to rope in some ’strategic partners’, including a construction firm for the project.

‘The condo is likely to have around 500 to 600 units, and could be launched sometime in the second half of next year. We’re looking at an average selling price above $850 per square foot, but of course if the market goes up, we’ll be very happy,’ says Tony Bin, CEO of Duchess Development, the holding company of Duke Development, the vehicle that Han Seng Juan and David Loh Kim Kang used to bid for the 190,000 square feet site next to Kovan MRT Station at a state tender that closed on Tuesday.

The $290.02 million bid for the Kovan site reflects a unit land price of $437 psf per plot ratio, and based on this, market watchers reckon the breakeven cost for the new condo works out to around $730-750 psf.

Mr Han and Mr Loh work at UOB-Kay Hian and are also well known as pre-IPO China investors. ‘They are diversifying into property,’ as Mr Bin puts it.

The two men will only be investors/shareholders and not be involved in the management of Duchess Development, which will be left to a professional team, added Mr Bin, who was formerly general manager of the property division of Guthrie GTS.

Market watchers reckon that given Mr Han’s and Mr Loh’s strong interest in China, it would not be surprising if they could also be looking at property ventures in that market.

 

Source: Business Times 4 Oct 07

Hertford Mansion, Holland Hill Lodge up for en bloc sale

HOME owners are going ahead with collective sales, with Colliers International marketing two new freehold sites.

One site, Hertford Mansion, is located at Hertford Road/Bristol Road, near Farrer Park, and the indicative price for the 11,527-square-foot plot is $12 million or $744 per sq foot per plot ratio (psf ppr).

The other site, Holland Hill Lodge, is expected to fetch $16 million. This works out to $1,108 psf ppr for the 9,033-sq-ft site.

Home owners’ price expectations may have been affected by the resent US sub-prime mortgage crisis as well as new requirements for collective sales. Colliers executive director (investment sale) Ho Eng Joo said: ‘Sellers have to be more realistic in the event that the en bloc sales slow down. It’s always a two-way traffic.

‘Every owner would, of course, like to sell their property at a price as high as possible. But, they also need to take into consideration whether developers are willing to pay the price.

‘Developers will be watching very closely the launches of new projects in order to price their costs of acquisition.’

With the process of organising an en bloc sale likely to be slower than before, Mr Ho expects the buying interest of developers could turn towards the city fringe and/or suburban areas where prices are lagging behind the high-end market.

The break-even cost for Hertford Mansion is about $1,100-$1,200 psf.

Mr Ho believes that given the flat contour and the regular shape of this site, the successful bidder could redevelop it into a boutique residential development with a five-storey block accommodating 20 units of 900 sq ft each.

The break-even price for Holland Hill Lodge is approximately $1,500-$1,600 psf. Mr Ho said: ‘Given that all the owners have already consented to proceed with the sale, there is no need for approval from the Strata Titles Board. As such, the legal process of transferring the ownership can be expected to complete within three months.’

There is no development charge payable for either site.

 

Source: Business Times 4 Oct 07

HORIZON TOWERS SAGA – Owners: missing pages are a minor defect

Judge Choo to deliver judgment on appeal next week

(SINGAPORE) Yesterday’s penultimate Horizon Towers appeal session was a decidedly tamer affair.

Still, Senior Counsel K Shanmugam of Allen & Gledhill (A&G), acting for the Hotel Properties consortium, was not spared heckling by majority owners seated in the public gallery when he sought permission from the court to address submissions made by the minority owners the day before.

Senior Counsel Michael Hwang, representing one of the minorities, opposed the move vigorously, arguing that only the applicants for the appeal – that is the majority owners, represented by the sales committee and their lawyers, Tan Rajah & Cheah – be allowed to reply to earlier submissions.

Judge Choo Han Teck proposed a middle ground: he will accept a written reply from Mr Shanmugam, but not an oral rebuttal, after the session.

Overall, the session was relatively calm, with Senior Counsel Chelva Rajah of Tan Rajah & Cheah, representing the majority owners, replying to submissions made by the minorities.

Mr Rajah rebutted the minorities’ claims that three missing pages could render an entire collective sale application null and void. At the heart of this appeal is whether the Strata Titles Board (STB) was right, in August, to throw out Horizon Towers’ application because it was missing three signature pages.

‘There has to be some proportion to this,’ Mr Rajah exhorted. He said that if the missing pages were substantial, then he would agree that it could be considered invalid. But, in the case of Horizon Towers, the three signature pages of the collective sale agreement – appended to the application – were only accidentally left out.

‘And it’s not really three pages, because one of the pages was there – but it was a copy of the faxed version, rather than the original – so it’s actually just two missing pages in question,’ Mr Rajah added. ‘Nothing can be more minor than this.’

He also cited the case of Dragon Court’s en bloc sale in 2003. The case went to court on a similar issue of missing disclosure. In that case, it was not disclosed that some of the owners were linked to the buyer. But the High Court allowed that application to stand, because the non-disclosure was subsequently made to the STB during the hearing.

Leaning on that judgment, Mr Rajah pointed out that Horizon Towers’ majority sellers had done the same – they had brought the missing pages to the attention of the STB during the August hearing.

He also argued against the minorities’ claims that the board – which heard the Horizon Towers’ application – had no power to amend the defective application. The minorities said the board was not properly constituted because the application, which leads to the constitution of the board, was defective.

But Mr Rajah said that regulations – and the Parliament’s recent amendments to en bloc rules – clearly show that the board was properly constituted, upon receiving the application, and had the power to cure any defects.

He concluded by asking the court to consider the facts of this case and decide if an entire application could be rendered invalid because of two missing pages.

Justice Choo adjourned the hearing to next week, at a date to be set later, when he will deliver his judgment on the appeal.

 

Source: Business Times 4 Oct 07

Hostile end to Horizon Towers hearing

TENSIONS ran high at the already prickly Horizon Towers hearing yesterday, as lawyers fought over who would have the last word.

The heated exchanges lasted less than an hour but they were more hostile than any of the previous day-long sessions since last Friday.

They brought to a close the appeal over the estate’s bungled collective sale – an appeal peppered by barbed comments between highly paid lawyers and regular jeers and boos from the public gallery.

The only lawyer scheduled to speak yesterday was Senior Counsel Chelva Rajah of Tan, Rajah and Cheah. He represents the condominium’s majority owners, who have asked the High Court to overturn the Strata Titles Board’s (STB’s) dismissal of their collective