Landed property stays local, for the time being
There are no plans to liberalise the existing restrictions on foreigners buying landed properties in Singapore, the Law Ministry said yesterday. ‘In land scarce Singapore, landed properties have to be treated as a special category where purchases by foreigners are subject to special approval,’ a MinLaw spokesman said.
Earlier this week, BT reported on a paper by Goldman Sachs (Singapore), which argued a case for lifting restrictions on foreigners buying landed homes in Singapore. The Goldman Sachs paper said such a change would serve as a catalyst for further foreign buying of private homes and boost the current residential property upcycle. Removing the restrictions would result in some positive spinoffs, and residential developers could gain from even greater foreign buying interest given the positive message such a move would send.
‘We think relaxing restrictions on foreigners buying landed property would accelerate Singapore’s efforts to attract foreign talent,’ the Goldman Sachs paper had said. However, some BT readers take a different view. One, Singaporean Patrick Chia, managing director of Hospitality Associates, who is a landed property owner, said: 'If foreigners are allowed to freely buy landed property, all the non-government owned landed property could theoretically and practically be bought up, because in this 21st Century, the world is flush with liquidity. The current abundance of petro-dollars from the oil-rich Middle-East countries and Russia can easily buy up Singapore. So can the current American and European funds with their billions. Bankers and real estate agents can confirm that foreign funds are looking for Singapore property assets to buy.’
Mr Chia, who has nearly 30 years’ experience in the Singapore property business, also recapped the historical circumstances in the early 1970s that led to the government introducing the Residential Property Act in 1973. That law bars foreigners, including permanent residents, from buying landed property here without prior government approval. ‘Way back in 1973, with the first oil shock when oil prices sky-rocketed, then-rich neighbours, Indonesians and Malaysians, were able to freely buy Singapore landed property and much of the prime landed real estate were bought by them. The government, realising the future implications of such a scenario if left unchecked, wisely instituted the current curbs to foreigner purchase of landed property,’ Mr Chia added.
And over the past 30 years, the government has continuously relaxed the curbs as needed, and pointed out that the Singapore government has been very accommodating in this regard compared with many other countries. In Singapore, foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property. Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under the Singapore Land Authority.
Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out. Among the criteria that the Minister for Law will consider when asked to approve foreigners/PRs buying a landed home in Singapore are the applicant’s qualifications and whether the applicant has made, or will be able to make, adequate economic contribution to Singapore.
Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to less than 48 hours under a special fast-track approval scheme. The landed properties that foreigners and PRs may be permitted to buy must have a land area of no more than 15,000 sq ft, although exceptions have been made, with some PRs buying Good Class Bungalows, which have a plot size of at least 1,400 square metres (about 15,070 sq ft). Foreign buyers may acquire an unlimited number of non-landed private homes, that is, condominiums and apartments. The only foreigners who may buy HDB flats on the resale market are PRs.
Source: The Business Times, 28 June 2007
Forum from the public: There has been disturbing talk in the media recently that the restrictions on foreigners buying landed homes in Singapore could be relaxed.I hope the authorities would quickly nip this rumour in the bud before there is too much public disquiet.Goldman Sachs (Singapore) is lobbying for the rescindment of the Residential Property Act, which has, since 1973, restricted foreigners and permanent residents from owning landed residential property without prior official approval.Goldman Sachs argues that this change would serve as a catalyst for further foreign buying of private homes and boost the current residential property up-cycle.
To further support this argument, it implies that Singaporeans already have a stake in the country by virtue of public housing catering to 80 per cent of us.I doubt anyone in Singapore really feels that the property market requires more encouragement. If anything, the reverse is probably true and the authorities are probably contemplating measures to cool the red-hot market to bring it to a more sustainable level.Goldman Sach’s reference to public housing also comes across as being a tad condescending to me.Hence I agree fully with the industry’s opinion leaders, who were quoted to be mostly against this proposal.
Mr Charles Chong, chairman of the Government Parliamentary Committee (National Development and Environment), was quoted as saying: ‘Landed properties should not be priced out of Singaporeans’ reach (or) it could lead to disgruntled Singaporeans.’Others said that the existing Act has the positive effect of ‘encouraging foreigners to commit to Singapore, to sink their roots here’ and that landed-property ownership is one of the ‘privileges of being Singaporean’.In Pearl S. Buck’s The Good Earth, the protagonist Wang Lung chided his sons when he overheard them talking about selling the land which he had loved so much. He said: ‘…if you sell the land, it is the end.’ - Dr Huang Shoou Chyuan.
The recent report and recommendation by an American bank that the restrictions on foreigners to purchase landed property be lifted is something which I feel the majority of Singaporeans would be up against.Additionally the economic arguments are flawed. The report seems to imply that lifting the restrictions will reduce the supply crunch and help control prices.I think lifting the restrictions will have detrimental effects - landed property prices will experience sharp jumps leading to an even greater frenzy in the property sector.
Cost of living and cost of business will jump again, leading to higher inflation and further reduce our cost-competitiveness.However, the most important factors against it are the sociopolitical effects.Singapore is a country owned by Singaporeans. If the restrictions are lifted very soon, Singaporeans will be renting from foreigners to live in Singapore, leading to alienation and resentment among the population.Lifting the restrictions belittles the privileges of citizenship too.In the same way that National Service is expected only from citizens, certain rights and privileges should continue to be reserved for citizens. - David Ng Boon Kiong
Source: The Straits Times, 28 June 2007
Posted by Property Wizkid
Asian property will continue to rise; predicted investors
It’s a decade since an asset bubble fed the Asian economic crisis and fears swirl over the US housing market and interest rates, but investors still believe the only way for Asia’s soaring property markets is up - at least for a couple of years. Asian economies are booming, and property is once again the hot subject of dinner conversations from Tokyo to Mumbai, fuelled by cheap credit, cross-border investment and rising incomes.
Policy-makers fear a boom-and-bust cycle where rising real estate prices fuel inflation and force interest rates higher, leaving households and companies loaded with debt and dragging on economic activity. But at the Reuters Real Estate Summit this week in Singapore, where some residents are seeing their rents jump 50 per cent overnight, property executives effused about India, despite a doubling in urban land prices since foreign property investment was ushered in two years ago.
Japan also appears to be still hugely popular, although average Tokyo office prices have leapt 25per cent in last two years. And investors believe government cooling measures will bring order to China’s market, while failing to stem a hunger for homes among the expanding and increasingly affluent middle class.
Justin Chiu, executive director of Hong Kong property giant Cheung Kong (Holdings), said the prospect of ever higher prices was driving Asia’s notoriously sentiment-driven markets. ‘If there are no bubbles, you don’t drink beer. It’s just plain water and there’s no incentive to invest,’ he said. ‘Of course, if you see too many bubbles, you stop pouring.’
Cheung Kong expects mainland China to account for a third of its property earnings by 2010 from about 18 per cent now. The Asian continent saw some US$94 billion of property investment in 2006, up 43 per cent on the previous year, but barely one-seventh of the global total. And investors show no sign they will stop the flow.
New flavoursMorgan Stanley said last week it had earmarked for 60per cent of a new US$8 billion fund for Asia and Goldman Sachs has raised about the same amount in a couple of funds, according to a source familiar with the matter. ING Real Estate is raising two US$1 billion funds for Asia, and private equity firm Blackstone is raising US$10 billion to spend globally. But some market watchers wonder where all the money will be spent, and if rising values will curb investment returns.
Asian commercial property is tightly held by families and private companies, so Peter Barge, Asia chief executive of property consultants Jones Lang LaSalle, believes many investors will have to take on risky development projects. ‘There’s a lot of money on the books, but people are scratching their heads about what to do with it,’ Mr Barge said. Japan is a perennial favourite in Asia because its US$1.27 trillion of investment-grade property offers huge choice.
Kurt Roeloffs, Asia head for Deutsche Bank’s property unit RREEF, put it at the top of his list followed by China and India. RREEF, one of the world’s biggest property fund managers, plans to spend around 30 per cent of its future private equity funds in Asia, Mr Roeloffs said on Monday. China is drawing Hong Kong developers such as Cheung Kong as well as funds run by ING Real Estate, AETOS Capital and Invesco.
But the new flavours of the month are India and Vietnam, which both rank among the most opaque property markets in the world but promise internal rates of return of 25-30 per cent.Forecasts that Indian property prices have surged too fast and could drop anywhere between 10 and 40 per cent are brushed aside on the grounds that an outsourcing boom is enriching a middle class couped up in crumbling homes built decades ago.
‘India has huge potential,’ said Seek Ngee Huat, head of the GIC Real Estate. An investment company of the Singapore government, and one of the world’s biggest property investors, GIC is eyeing developing markets including Russia and Turkey, while cautious about London offices because of steep price rises. Mr Barge believes Asia has at least two or three years more to run on the upward swing of its property cycle, saying: ‘Mother gravity is always there.’
Mr Seek was wary that defaults on US subprime mortgages could infect the whole financial system. ‘There are certainly financial risks being built up,’ he said. Meanwhile, Liew Mun Leong, chief executive of South-east Asia’s biggest developer, CapitaLand Ltd, which is launching funds for China and India this year, acknowledged that property investors may not have the best crystal balls. ‘It’s funny but we in the property industry can always predict when the market will turn up, but we can never say when it will turn down,’ he said.
Source: The Business Times, 28 June 2007
Posted by Property Wizkid
Temasek Holdings’ Mapletree Investments profit cross $1b
Temasek Holdings’ Mapletree Investments has topped the billion-dollar mark in earnings for the year ended March 31, 2007, thanks to a huge $971.2 million net revaluation gain. The Singapore investment company’s subsidiary also revealed in its latest annual report plans to launch more real estate investment trusts (Reits) on the Singapore Exchange (SGX) this year.
Mapletree - a Singapore real estate company with an Asian focus - reported a profit after tax and minority interests of $1.07 billion, up from the previous year’s net profit of $144.54 million. But without the $971.2 million net revaluation gain, operating profit was still up $31.8 million or 41 per cent at $109 million, with the boost coming from the positive market outlook in Singapore.
The group’s $971.2 million net revaluation gain was a quantum leap from the previous year’s $1.04 million. This increase was mainly contributed by VivoCity, which was completed in October 2006, as well as the increase in value of Mapletree’s other commercial properties, mostly offices.
The Reits that Mapletree plans to launch on SGX include Mapletree Commercial Trust with the VivoCity mall as the anchor asset and with revenue streams from office, retail and entertainment properties in Singapore. The group, which aims to be a leading real estate capital management company, is also in discussion with Indonesia’s Lippo Group to co-manage an Indonesia-focused shopping mall Reit, Mapletree Investments’ chairman Edmund Cheng said, without elaborating, in his annual report message.
Market watchers reckon that VivoCity itself, with about one million square feet net lettable area, could be worth more than $1.6 billion and that the group could also inject into the proposed Mapletree Commercial Trust its other nearby properties such as St James Power Station, HarbourFront Centre (formerly World Trade Centre), Mapletree’s stakes in HarbourFront Towers One and Two office blocks, PSA Building and PSA Vista. The combined value of the entire portfolio, including VivoCity, could be around $3 billion, say industry observers.
As for the Indonesia-focused mall Reit venture with Lippo, market watchers note Lippo controls 40 malls through its various units. An industry player says it makes sense for Lippo to partner a proven name in the Singapore Reit business if it wants to list a shopping centre Reit in Singapore. The group’s commercial property portfolio includes HarbourFront Centre, HarbourFront Towers One and Two (Mapletree owns 61 per cent of the two buildings), Keppel Bay Tower (30 per cent), SPI Building, St James Power Station, PSA Building and PSA Vista. Mapletree’s industrial property portfolio includes Tanjong Pagar and Pasir Panjang distriparks and Alexandra Distripark (including The Comtech, a high-tech industrial building).
In all, the group’s investment’s properties were valued at $3.72 billion as at March 31, 2007, up from $1.83 billion a year earlier. However, properties under development fell from $569.7 million to $157.7 million due to the re-classification of VivoCity property from ‘properties under development’ to ‘investment properties’ at market valuation upon its completion late last year. Mapletree’s operating profit rose from $77.2 million for financial year ended March 2006 to almost $109 million in FY March 2007 on the back of a 34.7 per cent jump in revenue to $216.6 million. The higher revenue was due mainly to the opening of VivoCity, as well as improved occupancy and rental rates achieved by the group’s other properties. This was partly offset by loss of revenue from properties that were injected into Mapletree Logistics Trust (MLT).
The group’s revenue was also boosted from higher fee income, contributed mainly by the SGX-listed MLT. The group also received a new fee income stream from one of its new funds - the privately held Mapletree Industrial Fund. Fee income accounted for 9 per cent of the group’s revenue for FY March 2007, up from a 5 per cent share for FY March 2006, reflecting Mapletree Investments’ expansion into the capital management business. In line with the improved performance, Mapletree Investments’ return on equity rose from 6 per cent in FY March 2006 to 37 per cent in FY March 2007. Return on total assets also increased from 6 per cent to 30 per cent over the same period.
Source: The Business Times, 28 June 2007
Posted by Property Wizkid
Stanley Ho to take 75% of Nova City/Nova Taipa Gdns project in Macau
Shun Tak Holdings Ltd, run by the family of casino tycoon Stanley Ho, will buy a 75 per cent stake in a Macau property project from Mr Ho’s private company and billionaire Gordon Wu for HK$6.87 billion (S$1.4 billion). Shun Tak will pay Mr Wu’s Hopewell Holdings Ltd HK$4.58 billion for a 50 per cent stake in the Nova City/Nova Taipa Gardens project in Macau, Hopewell said in a statement on Tuesday.
It will pay Mr Ho’s Sociedade de Turismo e Diversoes de Macau HK$2.29 billion for its 25 per cent stake, Shun Tak spokeswoman Catherine Szeto said. The purchase will give Shun Tak full ownership of the project, up from 25 per cent. Property prices in Macau, the only city in China where casinos are legal, are climbing as soaring gaming revenue and rising tourism boost the economy.
‘We have a leadership role in the property market in Macau,’ Ms Szeto said in a phone interview. The company has sufficient cash and existing financing to pay for the purchase, she added. Shares in Hopewell rose 5.1 per cent to HK$32.75 as of 10:21am in Hong Kong, heading for their biggest gain in more than a year.
Hong Kong-based Shun Tak is buying the shops at Nova Taipa Gardens and Nova City, the uncompleted residential phases four and five of Nova City and all cash and receivables from units sold in the first three phases, the company said in a faxed statement late on Tuesday.Real estate in Macau last year sold at an average 1,519 patacas (S$290.3) per square foot, more than doubling from 2002, according to Midland Realty Ltd, a Hong Kong-based property agency.
Macau’s economy may grow 16.5 per cent this year and next according to Enoch Fung, a Hong Kong-based economist at Goldman Sachs Group Inc. The economy grew 16.6 per cent last year, more than twice as fast as its 6.9 per cent expansion in 2005. Last year, Shun Tak and Hongkong Land Ltd sold all 800 apartments at One Central Residence, a luxury real estate project in Macau at an average price of about HK$5,000 per square foot. The apartments are scheduled to be finished in 2009.
In addition to developing real estate, Shun Tak also operates the main ferry service linking Hong Kong to Macau and manages hotels. Hong Kong-based Hopewell develops real estate, runs hotels and owns stakes in toll roads in China.
Source: The Business Times, 28 June 2007
Posted by Property Wizkid
Japan property market is attractive but tough
Mikihisa Hirai, president of Atlas Partners Japan Ltd, should be giddy with excitement as European and Middle Eastern clients are due to almost double the size of his property funds to just over US$800 million. But Mr Hirai knows he has his work cut out for him. With Tokyo office rents expected to rise another 60per cent to a peak in 2010 because of shrinking vacancy rates, now at just 2.7 per cent, Japan is a popular place for property investors.
But average prices for commercial buildings have already jumped 25 per cent in the last couple of years, and competition for assets between real estate investment trusts (Reits), private equity funds and institutional investors is hotting up, eating away at returns. ‘There are no simple and easy deals,’ Mr Hirai said. ‘I feel there are more deals where bid prices are ridiculously high.’
With rock-bottom interest rates despite an economic recovery, Japan drew 55per cent of the US$94 billion in property transactions in Asia last year, including an increasing amount of petrodollars from the Middle East. But now, yield-hungry investors are having to scour the country for more complex deals.
For example, Australian listed property trusts are starting to buy Japanese buildings, but employ heavy borrowing and currency hedging to artificially lift a property yield of 5 per cent into a more attractive 7.7 per cent yield for investors back home. Four property trusts carrying Japanese assets have listed in Australia in the past two years, including Babcock & Brown Japan Property Trust and Galileo Japan Trust. Such ‘financial engineering’ gives Australian investors an incentive to buy in Japan, says Peter Barge, chief executive officer of Jones Lang LaSalle Asia.
Deals are also growing bigger, Mr Barge said, as foreign investors try to outrun their local rivals.‘Japanese are becoming major competitors. So they go for deals worth at least half a billion dollars to get away from Japanese competitors,’ he said. ‘You have to be a big investor to find opportunities.’ Yesterday, Mitsubishi Fuso Truck and Bus Corp, the Japanese truck unit of DaimlerChrysler AG, said it had sold 180 real estate properties in Japan as part of its efforts to focus on its core businesses, in a deal valued at US$1.4 billion, according to a market source. The properties, mainly of retail operations for its regional sales centres, would be leased back to the same operators.
Investors are also moving away from the staple diet of offices. Australian real estate manager MacarthurCook Ltd is looking to buy Japanese logistics buildings which offer a yield of about 5 per cent, compared with yields for top-notch offices of as low as 2 per cent. ‘Not many logistics properties are included in Japanese Reits yet,’ said Craig Dunstan, managing director and chief investment officer for MacarthurCook. ‘It’s positive from the availability point of view.’
The MacarthurCook Industrial Real Estate Investment Trust SI, which listed in Singapore in April, expects Japan to account for about 20 per cent of its overall portfolio. The Japanese government, worried about another asset bubble, will start monitoring private funds from September, a step likely to force some smaller players out of the market. Others warn that rising interest rates in global markets may depress foreign investor appetite for assets in Japan.
Higher borrowing costs, already higher than property yields in Europe and the United States, could turn property investors more insular, said Daisuke Fukushima, senior analyst Nomura Securities Co Ltd. ‘Negative spreads in some overseas investments are widening and this means that investment properties are incurring latent losses,’ he said. ‘It’s likely that foreign investors will become less aggressive on their global investments when they are not sure how much losses they have at home.’
Source: The Business Times, 28 June 2007
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Who's has the winning bid for the billion dollar Farrer Court sale?
The tender for Farrer Court, Singapore’s first billion-dollar collective sale, closed yesterday with strong bids, industry players reckon. Speculation was that CapitaLand was the front runner and was engaged in negotiations late last night. Credo Real Estate, which is handling Farrer Court’s collective sale, declined to comment.
GuocoLand is also believed to have taken part in the tender. It clinched the freehold Leedon Heights earlier this year at $835 million or $1,062 psf of potential gross floor area. Farrer Court, however, has an even higher absolute reserve price, of $1.2 billion, which works out to slightly over $700 psf per plot ratio (psf ppr) for the 99-year leasehold site. Bids for Farrer Court are believed to have clearly surpassed that.
The official expected price when Farrer Court’s tender was launched last month was $1.5 billion, or around $850 psf ppr. The District 10 site, a privatised HUDC estate, is unique in being the only private residential site in the Farrer Road and Holland Road vicinity that is accorded a high plot ratio of 2.8 and a maximum height of 36 storeys.
Most of the surrounding sites are designated for either landed housing or low or medium-rise developments of up to five or 12 storeys. Farrer Court boasts not only the highest asking price in terms of the absolute dollar quantum for a collective sale, it also has the biggest land area at 838,488 sq ft, for an en bloc sale site. The maximum potential gross floor area of almost 2.35 million sq ft for the site - or about 1,800 apartments averaging 1,250 sq ft - means that a new development on the site would be the biggest condo development yet to be undertaken in Singapore, based on comments when the site was launched last month.
Source: The Business Times, 28 June 2007
Posted by Property Wizkid
Alexandra as new alternative to CBD?
Alexandra is emerging as a strong alternative to the central business district (CBD) as banks continue to be attracted to the business hub there. Real estate company Mapletree, which developed Alexandra Business Hub, says that it is in 'serious negotiations' to sign on up to five more banks, chief operating officer Tan Boon Leong told BT yesterday.
One of the banks is asking for 550,000 sq ft and another for 350,000 sq ft. It recently signed up DBS, HSBC and an American bank looking to move some of their operations there. Mapletree says the average space banks are seeking is 100,000 to 150,000 sq ft. Mr Tan says that while banks had earlier shifted operations to various neighbourhoods, Alexandra is a ‘true alternative’ to the CBD because of its location - 10 minutes from the CBD and its links to major roads leading to expressways.
Prime office rents in Raffles Place have hit record levels, forcing companies to reconsider their space requirements and manage costs, Mr Tan says. According to a CB Richard Ellis report last month, office rents in Singapore are the fifth fastest growing globally. Office rent at its Alexandra hub is about ‘40 per cent lower’ than going rates in the CBD. While prime office space is said to be going for about $12 per sq ft, Mapletree is asking $7 psf for office space and $4-$4.50 psf for back room operations space.
While financial institutions have earlier shifted some operations to neighbourhoods such as Tampines and Changi, Mr Tan says that Alexandra is preferred because of its proximity to town. Also, even though Alexandra used to be an industrial area, Mr Tan says there is no ‘image’ problem. ‘When banks see that other banks are coming, they take a second look,’ he said.
Based on demand so far, Mr Tan says he expects 50 to 60 per cent of the new leasable area of 1.6 million sq ft to be taken up by financial institutions. Oil and gas, telecoms and chemical companies may take up another 20 to 30 per cent, while the remaining space may be taken up by companies which offer support services such as IT.
Mapletree expects to have pre-commitment of 40 per cent of the new space by the first quarter next year. Mr Tan says multinational companies need more space in Singapore to expand and consolidate their regional presence affordably, which is what Alexandra Hub offers. The complex, which cost Mapletree $405 million to build, includes amenities catering for expatriates such as childcare facilities, a gym with a swimming pool, coffee outlets, laundry and garden landscape.
Source: The Business Times, 28 June 2007
Posted by Property Wizkid
9 industrial sites out for tender
The government yesterday said that nine sites are on offer under its industrial land sales programme for the second half of this year - three more than the sites it put on the market for the first half of 2007. The nine sites will together give about 3.74 million square feet of industrial space, up from the 2.79 million sq ft offered in the first half of the year.
However, the increase in the space offered under the industrial land sales programme is not as great as that seen for residential space, market observers said. The number of residential sites on offer through the confirmed list increased from two to eight from the first half of 2007 to the second half. ‘This could indicate that the government may see that the industrial property market is fairly stable with sufficient supply in the short and medium term,’ said Nicholas Mak, Knight Frank’s head of consultancy and research.
As with the first half of the year, just two industrial sites - this time, a 5.1 ha site in Sin Ming Lane and a 2.1 ha site in Jalan Tepong - will be offered under the confirmed list. Both sites are expected to see strong interest. The Sin Ming Lane plot has the potential to yield a large gross floor area of about 1.37 million sq ft. Potential bidders include car companies and/or workshops because of nearby vehicle inspection centres, said Li Hiaw Ho, executive director for research at CB Richard Ellis (CBRE). ‘The unit price for this plot might be lower as a result of the large land area,’ Mr Li said.
The Jalan Tepong site, on the other hand, is interesting because it has a lease of about 23 years, shorter than the usual tenure of 30 or 60 years. The tenure for the site is only until 2030 to dovetail with future developments in that area. The plot might also fetch a lower price because of the unusual tenure, Mr Li said. ‘Some fresh food companies might bid for the site as food manufacturing is permitted and the site is near to Jurong Port.’
The new reserve list has seven sites, three more than the previous reserve list. The seven sites can yield a total maximum gross floor area of 2.05 million sq ft, less than the 2.40 million sq ft that the four sites on the previous reserve list could yield. Despite the smaller floor area, the reserve list for the second half seems to be offering a variety of locations, Mr Mak said.
The take-up for factory space was 7.64 million sq ft in 2006 and 1.39 million sq ft in the first quarter of 2007. The market should therefore be able to absorb the gross floor area that can potentially come from the sites on the current reserve list, observers said. CBRE said average rents for all industrial space increased in the second quarter of 2007, with high-tech space rising the fastest.
Average rents for high-tech space rose 11.9 per cent from $2.10 per square foot (psf) in the first quarter to $2.35 psf in Q2 - the highest quarterly increase in the past five years. ‘The limited supply of office space coupled with rising rents encouraged many qualifying companies to look to high-tech properties to meet their needs,’ CBRE said. ‘Further rent increases for high-tech space during the second half of the year is expected as demand for offices is unlikely to let up while supply of office space will still remain tight.’
Source: The Business Times, 28 June 2007
Posted by Property Wizkid
Thursday, June 28, 2007
Monday, June 18, 2007
Singapore Property News Upfront 16
Another record for Enbloc sales. Just wonder how high buyers can afford...
An Ardmore Park condominium has just smashed the record for the most expensive collective sale in Singapore - less than a week since the last record was set. The Ardmore, a 24-unit freehold property off Orchard Road, was bought by high-end developer SC Global for $262 million, some $40 million above the initial asking price.
This works out to an eyebrow-raising $2,338 per sq ft per plot ratio (psf ppr), including a $16.6 million development charge. It far surpasses the last record of $1,788 psf ppr set by Char Yong Gardens in Cairnhill last Tuesday. The Ardmore has also become the first condo here to cross the $2,000 psf ppr mark in a collective sale. Other nearby estates making similar attempts include Grangeford Apartments at Leonie Hill and Elizabeth Heights and Trendale Tower in the Cairnhill area.
With this sale, each owner of The Ardmore - which has mainly three-bedroom units of 1,991 sq ft in size - stands to get about $11 million on average. No units have been transacted in the past two years, and the single unit that changed hands in 2005 went for $904 psf. The coveted condo was said to have attracted five other bids from big-name property developers in a public tender that closed last Tuesday. All the bids were close, a sign that developers remain bullish on the highest end of the property market despite the recent sharp run up in prices.
Home prices rose 4.8 per cent in the first quarter, after rising 10.2 per cent last year. In the same periods, prices in prime districts shot up 7.3 per cent and 25.4 per cent, respectively. The Ardmore sits on the last site with redevelopment potential in Ardmore Park, one of Singapore’s choicest residential districts. Most of the nearby condos are either fairly new or already sold for redevelopment.
SC Global’s winning offer for The Ardmore means it will have to sell units in the new project at more than $3,300 psf, and likely closer to $4,000 psf, said property experts. Mr Lui Seng Fatt, regional and head of investments at Jones Lang LaSalle, believes these prices are ‘doable’. ‘Ardmore is among the best addresses in Singapore,’ he said. ‘The price that SC Global is paying for this site is certainly no surprise.’ Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the breakeven price for the project could go up to $3,200 psf ppr. He said 45 to 50 new units of about 2,000 sq ft each could be built.
The 42,565 sq ft plot can host a new 36-storey development with a total floor area of 119,181 sq ft, SC Global said yesterday. Chairman and chief executive officer Simon Cheong said the group intends to build a high-end luxury condo. ‘The Ardmore Park address is well-established in the international community as an upmarket residential enclave,’ he said in a statement.
This purchase brings SC Global’s total bill for collective sales since last year to about $1 billion. Last year, it spent $648 million on Paterson Tower, Hilltops Apartments and some terrace houses in Cairnhill. The Ardmore sale is the latest in a string of record-breaking collective sales and comes a day after the Government said it is keeping an eye on fast-rising home prices.
Although Minister of National Development Mah Bow Tan said buyers of ‘multimillion-dollar’ homes in the central regions ‘can take care of themselves’, he added that it was important to ensure that ‘prices do not overshoot’. Last week, the Government released a slew of new residential sites, mainly in suburban areas, in what is being seen as a move to steady the market.
Source: The Straits Times, 18 June 2007
Posted by Property Wizkid
Enbloc Sales - Gain or Loss - It's your choice!
The recent rise in property prices has sparked a massive furore to jump on the bandwagon in collective sales. My estate in the East Coast is no exception in this spate of money-making ventures and the experience has left a sour taste in the palate. While many stand to benefit from such sales where prices are inflated due to demand, those with no alternative housing are left at a loss. Many of the latter fail to acknowledge the difficulties of finding a new house that matches up to the old spacious unit, complete with convenient locality and scenic surroundings, even with the big money one makes from the collective sale. Many of these home owners end up regretting that they ever signed the agreement, some pray the sale will fall through.
Certainly, as a business transaction, the gains are tremendous. However, on hindsight, many realise too late that there are limited options with what settlement they receive, and later, sentimentality sets in. Internal conflicts arise when sales committees fail to deliver essential information to residents, and to some, the coercion into signing almost amounts to forced eviction, since one has little choice when many others have already been lured into the transaction.
People need to realise that while property prices rise to a seller’s benefit, they also rise to the dismay of potential buyers. The latter usually include the people who take part in a profit-making collective sale in the first place. Sales committees need to ensure proper consultation and be understanding with residents to prevent internal conflicts. Potential sellers should also do their own research into alternative housing in the event of making a sale, so they will not regret such a major decision in future. - Liana Tang (Miss)
Source: The Straits Times, 18 June 2007
Posted by Property Wizkid
The Government peeps in to ensure it's ok
People panicking that they may have missed the boat in the surging property market had some reassurance from the Government yesterday. Minister for National Development Mah Bow Tan said the housing sector was being closely monitored to ensure there was sufficient supply and if demand went up, new housing sites would be released.
Asking Singaporeans not to panic, he said there was sufficient supply of housing in the next two to four years. ‘Don’t feel that you have missed the boat because there are quite a lot of boats coming along,’ he said. Home prices shot up by 10 per cent last year and are expected to rise by another 12 per cent this year.
Analysts see the Government’s release of 15 new sites for development last Thursday as a move to cool down the market. The release brings the total number of residential sites on sale in the second half of this year to 41. This is the largest number since 1997. Asked about the land release, Mr Mah said that since the take-up rate for new buildings had been ‘very strong’ in the past year, the Government decided to release more development land.
But he also said that it was important that the Government struck a balance, as an oversupply or shortage was undesirable. ‘It is very important for us to make sure that the prices do not overshoot or race ahead of the real growth in the economy. ‘I think it is not sustainable in the long run and, of course, it is also not good for our competitiveness if prices and rentals go up too fast.’ The minister said there was also no danger that the heat from the private property market would filter down to HDB public housing.
Referring to the record sale prices fetched by two five-room HDB units last week, he said they were exceptional cases because of their good locations and views. ‘The broader market is really quite steady. There is an increase but this increase is in line with the increase in the strength of the economy. I’m quite comfortable with the pricing in the broader market at the moment.’ He added that the sheer number and variety of HDB flats up for sale also helped to keep prices stable and there was no need for buyers to feel that they were being priced out of the market. ‘If you can’t buy an executive flat, buy a five-room. If you can’t afford central area, go to the suburbs. If you can’t afford Tampines, go to Woodlands or Yishun,’ he said.
Asked why most of the residential sites released on Thursday are mostly in the suburbs, such as Bishan and Sembawang, Mr Mah said the central areas were not a worry as collective sales will release new developments in these areas. While ‘it’s not the Government’s job to add more supply in these areas’’, he said it was important for the Government to ensure there was sufficient supply of housing in the suburbs. ‘I’m not talking about the multi- million-dollar apartments in the central area. I think those people can take care of themselves.’
Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid
Hot spot: Cairnhill
Constantly evolving landscape. In the Cairnhill area, the old is juxtaposed against the new, with the latest Cairnhill Crest just across the road from a much older The Cairnhill. But this picture is far from complete. The area is fast evolving with developments such as Hilltops Apartments still under construction, older boutique condominiums like Silver Towers about to be redeveloped and properties like Orchard Scotts completed recently.
The theme of the area is one of constant change, reinforced by the frequent heavy traffic in the surrounding areas. The attrition, development and movement are all set against the backdrop of the bustling main shopping belt of Orchard Road. The area also presents interesting contradictions in the form of high-end, trendy apartments such as The Light contrasting with the smaller one- and two-bedroom units of the Vida along Peck Hay Road.
Freehold units at Scotts 28 and The Light have been commanding prices of $1,978 per sq ft (psf) and $1,700 psf respectively on average, according to Savills Singapore. Mr Ku Swee Yong, Savills Singapore marketing and business development director, said that the benchmark had been set by Helios Residences, located next to The Light at Cairnhill Circle, which had been priced at between $2,500 psf and $3,000 psf. ‘The Edge has been going for up to $1,500 psf as well, which was pulled up when The Light sold well.’
Rumour has it that there will be a hotel-branded residence coming up along Cairnhill Road. And while negotiations with a five-star hotel are understood to be ongoing, the development is widely expected to push up prices when it comes on line, said Mr Ku. Meanwhile, the flagging sales of the one- and two-bedroom units of the Vida on Peck Hay Road have been attributed to the lack of interest in small units in the area.
Hot spot: Balmoral
Scenic spot with bungalows, condos. The Goodwood Hill loop at Balmoral offers a glimpse back in time. Large colonial bungalows painted simply in monotones are nestled in lush greenery, giving the area a peaceful, nostalgic feel, with a tinge of faded grandeur. Beyond the bungalows, low-rise condominium developments such as Casa Rosita and Balmoral Heights are also a defining feature, adding much needed variety to the area.
According to Savills, the average price per sq ft (psf) in the area is $1,460, with average asking rentals for two- to three-bedrooms ranging between $6,000 and $8,000. City Developments’ The Solitaire, a 59-unit freehold development priced at $1,950 psf, sold out after it was launched in April.
Other recent benchmarks in the area include Eden Spring in Balmoral Road which sold at $1,004 psf per plot ratio (ppr) last month to TG Development, and One Balmoral - sold to Hong Leong Group in March for $1,188 psf ppr.
Savills Singapore director of marketing and business development Ku Swee Yong highlighted Belmond Green as a property to look out for. ‘It’s a large piece of land overlooking nice landed properties at the back. ‘When Naga Court and Casa Rosita along Bukit Timah Road launch at an expected $2,000 psf, this will see prices along Balmoral going up as well,’ he said.
Casa Rosita was acquired by GuocoLand in a collective sale acquisition in April last year for $280 million. And Mr Ku believes that it is another development buyers looking for a scenic home could consider. ‘It actually overlooks the bungalows on Goodwood Hill and we understand that it will be developed with a small footprint and large grounds.’ No indication has been given as to when it will be launched.
Hot spot: Cavenagh
Peaceful cloister in heart of town. Aptly named Monk’s Hill for its serenity and quietude, this area is almost a temple of peace next to busy Newton Circus with its throng of diners and downtown traffic. The tranquillity is further enhanced - except perhaps when school’s out - by Monk’s Hill Secondary School and a madrasah (religious school) nearby.
The apartments and terrace houses, a mainstay at Monk’s Hill, are gnarled with age, but the rustic charm of old-school architecture and a monochrome palette give the area a soothing appeal. Also a lure is the great food at the famed Newton Hawker Centre a stone’s throw away. However, having the Istana close by on the other side of Cavenagh Road has limited the possibilities for developments in the vicinity.
For example, condominiums lining that stretch of road, such as Cavenagh Court and the Townhouse Apartments, have height restrictions and are also prevented from having clear windows on the side facing the Istana. As a result, the area has not proved to be as attractive as might be expected, though it is located next to the prime Orchard Road district. Of note is the collective sale potential of the 99-year-old Townhouse Apartments, which has seen its average price per sq ft hovering at $420, said Savills.
An interesting characteristic of the area is the presence of several black-and-white bungalows around Monk’s Hill Road, which have made it a hit with expatriates. But hardly any transactions of these Premas-run units have been recorded because of their conservation status.
Hot spot: Chancery
Mature estate on verge of change. Take a cheerful mix of bungalows, boutique apartments and yet-to-be-built condominiums such as Newton One, and you have Gilstead, a mature residential area hinting at changes to come. Newer gems such as Newton 18 and Gilstead 38 sprinkle the area, but the larger, slightly older developments such as Chancery Court and Jade Gardens define the location.
Clusters of bungalows and semi-detached houses are also popular, although these tend to be older. The Residences @ Evelyn has set the tone for the area with its $1,418 per sq ft (psf) average price and largest number of transactions, said Savills Singapore director of marketing and business development Ku Swee Yong.
Most of the developments are upmarket so he believes the best buys are condominiums with better facilities such as sizeable swimming pools. ‘These include Residences @ Evelyn, Park Infinia and Amaryllis Ville,’ Mr Ku said.
He added that the average psf price in the area was $1,250, with average asking rents for two- to three-bedroom units ranging from $6,000 to $8,000. One of the higher-end developments is the freehold Setia Residences, which was launched four years ago.
With an average price of $1,654 psf, a standard 3,348 sq ft unit in the project commands upwards of $5.4 million, with the asking rental ranging between $15,000 and $18,000. Some of the new launches include Newton Suites and Buckley 18, both freehold projects. They have recorded average prices of $1,203 psf and $1,420 psf respectively this year. Mr Ku noted that the Gilstead Road condos further away from Dunearn Road offered a peaceful environment coupled with the convenience of being a stone’s throw from the Newton MRT Station.
Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid
Agents revival - back to action!
The prospect of making big bucks in the property boom has lured former estate agents back into the game. Experts reckon that about 15 per cent of agents recruited by big firms recently comprise old hands ready to have another go at it. Dennis Wee Properties has taken on about 750 agents with about 100 of those returnees.
Said director Chris Koh: ‘When the housing market is less vibrant, competition forces some agents out and they leave to take up more stable jobs. ‘With the current rosy pro- perty market, ex-agents are returning. Now, everyone wants to become an agent.’ Returnees account for about 50 out of the 250 new hires each month at HSR Property Group.
At PropNex, returnees number about 20 of the 220 agents recruited each month. PropNex’s chief executive, Mr Mohamad Ismail, said these former agents want another shot at financial success. Mr Ryan Tan, 39, is one of them. The 39-year-old O-level holder quit the real estate business nine years ago and started selling insurance. But he gave that up two months ago to join PropNex, where he says he now draws between $10,000 and $15,000 a month.
‘The only mistake I made was not to have rejoined the business earlier,’ said Mr Tan, who closes at least one deal a week. In the grim days of 1998, he took several months to close just one deal. Ms Lucy Tan is another ex-agent who has returned to the property fray. The 46-year-old HSR representative quit in 2002 after six years in the business when her income dropped to $5,000 a month.
She stopped working to look after her ill brother but is back with a vengeance, making about $20,000 a month. She is rewarding herself within the next few months with a new car. Said Ms Tan, who rejoined the business last year: ‘It was worth it coming back. This job pays well and allows you to manage your time too. I hope to earn even more over time.’
For Ms Joyce Lau, 29, it is all a matter of timing. She spent two & half years working as a flight attendant after quitting the business. She returned in 2005 just when the market was picking up. ‘Leaving when times are bad and returning when times are good is the best way to maximise earnings,’ said Ms Lau, who earns about $25,000 a month at ERA.
The battle-scarred returnees are also well aware that the boom will not last forever. Having lived through the last downturn, Mr Tan, a father of two young children, said: ‘Times are good now, but concentrating too much on real estate might mean a big fall if the market collapses.’
His back-up plan: Selling insurance policies on the side and ensuring his wife draws a fixed income. She now earns $25,000 a month.
For more read, check out http://www.propertybingo.com/News.aspx?newsid=42
Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid
Conveyancing has never been better since 1996
The workload for conveyancing lawyers has gone through the roof as the hot property market runs them off their feet. Cases have more than doubled at some law firms, with no end in sight. But young lawyers are shying away from conveyancing, convinced it is long on boredom and short on glamour and cash. Whatever the truth of that, it is not helping the current crop shift the mountain of work piling up.
Mr Norman Ho of Rodyk & Davidson said his firm has handled 25 collective sales this year compared with just 12 for the whole of last year. ‘We’ve always been busy, but we’re definitely a lot busier these days,’ he said. Mr Mark Chua of Tito Isaac and Co gets up to 50 conveyancing cases a month compared with about 20 before. It all adds up to long hours and burnt weekends.
Mr Cedric Tay of De Souza Tay and Goh said he has been doing 12-hour shifts and spends weekends at the office: ‘I’ve been sacrificing a lot of personal time and have fat hope of observing regular hours.’
The Law Society does not keep track of the number of conveyancing lawyers, but most general practice firms have at least one or two conveyancers as the area is a bread-and-butter field.
Industry insiders estimate there has been only a 5 to 10 per cent increase in the number of conveyancers in the past two years - a sharp contrast to 30 to 40 per cent increases in fields such as corporate work.
National University of Singapore law dean Tan Cheng Han is not surprised: ‘Leaving aside last year and this year, real estate work was in the doldrums and there will naturally be some caution in choosing it as a field.’ It was the Asian financial crisis a decade ago that stopped the property market in its tracks and drove many conveyancing lawyers to other areas.
Young lawyers perceive conveyancing as poorly paid and boring. The first perception stems from moves in 2003 to replace fixed conveyance fees with guideline fees. That had the effect of shrinking a lawyer’s commission. In the past, he could earn about $6,000 in a million-dollar deal; now, it is less than half that.
A Law Society spokesman pointed out the starting pay is the same as for other lawyers - more than $4,000. But conveyancers admit that in the long run they earn far less than those in corporate work and litigation. Mr Tay earned $400,000 a year in corporate work but switched to conveyancing in 1990 and now pulls in less than $200,000. Conveyancing is seen as stodgy as it involves loads of paperwork and almost no court appearances. New law graduate Tang Hui Jing, doing her pupillage in commercial litigation, said: ‘Mention conveyancing to any law student and you’ll see looks of boredom.’
But Miss Tan Shi Jie, 25, who joined Rodyk & Davidson as a conveyancer last year, disagrees. ‘There’s a lot of adrenaline involved when handling corporate deals and tight deadlines.’ Law Society president Philip Jeyaretnam is confident more will enter the field: ‘Now that the property market is active, there are a lot of major deals that involve real estate aspects, so you will see first- and second-year lawyers wanting to become real estate lawyers.’
Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid
Suburban Condos gets hot
After years of being the poor cousin in the private home sector, the mass market condominium is back with a vengeance. It has been a long time coming with all the attention of developers seemingly on building pricey high-end homes in prime sites over the past couple of years.
But Thursday’s release of a slew of suburban sites - from Pasir Ris to Woodlands - should spark renewed interest by developers in the mass market sector, where prices are already rising. The expected flow of new mass market housing should nip any looming supply crunch in the bud, property consultants said.
Colliers International director of investment sales Ho Eng Joo said the release of so much suburban land ‘is to prevent any surge in mass market prices’. Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, believes buyers will not have it all their own way. ‘Demand for suburban sites will be good because there has been a lack of affordable mass market launches in the past year.’
The strong response to and some relatively high bids for a recent tender for a suburban Dakota Crescent site show there is demand for non-prime plots. Thursday’s release was part of a huge land sales programme for the second half of the year, with 20 residential sites, including those rolled over from the previous programme, up for grabs.
Some sites are on the confirmed list - that means they will be put up for sale at a scheduled date regardless of whether developers have shown interest. The Government also sells sites on the market-friendly reserve list, which are put up for sale only after developers indicate interest. There is a wide range of suburban sites - new hotspots like Tiong Bahru, central areas such as Ang Mo Kio and Bishan and outlying areas such as Woodlands.
Consultants said some of the reserve list sites are far more attractive than those on the confirmed list, and so those are likely to be triggered for sale. The hottest site on the reserve list is the 0.89ha plot in Tiong Bahru, which can accommodate about 395 mid-tier homes. Consultants said it was in a coveted location given that units at The Metropolitan next door sold well at an initial average price of $780 per sq ft (psf) with values rising further due to sub-sales. A new condominium on the site could sell for as high as $1,000 psf, said consultants.
The large condominium sites in Bishan and Toa Payoh - which can accommodate about 535 units each - could probably fetch prices of $700 psf to $800 psf, they said. A new condominium of about 555 units in Simon Road next to Kovan MRT Station could sell for $600 psf to $700 psf while the Boon Lay plot for about 685 units should attract good demand as well, they said. ‘The Boon Lay site could sell for about $600 psf. It is in between NUS and NTU and may see demand from expatriates working in the high-value industries in the west,’ said Savills Singapore director of marketing and business development Ku Swee Yong, referring to the National University of Singapore and Nanyang Technological University.
He also reckons there could be some demand from expatriates for a new condominium in Woodlands, where the Singapore American School and the Singapore Sports School are also located. Generally, though, consultants are less enthusiastic about the confirmed list sites in Elias Road, Choa Chu Kang Road and Woodlands. That is good news for home buyers who like those locations because it will mean lower bids and lower end-prices of possibly between $500 psf and $600 psf. The expected flow of new mass market housing should nip any looming supply crunch in the bud, say property consultants.
Source: The Straits Times, 16 June 2007
Posted by Property Wizkid
An Ardmore Park condominium has just smashed the record for the most expensive collective sale in Singapore - less than a week since the last record was set. The Ardmore, a 24-unit freehold property off Orchard Road, was bought by high-end developer SC Global for $262 million, some $40 million above the initial asking price.
This works out to an eyebrow-raising $2,338 per sq ft per plot ratio (psf ppr), including a $16.6 million development charge. It far surpasses the last record of $1,788 psf ppr set by Char Yong Gardens in Cairnhill last Tuesday. The Ardmore has also become the first condo here to cross the $2,000 psf ppr mark in a collective sale. Other nearby estates making similar attempts include Grangeford Apartments at Leonie Hill and Elizabeth Heights and Trendale Tower in the Cairnhill area.
With this sale, each owner of The Ardmore - which has mainly three-bedroom units of 1,991 sq ft in size - stands to get about $11 million on average. No units have been transacted in the past two years, and the single unit that changed hands in 2005 went for $904 psf. The coveted condo was said to have attracted five other bids from big-name property developers in a public tender that closed last Tuesday. All the bids were close, a sign that developers remain bullish on the highest end of the property market despite the recent sharp run up in prices.
Home prices rose 4.8 per cent in the first quarter, after rising 10.2 per cent last year. In the same periods, prices in prime districts shot up 7.3 per cent and 25.4 per cent, respectively. The Ardmore sits on the last site with redevelopment potential in Ardmore Park, one of Singapore’s choicest residential districts. Most of the nearby condos are either fairly new or already sold for redevelopment.
SC Global’s winning offer for The Ardmore means it will have to sell units in the new project at more than $3,300 psf, and likely closer to $4,000 psf, said property experts. Mr Lui Seng Fatt, regional and head of investments at Jones Lang LaSalle, believes these prices are ‘doable’. ‘Ardmore is among the best addresses in Singapore,’ he said. ‘The price that SC Global is paying for this site is certainly no surprise.’ Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the breakeven price for the project could go up to $3,200 psf ppr. He said 45 to 50 new units of about 2,000 sq ft each could be built.
The 42,565 sq ft plot can host a new 36-storey development with a total floor area of 119,181 sq ft, SC Global said yesterday. Chairman and chief executive officer Simon Cheong said the group intends to build a high-end luxury condo. ‘The Ardmore Park address is well-established in the international community as an upmarket residential enclave,’ he said in a statement.
This purchase brings SC Global’s total bill for collective sales since last year to about $1 billion. Last year, it spent $648 million on Paterson Tower, Hilltops Apartments and some terrace houses in Cairnhill. The Ardmore sale is the latest in a string of record-breaking collective sales and comes a day after the Government said it is keeping an eye on fast-rising home prices.
Although Minister of National Development Mah Bow Tan said buyers of ‘multimillion-dollar’ homes in the central regions ‘can take care of themselves’, he added that it was important to ensure that ‘prices do not overshoot’. Last week, the Government released a slew of new residential sites, mainly in suburban areas, in what is being seen as a move to steady the market.
Source: The Straits Times, 18 June 2007
Posted by Property Wizkid
Enbloc Sales - Gain or Loss - It's your choice!
The recent rise in property prices has sparked a massive furore to jump on the bandwagon in collective sales. My estate in the East Coast is no exception in this spate of money-making ventures and the experience has left a sour taste in the palate. While many stand to benefit from such sales where prices are inflated due to demand, those with no alternative housing are left at a loss. Many of the latter fail to acknowledge the difficulties of finding a new house that matches up to the old spacious unit, complete with convenient locality and scenic surroundings, even with the big money one makes from the collective sale. Many of these home owners end up regretting that they ever signed the agreement, some pray the sale will fall through.
Certainly, as a business transaction, the gains are tremendous. However, on hindsight, many realise too late that there are limited options with what settlement they receive, and later, sentimentality sets in. Internal conflicts arise when sales committees fail to deliver essential information to residents, and to some, the coercion into signing almost amounts to forced eviction, since one has little choice when many others have already been lured into the transaction.
People need to realise that while property prices rise to a seller’s benefit, they also rise to the dismay of potential buyers. The latter usually include the people who take part in a profit-making collective sale in the first place. Sales committees need to ensure proper consultation and be understanding with residents to prevent internal conflicts. Potential sellers should also do their own research into alternative housing in the event of making a sale, so they will not regret such a major decision in future. - Liana Tang (Miss)
Source: The Straits Times, 18 June 2007
Posted by Property Wizkid
The Government peeps in to ensure it's ok
People panicking that they may have missed the boat in the surging property market had some reassurance from the Government yesterday. Minister for National Development Mah Bow Tan said the housing sector was being closely monitored to ensure there was sufficient supply and if demand went up, new housing sites would be released.
Asking Singaporeans not to panic, he said there was sufficient supply of housing in the next two to four years. ‘Don’t feel that you have missed the boat because there are quite a lot of boats coming along,’ he said. Home prices shot up by 10 per cent last year and are expected to rise by another 12 per cent this year.
Analysts see the Government’s release of 15 new sites for development last Thursday as a move to cool down the market. The release brings the total number of residential sites on sale in the second half of this year to 41. This is the largest number since 1997. Asked about the land release, Mr Mah said that since the take-up rate for new buildings had been ‘very strong’ in the past year, the Government decided to release more development land.
But he also said that it was important that the Government struck a balance, as an oversupply or shortage was undesirable. ‘It is very important for us to make sure that the prices do not overshoot or race ahead of the real growth in the economy. ‘I think it is not sustainable in the long run and, of course, it is also not good for our competitiveness if prices and rentals go up too fast.’ The minister said there was also no danger that the heat from the private property market would filter down to HDB public housing.
Referring to the record sale prices fetched by two five-room HDB units last week, he said they were exceptional cases because of their good locations and views. ‘The broader market is really quite steady. There is an increase but this increase is in line with the increase in the strength of the economy. I’m quite comfortable with the pricing in the broader market at the moment.’ He added that the sheer number and variety of HDB flats up for sale also helped to keep prices stable and there was no need for buyers to feel that they were being priced out of the market. ‘If you can’t buy an executive flat, buy a five-room. If you can’t afford central area, go to the suburbs. If you can’t afford Tampines, go to Woodlands or Yishun,’ he said.
Asked why most of the residential sites released on Thursday are mostly in the suburbs, such as Bishan and Sembawang, Mr Mah said the central areas were not a worry as collective sales will release new developments in these areas. While ‘it’s not the Government’s job to add more supply in these areas’’, he said it was important for the Government to ensure there was sufficient supply of housing in the suburbs. ‘I’m not talking about the multi- million-dollar apartments in the central area. I think those people can take care of themselves.’
Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid
Hot spot: Cairnhill
Constantly evolving landscape. In the Cairnhill area, the old is juxtaposed against the new, with the latest Cairnhill Crest just across the road from a much older The Cairnhill. But this picture is far from complete. The area is fast evolving with developments such as Hilltops Apartments still under construction, older boutique condominiums like Silver Towers about to be redeveloped and properties like Orchard Scotts completed recently.
The theme of the area is one of constant change, reinforced by the frequent heavy traffic in the surrounding areas. The attrition, development and movement are all set against the backdrop of the bustling main shopping belt of Orchard Road. The area also presents interesting contradictions in the form of high-end, trendy apartments such as The Light contrasting with the smaller one- and two-bedroom units of the Vida along Peck Hay Road.
Freehold units at Scotts 28 and The Light have been commanding prices of $1,978 per sq ft (psf) and $1,700 psf respectively on average, according to Savills Singapore. Mr Ku Swee Yong, Savills Singapore marketing and business development director, said that the benchmark had been set by Helios Residences, located next to The Light at Cairnhill Circle, which had been priced at between $2,500 psf and $3,000 psf. ‘The Edge has been going for up to $1,500 psf as well, which was pulled up when The Light sold well.’
Rumour has it that there will be a hotel-branded residence coming up along Cairnhill Road. And while negotiations with a five-star hotel are understood to be ongoing, the development is widely expected to push up prices when it comes on line, said Mr Ku. Meanwhile, the flagging sales of the one- and two-bedroom units of the Vida on Peck Hay Road have been attributed to the lack of interest in small units in the area.
Hot spot: Balmoral
Scenic spot with bungalows, condos. The Goodwood Hill loop at Balmoral offers a glimpse back in time. Large colonial bungalows painted simply in monotones are nestled in lush greenery, giving the area a peaceful, nostalgic feel, with a tinge of faded grandeur. Beyond the bungalows, low-rise condominium developments such as Casa Rosita and Balmoral Heights are also a defining feature, adding much needed variety to the area.
According to Savills, the average price per sq ft (psf) in the area is $1,460, with average asking rentals for two- to three-bedrooms ranging between $6,000 and $8,000. City Developments’ The Solitaire, a 59-unit freehold development priced at $1,950 psf, sold out after it was launched in April.
Other recent benchmarks in the area include Eden Spring in Balmoral Road which sold at $1,004 psf per plot ratio (ppr) last month to TG Development, and One Balmoral - sold to Hong Leong Group in March for $1,188 psf ppr.
Savills Singapore director of marketing and business development Ku Swee Yong highlighted Belmond Green as a property to look out for. ‘It’s a large piece of land overlooking nice landed properties at the back. ‘When Naga Court and Casa Rosita along Bukit Timah Road launch at an expected $2,000 psf, this will see prices along Balmoral going up as well,’ he said.
Casa Rosita was acquired by GuocoLand in a collective sale acquisition in April last year for $280 million. And Mr Ku believes that it is another development buyers looking for a scenic home could consider. ‘It actually overlooks the bungalows on Goodwood Hill and we understand that it will be developed with a small footprint and large grounds.’ No indication has been given as to when it will be launched.
Hot spot: Cavenagh
Peaceful cloister in heart of town. Aptly named Monk’s Hill for its serenity and quietude, this area is almost a temple of peace next to busy Newton Circus with its throng of diners and downtown traffic. The tranquillity is further enhanced - except perhaps when school’s out - by Monk’s Hill Secondary School and a madrasah (religious school) nearby.
The apartments and terrace houses, a mainstay at Monk’s Hill, are gnarled with age, but the rustic charm of old-school architecture and a monochrome palette give the area a soothing appeal. Also a lure is the great food at the famed Newton Hawker Centre a stone’s throw away. However, having the Istana close by on the other side of Cavenagh Road has limited the possibilities for developments in the vicinity.
For example, condominiums lining that stretch of road, such as Cavenagh Court and the Townhouse Apartments, have height restrictions and are also prevented from having clear windows on the side facing the Istana. As a result, the area has not proved to be as attractive as might be expected, though it is located next to the prime Orchard Road district. Of note is the collective sale potential of the 99-year-old Townhouse Apartments, which has seen its average price per sq ft hovering at $420, said Savills.
An interesting characteristic of the area is the presence of several black-and-white bungalows around Monk’s Hill Road, which have made it a hit with expatriates. But hardly any transactions of these Premas-run units have been recorded because of their conservation status.
Hot spot: Chancery
Mature estate on verge of change. Take a cheerful mix of bungalows, boutique apartments and yet-to-be-built condominiums such as Newton One, and you have Gilstead, a mature residential area hinting at changes to come. Newer gems such as Newton 18 and Gilstead 38 sprinkle the area, but the larger, slightly older developments such as Chancery Court and Jade Gardens define the location.
Clusters of bungalows and semi-detached houses are also popular, although these tend to be older. The Residences @ Evelyn has set the tone for the area with its $1,418 per sq ft (psf) average price and largest number of transactions, said Savills Singapore director of marketing and business development Ku Swee Yong.
Most of the developments are upmarket so he believes the best buys are condominiums with better facilities such as sizeable swimming pools. ‘These include Residences @ Evelyn, Park Infinia and Amaryllis Ville,’ Mr Ku said.
He added that the average psf price in the area was $1,250, with average asking rents for two- to three-bedroom units ranging from $6,000 to $8,000. One of the higher-end developments is the freehold Setia Residences, which was launched four years ago.
With an average price of $1,654 psf, a standard 3,348 sq ft unit in the project commands upwards of $5.4 million, with the asking rental ranging between $15,000 and $18,000. Some of the new launches include Newton Suites and Buckley 18, both freehold projects. They have recorded average prices of $1,203 psf and $1,420 psf respectively this year. Mr Ku noted that the Gilstead Road condos further away from Dunearn Road offered a peaceful environment coupled with the convenience of being a stone’s throw from the Newton MRT Station.
Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid
Agents revival - back to action!
The prospect of making big bucks in the property boom has lured former estate agents back into the game. Experts reckon that about 15 per cent of agents recruited by big firms recently comprise old hands ready to have another go at it. Dennis Wee Properties has taken on about 750 agents with about 100 of those returnees.
Said director Chris Koh: ‘When the housing market is less vibrant, competition forces some agents out and they leave to take up more stable jobs. ‘With the current rosy pro- perty market, ex-agents are returning. Now, everyone wants to become an agent.’ Returnees account for about 50 out of the 250 new hires each month at HSR Property Group.
At PropNex, returnees number about 20 of the 220 agents recruited each month. PropNex’s chief executive, Mr Mohamad Ismail, said these former agents want another shot at financial success. Mr Ryan Tan, 39, is one of them. The 39-year-old O-level holder quit the real estate business nine years ago and started selling insurance. But he gave that up two months ago to join PropNex, where he says he now draws between $10,000 and $15,000 a month.
‘The only mistake I made was not to have rejoined the business earlier,’ said Mr Tan, who closes at least one deal a week. In the grim days of 1998, he took several months to close just one deal. Ms Lucy Tan is another ex-agent who has returned to the property fray. The 46-year-old HSR representative quit in 2002 after six years in the business when her income dropped to $5,000 a month.
She stopped working to look after her ill brother but is back with a vengeance, making about $20,000 a month. She is rewarding herself within the next few months with a new car. Said Ms Tan, who rejoined the business last year: ‘It was worth it coming back. This job pays well and allows you to manage your time too. I hope to earn even more over time.’
For Ms Joyce Lau, 29, it is all a matter of timing. She spent two & half years working as a flight attendant after quitting the business. She returned in 2005 just when the market was picking up. ‘Leaving when times are bad and returning when times are good is the best way to maximise earnings,’ said Ms Lau, who earns about $25,000 a month at ERA.
The battle-scarred returnees are also well aware that the boom will not last forever. Having lived through the last downturn, Mr Tan, a father of two young children, said: ‘Times are good now, but concentrating too much on real estate might mean a big fall if the market collapses.’
His back-up plan: Selling insurance policies on the side and ensuring his wife draws a fixed income. She now earns $25,000 a month.
For more read, check out http://www.propertybingo.com/News.aspx?newsid=42
Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid
Conveyancing has never been better since 1996
The workload for conveyancing lawyers has gone through the roof as the hot property market runs them off their feet. Cases have more than doubled at some law firms, with no end in sight. But young lawyers are shying away from conveyancing, convinced it is long on boredom and short on glamour and cash. Whatever the truth of that, it is not helping the current crop shift the mountain of work piling up.
Mr Norman Ho of Rodyk & Davidson said his firm has handled 25 collective sales this year compared with just 12 for the whole of last year. ‘We’ve always been busy, but we’re definitely a lot busier these days,’ he said. Mr Mark Chua of Tito Isaac and Co gets up to 50 conveyancing cases a month compared with about 20 before. It all adds up to long hours and burnt weekends.
Mr Cedric Tay of De Souza Tay and Goh said he has been doing 12-hour shifts and spends weekends at the office: ‘I’ve been sacrificing a lot of personal time and have fat hope of observing regular hours.’
The Law Society does not keep track of the number of conveyancing lawyers, but most general practice firms have at least one or two conveyancers as the area is a bread-and-butter field.
Industry insiders estimate there has been only a 5 to 10 per cent increase in the number of conveyancers in the past two years - a sharp contrast to 30 to 40 per cent increases in fields such as corporate work.
National University of Singapore law dean Tan Cheng Han is not surprised: ‘Leaving aside last year and this year, real estate work was in the doldrums and there will naturally be some caution in choosing it as a field.’ It was the Asian financial crisis a decade ago that stopped the property market in its tracks and drove many conveyancing lawyers to other areas.
Young lawyers perceive conveyancing as poorly paid and boring. The first perception stems from moves in 2003 to replace fixed conveyance fees with guideline fees. That had the effect of shrinking a lawyer’s commission. In the past, he could earn about $6,000 in a million-dollar deal; now, it is less than half that.
A Law Society spokesman pointed out the starting pay is the same as for other lawyers - more than $4,000. But conveyancers admit that in the long run they earn far less than those in corporate work and litigation. Mr Tay earned $400,000 a year in corporate work but switched to conveyancing in 1990 and now pulls in less than $200,000. Conveyancing is seen as stodgy as it involves loads of paperwork and almost no court appearances. New law graduate Tang Hui Jing, doing her pupillage in commercial litigation, said: ‘Mention conveyancing to any law student and you’ll see looks of boredom.’
But Miss Tan Shi Jie, 25, who joined Rodyk & Davidson as a conveyancer last year, disagrees. ‘There’s a lot of adrenaline involved when handling corporate deals and tight deadlines.’ Law Society president Philip Jeyaretnam is confident more will enter the field: ‘Now that the property market is active, there are a lot of major deals that involve real estate aspects, so you will see first- and second-year lawyers wanting to become real estate lawyers.’
Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid
Suburban Condos gets hot
After years of being the poor cousin in the private home sector, the mass market condominium is back with a vengeance. It has been a long time coming with all the attention of developers seemingly on building pricey high-end homes in prime sites over the past couple of years.
But Thursday’s release of a slew of suburban sites - from Pasir Ris to Woodlands - should spark renewed interest by developers in the mass market sector, where prices are already rising. The expected flow of new mass market housing should nip any looming supply crunch in the bud, property consultants said.
Colliers International director of investment sales Ho Eng Joo said the release of so much suburban land ‘is to prevent any surge in mass market prices’. Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, believes buyers will not have it all their own way. ‘Demand for suburban sites will be good because there has been a lack of affordable mass market launches in the past year.’
The strong response to and some relatively high bids for a recent tender for a suburban Dakota Crescent site show there is demand for non-prime plots. Thursday’s release was part of a huge land sales programme for the second half of the year, with 20 residential sites, including those rolled over from the previous programme, up for grabs.
Some sites are on the confirmed list - that means they will be put up for sale at a scheduled date regardless of whether developers have shown interest. The Government also sells sites on the market-friendly reserve list, which are put up for sale only after developers indicate interest. There is a wide range of suburban sites - new hotspots like Tiong Bahru, central areas such as Ang Mo Kio and Bishan and outlying areas such as Woodlands.
Consultants said some of the reserve list sites are far more attractive than those on the confirmed list, and so those are likely to be triggered for sale. The hottest site on the reserve list is the 0.89ha plot in Tiong Bahru, which can accommodate about 395 mid-tier homes. Consultants said it was in a coveted location given that units at The Metropolitan next door sold well at an initial average price of $780 per sq ft (psf) with values rising further due to sub-sales. A new condominium on the site could sell for as high as $1,000 psf, said consultants.
The large condominium sites in Bishan and Toa Payoh - which can accommodate about 535 units each - could probably fetch prices of $700 psf to $800 psf, they said. A new condominium of about 555 units in Simon Road next to Kovan MRT Station could sell for $600 psf to $700 psf while the Boon Lay plot for about 685 units should attract good demand as well, they said. ‘The Boon Lay site could sell for about $600 psf. It is in between NUS and NTU and may see demand from expatriates working in the high-value industries in the west,’ said Savills Singapore director of marketing and business development Ku Swee Yong, referring to the National University of Singapore and Nanyang Technological University.
He also reckons there could be some demand from expatriates for a new condominium in Woodlands, where the Singapore American School and the Singapore Sports School are also located. Generally, though, consultants are less enthusiastic about the confirmed list sites in Elias Road, Choa Chu Kang Road and Woodlands. That is good news for home buyers who like those locations because it will mean lower bids and lower end-prices of possibly between $500 psf and $600 psf. The expected flow of new mass market housing should nip any looming supply crunch in the bud, say property consultants.
Source: The Straits Times, 16 June 2007
Posted by Property Wizkid
Wednesday, June 13, 2007
Singapore Property News Upfront 15
Foreign investors have pumped $885.5 million into residential land purchases
This year foreign funds have outstripped the $651.84 million for the whole of last year. And CapitaLand said yesterday that it hopes to redevelop the $420 million Char Yong Gardens with US-based Wachovia Development Corporation, so the sum invested by foreigners is set to increase further.
According to an analysis of data by CB Richard Ellis (CBRE), purchases by foreign investors so far in 2007 amount to 11.4 per cent of a total of $7.13 billion, excluding Char Yong Gardens. For the whole of 2006, they accounted for 7.12 per cent of a total of $8.17 billion.
Significant acquisitions with foreign investment include Horizon Towers by Hotel Properties Ltd (HPL) and Horizon Investments, an entity owned by funds managed by Morgan Stanley Real Estate and Qatar Investment Authority, the investment arm of the Emirate of Qatar. Two unnamed private funds, with HPL, also bought into CapitaLand’s Gillman Heights site.
On the marked increase in foreign investment, CBRE’s Jeremy Lake said: ‘The Singapore residential growth story has spread further afield. What was a secret 18 months ago is no longer a secret.’ On tie-ups with foreigners, Patricia Chia, chief executive of CapitaLand Residential Singapore, said: ‘Partners come along with us because they share our vision on the Singapore residential market and the sites that we have. More often than not, they do not have development and execution capabilities, but have real estate knowledge globally.
One of the consequences of so much global capital is that it could raise price expectations for prime collective sale sites. CBRE’s analysis of data also shows that although the number of transactions overall is increasing, the number in prime districts appears to be dropping. In 2006, 30 of 76 collective sale deals were in District 9 alone, representing 39 per cent of all transactions.
This percentage has now dropped to 16 per cent or 10 out of 62 transactions done year to date.
The percentage of transactions in the prime districts of 9, 10 and 11 combined has also dropped, from 68 per cent for the whole of 2006 to 47 per cent year to date.
Prices, availability and location combine to make a site attractive. But as Mr Lake puts it: ‘Developers won’t buy a site if they don’t think they can make money on it. You only have to look at the sites that have been launched but not sold.’ The shift to non-prime districts is not necessarily a bad thing. As Mr Lake notes, it suggests that the recovery, supported by demand, has spread beyond traditional high-end areas.
In 2006, districts 5, 12, 19, 21 and 27 combined made up only 13 per cent of the collective sales pie. For the first five months of 2007, district 19 (Serangoon) alone made up 10 per cent. Other districts highlighted by CBRE include the combined districts 15 and 16 (19 per cent) and districts 2,4,5 and 8 (13 per cent).
Mr Lake believes one possible outcome of a more even spread of transactions across all districts is that the gap between prices for different districts could shrink. Currently the gap can be extremely wide, even if the sites are just minutes apart. CBRE, for instance, is marketing Grangeford Apartments for $2,000 per sq ft per plot ratio and Alexandra Centre for around $300 psf ppr.
City Developments is one outfit that believes in paying the right price for the right property at the right time. ‘We have consistently maintained a valuable land bank which includes a fine range of sites in all parts of Singapore,’ said group general manager Chia Ngiang Hong.
‘With this strategy, CDL has the advantage of creating more value by being able to respond quickly to the market and selectively launch the most appropriate project at any given time so as to best maximise its investment returns.’
CDL’s most recent acquisition was Thomson Mansions in the Thomson/Balestier area.
Developers will now have to look harder. Lippo Realty executive director Thio Gim Hock said: ‘I believe en bloc asking prices are getting quite high. However, Lippo is always on the lookout for opportunities both in prime and other areas.’
Source: The Business Times, 13 June 2007
Posted by Property Wizkid
Capitaland ups the benchmark with purchase of Char Yong Gdns
Setting a new benchmark price for residential land in Singapore, CapitaLand has bought Char Yong Gardens at the corner of Cairnhill and Hullet roads at a unit land price of $1,788 psf of potential gross floor area inclusive of development charges payable to the state.
The 93,274 sq ft freehold site is next to the Silver Towers plot which CapitaLand bought in September last year for $1,107 psf per plot ratio (psf ppr). The average land cost of the two sites works out to about $1,400 psf ppr. It remains to be seen if CapitaLand will amalgamate the two plots for a single project.
Prior to yesterday’s deal, the record price for residential land was $1,735 psf ppr set by the sale of The Parisian at Angullia Park in December last year to Overseas Union Enterprise. CapitaLand said yesterday it has signed a sale and purchase agreement to acquire Char Yong Gardens through a collective sale for $420 million. The unit land price of $1,788 psf ppr is inclusive of a $47 million development charge.
Market watchers reckoned CapitaLand’s break-even cost for a new condo on the site could be around $2,200 to $2,300 psf. Char Yong’s unit land price is 16 per cent higher than the $1,542 psf ppr that Sing Holdings paid in March this year for the nearby Hillcourt Apartments.
Jones Lang LaSalle brokered the collective sale of Char Yong Gardens.
The sale to CapitaLand was agreed following the lapse of an earlier offer made in late April by a joint venture involving China, Indonesia and Singapore entities. But that offer is believed to have had a series of conditions. CapitaLand’s acquisition of Char Yong Gardens is subject to approval from the Strata Titles Board. Consent from owners controlling at least 80 per cent of share values at Char Yong Gardens has been obtained, JLL regional director and head of investments Lui Seng Fatt confirmed yesterday.
CapitaLand said yesterday it is in talks with Wachovia Development Corporation to develop the Char Yong site through a 50:50 joint venture. The company is a wholly owned subsidiary of Wachovia Corporation, one of the biggest diversified financial services groups in the US, through which certain real estate activities are transacted.
For now, the plan is to redevelop the Char Yong plot into a 20-storey condo with about 130 biggish apartments. The project is slated for launch in end-2008. CapitaLand said that since 2005, it has bought four residential sites and one mixed development plot in Singapore. These include Gillman Heights, for which it has partnered Hotel Properties and two funds. ‘The company will continue to seize opportunities to acquire prime sites to augment its existing landbank,’ it said.
Source: The Business Times, 13 June 2007
Posted by Property Wizkid
Ho Bee & Choice Homes join hands to take on Dakota Crescent
Reflecting developers’ confidence in the mid-tier residential sector, a joint venture between Ho Bee and NTUC Choice Homes yesterday cast the top bid of $524 psf per plot ratio for a 99-year leasehold condo plot at Dakota Crescent in the Mountbatten Road/Old Airport Road area fronting Geylang River.
The state tender attracted 15 bids, most of them at above $400 per square foot per plot ratio.
Market watchers recalled that the last time 99-year condo sites outside the prime districts and Sentosa Cove fetched such high price levels was in 1997. In that year, the plots that were subsequently developed into the Rafflesia condo in Bishan and Costa del Sol in the Bayshore area were sold at $403 psf per plot ratio and $457 psf ppr respectively, according to CB Richard Ellis data.
Ho Bee Investment executive director Ong Chong Hua estimates the break-even cost for a new condo on the Dakota Crescent site will be about $850 psf and that it could sell for about $1,000 to $1,100 psf on average. ‘There’s currently a shortage of such condos in this sort of price range,’ he observed. ‘The project will be pitched as a mid-market condo located in the city-fringe, Mountbatten/East Coast area. If you cannot afford the Sentosa Cove lifestyle, this is a very good alternative,’ Mr Ong said.
Going by current market prices, Ho Bee/NTUC Choice Homes should not find it challenging to achieve their target selling prices. Wing Tai is said to have achieved an average price of $1,500-1,600 psf for its freehold condo near Kallang Riverside (The Riverine) which it began selling in April and which is now fully sold.
Ho Bee’s and NTUC Choice Homes’ proposed condo at Dakota Crescent will be 18 to 20 storeys high and have about 370 apartments comprising two, three and four-bedders. The project is slated for launch by mid-2008. ‘This is not a traditional upgrader’s market if you look at the site’s attributes - it fronts the Geylang River, is across the low-rise Goodman Road area and just about 100 metres from the Dakota MRT Station which will be linked by the Circle Line to Suntec City,’ Mr Ong said. ‘The site is also near the future Sports Hub and is easily connected to Nicholl Highway, PIE and ECP.’
The top bid by Ho Bee/NTUC Choice Homes of $228.89 million or $524 psf ppr was just 3 per cent higher than the second highest offer of $508 psf ppr, which came from IOI Land unit Multi Wealth (Singapore). GuocoLand was in third position, with $475 psf ppr. CapitaLand teamed up with US-based Wachovia Development Corporation to cast a $466 psf ppr bid. Other contenders included Frasers Centrepoint ($451 psf ppr), Allgreen Properties & Hoe Seng Company ($430 psf ppr), City Developments, Sim Lian Land and Keppel Land. Wing Tai placed a joint bid with United Engineers unit Greatearth Developments.
Source: The Business Times, 13 June 2007
Posted by Property Wizkid
Alexandra Centre - collective sale at $45 million
The 50,838 sq ft site is for residential use with first-floor commercial use. It can be built up to four storeys and the allowable plot ratio is three. The development charge (DC) is estimated at $1.21 million. The property is about 25 years old and at present there are 12 ground floor shops and 12 apartments. It is on Alexandra Road close to Ikea and The Anchorage, with Queenstown MRT station a five-minute walk away. More than 80 per cent of the share value owners have signed the collective sale agreement so far.
Based on the asking price, owners of the apartments stand to get about $1.25 million each while shopowners will receive around $2.5 million each. This is about twice as much as they would get if they sold their units individually. A recent collective sale in the area is the privatised former HUDC estate Gillman Heights. At $548 million, the acquisition cost for that site worked out to $363 per square foot of potential gross floor area, including an approximate $90 million DC. But the land area of 836,432 sq ft is the biggest for a collective sale so far and much bigger than the Alexandra Centre site. The tender for Alexandra Centre closes on July 12.
Source: The Business Times, 13 June 2007
Posted by Property Wizkid
HK auction site price fails expectation
A residential site along Hong Kong’s harbour has been auctioned for HK$5.56 billion (S$1.1 billion) in a sluggish sale that is unlikely to provide much of a boost to the flagging mass property market. The auction was tipped by analysts to fetch up to HK$7 billion for government coffers and hopes were high that the sale would inflate prices and trigger buying activity in the mass residential sector, which has treaded water for the first half of 2007.
Developer Sun Hung Kai Properties bid successfully for the 122,200 sq ft site, which enjoys views of the city’s skyline. The minimum asking price for the plot of land was HK$4.2 billion. It is Hong Kong’s third land auction this year, and one that had been eyed as a catalyst to bigger price movements in the mass market. Many sellers in the secondary market had been holding off in the hope of gleaning a better price after the auction.
‘Everybody was expecting more than HK$6 billion,’ explained Ricky Poon, director of residential sales at Colliers International. ‘I think it’s below expectation, but better than what was submitted in the land application. I don’t think people will be too optimistic though - there’s a lot who were waiting to see how the land auction went today, they decided to wait before taking the next step.’
In the last land auction in May, two sites in the Tuen Mun area were sold for HK$1.74 billion, also below the top end of expectations. The city, however, boasts as one of its most lucrative auctions the December sale of a Peak residential site to Sun Hung Kai Properties for HK$1.8 billion. This put the accommodation value at HK$42,196 psf - potentially one of the most expensive land sites in the world.
Luxury residential sales are expected to post double-digit growth this year as limited supply and an influx of capital to the city pushes up prices. However, the mass residential sector is still lagging in terms of growth, although sales have picked up slightly in the first half of the year. While luxury sales are at 1997 levels or above, the mass sector is still about 20 per cent short, according to Mr Poon.
He explained that residential property on Hong Kong island is 20-25 per cent below 1997 prices, while those out in Kowloon and the New Territories could be as much as 40 per cent below. ‘There’s still a big gap,’ he stressed. ‘For the last two to three years, there’s a lot of remaining stock in the mass market, we still have quite a lot,’ he said. There was speculation that legal action by a resident seeking to limit development of high rises in the area may also have dampened enthusiasm for the auction.
An application for a judicial review was filed on the eve of the auction seeking to stop the Town Planning Board and the government from building a skyscraper in the district. The resident claimed the government did not follow guidelines when giving approval to the development of high-rise buildings, in particular, ignoring parts of the Town Planning Ordinance which should promote health and general welfare of residents.
In Hong Kong, the issue of the ‘wall effect’ has become a thorny topic for the government, as the city suffers sweltering temperatures and restricted air flow because of high rise construction.
Although the government said the judicial review application would not affect the auction, it would be wary of ignoring the significance - it was just a few years ago that an elderly resident filed legal proceedings against the city’s first Reit.
The tenant had protested over the selling off of public assets - housing estate shopping centres and car parks - as contrary to residents’ best interests. The deal had to be delayed - causing much embarrassment to the government - as a result, as the court considered the legal issues, although the listing eventually went ahead.
Source: The Business Times, 13 June 2007
Posted by Property Wizkid
China tightens foreign speculation
China said overseas developers must prove they have real estate projects under way before they are allowed to form companies, in a move to tighten rules to curb property speculation.
Overseas investors must provide proof of their projects in addition to incorporating local companies before they’re allowed to invest in the country, the State Administration of Foreign Exchange said in a statement posted on its website yesterday.
The Chinese government has tightened loans to developers, cracked down on housing speculators and raised taxes to cool the real estate market, amid concern that soaring prices have made housing beyond the reach of many buyers. Property prices in 70 of China’s major cities rose by 5.4 per cent in April from 2006, while the average price jumped as much as 23.6 per cent in the southern city of Beihai.
‘The government is trying to curb speculation rather than control normal foreign investment,’ said Huatai Securities Co’s analyst Zhang Chifei, in the eastern city of Nanjing. ‘The impact on the property market won’t be too significant since it’s still mainly driven by domestic demand.’
China’s currency administrator yesterday also said that it will bar overseas investors from changing the names of actual real estate owners and bypassing regulations.
‘Return investment’, or direct investments inside China by a local resident via a special-purpose company, ‘will be strictly controlled’, according to yesterday’s statement. Foreign investors should obtain land-use rights for their projects or own real estate before they can be approved for real estate development and operations, according to the statement.
China in July 2006 required foreign institutions and individuals to set up foreign-invested companies before buying real estate for investment purposes. The government in September required overseas companies to pay in full rather than instalments when they acquire Chinese developers. Chinese builders are also barred from borrowing from overseas institutions to buy or develop land if their capital is less than 35 per cent of the total investment.
The government will ’strictly control’ foreign investment in high-end real estate projects, yesterday’s statement said. Tomson Group Ltd, developer of China’s costliest residential project, is under investigation for allegedly faking sales of its Tomson Riviera apartments on the east bank of Shanghai’s Huangpu River, the Shanghai Housing and Land Administration Bureau said on June 6. The company in August 2006 sold three apartments for 130 million yuan (S$26.1 million) each, or a record 130,000 yuan per sq m. Those sales contracts have since been cancelled.
Source: The Business Times, 12 June 2007
Posted by Property Wizkid
This year foreign funds have outstripped the $651.84 million for the whole of last year. And CapitaLand said yesterday that it hopes to redevelop the $420 million Char Yong Gardens with US-based Wachovia Development Corporation, so the sum invested by foreigners is set to increase further.
According to an analysis of data by CB Richard Ellis (CBRE), purchases by foreign investors so far in 2007 amount to 11.4 per cent of a total of $7.13 billion, excluding Char Yong Gardens. For the whole of 2006, they accounted for 7.12 per cent of a total of $8.17 billion.
Significant acquisitions with foreign investment include Horizon Towers by Hotel Properties Ltd (HPL) and Horizon Investments, an entity owned by funds managed by Morgan Stanley Real Estate and Qatar Investment Authority, the investment arm of the Emirate of Qatar. Two unnamed private funds, with HPL, also bought into CapitaLand’s Gillman Heights site.
On the marked increase in foreign investment, CBRE’s Jeremy Lake said: ‘The Singapore residential growth story has spread further afield. What was a secret 18 months ago is no longer a secret.’ On tie-ups with foreigners, Patricia Chia, chief executive of CapitaLand Residential Singapore, said: ‘Partners come along with us because they share our vision on the Singapore residential market and the sites that we have. More often than not, they do not have development and execution capabilities, but have real estate knowledge globally.
One of the consequences of so much global capital is that it could raise price expectations for prime collective sale sites. CBRE’s analysis of data also shows that although the number of transactions overall is increasing, the number in prime districts appears to be dropping. In 2006, 30 of 76 collective sale deals were in District 9 alone, representing 39 per cent of all transactions.
This percentage has now dropped to 16 per cent or 10 out of 62 transactions done year to date.
The percentage of transactions in the prime districts of 9, 10 and 11 combined has also dropped, from 68 per cent for the whole of 2006 to 47 per cent year to date.
Prices, availability and location combine to make a site attractive. But as Mr Lake puts it: ‘Developers won’t buy a site if they don’t think they can make money on it. You only have to look at the sites that have been launched but not sold.’ The shift to non-prime districts is not necessarily a bad thing. As Mr Lake notes, it suggests that the recovery, supported by demand, has spread beyond traditional high-end areas.
In 2006, districts 5, 12, 19, 21 and 27 combined made up only 13 per cent of the collective sales pie. For the first five months of 2007, district 19 (Serangoon) alone made up 10 per cent. Other districts highlighted by CBRE include the combined districts 15 and 16 (19 per cent) and districts 2,4,5 and 8 (13 per cent).
Mr Lake believes one possible outcome of a more even spread of transactions across all districts is that the gap between prices for different districts could shrink. Currently the gap can be extremely wide, even if the sites are just minutes apart. CBRE, for instance, is marketing Grangeford Apartments for $2,000 per sq ft per plot ratio and Alexandra Centre for around $300 psf ppr.
City Developments is one outfit that believes in paying the right price for the right property at the right time. ‘We have consistently maintained a valuable land bank which includes a fine range of sites in all parts of Singapore,’ said group general manager Chia Ngiang Hong.
‘With this strategy, CDL has the advantage of creating more value by being able to respond quickly to the market and selectively launch the most appropriate project at any given time so as to best maximise its investment returns.’
CDL’s most recent acquisition was Thomson Mansions in the Thomson/Balestier area.
Developers will now have to look harder. Lippo Realty executive director Thio Gim Hock said: ‘I believe en bloc asking prices are getting quite high. However, Lippo is always on the lookout for opportunities both in prime and other areas.’
Source: The Business Times, 13 June 2007
Posted by Property Wizkid
Capitaland ups the benchmark with purchase of Char Yong Gdns
Setting a new benchmark price for residential land in Singapore, CapitaLand has bought Char Yong Gardens at the corner of Cairnhill and Hullet roads at a unit land price of $1,788 psf of potential gross floor area inclusive of development charges payable to the state.
The 93,274 sq ft freehold site is next to the Silver Towers plot which CapitaLand bought in September last year for $1,107 psf per plot ratio (psf ppr). The average land cost of the two sites works out to about $1,400 psf ppr. It remains to be seen if CapitaLand will amalgamate the two plots for a single project.
Prior to yesterday’s deal, the record price for residential land was $1,735 psf ppr set by the sale of The Parisian at Angullia Park in December last year to Overseas Union Enterprise. CapitaLand said yesterday it has signed a sale and purchase agreement to acquire Char Yong Gardens through a collective sale for $420 million. The unit land price of $1,788 psf ppr is inclusive of a $47 million development charge.
Market watchers reckoned CapitaLand’s break-even cost for a new condo on the site could be around $2,200 to $2,300 psf. Char Yong’s unit land price is 16 per cent higher than the $1,542 psf ppr that Sing Holdings paid in March this year for the nearby Hillcourt Apartments.
Jones Lang LaSalle brokered the collective sale of Char Yong Gardens.
The sale to CapitaLand was agreed following the lapse of an earlier offer made in late April by a joint venture involving China, Indonesia and Singapore entities. But that offer is believed to have had a series of conditions. CapitaLand’s acquisition of Char Yong Gardens is subject to approval from the Strata Titles Board. Consent from owners controlling at least 80 per cent of share values at Char Yong Gardens has been obtained, JLL regional director and head of investments Lui Seng Fatt confirmed yesterday.
CapitaLand said yesterday it is in talks with Wachovia Development Corporation to develop the Char Yong site through a 50:50 joint venture. The company is a wholly owned subsidiary of Wachovia Corporation, one of the biggest diversified financial services groups in the US, through which certain real estate activities are transacted.
For now, the plan is to redevelop the Char Yong plot into a 20-storey condo with about 130 biggish apartments. The project is slated for launch in end-2008. CapitaLand said that since 2005, it has bought four residential sites and one mixed development plot in Singapore. These include Gillman Heights, for which it has partnered Hotel Properties and two funds. ‘The company will continue to seize opportunities to acquire prime sites to augment its existing landbank,’ it said.
Source: The Business Times, 13 June 2007
Posted by Property Wizkid
Ho Bee & Choice Homes join hands to take on Dakota Crescent
Reflecting developers’ confidence in the mid-tier residential sector, a joint venture between Ho Bee and NTUC Choice Homes yesterday cast the top bid of $524 psf per plot ratio for a 99-year leasehold condo plot at Dakota Crescent in the Mountbatten Road/Old Airport Road area fronting Geylang River.
The state tender attracted 15 bids, most of them at above $400 per square foot per plot ratio.
Market watchers recalled that the last time 99-year condo sites outside the prime districts and Sentosa Cove fetched such high price levels was in 1997. In that year, the plots that were subsequently developed into the Rafflesia condo in Bishan and Costa del Sol in the Bayshore area were sold at $403 psf per plot ratio and $457 psf ppr respectively, according to CB Richard Ellis data.
Ho Bee Investment executive director Ong Chong Hua estimates the break-even cost for a new condo on the Dakota Crescent site will be about $850 psf and that it could sell for about $1,000 to $1,100 psf on average. ‘There’s currently a shortage of such condos in this sort of price range,’ he observed. ‘The project will be pitched as a mid-market condo located in the city-fringe, Mountbatten/East Coast area. If you cannot afford the Sentosa Cove lifestyle, this is a very good alternative,’ Mr Ong said.
Going by current market prices, Ho Bee/NTUC Choice Homes should not find it challenging to achieve their target selling prices. Wing Tai is said to have achieved an average price of $1,500-1,600 psf for its freehold condo near Kallang Riverside (The Riverine) which it began selling in April and which is now fully sold.
Ho Bee’s and NTUC Choice Homes’ proposed condo at Dakota Crescent will be 18 to 20 storeys high and have about 370 apartments comprising two, three and four-bedders. The project is slated for launch by mid-2008. ‘This is not a traditional upgrader’s market if you look at the site’s attributes - it fronts the Geylang River, is across the low-rise Goodman Road area and just about 100 metres from the Dakota MRT Station which will be linked by the Circle Line to Suntec City,’ Mr Ong said. ‘The site is also near the future Sports Hub and is easily connected to Nicholl Highway, PIE and ECP.’
The top bid by Ho Bee/NTUC Choice Homes of $228.89 million or $524 psf ppr was just 3 per cent higher than the second highest offer of $508 psf ppr, which came from IOI Land unit Multi Wealth (Singapore). GuocoLand was in third position, with $475 psf ppr. CapitaLand teamed up with US-based Wachovia Development Corporation to cast a $466 psf ppr bid. Other contenders included Frasers Centrepoint ($451 psf ppr), Allgreen Properties & Hoe Seng Company ($430 psf ppr), City Developments, Sim Lian Land and Keppel Land. Wing Tai placed a joint bid with United Engineers unit Greatearth Developments.
Source: The Business Times, 13 June 2007
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Alexandra Centre - collective sale at $45 million
The 50,838 sq ft site is for residential use with first-floor commercial use. It can be built up to four storeys and the allowable plot ratio is three. The development charge (DC) is estimated at $1.21 million. The property is about 25 years old and at present there are 12 ground floor shops and 12 apartments. It is on Alexandra Road close to Ikea and The Anchorage, with Queenstown MRT station a five-minute walk away. More than 80 per cent of the share value owners have signed the collective sale agreement so far.
Based on the asking price, owners of the apartments stand to get about $1.25 million each while shopowners will receive around $2.5 million each. This is about twice as much as they would get if they sold their units individually. A recent collective sale in the area is the privatised former HUDC estate Gillman Heights. At $548 million, the acquisition cost for that site worked out to $363 per square foot of potential gross floor area, including an approximate $90 million DC. But the land area of 836,432 sq ft is the biggest for a collective sale so far and much bigger than the Alexandra Centre site. The tender for Alexandra Centre closes on July 12.
Source: The Business Times, 13 June 2007
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HK auction site price fails expectation
A residential site along Hong Kong’s harbour has been auctioned for HK$5.56 billion (S$1.1 billion) in a sluggish sale that is unlikely to provide much of a boost to the flagging mass property market. The auction was tipped by analysts to fetch up to HK$7 billion for government coffers and hopes were high that the sale would inflate prices and trigger buying activity in the mass residential sector, which has treaded water for the first half of 2007.
Developer Sun Hung Kai Properties bid successfully for the 122,200 sq ft site, which enjoys views of the city’s skyline. The minimum asking price for the plot of land was HK$4.2 billion. It is Hong Kong’s third land auction this year, and one that had been eyed as a catalyst to bigger price movements in the mass market. Many sellers in the secondary market had been holding off in the hope of gleaning a better price after the auction.
‘Everybody was expecting more than HK$6 billion,’ explained Ricky Poon, director of residential sales at Colliers International. ‘I think it’s below expectation, but better than what was submitted in the land application. I don’t think people will be too optimistic though - there’s a lot who were waiting to see how the land auction went today, they decided to wait before taking the next step.’
In the last land auction in May, two sites in the Tuen Mun area were sold for HK$1.74 billion, also below the top end of expectations. The city, however, boasts as one of its most lucrative auctions the December sale of a Peak residential site to Sun Hung Kai Properties for HK$1.8 billion. This put the accommodation value at HK$42,196 psf - potentially one of the most expensive land sites in the world.
Luxury residential sales are expected to post double-digit growth this year as limited supply and an influx of capital to the city pushes up prices. However, the mass residential sector is still lagging in terms of growth, although sales have picked up slightly in the first half of the year. While luxury sales are at 1997 levels or above, the mass sector is still about 20 per cent short, according to Mr Poon.
He explained that residential property on Hong Kong island is 20-25 per cent below 1997 prices, while those out in Kowloon and the New Territories could be as much as 40 per cent below. ‘There’s still a big gap,’ he stressed. ‘For the last two to three years, there’s a lot of remaining stock in the mass market, we still have quite a lot,’ he said. There was speculation that legal action by a resident seeking to limit development of high rises in the area may also have dampened enthusiasm for the auction.
An application for a judicial review was filed on the eve of the auction seeking to stop the Town Planning Board and the government from building a skyscraper in the district. The resident claimed the government did not follow guidelines when giving approval to the development of high-rise buildings, in particular, ignoring parts of the Town Planning Ordinance which should promote health and general welfare of residents.
In Hong Kong, the issue of the ‘wall effect’ has become a thorny topic for the government, as the city suffers sweltering temperatures and restricted air flow because of high rise construction.
Although the government said the judicial review application would not affect the auction, it would be wary of ignoring the significance - it was just a few years ago that an elderly resident filed legal proceedings against the city’s first Reit.
The tenant had protested over the selling off of public assets - housing estate shopping centres and car parks - as contrary to residents’ best interests. The deal had to be delayed - causing much embarrassment to the government - as a result, as the court considered the legal issues, although the listing eventually went ahead.
Source: The Business Times, 13 June 2007
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China tightens foreign speculation
China said overseas developers must prove they have real estate projects under way before they are allowed to form companies, in a move to tighten rules to curb property speculation.
Overseas investors must provide proof of their projects in addition to incorporating local companies before they’re allowed to invest in the country, the State Administration of Foreign Exchange said in a statement posted on its website yesterday.
The Chinese government has tightened loans to developers, cracked down on housing speculators and raised taxes to cool the real estate market, amid concern that soaring prices have made housing beyond the reach of many buyers. Property prices in 70 of China’s major cities rose by 5.4 per cent in April from 2006, while the average price jumped as much as 23.6 per cent in the southern city of Beihai.
‘The government is trying to curb speculation rather than control normal foreign investment,’ said Huatai Securities Co’s analyst Zhang Chifei, in the eastern city of Nanjing. ‘The impact on the property market won’t be too significant since it’s still mainly driven by domestic demand.’
China’s currency administrator yesterday also said that it will bar overseas investors from changing the names of actual real estate owners and bypassing regulations.
‘Return investment’, or direct investments inside China by a local resident via a special-purpose company, ‘will be strictly controlled’, according to yesterday’s statement. Foreign investors should obtain land-use rights for their projects or own real estate before they can be approved for real estate development and operations, according to the statement.
China in July 2006 required foreign institutions and individuals to set up foreign-invested companies before buying real estate for investment purposes. The government in September required overseas companies to pay in full rather than instalments when they acquire Chinese developers. Chinese builders are also barred from borrowing from overseas institutions to buy or develop land if their capital is less than 35 per cent of the total investment.
The government will ’strictly control’ foreign investment in high-end real estate projects, yesterday’s statement said. Tomson Group Ltd, developer of China’s costliest residential project, is under investigation for allegedly faking sales of its Tomson Riviera apartments on the east bank of Shanghai’s Huangpu River, the Shanghai Housing and Land Administration Bureau said on June 6. The company in August 2006 sold three apartments for 130 million yuan (S$26.1 million) each, or a record 130,000 yuan per sq m. Those sales contracts have since been cancelled.
Source: The Business Times, 12 June 2007
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Tuesday, June 5, 2007
Singapore Property News Upfront 14
Foreigners command a strong presence for 1st Quarter
Companies and foreigners upped their share of caveats lodged for private home purchases in the first quarter of this year, according to an analysis of caveats by estate agents DTZ Debenham Tie Leung. Companies accounted for 8 per cent, or 538 of the total 7,042 caveats lodged for private homes in the first quarter of the year, up from a 6 per cent share in the preceding quarter.
The 538 homes that companies bought in Q1 this year is an increase of 15.2 per cent from the preceding quarter and the highest quarterly figure ever captured by the Urban Redevelopment Authority’s Realis caveats data, which go back to Q1 1995. During the height of the last major bull run in Q2 1996, companies bought 462 private homes while the figure for Q3 1999, a year that saw a short-lived property rally, was 413.
Companies include both entities incorporated in Singapore and overseas and these buyers would include property funds as well as high-net-worth individuals who set up offshore companies to purchase properties for tax or confidentiality reasons, suggests DTZ executive director Ong Choon Fah. Some of the caveats for private homes lodged by companies are for collective sale deals. Among the caveats lodged by companies in the first quarter were 35 caveats for Amaryllis Ville, 24 for The Fernhill, 12 for Water Place and 11 for Marina Bay Residences.
Mrs Ong expects corporate buyers like funds to continue growing in importance as private residential property buyers. ‘Traditionally, overseas property funds buy offices in Singapore, but with opportunities becoming more limited, they will increasingly turn to the residential sector,’ she added. DTZ’s analysis of caveats lodged for private homes captured by the Realis system also shows that foreigners (including permanent residents) snapped up 1,938 private homes in the first three months of this year.
While this is up just marginally from the 1,934 caveats lodged by foreigners in the preceding quarter, it is nonetheless the highest level of foreign purchases in a quarter ever captured by Realis. Foreigners also upped their share of private home purchases to 27 per cent in Q1 this year, a figure that has been previously surpassed on just one other occasion. That was in Q4 1995, when foreigners accounted for 32 per cent or 1,534 of the total 4,781 caveats lodged for private homes.
DTZ also observed that while the number of private apartments and condos that foreigners bought from developers in the primary market declined 21 per cent quarter-on-quarter to 540 in Q1 2007, the number of apartments/condos foreigners picked up in the secondary or resale market rose 13 per cent to 1,315 over the same period. ‘This was the largest number of resale apartments that foreigners purchased in a quarter. Foreigners accounted for a 32 per cent share in overall resale condos/apartments transacted. This trailed only Q4 1995, when the share was 48 per cent,’ DTZ said.
‘Unlike new projects, private homes in the secondary market are usually ready for lease. This therefore attracts foreign investors who wish to have a share in the current buoyant leasing market. Similarly, resale properties are valued by foreigners who are new in Singapore and require immediate accommodation. There are also some who have received permanent residence and are keen to own residential properties, partly as rents have been rising,’ DTZ observed.
Projects that saw a high percentage of caveats lodged by foreign buyers in the secondary market in Q1 included Costa del Sol, Caribbean at Keppel Bay, The Nexus, Cuscaden Residences, Pebble Bay and Leonie Gardens. Districts 10, 9 and 15 were the three most popular locations for foreigners who bought condos and private apartments in the secondary market in Q1.
As for foreigners who purchased condos/apartments directly from developers in the primary market, the three most sought-after districts in Q1 were 9, 10 and 11, followed by 15 and 1. Tribeca, Residences @ Evelyn, RiverGate, St Regis Residences, Waterfall Gardens and Marina Bay Residences were among the projects that saw a high proportion of foreign buying in the primary market in Q1.
The 540 condos/apartments that foreign buyers purchased from developers in Q1 accounted for 28 per cent of developer sales of non-landed homes during the period. Indonesians and Malaysians continued to be the largest groups of foreign buyers of overall private homes in Q1 this year, accounting for 21 per cent and 19 per cent respectively of caveats, followed by buyers from India, with a 14 per cent share. Indian nationals picked up 275 private homes in Q1 this year, an increase of 13 per cent from Q4 last year.
Buyers from the United Kingdom were the fourth-largest home buying market in Q1 (9 per cent share) followed by mainland China (5 per cent). Australians lodged caveats for 100 private homes in Q1, up 15 per cent from the preceding quarter. Koreans also continued to increase their investments in private residential properties in Singapore, picking up 96 homes in Q1, reflecting a 30 per cent quarter-on-quarter increase and a 380 per cent year-on-year jump.
Source: The Business Times, 05 June 2007
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When will the boom ends?
MR KWEK LENG BENG, executive chairman of the Hong Leong Group, when asked about how long the collective sale frenzy can be sustained, has this to say, ‘Of course, it will continue but up to a certain point. Singaporeans are reactive - ‘Oh, I better hold on, I don’t sell, I want to make more money.’ An Englishman taught me 40 years ago, when you have good profit, you shouldn’t be greedy, you should get out. Let the next person take the higher risk and make some profit. Nobody can tell when is the peak, when is the rock bottom…’
‘Office property will continue to go up because we have very limited supply. We are so successful in attracting multinationals and many companies when the economy is good… Don’t forget we’ve gone through about 10 years of difficult times, when we had retrenchments and we had to deal with so many problems one after another, including Sept 11, bird flu. Now, we have passed all these, we are on a new platform. The opportunity is there for the private sector to take advantage of. The Government has created an environment very conducive to doing business.’ Mr Kwek commented, on how long high office rental prices will continue. He confirmed that City Developments, the publicly listed property arm of Hong Leong Group, was interested in bidding for a prime 1.02ha Marina Bay site opposite One Raffles Quay.
Source: The Straits Times, 05 June 2007
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Another case of "I'm not moving!" enbloc saga
He was the last one left in the 140-unit private estate, and property developer City Developments (CDL) - which bought over Lock Cho Apartments - wants to take legal action against him. Mr Chan Kin Foo busted the original mid-May deadline - and an extension to May 25 - to move out of the estate at Jalan Raja Udang in Balestier.
Mr Chan, 63, however, is uncontactable now. CDL said this is putting a strain on its redevelopment work. ‘Any further delay will result in an increase in our holding costs and an undue delay in executing redevelopment,’ said a CDL spokesman. This is the second time in three months in which a property developer decided to take ex-owners to court for refusing to move out of their home after it was sold en bloc.
The first was in April - when a family of four refused to leave their unit at Lincolnsvale estate in Surrey Road, which was bought over by Sim Lian Land. Lock Cho Apartments consists of two blocks of walk-up apartments and two blocks of high-rise units. The site was purchased in a collective sale with two other neighbouring sites - Comfort Mansion and an eight-unit apartment - on March 31 last year for $156.3 million.
Mr Chan and three other owners did not sign the collective sale agreement. This sale was subject to the approval of the Strata Titles Board (STB), which was given on Nov 14 last year. CDL has paid out the sale amount in full. Late last month, The Straits Times was able to speak to Mr Chan, who said he lived alone in his unit.
He had said he did not agree to the sale because he felt his walk-up apartment deserved more money than the apartments in the high-rise blocks. According to Credo Real Estate, which handled the sale, Mr Chan received about $900,000. Other residents received from $840,000 to $1.3 million, which is 60 to 90 per cent of their current market prices, Credo said.
Residents were also told to vacate by May 13, which they all did, except for Mr Chan.
He continued to return to his apartment - his home for the past 30 years - even though he was now trespassing. He was finally barred from entering the premises - and his apartment - at about 2am on May 24 by the estate security guard. Since then, he has not returned or contacted CDL.
The developer extended its deadline to May 25 for him to at least contact it for the handing over of his keys, which he did not do. ‘We are left with no choice but to refer this matter to our solicitors,’ said its spokesman. CDL said it had sent adequate legal notices to inform Mr Chan that he had to leave and hand over his keys. The law firm that handled the Lock Cho Apartments sale, Rodyk & Davidson, said that Mr Chan was a ‘passive objector’ to the sale: He did not sign the sale agreement or file an objection before the STB when he could do so.
The law firm said it had sent letters to persuade Mr Chan to sign title transfer documents but he failed to do so. Further notices were sent informing him that it would be seeking an STB order to appoint a representative to sign the documents on his behalf. The law firm received no word from him and it went ahead with this move.
On Oct 23 last year, the STB authorised a representative to sign the documents for Mr Chan and the $900,000 from his unit was ‘paid into the High Court’, in accordance with the Strata Titles Act. According to a property lawyer that The Straits Times spoke to, a possible legal action CDL might be taking is an eviction order to dispossess Mr Chan from the unit. Mr Chan could also be liable for damages in the form of bank interest chalked up by CDL due to the delay.
Source: The Straits Times, 04 June 2007
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Sweeping away the old - Amber Road
A WAVE of collective sales is gradually sweeping old properties out of the area, to make room for high-style condos that will give the street a brand-new look. This enclave is becoming the hottest on East Coast Road as buyers snap up units at yet-to-be-completed, relatively large condos, jacking up the area’s value.
Prices averaged $850 to $1,000 per sq ft (psf) in the first quarter, up 40 to 45 per cent from $600 to $700 psf a year ago, said consultancy CB Richard Ellis (CBRE). Condos under construction include Wheelock Properties’ 546-unit The Sea View; MCL Land’s 400-unit The Esta; the 562-unit One Amber from United Industrial Corp and United Overseas Land; and Ho Bee’s 42-unit Vertis.
The three large freehold condos have seen active sub-sales, said CBRE. They are popular for the location, facilities and well-known developers, said a consultant. Recent deals for The Sea View were done near $1,000 psf on average. Buyers will soon have more choices.
A new project is earmarked for the sites now housing Amber Lodge and Jin Fu Apartments. Voda Land bought these estates en bloc in a private treaty at an undisclosed price and aims to launch Amber Residences in about three months. It will be an ‘upper mid-market’ condo with 114 units in one 21-storey block, said Savills Singapore.
More condos will come when Far East Organization redevelops Amberville and Rose Garden, which it bought in collective sales last year. For now, while construction roars ahead, the existence of older estates like Rose Garden makes for a noisy juxtaposition of past and future.
Heart of the district with sea-front housing - Marine Parade
MARINE Parade is the heart of the entire East Coast Road district and is a textbook example of how to develop reclaimed land. It brings together a popular shopping mall, schools and sea-front housing all within a linear stretch. Public housing dominates, though older, large condos such as Mandarin Gardens and Neptune Court also enjoy the sea breeze and East Coast Park is just a stroll away.
It is no wonder the HDB flats here, particularly those with sea views, have always commanded a premium. And recently, they have benefited further from the robust activity in the private residential market, said CBRE. Prices of five-room flats hit $358 per sq ft (psf) or some $467,000 on average in the first quarter, up 13.5 per cent from a year ago. This compares with a 7 to 8 per cent rise in prices of three- and four-room flats in the same period.
A four-room flat costs about $334 or some $305,000 on average, up nearly 7 per cent from a year ago. But when it comes to rental, the four-roomers seem to be the most sought after. Average monthly rents of four-roomers rose by a hefty 47 per cent to $1.47 psf in the first quarter. This compares with a 23 per cent rise to $1.62 psf for three-roomers and a 7 per cent rise to $1.19 psf for five-roomers, said CBRE.
Private home prices in the area have risen by 20 to 40 per cent to $700 to $800 psf over a 12-month period as of the first quarter, said CBRE. The area’s newest large condo is the 99-year leasehold Cote D’Azur.
Oozing old-world charm - Katong
RUSTIC shophouses, good food and a strong Peranakan heritage make Katong a real gem in the East Coast area. The housing developments are mostly low-rise, with shophouses and boutique condominiums the mainstay, although there are quaint colonial houses for lease along Kuo Chuan Avenue.
Apart from the old-world charm, there is 24/7 shopping at Cold Storage in Katong Mall.
There are few new developments, though more may come as there have been several collective sale targets. Sea Breeze Apartments was sold en bloc and should become an 88-unit project while a 229-unit condo in Jago Close is also expected, said CBRE.
Most of the properties here are small and rather old, so interest has not been very strong, with prices done in the past year or so at between $400 and $787 psf, said CBRE. Developments such as Ceylon Crest and Katong Gardens transacted recently at about $540 to $550 psf on average.
Others such as East Galleria and Bellezza @ Katong go for about $650 psf on average.
Sleepy stretch enjoys new lease of life - St Patrick’s
IF YOU are looking for some peace and quiet in the East Coast locale, then the St Patrick’s area might be just your cup of tea. The many boutique apartments, nestled alongside schools including St Patrick’s Secondary School and CHIJ Katong Primary, enjoy a special serenity that even the construction work at Grand Duchess at St Patrick’s and St Patrick’s Loft cannot disrupt.
The sleepy area has seen three launches recently. One was the 37-unit St Patrick’s Loft - marketed late last year at over $600 per sq ft (psf). Then came the fast sell-out of the 121-unit Grand Duchess, which created a stir. This project, which sold at $740 psf on average, further raised the area’s value.
Just a year ago, average levels were at just below $500 psf. Five Grand Duchess sub-sales were done at $700 psf to $900 psf, said CB Richard Ellis (CBRE). MCL Land’s recently sold-out Tierra Vue rode on the success of Grand Duchess and started sales at $800 psf. One 1,270 sq ft unit was said to have been sold at $1,051 psf, a record for the area, said CBRE. More new projects are expected for the area.
Steady stream of small projects - Joo Chiat / Telok Kurau
THE sleaze of Joo Chiat is often put in the spotlight but beyond the colourful nightspots, the area is a quiet residential zone dominated by low-rise boutique developments and terrace houses.
A sprinkling of amenities such as schools, a medical centre, a park and good food also make this a conducive residential district.
Home prices rose to $600 to $700 per sq ft (psf) on average in the first quarter of the year, up from $450 to $550 psf a year ago, said CBRE. There has been a steady stream of small apartments launched, with projects like Le Merritt selling for $650 psf this year. Last month, a 1,626 sq ft terrace house went for $1.2 million while a 2,190 sq ft semi-detached home went for $1.51 million. Sim Lian Land bought Wen Yuan Court, K Gardens and Leyuke Apartments last year, but will launch its new project for sale only next year.
Cafes give quiet area some buzz - Siglap / Frankel
THE hub of activity in the otherwise homogeneous area of bungalows and semi-detached houses is the Siglap Road and East Coast Road junction. Siglap Shopping Centre and rows of cafes and eateries give the otherwise quiet area some buzz, upping the area’s hip quotient. With few new projects, Axis @ Siglap, a 40-unit boutique condo marketed earlier this year, sold out in a matter of weeks at an average price of nearly $800 per sq ft (psf). This was above the range of $600 to $700 psf for most properties in the area, Savills had said.
The strong demand is good news to developers who have bought sites in the area. Sing Holdings and a fund will redevelop Finland Gardens while Frasers Centrepoint will redevelop Flamingo Valley. Prices for landed homes tend to vary widely, though they have moved up moderately. In May, a 4,700 sq ft bungalow on Siglap Road sold for $1.9 million while a 9,586 sq ft bungalow on the same stretch sold for $5 million.
Source: The Straits Times, 03 June 2007
Posted by Property Wizkid
Companies and foreigners upped their share of caveats lodged for private home purchases in the first quarter of this year, according to an analysis of caveats by estate agents DTZ Debenham Tie Leung. Companies accounted for 8 per cent, or 538 of the total 7,042 caveats lodged for private homes in the first quarter of the year, up from a 6 per cent share in the preceding quarter.
The 538 homes that companies bought in Q1 this year is an increase of 15.2 per cent from the preceding quarter and the highest quarterly figure ever captured by the Urban Redevelopment Authority’s Realis caveats data, which go back to Q1 1995. During the height of the last major bull run in Q2 1996, companies bought 462 private homes while the figure for Q3 1999, a year that saw a short-lived property rally, was 413.
Companies include both entities incorporated in Singapore and overseas and these buyers would include property funds as well as high-net-worth individuals who set up offshore companies to purchase properties for tax or confidentiality reasons, suggests DTZ executive director Ong Choon Fah. Some of the caveats for private homes lodged by companies are for collective sale deals. Among the caveats lodged by companies in the first quarter were 35 caveats for Amaryllis Ville, 24 for The Fernhill, 12 for Water Place and 11 for Marina Bay Residences.
Mrs Ong expects corporate buyers like funds to continue growing in importance as private residential property buyers. ‘Traditionally, overseas property funds buy offices in Singapore, but with opportunities becoming more limited, they will increasingly turn to the residential sector,’ she added. DTZ’s analysis of caveats lodged for private homes captured by the Realis system also shows that foreigners (including permanent residents) snapped up 1,938 private homes in the first three months of this year.
While this is up just marginally from the 1,934 caveats lodged by foreigners in the preceding quarter, it is nonetheless the highest level of foreign purchases in a quarter ever captured by Realis. Foreigners also upped their share of private home purchases to 27 per cent in Q1 this year, a figure that has been previously surpassed on just one other occasion. That was in Q4 1995, when foreigners accounted for 32 per cent or 1,534 of the total 4,781 caveats lodged for private homes.
DTZ also observed that while the number of private apartments and condos that foreigners bought from developers in the primary market declined 21 per cent quarter-on-quarter to 540 in Q1 2007, the number of apartments/condos foreigners picked up in the secondary or resale market rose 13 per cent to 1,315 over the same period. ‘This was the largest number of resale apartments that foreigners purchased in a quarter. Foreigners accounted for a 32 per cent share in overall resale condos/apartments transacted. This trailed only Q4 1995, when the share was 48 per cent,’ DTZ said.
‘Unlike new projects, private homes in the secondary market are usually ready for lease. This therefore attracts foreign investors who wish to have a share in the current buoyant leasing market. Similarly, resale properties are valued by foreigners who are new in Singapore and require immediate accommodation. There are also some who have received permanent residence and are keen to own residential properties, partly as rents have been rising,’ DTZ observed.
Projects that saw a high percentage of caveats lodged by foreign buyers in the secondary market in Q1 included Costa del Sol, Caribbean at Keppel Bay, The Nexus, Cuscaden Residences, Pebble Bay and Leonie Gardens. Districts 10, 9 and 15 were the three most popular locations for foreigners who bought condos and private apartments in the secondary market in Q1.
As for foreigners who purchased condos/apartments directly from developers in the primary market, the three most sought-after districts in Q1 were 9, 10 and 11, followed by 15 and 1. Tribeca, Residences @ Evelyn, RiverGate, St Regis Residences, Waterfall Gardens and Marina Bay Residences were among the projects that saw a high proportion of foreign buying in the primary market in Q1.
The 540 condos/apartments that foreign buyers purchased from developers in Q1 accounted for 28 per cent of developer sales of non-landed homes during the period. Indonesians and Malaysians continued to be the largest groups of foreign buyers of overall private homes in Q1 this year, accounting for 21 per cent and 19 per cent respectively of caveats, followed by buyers from India, with a 14 per cent share. Indian nationals picked up 275 private homes in Q1 this year, an increase of 13 per cent from Q4 last year.
Buyers from the United Kingdom were the fourth-largest home buying market in Q1 (9 per cent share) followed by mainland China (5 per cent). Australians lodged caveats for 100 private homes in Q1, up 15 per cent from the preceding quarter. Koreans also continued to increase their investments in private residential properties in Singapore, picking up 96 homes in Q1, reflecting a 30 per cent quarter-on-quarter increase and a 380 per cent year-on-year jump.
Source: The Business Times, 05 June 2007
Posted by Property Wizkid
When will the boom ends?
MR KWEK LENG BENG, executive chairman of the Hong Leong Group, when asked about how long the collective sale frenzy can be sustained, has this to say, ‘Of course, it will continue but up to a certain point. Singaporeans are reactive - ‘Oh, I better hold on, I don’t sell, I want to make more money.’ An Englishman taught me 40 years ago, when you have good profit, you shouldn’t be greedy, you should get out. Let the next person take the higher risk and make some profit. Nobody can tell when is the peak, when is the rock bottom…’
‘Office property will continue to go up because we have very limited supply. We are so successful in attracting multinationals and many companies when the economy is good… Don’t forget we’ve gone through about 10 years of difficult times, when we had retrenchments and we had to deal with so many problems one after another, including Sept 11, bird flu. Now, we have passed all these, we are on a new platform. The opportunity is there for the private sector to take advantage of. The Government has created an environment very conducive to doing business.’ Mr Kwek commented, on how long high office rental prices will continue. He confirmed that City Developments, the publicly listed property arm of Hong Leong Group, was interested in bidding for a prime 1.02ha Marina Bay site opposite One Raffles Quay.
Source: The Straits Times, 05 June 2007
Posted by Property Wizkid
Another case of "I'm not moving!" enbloc saga
He was the last one left in the 140-unit private estate, and property developer City Developments (CDL) - which bought over Lock Cho Apartments - wants to take legal action against him. Mr Chan Kin Foo busted the original mid-May deadline - and an extension to May 25 - to move out of the estate at Jalan Raja Udang in Balestier.
Mr Chan, 63, however, is uncontactable now. CDL said this is putting a strain on its redevelopment work. ‘Any further delay will result in an increase in our holding costs and an undue delay in executing redevelopment,’ said a CDL spokesman. This is the second time in three months in which a property developer decided to take ex-owners to court for refusing to move out of their home after it was sold en bloc.
The first was in April - when a family of four refused to leave their unit at Lincolnsvale estate in Surrey Road, which was bought over by Sim Lian Land. Lock Cho Apartments consists of two blocks of walk-up apartments and two blocks of high-rise units. The site was purchased in a collective sale with two other neighbouring sites - Comfort Mansion and an eight-unit apartment - on March 31 last year for $156.3 million.
Mr Chan and three other owners did not sign the collective sale agreement. This sale was subject to the approval of the Strata Titles Board (STB), which was given on Nov 14 last year. CDL has paid out the sale amount in full. Late last month, The Straits Times was able to speak to Mr Chan, who said he lived alone in his unit.
He had said he did not agree to the sale because he felt his walk-up apartment deserved more money than the apartments in the high-rise blocks. According to Credo Real Estate, which handled the sale, Mr Chan received about $900,000. Other residents received from $840,000 to $1.3 million, which is 60 to 90 per cent of their current market prices, Credo said.
Residents were also told to vacate by May 13, which they all did, except for Mr Chan.
He continued to return to his apartment - his home for the past 30 years - even though he was now trespassing. He was finally barred from entering the premises - and his apartment - at about 2am on May 24 by the estate security guard. Since then, he has not returned or contacted CDL.
The developer extended its deadline to May 25 for him to at least contact it for the handing over of his keys, which he did not do. ‘We are left with no choice but to refer this matter to our solicitors,’ said its spokesman. CDL said it had sent adequate legal notices to inform Mr Chan that he had to leave and hand over his keys. The law firm that handled the Lock Cho Apartments sale, Rodyk & Davidson, said that Mr Chan was a ‘passive objector’ to the sale: He did not sign the sale agreement or file an objection before the STB when he could do so.
The law firm said it had sent letters to persuade Mr Chan to sign title transfer documents but he failed to do so. Further notices were sent informing him that it would be seeking an STB order to appoint a representative to sign the documents on his behalf. The law firm received no word from him and it went ahead with this move.
On Oct 23 last year, the STB authorised a representative to sign the documents for Mr Chan and the $900,000 from his unit was ‘paid into the High Court’, in accordance with the Strata Titles Act. According to a property lawyer that The Straits Times spoke to, a possible legal action CDL might be taking is an eviction order to dispossess Mr Chan from the unit. Mr Chan could also be liable for damages in the form of bank interest chalked up by CDL due to the delay.
Source: The Straits Times, 04 June 2007
Posted by Property Wizkid
Sweeping away the old - Amber Road
A WAVE of collective sales is gradually sweeping old properties out of the area, to make room for high-style condos that will give the street a brand-new look. This enclave is becoming the hottest on East Coast Road as buyers snap up units at yet-to-be-completed, relatively large condos, jacking up the area’s value.
Prices averaged $850 to $1,000 per sq ft (psf) in the first quarter, up 40 to 45 per cent from $600 to $700 psf a year ago, said consultancy CB Richard Ellis (CBRE). Condos under construction include Wheelock Properties’ 546-unit The Sea View; MCL Land’s 400-unit The Esta; the 562-unit One Amber from United Industrial Corp and United Overseas Land; and Ho Bee’s 42-unit Vertis.
The three large freehold condos have seen active sub-sales, said CBRE. They are popular for the location, facilities and well-known developers, said a consultant. Recent deals for The Sea View were done near $1,000 psf on average. Buyers will soon have more choices.
A new project is earmarked for the sites now housing Amber Lodge and Jin Fu Apartments. Voda Land bought these estates en bloc in a private treaty at an undisclosed price and aims to launch Amber Residences in about three months. It will be an ‘upper mid-market’ condo with 114 units in one 21-storey block, said Savills Singapore.
More condos will come when Far East Organization redevelops Amberville and Rose Garden, which it bought in collective sales last year. For now, while construction roars ahead, the existence of older estates like Rose Garden makes for a noisy juxtaposition of past and future.
Heart of the district with sea-front housing - Marine Parade
MARINE Parade is the heart of the entire East Coast Road district and is a textbook example of how to develop reclaimed land. It brings together a popular shopping mall, schools and sea-front housing all within a linear stretch. Public housing dominates, though older, large condos such as Mandarin Gardens and Neptune Court also enjoy the sea breeze and East Coast Park is just a stroll away.
It is no wonder the HDB flats here, particularly those with sea views, have always commanded a premium. And recently, they have benefited further from the robust activity in the private residential market, said CBRE. Prices of five-room flats hit $358 per sq ft (psf) or some $467,000 on average in the first quarter, up 13.5 per cent from a year ago. This compares with a 7 to 8 per cent rise in prices of three- and four-room flats in the same period.
A four-room flat costs about $334 or some $305,000 on average, up nearly 7 per cent from a year ago. But when it comes to rental, the four-roomers seem to be the most sought after. Average monthly rents of four-roomers rose by a hefty 47 per cent to $1.47 psf in the first quarter. This compares with a 23 per cent rise to $1.62 psf for three-roomers and a 7 per cent rise to $1.19 psf for five-roomers, said CBRE.
Private home prices in the area have risen by 20 to 40 per cent to $700 to $800 psf over a 12-month period as of the first quarter, said CBRE. The area’s newest large condo is the 99-year leasehold Cote D’Azur.
Oozing old-world charm - Katong
RUSTIC shophouses, good food and a strong Peranakan heritage make Katong a real gem in the East Coast area. The housing developments are mostly low-rise, with shophouses and boutique condominiums the mainstay, although there are quaint colonial houses for lease along Kuo Chuan Avenue.
Apart from the old-world charm, there is 24/7 shopping at Cold Storage in Katong Mall.
There are few new developments, though more may come as there have been several collective sale targets. Sea Breeze Apartments was sold en bloc and should become an 88-unit project while a 229-unit condo in Jago Close is also expected, said CBRE.
Most of the properties here are small and rather old, so interest has not been very strong, with prices done in the past year or so at between $400 and $787 psf, said CBRE. Developments such as Ceylon Crest and Katong Gardens transacted recently at about $540 to $550 psf on average.
Others such as East Galleria and Bellezza @ Katong go for about $650 psf on average.
Sleepy stretch enjoys new lease of life - St Patrick’s
IF YOU are looking for some peace and quiet in the East Coast locale, then the St Patrick’s area might be just your cup of tea. The many boutique apartments, nestled alongside schools including St Patrick’s Secondary School and CHIJ Katong Primary, enjoy a special serenity that even the construction work at Grand Duchess at St Patrick’s and St Patrick’s Loft cannot disrupt.
The sleepy area has seen three launches recently. One was the 37-unit St Patrick’s Loft - marketed late last year at over $600 per sq ft (psf). Then came the fast sell-out of the 121-unit Grand Duchess, which created a stir. This project, which sold at $740 psf on average, further raised the area’s value.
Just a year ago, average levels were at just below $500 psf. Five Grand Duchess sub-sales were done at $700 psf to $900 psf, said CB Richard Ellis (CBRE). MCL Land’s recently sold-out Tierra Vue rode on the success of Grand Duchess and started sales at $800 psf. One 1,270 sq ft unit was said to have been sold at $1,051 psf, a record for the area, said CBRE. More new projects are expected for the area.
Steady stream of small projects - Joo Chiat / Telok Kurau
THE sleaze of Joo Chiat is often put in the spotlight but beyond the colourful nightspots, the area is a quiet residential zone dominated by low-rise boutique developments and terrace houses.
A sprinkling of amenities such as schools, a medical centre, a park and good food also make this a conducive residential district.
Home prices rose to $600 to $700 per sq ft (psf) on average in the first quarter of the year, up from $450 to $550 psf a year ago, said CBRE. There has been a steady stream of small apartments launched, with projects like Le Merritt selling for $650 psf this year. Last month, a 1,626 sq ft terrace house went for $1.2 million while a 2,190 sq ft semi-detached home went for $1.51 million. Sim Lian Land bought Wen Yuan Court, K Gardens and Leyuke Apartments last year, but will launch its new project for sale only next year.
Cafes give quiet area some buzz - Siglap / Frankel
THE hub of activity in the otherwise homogeneous area of bungalows and semi-detached houses is the Siglap Road and East Coast Road junction. Siglap Shopping Centre and rows of cafes and eateries give the otherwise quiet area some buzz, upping the area’s hip quotient. With few new projects, Axis @ Siglap, a 40-unit boutique condo marketed earlier this year, sold out in a matter of weeks at an average price of nearly $800 per sq ft (psf). This was above the range of $600 to $700 psf for most properties in the area, Savills had said.
The strong demand is good news to developers who have bought sites in the area. Sing Holdings and a fund will redevelop Finland Gardens while Frasers Centrepoint will redevelop Flamingo Valley. Prices for landed homes tend to vary widely, though they have moved up moderately. In May, a 4,700 sq ft bungalow on Siglap Road sold for $1.9 million while a 9,586 sq ft bungalow on the same stretch sold for $5 million.
Source: The Straits Times, 03 June 2007
Posted by Property Wizkid
Sunday, June 3, 2007
Singapore Property News Upfront 13
Heavyweights of the industry fights for the "Largest Agency Title"
HSR says it has used the tagline for its ads but PropNex claims it should be the biggest agency here. So, which is the biggest of them all? Property agencies, that is. The honour of being able to claim the title of Singapore’s No. 1 agency has sparked a bizarre battle between two heavyweights.
In one corner is HSR International Realtors, which was named the largest real estate agency in Singapore by the Singapore Book of Records (SBOR) last month. The 27-year-old firm and its 5,136 agents, says chief executive (CEO) Patrick Liew, have since used ‘the largest real estate agency’ as a tagline for advertisements.
On Wednesday, however, a challenger emerged from the opposite corner. PropNex, now in its seventh year of business, sent out a statement claiming that its 5,686 agents make it ‘truly Singapore’s largest real estate company’ - a slogan it said has always been used on its website and has even been quoted in the media. ‘We have been advertised, quoted and accepted as the largest real estate agency in Singapore since 2003,’ CEO Mohamed Ismail told The Straits Times yesterday. ‘It is not official, but nobody disputed it until last month.’
He said that ‘he knew from the beginning that HSR’s claim had no merits’ because its office and staff sizes were lower than those of PropNex. HSR hit back by saying its claim was based on PropNex’s published figure of 3,800 agents. But PropNex said the figure referred to only ‘active agents’ - those who have closed a deal within the last year - while it has many more registered agents.
At the heart of this tussle is an issue more weighty than simply the flexing of mathematical muscle. Mr Mohamed said the conflicting claims have affected credibility and caused confusion among clients. ‘We were giving a pitch for a project in Malaysia when the developer asked us if it was true that PropNex had the largest agency, because they had seen HSR’s ad.’ He has since taken up the issue with Mr Ong Eng Huat, the SBOR’s president, and expects a response by next week.
Mr Ong said that ‘while at the time we were quite satisfied that HSR has the largest number of agents, the figure is always changing’. The SBOR is ‘reviewing the method of measuring’, and it is not prepared to do further audits until it comes up with ‘a better form of measurement’. Meanwhile, it is understood that HSR has been told not to attribute the claim of being the largest agency to the SBOR in its ads.
HSR’s Mr Liew told ST yesterday that size does not matter: ‘If we really wanted to play the numbers game, it’s not difficult. I can also produce 10,000 names, but where does it end?’
For him, ‘the important thing is not to be the largest, but to be the best’. ‘I lay claim to having the highest-paid agents. This month, my top agent is making at least $1.7 million. I throw my last dollar down that my top 30 agents will outdo their top 30. They cannot beat me.’
Another big gun, ERA, has refrained from jumping into the fray, even though it boasts more than 5,000 agents. ‘We are not interested in being the biggest,’ said assistant vice-president Eugene Lim. ‘(Being a) big agency doesn’t mean big market share. It’s about productivity; it’s the number of transactions you do.’
Source: The Straits Times, 02 June 2007
Posted by Property Wizkid
Fancy having part of $10m commissions? Be an Agent.
The smartest way to take advantage of the property upturn could be to become an estate agent. PropNex CEO Mohamed Ismail says that in April alone its agents earned more than $10 million commissions - twice as much as in April 2006. The number of transactions also increased - from 1,648 to 2,445 - over the period. And in the first three weeks of May, PropNex again recorded more than $10 million of commissions, which bodes well for the full year.
In 2006, commissions totalled $75 million, Mr Mohamed said. According to PropNex data, the increase in commissions has resulted from transactions in the private secondary market and residential rental market. Commissions from the private secondary market increased 200 per cent year on year in April. Slightly over 50 per cent of total commissions in April came from the private market, with the remainder from rental, commercial and Housing & Development Board transactions.
Interestingly, 21 per cent of total commissions resulted from transactions in prime districts 9, 10 and 11, the downtown core and Sentosa. PropNex has also wasted no time setting up a new luxury homes division headed by Douglas Wong, formerly associate director of Knight Frank’s Good Class Bungalow (GCB) arm Regal Homes.
On the performance so far, Mr Mohamed said: ‘The PropNex Grandeur Homes team is starting to show results, with five transactions closed in the core areas including Sentosa and downtown. Grandeur Homes is already serving more than 30 GCB clients and many high net-worth buyers looking to invest in Singapore.’ Mr Mohamed expects Grandeur to capture 20 per cent of all GCB sales within a year.
With the property market so active, PropNex has also seen record hires. In March, it took on a record 207 new agents. Based on the 5,686 licences renewed, as reported to the Inland Revenue Authority of Singapore at end-2006, Mr Mohamed said PropNex is Singapore’s biggest real estate company. ‘More people are attracted to the lucrative prospect of being their own boss and the unlimited possibilities sales can bring,’ he said.
Source: The Business Times, 02 June 2007
Posted by Property Wizkid
Tan Chin Tuan Mansion restored and extended
Tan Chin Tuan Mansion has been restored and redeveloped to include a luxury 20-storey condominium. But most of the units will only be for lease. Four of the 16 units will be kept by the family of the late Tan Chin Tuan. Based on the current benchmark price of about $2,500 psf for Suites @ Cairnhill, the remaining 12 have a market value of about $120 million.
The property has been redeveloped by a business entity called Cairnhill Rock and Chew Gek Khim, granddaughter of Tan Chin Tuan. ‘It has always been the intention of the private company to keep the entire building for sentimental and historical reasons,’ she said. The units are large at almost 4,000 sq ft each. Rents have not been fixed. Ms Chew said they will be benchmarked to market rates. ‘But we will be very selective in our choice of tenants, given the small number of units for lease and the fact that they will be living in close proximity to my family members.’
The development is being marketed by Knight Frank and temporary occupation permit (TOP) is expected by mid-2007. Leasing is not without its upside. For Q1 2007, the official rental index (non-landed) increased 8 per cent quarter on quarter and 23 per cent year on year.
A good indicator of possible rents is the recently launched Orchard Scotts Residences by Far East Organization (FEO) nearby. A spokesman for FEO said monthly rents range from about $8,300 for a 538 sq ft unit to $30,000 for a 3,810 sq ft unit, including a range of services.
Orchard Scotts comprises three blocks. And one of these - or 206 of the 387 units in the whole development - is reserved as serviced residences. Keppel Land is another developer that has held on to units to rent instead of sell. A Keppel Land spokesman said the 168 corporate residence units within the 969-unit Caribbean at Keppel Bay have been close to full occupancy since operations started in 2005.
Explaining its rationale, Keppel Land said: ‘The residences were set aside to cater to the growing number of international travellers here, especially foreigners who are drawn to the world-class waterfront lifestyle we are offering.’ Keppel Land may consider renting units at its new Reflections at Keppel Bay too. Keppel Land said: ‘We have successfully launched our first phase of Reflections at Keppel Bay and are planning for our second phase. As the completion of Reflections at Keppel Bay will take a few years, our options are open at this point in time.’
Source: The Business Times, 01 June 2007
Posted by Property Wizkid
China developer raises US$150m worth of bonds
Shanghai Zendai Property Ltd, which develops real estate in China, raised US$150 million from its first dollar-denominated bond sale, according to an e-mail statement sent to investors. The Hong Kong-listed developer priced the five-year fixed-rate notes to yield 10 per cent, or 5.19 percentage points above US Treasuries, the term sheet shows. Merrill Lynch & Co manages the sale.
The bonds are rated five levels below investment grade at B2 by Moody’s Investors Service, and one level higher at B+ by Standard & Poor’s. Shanghai Zendai’s profit rose 14 per cent to HK$230.5 million (S$45 million) in 2006 as it sold more properties in China. At the end of 2006, it had HK$814 million of bank loans, with HK$351 million due in one year, according to its earnings report.
Property prices in 70 large and medium-size Chinese cities rose 5.3 per cent in February from a year earlier, according to a government survey. New home prices increased 9.9 per cent in the southern city of Shenzhen and 9.7 per cent in Beijing. Lai Fung Holdings Ltd, a Hong Kong-based developer of property in China, in March sold US$200 million of seven-year bonds priced to yield 9.125 per cent.
The securities, rated B+ by S&P, now trade at 4.47 percentage points more than US Treasuries, according to Merrill Lynch.
Source: The Business Times, 31 May 2007
Posted by Property Wizkid
HSR says it has used the tagline for its ads but PropNex claims it should be the biggest agency here. So, which is the biggest of them all? Property agencies, that is. The honour of being able to claim the title of Singapore’s No. 1 agency has sparked a bizarre battle between two heavyweights.
In one corner is HSR International Realtors, which was named the largest real estate agency in Singapore by the Singapore Book of Records (SBOR) last month. The 27-year-old firm and its 5,136 agents, says chief executive (CEO) Patrick Liew, have since used ‘the largest real estate agency’ as a tagline for advertisements.
On Wednesday, however, a challenger emerged from the opposite corner. PropNex, now in its seventh year of business, sent out a statement claiming that its 5,686 agents make it ‘truly Singapore’s largest real estate company’ - a slogan it said has always been used on its website and has even been quoted in the media. ‘We have been advertised, quoted and accepted as the largest real estate agency in Singapore since 2003,’ CEO Mohamed Ismail told The Straits Times yesterday. ‘It is not official, but nobody disputed it until last month.’
He said that ‘he knew from the beginning that HSR’s claim had no merits’ because its office and staff sizes were lower than those of PropNex. HSR hit back by saying its claim was based on PropNex’s published figure of 3,800 agents. But PropNex said the figure referred to only ‘active agents’ - those who have closed a deal within the last year - while it has many more registered agents.
At the heart of this tussle is an issue more weighty than simply the flexing of mathematical muscle. Mr Mohamed said the conflicting claims have affected credibility and caused confusion among clients. ‘We were giving a pitch for a project in Malaysia when the developer asked us if it was true that PropNex had the largest agency, because they had seen HSR’s ad.’ He has since taken up the issue with Mr Ong Eng Huat, the SBOR’s president, and expects a response by next week.
Mr Ong said that ‘while at the time we were quite satisfied that HSR has the largest number of agents, the figure is always changing’. The SBOR is ‘reviewing the method of measuring’, and it is not prepared to do further audits until it comes up with ‘a better form of measurement’. Meanwhile, it is understood that HSR has been told not to attribute the claim of being the largest agency to the SBOR in its ads.
HSR’s Mr Liew told ST yesterday that size does not matter: ‘If we really wanted to play the numbers game, it’s not difficult. I can also produce 10,000 names, but where does it end?’
For him, ‘the important thing is not to be the largest, but to be the best’. ‘I lay claim to having the highest-paid agents. This month, my top agent is making at least $1.7 million. I throw my last dollar down that my top 30 agents will outdo their top 30. They cannot beat me.’
Another big gun, ERA, has refrained from jumping into the fray, even though it boasts more than 5,000 agents. ‘We are not interested in being the biggest,’ said assistant vice-president Eugene Lim. ‘(Being a) big agency doesn’t mean big market share. It’s about productivity; it’s the number of transactions you do.’
Source: The Straits Times, 02 June 2007
Posted by Property Wizkid
Fancy having part of $10m commissions? Be an Agent.
The smartest way to take advantage of the property upturn could be to become an estate agent. PropNex CEO Mohamed Ismail says that in April alone its agents earned more than $10 million commissions - twice as much as in April 2006. The number of transactions also increased - from 1,648 to 2,445 - over the period. And in the first three weeks of May, PropNex again recorded more than $10 million of commissions, which bodes well for the full year.
In 2006, commissions totalled $75 million, Mr Mohamed said. According to PropNex data, the increase in commissions has resulted from transactions in the private secondary market and residential rental market. Commissions from the private secondary market increased 200 per cent year on year in April. Slightly over 50 per cent of total commissions in April came from the private market, with the remainder from rental, commercial and Housing & Development Board transactions.
Interestingly, 21 per cent of total commissions resulted from transactions in prime districts 9, 10 and 11, the downtown core and Sentosa. PropNex has also wasted no time setting up a new luxury homes division headed by Douglas Wong, formerly associate director of Knight Frank’s Good Class Bungalow (GCB) arm Regal Homes.
On the performance so far, Mr Mohamed said: ‘The PropNex Grandeur Homes team is starting to show results, with five transactions closed in the core areas including Sentosa and downtown. Grandeur Homes is already serving more than 30 GCB clients and many high net-worth buyers looking to invest in Singapore.’ Mr Mohamed expects Grandeur to capture 20 per cent of all GCB sales within a year.
With the property market so active, PropNex has also seen record hires. In March, it took on a record 207 new agents. Based on the 5,686 licences renewed, as reported to the Inland Revenue Authority of Singapore at end-2006, Mr Mohamed said PropNex is Singapore’s biggest real estate company. ‘More people are attracted to the lucrative prospect of being their own boss and the unlimited possibilities sales can bring,’ he said.
Source: The Business Times, 02 June 2007
Posted by Property Wizkid
Tan Chin Tuan Mansion restored and extended
Tan Chin Tuan Mansion has been restored and redeveloped to include a luxury 20-storey condominium. But most of the units will only be for lease. Four of the 16 units will be kept by the family of the late Tan Chin Tuan. Based on the current benchmark price of about $2,500 psf for Suites @ Cairnhill, the remaining 12 have a market value of about $120 million.
The property has been redeveloped by a business entity called Cairnhill Rock and Chew Gek Khim, granddaughter of Tan Chin Tuan. ‘It has always been the intention of the private company to keep the entire building for sentimental and historical reasons,’ she said. The units are large at almost 4,000 sq ft each. Rents have not been fixed. Ms Chew said they will be benchmarked to market rates. ‘But we will be very selective in our choice of tenants, given the small number of units for lease and the fact that they will be living in close proximity to my family members.’
The development is being marketed by Knight Frank and temporary occupation permit (TOP) is expected by mid-2007. Leasing is not without its upside. For Q1 2007, the official rental index (non-landed) increased 8 per cent quarter on quarter and 23 per cent year on year.
A good indicator of possible rents is the recently launched Orchard Scotts Residences by Far East Organization (FEO) nearby. A spokesman for FEO said monthly rents range from about $8,300 for a 538 sq ft unit to $30,000 for a 3,810 sq ft unit, including a range of services.
Orchard Scotts comprises three blocks. And one of these - or 206 of the 387 units in the whole development - is reserved as serviced residences. Keppel Land is another developer that has held on to units to rent instead of sell. A Keppel Land spokesman said the 168 corporate residence units within the 969-unit Caribbean at Keppel Bay have been close to full occupancy since operations started in 2005.
Explaining its rationale, Keppel Land said: ‘The residences were set aside to cater to the growing number of international travellers here, especially foreigners who are drawn to the world-class waterfront lifestyle we are offering.’ Keppel Land may consider renting units at its new Reflections at Keppel Bay too. Keppel Land said: ‘We have successfully launched our first phase of Reflections at Keppel Bay and are planning for our second phase. As the completion of Reflections at Keppel Bay will take a few years, our options are open at this point in time.’
Source: The Business Times, 01 June 2007
Posted by Property Wizkid
China developer raises US$150m worth of bonds
Shanghai Zendai Property Ltd, which develops real estate in China, raised US$150 million from its first dollar-denominated bond sale, according to an e-mail statement sent to investors. The Hong Kong-listed developer priced the five-year fixed-rate notes to yield 10 per cent, or 5.19 percentage points above US Treasuries, the term sheet shows. Merrill Lynch & Co manages the sale.
The bonds are rated five levels below investment grade at B2 by Moody’s Investors Service, and one level higher at B+ by Standard & Poor’s. Shanghai Zendai’s profit rose 14 per cent to HK$230.5 million (S$45 million) in 2006 as it sold more properties in China. At the end of 2006, it had HK$814 million of bank loans, with HK$351 million due in one year, according to its earnings report.
Property prices in 70 large and medium-size Chinese cities rose 5.3 per cent in February from a year earlier, according to a government survey. New home prices increased 9.9 per cent in the southern city of Shenzhen and 9.7 per cent in Beijing. Lai Fung Holdings Ltd, a Hong Kong-based developer of property in China, in March sold US$200 million of seven-year bonds priced to yield 9.125 per cent.
The securities, rated B+ by S&P, now trade at 4.47 percentage points more than US Treasuries, according to Merrill Lynch.
Source: The Business Times, 31 May 2007
Posted by Property Wizkid
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