A question of time for developers

Tuesday, November 30, 2010

Published November 30, 2010

A question of time for developers


BT'S ESTIMATES show that generally developers who bought sites through collective sales and other private sector sources in the 2006-2007 period are likely to have to complete their projects on them by 2014-2015, if they don't wish to make hefty payments to the state for any time extension.


BT's calculation assumed that it took about one year for the en bloc sales to be given the nod by the Strata Titles Board/High Court. Another assumption is a six-year project completion period (PCP) prevailing at the time for private residential projects undertaken by foreign housing developers with Qualifying Certificates, a category that covers not just foreign players like China Sonangol but effectively all Singapore-listed developers. A company is defined 'foreign' if it has even one non-Singaporean shareholder or director.

BT also worked in a one-year free extension to the PCP period that many of these developers would have applied for under a concession granted by the Government in the January 2009 Budget to help mitigate the effects of the property slump following 2008's global financial crisis.


Source: businesstimes.com.sg

Punggol Town Centre site up for bidding

Published November 30, 2010

Punggol Town Centre site up for bidding

By FELDA CHAY


THE Housing and Development Board (HDB) is launching a tender for a mixed commercial and residential site in Punggol Town Centre - the first site sale along the Punggol Waterway - and industry watchers expect the site to see healthy interest.


Located at the junction of Punggol Central and Punggol Walk, the 99-year leasehold site has a maximum permissible gross floor area of 1.4 million sq ft. According to HDB, the site can potentially yield 542,501 sq ft of gross commercial space, and 685 dwelling units.

It has a project completion period of seven years from the date of acceptance of the tender.

Said Ong Kah Seng, Cushman & Wakefield's senior manager of Asia-Pacific research: 'The mixed- use site is expected to draw moderate interest from developers, particularly from some developers who wish to have a first-mover advantage in developing condominiums in Punggol, a new growth residential area which is by far predominantly public residential.'

He expects the site to draw about seven bids, with the expected winner to fork out between $400- $450 per square foot per plot ratio (psf ppr).

Assuming that the project is launched in the second half of next year, the expected selling price of the apartments should be between $800-$850 per square foot, he added.

Mr Ong said that some developers who participated in the recent tender of a close-by site in Punggol Central/Punggol Walk, but failed to secure the land, may participate in this tender as private housing demand in the northeastern area is expected to be overall positive.

Chua Chor Hoon, DTZ's head of research in South- east Asia, noted that the site will house the first major shopping centre in the town, and is located in the immediate vicinity of the MRT and LRT stations and the bus interchange.

The new flats in the area should provide a ready catchment of shoppers, said Ms Chua. She expects six to nine bids for the site.


Source: businesstimes.com.sg

Non-landed private home prices fall 0.7% in October

Published November 30, 2010

Non-landed private home prices fall 0.7% in October
Drop was caused by falling prices in the central and non-central locations


By UMA SHANKARI


PRICES of non-landed private homes fell 0.7 per cent in October, according to the monthly index compiled by the National University of Singapore (NUS).


NUS' Singapore Residential Price Index (SRPI) shows overall home prices fell last month, after having climbed 1.1 per cent per month in both August and September.

The last time the overall index fell was in July, when it dipped 0.1 per cent. NUS has been compiling the index since March this year.

October's drop was caused by falling prices in the 'central' and 'non-central' locations.

Home prices in central locations fell 1.1 per cent last month, after climbing 0.9 per cent in September. The central SRPI last fell in July, by 0.8 per cent.

And in a sign that the slowdown in the property market is now spreading to the mass market segment, the non-central SRPI dipped 0.5 per cent in October - the first time it has fallen since NUS started compiling the index. The non- central SRPI rose 1.3 per cent in September.

Year-to-date, the overall SRPI is up 10.7 per cent. Non-central prices are up 12.8 per cent, while prices in the central region have climbed a smaller 8.1 per cent.

The October flash estimate for the central region is now 3.6 per cent below its pre-financial crisis high in November 2007.

However, for the non- central region, the latest index has surpassed its pre- crisis peak in January 2008 by 14.9 per cent.

As a result, the overall SRPI flash estimate for October is 7.6 per cent above its November 2007 high.

Looking ahead, analysts expect mass market home prices to moderate further, given the impending large supply of development sites being offered for sale by the government.

'Most of the sites in the H1 2011 Government Land Sale programme will inject supply to the mass market segment, and this may rein in mass market home prices,' said Christine Sun, senior manager at Savills Research & Consultancy.

But it will have little impact on the mid-tier and luxury home prices, which could rise further, given the positive economic outlook for next year, she said.

DMG & Partners Research analyst Brandon Lee, for example, expects a 10 per cent fall in mass market home prices due to supply and continued policy risks.

NUS' index, which is compiled by the Institute of Real Estate Studies, was launched to serve as a resource for developing property derivatives in Singapore.

It is computed using the market values of a basket of completed properties.

Uncompleted projects are not included in the basket, as price movements for such projects can be different from those in the rest of the market.

But the impact of new launches on the prices of completed properties in the vicinity is factored in.


Source: businesstimes.com.sg

New rule may weigh on prices of luxury condos

Published November 30, 2010

New rule may weigh on prices of luxury condos
Developers lose flexibility to time their construction as delays could spell big payouts on their part
By KALPANA RASHIWALA
(SINGAPORE) The prices of luxury condos have continued to rise this year but a new rule may soon tie the hands of the developers.


Till now, many have picked their time to launch developments when sentiments are good and decent prices can be charged. But under the rule changes which are expected to kick in early next year, they may lose this luxury.

If they bust the project completion period on sites bought from private sector sources, they stand to lose not just the 10 per cent bankers' guarantee for land cost, but could also end up making huge payments for time extension.

All this could force them to launch earlier than they might like and affect prices, market watchers said.

The median price of new luxury condo transactions stood at $3,265 per square foot in Q3 this year, an increase of 18.7 per cent year to date, according to CB Richard Ellis' analysis. However, the figure is still about 13 per cent shy of the peak achieved in Q4 2007.

A question mark now hangs over whether the previous peak median price of $3,750 psf can be scaled next year.

CBRE's compilation shows about 1,500-odd luxury non-landed homes could be generated on projects that have received planning approval from Urban Redevelopment Authority and which have yet to be launched. These include five projects in the Ardmore Park area alone, the Westwood site at Orchard Boulevard, the former Parisian plot at Angullia Park and Ho Bee's and IOI's 302-unit condo on the Pinnacle Collection plot at Sentosa Cove.

CBRE executive director (residential) Joseph Tan says: 'Developers' strategy in the first instance, would be to hold off launching these projects as long as they can until sentiment improves further in this segment.'

Agreeing, Wheelock Properties (Singapore) CEO David Lawrence says: 'Traditionally, developers know that for really high-end projects on very good sites like Ardmore Park, if you just keep them in your pockets, eventually prices will come up and they make money. But developers can't do that anymore.'

The catch is the amendment to the Residential Property Act that will apply to private residential projects undertaken by foreign housing developers with Qualifying Certificates (QCs), a category which effectively covers all listed developers.

Such projects, built on residential sites bought from private-sector sources, will in future have to be completed within the stipulated project completion period (PCP). Otherwise, the developers may not only lose their bankers' guarantees as is the case currently but also have to pay the state for any time extension.

This is similar to the scheme for sites sold through the Government Land Sales Programme. Developers have to pay 8 per cent of the tendered land price for the first year of PCP extension. They must pay 16 per cent for the second year's extension and 24 per cent per annum for the third and subsequent years.

CBRE's Mr Tan estimates that since it takes 30-36 months to complete a typical high-rise condo, and assuming developers need to attain Temporary Occupation Permit (TOP) by 2014-2015, construction would have to begin around 2011-2012.

That still leaves some room to avoid a bunching of project launches given that on average, developers have been able to sell an average of about 650 non-landed homes per year at above $2,000 psf over the past five years.

One way that deep-pocketed developers may get out of the bind is to build their projects first - and meet PCP deadlines - but launch them for sale only when the sentiment is good.

For this reason, most property consultants don't expect developers to drop prices. 'But there's a good chance they may have to reduce their profit expectations if they wish to clear the units,' says Knight Frank managing director (residential services) Peter Ow. While he's betting there's a fair chance that the market could revisit the 2007-high in luxury condo prices next year, others are less sanguine.

As Mr Lawrence puts it: 'Prime property in the long term will still do very well in Singapore, but it's a difficult period at the moment. There's plenty of demand. I think prices won't come down much, but they won't go up to the level that developers are expecting; perhaps (they'll have to) make much finer profit margins.'

There have been 'one-off' cases of high-priced transactions lately - such as a high-floor apartment at Boulevard Vue that Far East Organization sold last month for $4,800 psf reportedly to a foreign buyer. 'However, we'll need to see more foreign money flowing into Singapore. Right now, Singapore luxury condo prices are still below those in other major cities including London, where prime apartments are going for about £2,500-4,000 psf' (S$5,205-8,329) says CBRE's Mr Tan.

DTZ South-east Asia research head Chua Chor Hoon said: 'With the major economies still weak, foreign buyers have not come back to Singapore in a big way yet.'

Knight Frank's Mr Ow is hopeful that 'property curbs in China and Hong Kong could divert some moneys to Singapore and boost our high-end market'.














Source: Businesstimes.com.sg

S'pore properties stay on firm ground

Published November 25, 2010

S'pore properties stay on firm ground


YESTERDAY's report by DTZ Research provided yet another confirmation as to why the private property market in Singapore is likely to stay firm. In the report, which detailed Singapore's residential demand for the third quarter, the property consultancy highlighted that mainland Chinese buyers, who have grown significantly in numbers from 2007, recorded their highest share of 20 per cent among non-Singaporean buyers. This puts them on a par with Indonesians as the second largest group of non-Singaporean buyers, after Malaysians who top the list with 21 per cent. Meanwhile, Indian nationals have also expanded their presence significantly from 14 per cent in 2009 to 17 per cent.


Meanwhile, companies too are returning to the market. They accounted for 3 per cent of all transactions in the third quarter, up from 2 per cent in the previous quarter. This is still some way off from their 10 per cent or more share registered in the third quarter of 2007. Overall, the number of private property transactions for the first nine months of this year is about 28,000, and has a high likelihood of exceeding last year's total transactions of some 32,000.

A number of factors could spell continued demand for Singapore private properties. One, the huge wave of liquidity flowing into this part of the world, arising primarily from the quantitative easing in the United States and the poor economic outlook in the West. Meanwhile, other Asian economies, namely China and Hong Kong, in a bid to stop a property bubble from further inflating in their own markets, have introduced numerous cooling measures. That, in turn, will redirect some of the liquidity into Singapore, unless even harsher measures are put in place by the Singapore government. Two, the growing number of rich Asians. According to the World Wealth Report 2010, published by Merrill Lynch Global Wealth Management and Capgemini SA, the number of people with investable assets of US$1 million in the Asia-Pacific region rose 26 per cent to three million, catching up with Europe for the first time. Wealth in the region surged 31 per cent to US$9.7 trillion. China's millionaire club grew by 31 per cent from 2008 to 477,000 people, while India's expanded by 51 per cent to 126,700 people. This trend looks set to continue. This growing group will increasingly want to diversify its investment portfolios. Singapore, with its stable government and socio-economic backdrop and rising 'hipness' quotient, will attract its fair share of funds.

So, should the Singapore government come down hard to stem the inflow of foreign funds? Such a move doesn't quite make sense, given that the government has worked hard for many years to make Singapore what it is today - an appealing place to live in. So, more likely moves include measures to ensure abundance, affordability and desirability of public housing, and perhaps at the same time penalising the inflow and outflow of short-term capital. Properties, it would appear, remain on firm ground in Singapore.

Source:www.businesstimes.com.sg

More sites to be put on 1H2011 GLS programme: MND

November 25, 2010, 12.47 pm (Singapore time)

More sites to be put on 1H2011 GLS programme: MND

By ANGELA TAN


The Ministry of National Development (MND) announced on Thursday that it will place 17 sites, which can yield about 8,100 residential units in total, on the Confirmed List of the 1H2011 Government Land Sales (GLS) Programme in order to maintain a strong supply of private housing to meet demand.


This is comparable to the supply from the Confirmed List in the 2H2010 GLS Programme, which was the highest supply since the Confirmed List/Reserve List system was introduced in 2H2001.

The 17 Confirmed List sites comprise 16 residential sites (including 3 Executive Condominium (EC) sites) and 1 commercial & residential site.

In addition, the Reserve List in 1H2011 will have 13 sites, which can together yield about 6,200 residential units. The 13 Reserve List sites comprise 12 residential sites (including 1 EC site) and 1 commercial & residential site.

The 1H2011 GLS Programme will therefore have a total of 30 sites for residential development, including 4 EC sites and 2 commercial & residential sites, which can generate about 14,300 private residential units.


Sourcer: www.businesstimes.com.sg

HDB awards Tampines Ave 8 site at S$187.59 mln

November 25, 2010, 5.27 pm (Singapore time)

HDB awards Tampines Ave 8 site at S$187.59 mln

By ANGELA TAN


The Housing & Development Board (HDB) announced on Thursday that it has awarded the sale tender for the land parcel at Tampines Avenue 8 to Hoi Hup Realty Pte Ltd, Sunway Developments Pte Ltd and SC Wong Holdings Pte Ltd.


The winning bid for the 20,600 sq m site was S$187.59 million.

The proposed development for the 99-year lease site is for Executive Condominium Housing, with an estimated 525 units.



Source: www.businesstimes.com.sg

CapitaLand, HPL unveil d'Leedon at average S$1,680 psf

November 25, 2010, 5.34 pm (Singapore time)

CapitaLand, HPL unveil d'Leedon at average S$1,680 psf

By ANGELA TAN


CapitaLand, Hotel Properties Limited and their partners on Thursday unveiled d'Leedon, a residential development along Farrer Road on the site of the former Farrer Court.


d'Leedon, designed by internationally-renowned Pritzker Architecture Prize winner Zaha Hadid, is being developed by a CapitaLand-led consortium that includes Hotel Properties Limited, a fund managed by Morgan Stanley Real Estate and Wachovia Development Corporation (a unit of Wells Fargo & Company).

A total of 1,715 units - comprising 1,703 apartments and 12 exclusive semi-detached houses - will be built on the expansive 840,049 sq ft site. The apartments are spread over seven 36-storey residential towers.

The average price of the units is S$1,680 per square foot.

www.businesstimes.com.sg
Source:

Good take-up seen at home launches

Monday, November 29, 2010

Published November 29, 2010

Good take-up seen at home launches
CapitaLand sells 48 units at d'Leedon preview


By EMILYN YAP


(SINGAPORE) Property developers continued to log sales at their residential projects over the past week.


During the weekend, CapitaLand sold 48 units at d'Leedon - where Farrer Court used to be - for an average price of $1,680 per sq ft. It previewed the project only to former Farrer Court owners and 266 households visited the show gallery.

Units sold included one-plus-study units, two-bedders and three bedders. The former residents were able to choose from 200 units of various sizes across all floors in two towers.

The 99-year leasehold d'Leedon will have 1,703 apartments spread over seven towers and 12 semi-detached houses. Official sales will start this Thursday.

'We are very happy with the sales response,' said CapitaLand Residential Singapore CEO Wong Heang Fine. 'We expect more response from owners who could not make it for this preview.'

Another developer, UOL Group, has sold a total of 252 units out of 320 launched at the freehold Spottiswoode Residences. Selling prices ranged from $1,720 to $2,270 psf.

Sales at the project near Tanjong Pagar have been brisk. It was first launched about two weeks ago and 130 units were taken up during a three-day preview, out of 150 released then. The highest price achieved for those 130 units was $2,150 psf.

Over at Tampines, Sim Lian Group has sold 375 units at Waterview at an average price of $838 psf. It has launched 500 units in the 99-year leasehold project so far.

Sales have risen from last Monday, when the developer said that it sold 332 units.

Weekend sales figures for both Spottiswoode Residences and Waterview were not available. It is therefore unclear if the pace of home buying has slowed after more measures to keep the property market stable were announced last Thursday.

Concerned that hot money and low interest rates would send private home prices rising too quickly, the government pledged to release more land next year. Sites which can yield a record 14,310 new homes will be available under the H1 2011 land sales programme.

On Saturday, National Development Minister Mah Bow Tan also stressed that the government will introduce more measures to curb property prices if necessary.


Source: http://www.businesstimes.com.sg/

Bus interchange plot in Bukit Panjang slated for mixed use

Published November 27, 2010

Bus interchange plot in Bukit Panjang slated for mixed use

By KALPANA RASHIWALA


THE Urban Redevelopment Authority has made a commercial/residential plot in the Bukit Panjang area available for application.
The Reserve List site is next to an existing LRT station and the future Bukit Panjang MRT Station under Downtown Line 2, which will be connected to key precincts in the city centre such as Bugis and Marina Bay.

At least 35 per cent of the 612,078 sq ft maximum gross floor area (GFA) must be set aside for commercial use.

The project's residential component could yield about 310 apartments. The 1.9 hectare site - at the corner of Petir and Jelebu roads - is occupied by a bus interchange, which will have to be redeveloped and integrated within the future development. The GFA for the permanent bus interchange will be counted as part of the total GFA for commercial use, URA said.

Despite the fact that the state will continue to roll out a substantial quantum of residential land through the Confirmed List in the first half of 2011, some developers could still be keen on applying for the Bukit Panjang mixed-use plot to be released for launch from the state's Reserve List if they are keen on embarking on a suburban shopping centre development.

And the sale of the residential component would help finance the development, analysts say. 'Those keen on the site would have to be confident of making the shopping centre successful,' says Credo Real Estate executive director Ong Teck Hui. 'The mall would have to be sufficiently large and have an attractive tenant mix to create critical mass and compete with the surrounding malls.'

The plot is a stone's throw from Bukit Panjang Plaza and Ten Mile Junction.

Cushman & Wakefield senior manager (Asia Pacific research) Ong Kah Seng says that if the plot were launched today, it could draw about five bids, with top offers ranging from $330-370 per sq ft per plot ratio.

'They would probably be looking at an average selling price of about $770-830 psf for the apartments assuming they are marketed in the second half of next year,' he said.

Earlier this year, Far East Organization clinched the Ten Mile Junction site in a state tender for $164 million or $437 psf ppr. It plans to retrofit the existing retail space to create a new mall called Junction 10, with about 120,000 sq ft of retail space, and develop 338 small office-home office (SoHo) units. The construction cost for the entire project is estimated at $100 million.

The SoHo project - called The Tennery - will be launched in the first quarter of next year. The units are expected to be upmarket - along the lines of Far East's The Greenwich in the Seletar Hills area.


Source:www.businesstimes.com.sg

Far East buys Paramount Hotel, Shopping Centre

Published November 27, 2010

Far East buys Paramount Hotel, Shopping Centre
The $214m deal involves a collective sale; Far East plans to manage the hotel


By KALPANA RASHIWALA


FAR East Organization has clinched Paramount Hotel and Shopping Centre along East Coast Road for $214 million.

BT understands that Far East plans to keep the freehold asset as an investment property for recurring income although refurbishment is likely to be on the cards.

The deal involves a collective sale and will be subject to approval from the Strata Titles Board.

Approval has been obtained from owners controlling over 90 per cent of share values and strata floor area in the asset.

Far East plans to manage the hotel. It is currently operated by YTC Corporation, which is selling the 229-room hotel. YTC also owns the Peninsula Excelsior Hotel at Coleman Street.

BT understands that YTC stands to receive about $167 million for the hotel, which translates to about $730,000 per room. The balance $47 million will be payable to the owners of the 95 strata shop units in the development. The ageing hotel and shops are housed in a four-storey podium and eight-storey tower block.

Far East was the highest of nearly 10 bidders that participated in the tender for the collective sale, which closed on Nov 23.

The property has a freehold land area of 102,685 square feet and is zoned for hotel use with a gross plot ratio of up to 3.0 under Master Plan 2008.

The location is familiar to Far East. It is developing Silver Sea and The Shore Residences condominium projects nearby.

The sale was brokered by Jones Lang LaSalle (JLL). The property consultant said that the site was formerly zoned for 'local shopping' use under the 1958 and 1980 Master Plans.

'Subject to planning approval from the authorities, the site with a potential gross floor area of up to 308,056 sq ft has varied redevelopment options such as hotel, commercial, residential or a combination thereof,' it said.

JLL added that the $214 million purchase price works out to about $1,178 per square foot per plot ratio (psf ppr) including development charge (DC) of $40.07 million for residential use at a plot ratio of 2.1 or $736 psf ppr including an estimated $12.8 million DC for a mix of hotel and commercial use at 3.0 plot ratio.


Source:www.businesstimes.com.sg

The hazy mix of cooling measures, excess liquidity and real demand

Published November 27, 2010

News analysis
The hazy mix of cooling measures, excess liquidity and real demand
With govt intending to tighten immigration, release of new sites may not be readily absorbed; developers welcome the new supply and predict prices will hold


By UMA SHANKARI


THE government's move to roll out a bumper supply of new residential sites for development in the first half of 2011 was largely expected by the industry.


But on top of that, there is also an increasing sense that more demand-side measures to cool the property market are on the way.

Home buyers, developers and the stock market have all largely shrugged off the last round of anti-speculation measures introduced on Aug 30.

On Thursday, Singapore's central bank said low borrowing costs and excess liquidity globally may push the island's property prices higher again, setting back government efforts to cool the market.

There are also risks of buyers taking on 'excessive leverage' amid expectations of a sustained period of low rates, and financial institutions easing lending standards and extending more loans to make up for narrowing interest margins, the Monetary Authority of Singapore (MAS) said in its Financial Stability Review report.

The MAS report comes hot on the heels of recent statements by Prime Minister Lee Hsien Loong and Finance Minister Tharman Shanmugaratnam, leading to speculation that the potential for further government intervention has increased significantly.

'While sentiment was dampened in the weeks that immediately followed the Aug 30 measures, there are signs to suggest the property market is becoming active again,' said Nomura analyst Min Chow Sai. 'These have not escaped the government, judging by the recent comments from officials, including the Prime Minister.'

The government is likely concerned the market appears to have shrugged off the February and August measures relatively quickly. Home sales in September declined after the latest round of anti-speculation measures, but picked up again in October. The private property price index also moderated only slightly in the third quarter, with the quarter-on-quarter change in the index falling from 5.3 per cent in Q2 2010 to 2.9 per cent in Q3.

This is partly due to excess liquidity, as pointed out by MAS. But prices and transaction volumes are also being propelled by genuine demand - just as developers here have been saying.

Much of the current tight supply situation is caused by the large growth in population numbers from 2005 to 2009, said Citigroup economist Kit Wei Zheng. Over those five years, Singapore's population rose by more than 800,000.

But with the government's present intention of tightening immigration, the population is not likely to keep growing at the same pace. So the new supply announced on Thursday - which is likely to come on stream over the next four to five years - may not be as readily absorbed.

'The key sense of uncertainty in the medium term is to what extent the immigration policy will be tightened,' Mr Kit said.

Add possible new demand-side measures into the mix and the whole picture gets even more hazy. One policy change seen as likely is a further reduction in the loan-to-value (LTV) ratio cap.

The supply card has already been played. The Ministry of National Development (MND) plans to offer 17 residential sites, with the potential 8,100 private and executive condominium units, under the Confirmed List of the Government Land Sales (GLS) Programme for first-half 2011. This is close to the record 8,135 units offered under Confirmed List sites in the current H2 2010.

Including Reserve List sites, the H1 2011 GLS Programme will have a total of 30 sites that can generate a record 14,300 residential units - even higher than the record 13,900 residential units offered for H2 2010.

'When put into context of demand take-up, H1 2011 total potential land sales of 14,310 units (12,020 private units and 2,290 executive condominiums) are tracking close to our full-year 2010 estimated take-up of 14,500 private units and are likely to compound the basic picture of over-capacity build-out from H2 2012,' Goldman Sachs analysts Paul Lian and June Zhu said in a Nov 25 note.

But perhaps the more telling number is this: According to MND, the total potential supply of private housing units that can be completed in the next few years will be about 80,200 units.

Real estate stocks fell slightly yesterday in response to news of the new supply and speculation about more impending measures. CapitaLand lost 0.8 per cent, City Developments shed one per cent and Keppel Land ended the day 1.3 per cent lower.

But developers BT spoke to - including CapitaLand, City Developments' parent company Hong Leong Group and Keppel Land - said they welcome the release of more sites, and predicted that prices will hold.

'The government is wise in ensuring adequate supply of residential and commercial property,' said Hong Leong spokesman Gerry de Silva. 'More land supply means that tender prices are likely to be moderated as there will be less aggressive price bidding among developers, who now have a wider variety of choices to tender for and can selectively replenish their land banks. This will be good in ensuring a sustainable property market and will ensure there are no runaway property prices. We expect prices to hold.'


Source: http://www.businesstimes.com.sg/

Housing loans rise to 34.5% of banks' portfolio

Published November 26, 2010

Housing loans rise to 34.5% of banks' portfolio


(SINGAPORE) Banks' exposure to housing loans has risen to 34.5 per cent, said the Monetary Authority of Singapore in its Financial Stability Review 2010 released yesterday.


Strong demand for homes has seen housing loan growth averaging some 20 per cent on a year-on-year basis in 2010, since hitting a trough in early 2009, it said.

While it is premature to assess the full impact of the measures announced at end-August 2010, outstanding housing loan growth has moderated slightly on both a year-on-year and quarter-on-quarter basis in September 2010.

Local bank chiefs said earlier this month that new mortgage applications have slumped 20-25 per cent since end-August.

The MAS said that given the strong growth since early 2009, housing loans now account for about 34.5 per cent of DBU (domestic banking unit) non-bank loans as at September 2010, slightly above the average of 32.1 per cent since 2004.

The bulk of housing loans (more than 70 per cent) are for owner-occupied residential properties, which tend to have a lower risk profile.

Negative equity housing loans represented less than one per cent of outstanding housing loans as at September 2010, down from a peak of close to 3 per cent in September 2009.

Similarly, the share of housing loans with loan-to-value above 80 per cent fell from a high of 17.3 per cent in September 2009 to 7.1 per cent as at September 2010.

The asset quality of housing loans remains robust with non-performing loan (NPL) ratios at well below one per cent as at Q3 2010.

The MAS also said that after 10 consecutive months of contraction, year-on-year growth of outstanding building and construction (B&C) loans turned positive in August 2010.

The banking system's Section 35 property exposures (which excludes home loans) stood at 15.8 per cent as at Q3 2010, well below the regulatory limit of 35 per cent.

Section 35 ratio looks at property exposures which include loans to property and non-property corporations, housing loans for investment purposes and other property-related debt instruments.

Lending to the B&C sector accounted for about 17 per cent of total DBU non-bank loans as at September 2010. The NPL ratio for B&C loans remained low through the downturn, almost reaching one per cent in Q2 2009, but moderating to well below one per cent as at September 2010.

The relatively robust asset quality of B&C loans is largely due to the recovery of the property market and the improving financial conditions of B&C firms.

B&C loans growth could rise moving forward owing to continued land sales and more construction of HDB Build-to-Order projects.

While B&C NPLs appear benign at this juncture, developments should be closely monitored in view of likely stronger loan growth and the risk that borrowing decisions may be distorted by assumptions of a sustained low interest rate environment, the MAS said.


Source:www.businesstimes.com.sg

200 d'Leedon units for sale to ex-Farrer Court owners

Thursday, November 25, 2010

Published November 26, 2010

200 d'Leedon units for sale to ex-Farrer Court owners
Average selling price is $1,680 psf; or under $1m for a one-plus-study unit


By LYNN KAN

CAPITALAND will release 200 units of its highly anticipated 1,715-unit residential project, d'Leedon, this weekend for sale to former owners of Farrer Court, who sold the land to CapitaLand in 2007.


CapitaLand said that the public launch of the 99-year leasehold residential project on Farrer Road will be 'soon' after this preview.

The units that will be on sale range from one-plus- study to four-bedroom units. The average selling price is $1,680 per square foot (psf), which translates to below $1 million for the smallest units to $1.5 million for a two-bedder.

These units are drawn from two of d'Leedon's seven 36-storey towers, which are near its King's Road entrance. They make up barely one-third of the two towers' 678 units.

d'Leedon will also have penthouses, three-storey garden homes and landed property. The latter, 12 semi-detached garden villas, will be rolled out in d'Leedon's last phase. CapitaLand would not say how many phases the project will have.

The total cost of developing the District 10 project is about $3 billion. This includes the $1.3 billion price tag for the 840,049 sq ft site which was bought in a collective sale in 2007.

The breakeven cost remains at CapitaLand's previous estimates of $1,350 to $1,450 psf.

d'Leedon is being developed by a CapitaLand-led consortium that includes Hotel Properties Limited, a fund managed by Morgan Stanley Real Estate, and Wachovia Development Corporation.

Yesterday, CapitaLand Residential Singapore's chief executive Wong Heang Fine said that interest in d'Leedon seems to be good, with 300 of Farrer Court's 600-odd residents indicating that they would come to the preview.

When asked why the project took this long to come to market when the land was bought in 2007, CEO and president of CapitaLand Group Liew Mun Leong said that it was partly to do with the recession when it was 'senseless to do any launch'.

He also quipped: 'It also takes time to get our architects to conceive the design - and good architects are difficult to manage.'

The architect behind d'Leedon is Zaha Hadid, the first female winner of the Pritzker Architecture Prize. Patrik Schumacher from Zaha Hadid Architects who also worked on the project with Ms Hadid said that the buildings' inspiration was very much taken from nature.

The 150-metre tall towers were conceptualised as flowers growing upwards from a central strip of private gardens. Each tower is unique as they are sub-divided into 'petals' according to the number of units on each floor.

The towers take up only 22 per cent of the land area. The rest of the 655,000 sq ft space, said Mr Schumacher, is dedicated to two swimming pools, greenery and recreational facilities such as clubhouses.

One tower of d'Leedon will have its third to 10th levels host 80 elderly friendly units. Mr Wong said they are meant to encourage multi-generational families to live close to one another.

Viewers of d'Leedon's show galleries would see luxurious customised decor. Four show suites were decked out by Hong Kong- based interior designer Terence Tam from Union-Tech Services. Each apartment comes with its own scent, such as baked bread or marinated salmon.

The last, a three-storey garden home, was specially designed by Zaha Hadid Architects and bears Ms Hadid's signature use of curves in its furnishings, bed linen and even wallpaper.

d'Leedon is expected to obtain its temporary occupation permit by 2015.

Source:www.businesstimes.com.sg

SingXpress wins Balestier site with $21m bid

Published November 26, 2010

SingXpress wins Balestier site with $21m bid

By JAMIE LEE

SINGXPRESS has successfully tendered for a $21 million property project at Balestier Road through a subsidiary, it said yesterday.

The company, which recently shed its travel-related businesses to focus on property investment, said it plans to redevelop an existing block of 16 flats at 235 Balestier Road, known as Waldorf Mansions.

The site has a permissible total gross floor area for construction of 31,875 sq ft for residential use.

SingXpress intends to redevelop it into about 50 apartments.

The initial funding of $7 million will come through equity and shareholders' loans.

SingXpress will pay 90 per cent of that amount, in proportion to its stake in its subsidiary that won the bid. The balance of the funding may come through shareholders' loans, it said.

No date has been set for the completion of the development, but SingXpress said it did not expect the acquisition to have a significant effect on the group's earnings for the current financial year.

The company said it failed in a second tender, but did not give details.

SingXpress said this month that its Catalist sponsor Phillip Securities had resigned because the brokerage has not been able to fill the position for head of its corporate finance department.

The last day of its sponsorship is Feb 11.

Phillip Securities has also resigned as sponsor for Asiamedics, citing the same reason.

When contacted, a spokesman for the brokerage would only say that it is working with the companies to find new sponsors.

Source: www.businesstimes.com.sg

Govt plays land supply card, has more up its sleeve

Published November 26, 2010


Govt plays land supply card, has more up its sleeve
Bumper offering of residential sites over coming months; MAS keeping eye on property market situation

By UMA SHANKARI

(SINGAPORE) Singapore stands ready to take more steps to cool the property market and will roll out another bumper supply of land for new residential projects for the first half of 2011, government agencies said yesterday.

There is 'a possibility' that property transactions and prices could pick up again given the current global conditions of ample liquidity and low interest rates, said the Monetary Authority of Singapore (MAS) in its Financial Stability Review report.

But MAS conceded that the Aug 30 anti-speculation measures appear to have dampened activity in the private residential property market 'somewhat'.

The government will adopt additional measures if necessary, MAS added.

Tackling the supply side of the equation, the Ministry of National Development (MND) said it will release a large supply of land for new homes in H1 2011 as demand from both developers and homeowners remains robust.

A total of 17 residential sites, with a potential 8,100 private and executive condominium units, will be offered under the confirmed list of MND's Government Land Sales (GLS) Programme for H1 2011. This is close to the record 8,135 units offered under confirmed list sites in H2 2010.

More than half of the new sites are located close to plots sold earlier this year in government land tenders or are near popular property launches. But MND said that the sites were not selected with the intention of dampening prices at neighbouring developments.

'Demand for private housing remained strong for the first 10 months of 2010 because of Singapore's strong economic performance,' said Marc Boey, group director for land sales and administration at the Urban Redevelopment Authority, an MND unit. 'In response to the strong demand, developers have continued to acquire land for private housing development from the second-half 2010 GLS Programme.'

Developers sold about 13,600 private homes (including about 530 executive condo units) in the first 10 months of the year. This is comparable to what was sold over the same period last year.

Major developers including CapitaLand, Hong Leong Group and Keppel Land said that they welcomed the release of more sites and predicted that prices will hold.

'I do not think the GLS will depress prices,' said CapitaLand chief executive Liew Mun Leong, who was speaking at a property launch. 'Demand is still heavy. Developers want to get their inventory built up.'

But some market players raised concerns of oversupply just as the H2 2010 GLS Programme was unveiled in May this year.

'Developers are still bidding for sites and bid prices have not fallen much. So the government continues to flood the market with supply. It might be too much,' said one developer.

DTZ's South-east Asia research head Chua Chor Hoon said that if developers soak up the supply, there will be a substantial number of units which will be completed in a few years' time.

'If the Western economies do not pick up by then and global growth is not strong, there may be a problem of too many units chasing after a smaller pool of occupants,' Ms Chua warned. 'On the other hand, if the Western economies recover, interest rates will start to rise which will also curtail buying demand, which is currently fuelled by the low interest rates.'

Teo Hong Lim, chief executive of Roxy-Pacific Holdings, pointed out that sites sold through government land tenders are still more attractive than those bought from the private sector through treaties and collective sale tenders.

Including reserve list sites, the H1 2011 GLS Programme will have a total of 30 sites which can generate about 14,300 residential units. This is higher than the 13,900 residential units offered for the second half of 2010.

The increase is due mainly to an increase in the reserve list supply from about 5,800 units in H2 2010 to 6,200 units in the first half of 2011.

Across all sectors, the H1 2011 GLS Programme comprises 19 confirmed list sites and 25 reserve list sites. There will be 28 residential sites, five commercial sites, two commercial & residential sites, one 'white' site and eight hotel sites.

These sites can potentially yield about 14,300 private homes, 318,000 square metres of commercial gross floor area and 3,700 hotel rooms.

Home sales in Singapore declined in September following the latest round of anti-speculation measures. But sales of new private homes picked up again in October. The private property price index moderated somewhat in Q3 2010.

But views from market contacts appear mixed, said MAS, with some buyers staying on the sidelines in the hope of price declines and others expecting transaction volumes to pick up again next year.

MAS also warned that expectations of a sustained period of low interest rates may affect the borrowing decisions of individuals and encourage buyers to take on excessive leverage. And financial institutions may also be tempted to loosen lending standards in a bid to extend more loans in the face of thinning interest margins

Source: www.businesstimes.com.sg

S'pore properties stay on firm ground

Wednesday, November 24, 2010

Published November 25, 2010

YESTERDAY's report by DTZ Research provided yet another confirmation as to why the private property market in Singapore is likely to stay firm. In the report, which detailed Singapore's residential demand for the third quarter, the property consultancy highlighted that mainland Chinese buyers, who have grown significantly in numbers from 2007, recorded their highest share of 20 per cent among non-Singaporean buyers. This puts them on a par with Indonesians as the second largest group of non-Singaporean buyers, after Malaysians who top the list with 21 per cent. Meanwhile, Indian nationals have also expanded their presence significantly from 14 per cent in 2009 to 17 per cent.

Meanwhile, companies too are returning to the market. They accounted for 3 per cent of all transactions in the third quarter, up from 2 per cent in the previous quarter. This is still some way off from their 10 per cent or more share registered in the third quarter of 2007. Overall, the number of private property transactions for the first nine months of this year is about 28,000, and has a high likelihood of exceeding last year's total transactions of some 32,000.

A number of factors could spell continued demand for Singapore private properties. One, the huge wave of liquidity flowing into this part of the world, arising primarily from the quantitative easing in the United States and the poor economic outlook in the West. Meanwhile, other Asian economies, namely China and Hong Kong, in a bid to stop a property bubble from further inflating in their own markets, have introduced numerous cooling measures. That, in turn, will redirect some of the liquidity into Singapore, unless even harsher measures are put in place by the Singapore government. Two, the growing number of rich Asians. According to the World Wealth Report 2010, published by Merrill Lynch Global Wealth Management and Capgemini SA, the number of people with investable assets of US$1 million in the Asia-Pacific region rose 26 per cent to three million, catching up with Europe for the first time. Wealth in the region surged 31 per cent to US$9.7 trillion. China's millionaire club grew by 31 per cent from 2008 to 477,000 people, while India's expanded by 51 per cent to 126,700 people. This trend looks set to continue. This growing group will increasingly want to diversify its investment portfolios. Singapore, with its stable government and socio-economic backdrop and rising 'hipness' quotient, will attract its fair share of funds.

So, should the Singapore government come down hard to stem the inflow of foreign funds? Such a move doesn't quite make sense, given that the government has worked hard for many years to make Singapore what it is today - an appealing place to live in. So, more likely moves include measures to ensure abundance, affordability and desirability of public housing, and perhaps at the same time penalising the inflow and outflow of short-term capital. Properties, it would appear, remain on firm ground in Singapore.

Source: www.businesstimes.com.sg

EC housing land prices bouncing back?

Tuesday, November 23, 2010

Published November 24, 2010

PROPERTY
EC housing land prices bouncing back?

By KALPANA RASHIWALA

THERE appears to have been a rebound in the pricing of executive condominium (EC) housing land.


A tender for an EC site at Tampines Avenue 8 yesterday drew a top bid of $302.14 per square foot per plot ratio (psf ppr) from a tie-up between Hoi Hup Realty, Sunway Developments and SC Wong Holdings. This land price is 15 per cent higher than the $263 psf ppr winning bid for an EC plot in Pasir Ris sold at a tender that closed last month. The latest tender in Tampines drew six bids.

Two schools of thought have emerged on the latest tender result. Some market watchers attribute the higher top bid at yesterday's tender to Tampines having more amenities than Pasir Ris and as Hoi Hup director Wong Sjew Hung says, 'Tampines being a more mature town than Pasir Ris'.

However, Cushman & Wakefield senior manager (Asia-Pacific research) Ong Kah Seng argues that the higher pricing for the latest EC site 'is due not just to location but increasingly positive market sentiment as reflected in strong sales by developers'.

He also noted that EC projects are being well received as they're more affordably priced, at about 15-20 per cent below 99-year leasehold suburban private condos (in similar locations), which are scaling record prices.

ECs are a hybrid of public and private housing with ownership and resale restrictions in the first 10 years. After that period, they are fully privatised. EC projects, which boast private condo facilities, are an attractive housing option for buyers who meet the eligibility criteria, including a monthly household income ceiling of $10,000.

Credo Real Estate executive director Ong Teck Hui said that the top bid for the Tampines plot being 15 per cent higher than the Pasir Ris plot could be due also to the latest plot having a better configuration and this being the first EC site to be released in Tampines this year.

Nonetheless, he said that the top bid yesterday is an optimistic one given that winning bids for 99-year private condo plots in other HDB new town locations have been in the $320-345 psf ppr region lately.

The Hoi Hup consortium's top bid at yesterday's tender was about 8.6 per cent higher than the second highest offer of $172.8 million or about $278 psf ppr by Frasers Centrepoint and Lum Chang Building Contractors. City Developments unit Grand Isle Holdings bid $260 psf ppr and EL Development offered $239 psf ppr.

NTUC Choice Homes Co-op offered $238 psf ppr and Sim Lian was the lowest bidder, at $228 psf ppr.

Hoi Hup's Ms Wong said that the plan is to develop a 16-storey project with 575 units on the Tampines Ave 8 plot. About 60 per cent of units will be three-bedroom compact apartments of slightly over 1,000 sq ft; 20 per cent will be two-bedders; slightly more than 10 per cent will be dual-key units comprising a studio unit attached to a two-bedder. The rest will be four-bedders.

'Our breakeven cost will be slightly over $600 psf and we're looking at an average selling price of below $700 psf.'

CBRE Research executive director Li Hiaw Ho said: 'There will be a market for this new EC project if it's priced 15-20 per cent below the recently released Waterview.'

Waterview, a 99-year leasehold private condo a stone's throw away from the latest EC plot, has an average price of $838 psf. It is being developed by Sim Lian


















Source: www.businesstimes.com.sg

China buyers home in on S'pore properties

Published November 24, 2010

China buyers home in on S'pore properties
Their presence is growing; more may come in as HK, China cool markets back home

By EMILYN YAP

(SINGAPORE) Home hunters from China are becoming a force to be reckoned with in Singapore, and their presence could grow further as the authorities on the mainland and in Hong Kong clamp down on real estate speculation.

Analysing the caveats lodged, property consultancy DTZ found that the Chinese accounted for 20 per cent of private home transactions involving foreigners and permanent residents (PRs) in the third quarter. This proportion is the highest since official data was available from 1995.

The Chinese became the second-largest group of non-Singaporean buyers, on a par with Indonesians. Malaysians took top spot with a 21 per cent share, and Indians ranked fourth with 14 per cent.

On the whole, foreigners and PRs accounted for 23 per cent of the 7,888 private-home transactions in the third quarter.

Singaporeans bought the majority of homes and had a 73 per cent share. Companies were involved in the remaining 3 per cent.

The presence of Chinese buyers has grown significantly since 2007, DTZ said. Just a quarter earlier in Q2, they made up 17 per cent of non-Singaporean private home buyers, coming in third behind Malaysians and Indonesians.

Their share of transactions 'may go up further as recent property market curbs in China could prompt more mainland Chinese buyers to turn their attention overseas', DTZ said.

The Chinese government has introduced a raft of rules to cool the property market in the last few months. These include a suspension of mortgages for third homes, higher interest rates, and larger down payments for homes. A property tax is now said to be on the cards.

Hong Kong has also stepped up efforts to weed out property speculators.

Just a few days ago, the authorities imposed a special stamp duty on property transactions with short holding periods - those reselling their properties within six months would be taxed as much as 15 per cent of the total transaction amount.

Chinese buyers are probably expecting limited upside from investing in property at home as more measures come into play, said Credo Real Estate executive director Ong Teck Hui. As a result, some of them could turn to Singapore.

Anecdotally, quite a number of Chinese also buy property in Hong Kong, so rule changes there would also have an effect, he added.

Savills residential director Phylicia Ang agreed that policy tightening on the mainland could lead more Chinese property buyers here. But she pointed out that many purchase homes in Singapore not so much for investment, but because they become PRs or have family members studying here.

'Singapore is one of those cities that they are comfortable with,' said Knight Frank managing director (residential services) Peter Ow.

A number of them become acquainted with the property market here through their private bankers or local developers with offices in China, such as Far East Organization, he added.

The topic of foreigners buying property in Singapore is a touchy one, especially at a time of rising home prices. Singapore has introduced several measures to keep the property market stable since September last year.

On Monday, Finance Minister Tharman Shanmugaratnam said that 'the government will continue to monitor the situation closely and take additional steps, if necessary, to ensure financial stability and sustainable asset markets'.

Most property consultants do not expect the authorities here to tighten policies as sharply as Hong Kong did - at least for the time being. The rate of price escalation for non-landed private homes has slowed in the third quarter and the government may wait to see how prices move for the rest of the year, said Credo's Mr Ong.

The market will be watching CapitaLand's launch of D'Leedon closely for signs of where private home prices are headed. A preview of the project is said to be taking place this week, with asking prices mostly above $1,600 per square foot.

Source: www.businesstimes.com.sg

CapitaLand rolls out 1,715-unit D'Leedon on Farrer Rd

Monday, November 22, 2010

Published November 23, 2010

CapitaLand rolls out 1,715-unit D'Leedon on Farrer Rd
Units in the District 10 project will mostly be priced north of $1,600 psf


By UMA SHANKARI

CAPITALAND has started marketing D'Leedon, the 1,715-unit, 99-year leasehold residential project it will build on the site of the former Farrer Court.

The D'Leedon showflat has been built and agents have started distributing flyers to prospective buyers.

Units in the District 10 project on Farrer Road will mostly be priced upwards of $1,600 per sq ft (psf) for the most part, BT understands.

In terms of the number of units, D'Leedon is believed to be the largest single condominium project ever in Singapore.

But CapitaLand is expected to roll out the project only in phases.

The developer paid a record $1.3 billion for Farrer Court in a collective sale in June 2007 at the peak of the property boom.

That worked out to as much as $783 psf of potential gross floor area.

In 2008, CapitaLand said the entire development would cost around $3 billion and would be in the recognised style of architect Zaha Hadid, the first female recipient of the coveted Pritzker Architecture Prize.

Patricia Chia, who was then head of CapitaLand's residential arm, pegged the project's breakeven cost at around $1,350 psf to $1,450 psf.

D'Leedon will comprise seven high-end residential towers and 12 villas.

The smallest condominium units will be about 900 sq ft, while some villas will be larger than 4,000 sq ft.

Zaha Hadid Architects' design for D'Leedon consists of seven 36-storey, 150-metre towers that will appear to 'grow' from sunken private gardens in the project's landscape.

The towers themselves are sub-divided into 'petals', according to the number of residential units on each floor.

The tops of the buildings will be a series of 'fingers' stepped at different heights.

Zaha Hadid and architectural theorist Patrik Schumacher, who are in charge of the project, have been designing in Singapore for around 10 years now.

Singaporean architecture and engineering firm RSP has also been involved in D'Leedon's design.



Source: www.businesstimes.com.sg

Landed property fever?

Sunday, November 21, 2010

Landed property fever?

Judging from present trends, the landed segment appears to be headed for new highs

by Ong TeckHui
05:55 AM Nov 19, 2010

Six weeks ago, this paper featured my article, Quest for landed property picks up. In it, I touched on the growing scarcity of landed properties in Singapore and its impact on demand and prices.

We observed how landed property prices outperformed non-landed prices during this market upturn. Landed home prices rose 43.2 per cent, compared to 37 per cent for non-landed ones between the middle of last year and the middle of this year, according to the Urban Redevelopment Authority's (URA) residential property price index. Since that article was published, several events have occurred that make it worthwhile to pursue the landed story further.



Landed homes outperform by an even wider margin

When the URA released the third-quarter real estate statistics on Oct 22, all eyes were on the residential price index to see how the market might have been affected by the Aug 30 cooling measures.

As expected, overall prices of private residential properties increased at a slower pace of 2.9 per cent in 3Q2010, compared to 5.3 per cent in the previous quarter.

Closer scrutiny revealed a divergence in the price increases between non-landed and landed homes.

While the rate of price increase for non-landed homes slowed to 1.6 per cent in 3Q2010 from 5 per cent in 2Q2010, that for landed homes bucked the trend by picking up. Landed prices rose 6.2 per cent in 2Q2010 but surged 7.7 per cent in the third quarter. Five quarters of a rising market have pushed landed prices up by 54 per cent but only 39 per cent for non-landed.

The table above compares price changes between landed and non-landed homes, as well as between the different types of landed homes and in different regions from 2Q2009 to 3Q2010.

While all types of landed property have surpassed non-landed in price performance, it is the detached category that impressed with an overall price increase of 58.3 per cent.

Even more surprising is the 63.9-per-cent price increase for detached houses in the north-east region. Although non-landed prices lagged with a 39.1-per-cent increase for the five quarters, those in the rest of central region enjoyed a creditable increase of 49.8 per cent.

On Oct 28, the URA conducted an auction to sell 14 land parcels for landed property development in Sembawang Greenvale Phase 3. These parcels would generate 115 landed units, the majority of which will be terrace houses.

What surprised many was the bullish bidding at the auction.

At the close of the auction, the URA raked in $134.55 million for a total site area of 246,327 sq ft, working out to $546 psf on average.

By contrast, phases 1 and 2 were sold in Oct 2007 and April 2008 at significantly lower average land prices of $285 psf and $223 psf, respectively. What drove demand for these 99-year leasehold land parcels?



Landed Sandwich Class?

For some upgraders to landed property, the price gap between their existing homes and freehold landed homes may be too much of a stretch financially. The more affordable 99-year leasehold landed home bridges the gap, as prices for such properties are about 20 to 25 per cent lower than freehold ones.

Over the years, a critical mass of 99-year landed homes has grown into an established market. In the first three quarters of this year, 17 per cent of all landed property transactions were for 99-year leasehold homes.

Compared to freehold property, the values of 99-year landed homes appreciate slower but their affordability continues to attract buyers.



New benchmarks raise price expectations

Under the present market conditions, 99-year terrace and semi-detached houses on the secondary market in suburban locations generally command $600 to $800 psf, while the $1,000 psf threshold is crossed mainly in the prime districts.

For example, a 3,000-sq-ft semi-detached house in Kingsville (102 years lease from 1996) sold for $3.9 million, or $1,300 psf, while a 3,423-sq-ft terrace house at The Greenwood (103 years from 2008) sold for $3.44 million, or $1,005 psf.

However, Sembawang Greenvale, an outlying location in the north, has also seen new 99-year leasehold houses selling for more than $1,000 psf.

A 1,668-sq-ft terrace house (99 years from 2008) transacted at close to $1.8 million, or $1,070 psf , while another with 1,808 sq ft fetched $1.82 million, or $1,006 psf. Numerous other similar properties in that area have commanded above $900 psf.

Such bullish pricing has contributed to enthusiastic bidding for the Sembawang Greenvale land parcels and the market can expect new units to be just as optimistically priced when they are launched.

At land prices of between $443psf to $640psf in Sembawang Greenvale, the target sale price for a typical 99-year terrace house would be around $2 million, or $1,200 psf, which would be a new benchmark for this market segment.

Judging from present trends, it appears that the landed segment of the property market is headed for new highs.



The writer is executive director, Research and Consultancy at Credo Real Estate.


source: www.todayonline.com/Business

Potential oversupply to hit prices

by Ku Swee Yong
05:55 AM Nov 19, 2010

Singapore is about 700 sq km in size and has roughly 890,000 public housing, 70,000 landed residential and 187,000 non-landed residential units. It is a small country with a small residential property market compared to 100 or more countries. However, the challenge of keeping tab on the physical supply of residential units in Singapore seems insurmountable, especially when trying to estimate future supply.

It seems easier to track completions for the private residential sector as the Urban Redevelopment Authority (URA) publishes quarterly data. Data for Housing and Development Board (HDB) completions and total HDB supply are available once a year from its annual reports. As we have no ability to forecast the HDB demolition pipeline, net additional supply of HDB stock is also impossible to predict.

Let's examine the anticipated supply of private residential units this year. In the URA's 1Q2006 publication, it was anticipated that 6,115 units will be completed this year. Most of those were "planned" and not yet "under construction".

Over the next few quarters, this number grew and by 3Q2007, it was anticipated that up to 21,451 units will get the Temporary Occupation Permit (TOP) this year. This is a 251 per cent rise over 18 months. During that time, there were worries that private residential prices were rising beyond the reach of HDB upgraders. The strong supply numbers sought to alleviate these concerns.

However, as the global economy faltered with Bear Stearns disappearing in March 2008 and Lehman Brothers collapsing in September 2008, the anticipated number of units getting TOP for this year dropped to a low of 5,394 in 2Q2009, coinciding with the worst point of most major stock market indices. This was only nine months away from 2010.

What happened? Did construction companies stop work? Did developers request construction companies to slow down? How did the anticipated supply ratchet down as quickly as it had sprung up?

Forecasts should get sharper and more precise as the event draws nearer. Yet those were turbulent times and the URA's survey of developers could have reflected high degrees of uncertainty too.

But the swing from a high of 21,000 to 5,400 and now back to around 10,000 makes challenging work for investment consultants.

Average annual completions in the last decade numbered about 8,000 units. In mid-2007, an investor holding a residential unit that should be completed this year would think that there was way too much supply coming onstream. He would decide to sell.

In the middle of last year, an investor holding a unit that should be completed this year would decide to hold, because there seemed to be inadequate supply coming onstream. However, the 5,394 units that were anticipated to be completed in the whole of this year were surpassed by June this year, when 5,786 units obtained TOP.

We anticipate this year will close off with 10,536 units completed, almost double the number that the investor in the middle of last year had thought and 32 per cent higher than the long term average of 8,000 units. It poses a challenge for us in advising clients who may want to time their investments and divestments.

What's the supply outlook for the next few years?

As we approach next year, I anticipate that we would also face an upsurge in TOP numbers. Although current official data show that 6,766 units will get TOP next year, my estimate is that we are likely to close next year with more than 10,000 units completed per year. There is a very high chance that many of the units anticipated to complete in 2012 will be ahead of schedule.

Two financial analysts I hold in high regard are Ms Wendy Koh and Mr Tan Chun Keong from Citibank Equities Research, who faithfully track and make projections for private residential completions. In their report Singapore Property - Increasingly Unfavorable Risk/Reward Ratio, they forecast a completion of over 10,000 units in this year and 11,000 each next year and 2012.

Responding to the thirst for private housing and for land to build private residential developments, the Government Land Sales (GLS) programme for 2H2010 has 18 sites on the Confirmed List and 13 sites on the Reserve List. These 31 sites can generate 13,905 units. This is the highest potential supply quantum in the history of the GLS programme.

The HDB has also stepped up its supply of new homes. In his National Day Rally speech, Prime Minister Lee Hsien Loong said 16,000 new HDB flats would be built this year and up to 22,000 next year. In addition, the HDB will accelerate the completion of flats to 2.5 years.

As for the total supply pipeline of private homes, there are almost 73,000 coming onstream within the next five to six years. As many as 55,000 units are expected to be completed by 2014. This represents more than 20 per cent of today's total stock of about 257,000 units.

Of the 19,535 units that are expected to get TOP in 2013, 11,621 are already under construction. Of the 20,504 in 2014, 8,768 are already under construction. We estimate the bulk of those "under construction" units will be completed ahead of schedule because building a typical condominium project takes 24 to 30 months. Exceptions would be very large-scale developments such as The Interlace that has over 1,000 units. Most projects that have begun construction should be completed in late 2012 or in 2013.

What does this all mean?

To sum it up, we believe that in the private residential space, there will be about 11,000 to 12,000 units completing next year and in 2012, and about 12,000 to 14,000 units completing in 2013 and 2014. The completions this year and next will be heavier in the prime districts but completions in 2013 to 2014 will be mainly in the mass market segment.

Adding to this are 16,000 to 22,000 HDB flats that will be completed per year. So, prices may slide from the potential oversupply rather than from the policy measures announced on Aug 30.

What about the demand side of the equation? Singapore's economic make-up has been overhauled and restructured in the 13 years since the Asian financial crisis. Job creation has been strong, with the services sector expanding and financial institutions abuzz with activity, and demand for housing will be driven by the population growth.

So while we may see a potential price drop of 10 per cent next year, the global economic recovery anticipated in 2012 may bring new levels of demand to Singapore.

Supply within three years we can confidently forecast. As for demand, we can be optimistic, but to be able to forecast whether it will match or exceed supply, I'll sign up for tea-leaves-reading classes.



The writer is the founder of real estate agency International Property Advisor, which provides services to high-net-worth individuals.

Source: www.todayonline.com

The return of upgrader demand

by Colin Tan
05:55 AM Nov 19, 2010

If there is anything remarkable about the recently-released developer sales for last month, it has to be the spectacular return of HDB upgraders to the housing market.

In all, 1,597 units were sold during the month, of which about a third or 529 were executive condominiums (ECs). They helped propel developer sales to a dazzling 74 per cent gain over the previous month.

The release of new ECs for the first time in about five years helped relieve some of the growing pent-up demand from upgraders, as well as absorb some of the liquidity pressures in the lower tiers of the housing market.

For many months now, upgraders have been sidelined by investor buyers in the private housing market. While liquidity levels are also at much higher levels at the lower end of the housing market, they cannot match the funds in the hands of investors.

Much of the upgrader demand has no place to turn to as prices of even the mass market segment rise beyond the affordability of most of these buyers. The limited options available to this sandwiched class are to upgrade to ECs and, to a lesser extent, Design, Build and Sell Scheme (DBSS) units.

I expect sales from the upgrader segment to continue to grow from strength to strength in the coming months as more EC and DBSS projects are launched.

Some have suggested that ECs are siphoning off some of the demand for the lower-priced mass market private housing apartments. They note that mass market condos in suburban areas had suffered a drop of about 25 per cent in sales volume, compared with the figure in September.

I would think not. The markets are quite distinct by now, polarised by the jump in prices over the past several months. Upgrader buyers in the private housing market are now in the small minority.

If there was a sharp drop in sales of mass market condos, it was because fewer such projects were launched.

It was also reported that the number of private homes sold in the $2,000 to $2,500 per sq ft price band last month was 207 units, or about eight times the 26 units developers sold in September.

If there were more units sold in the higher price bands, it was because more of such projects were launched during the month. This statistic in itself does not mean prices have risen much higher.

If we analyse price trends without regard to the launches, it will be very confusing. Prices will be shooting up one month and down sharply in another.

Some have commented that the buoyant sales last month may soon lead to another round of cooling measures. Without a proper analysis of prices, I think it is a little premature to talk about a new set of measures.

Have the cooling measures worked?

Industry observers have not helped with their comments. This is partly because they themselves are not clear about the objectives of the cooling measures. If anything, the calibrated approach in the introduction of the cooling measures is meant to restrain prices rather than curtail sales.

And the measures are not targeted at any one housing segment. While they may appear to affect the mass market segment more than others, I am pretty sure that was not the primary objective of policymakers.

The measures are meant to safeguard the system, not punish developers or investors. If sales soared while prices stayed flat, I do not think they will put the system at further risk. The problem is rapid price increases without corresponding growth in fundamentals.

Has that happened again? Maybe yes, maybe no. The test will be when the flash estimate of the property price index is released at the end of this year.

Finally, there has been much debate about housing affordability as well as statistics put out to show if housing is still affordable or otherwise.

At the end of the day, it boils down to the individual household. Even as household incomes rise, they may have less to spend for housing after setting aside money for necessaries.

Many people tell me that children's tuition, music and ballet lessons and holidays are necessary expenditure these days. So are mobile phones, flat screen TVs, broadband and housemaids. With a growing list of necessaries, housing affordability will always be an issue with some households.

Perceptions of affordability also depend on the threshold of the household. Are they conservative spenders or risk takers? A conservative household will always need to set aside more before spending on a home.



The writer is head, research and consultancy at Chesterton Suntec International.

Source; www.todayonline.com

HDB offers 1,176 build-to-order flats in Yishun

Saturday, November 20, 2010

Published November 19, 2010


THE Housing & Development Board (HDB) yesterday offered 1,176 new flats at Yishun - and plans to roll out another 1,010 at Punggol next month.


This takes the number of new units under the build-to-order (BTO) and sale-of-balance flat schemes this year to about 17,700.

The latest flats in Yishun are under the BTO programme. The estate, Yishun Greenwalk, is bounded by Yishun Ring Road, Yishun Avenue 6, Yishun Avenue 9 and a canal linked to Sungei Khatib.

The estate is near Yishun MRT station, Yishun bus interchange and Northpoint shopping centre.

It is also near educational facilities such as Northland Secondary School and Chongfu Primary School. Also in the vicinity are Khoo Teck Puat Hospital, Yishun Park and Safra Yishun Country Club.

Of the 1,176 new units, 112 are three-room flats, 602 are four-room flats and 462 are five-room flats.

The five-room units are priced at $298,000 to $365,000. According to HDB, a comparable five- room resale flat in the vicinity would cost $398,000 to $432,000. The deadline for flat application is Dec 1.

Real estate agency PropNex expects Yishun Greenwalk to be popular with home seekers. Units in the estate could be four times subscribed, said spokesman Adam Tan.

Because the site is within walking distance of Yishun MRT station and near to schools, it is particularly suitable for couples looking to start a family in the next few years, he said.

Source: www.businesstimes.com.sg

Some 200 units sold at Waterview condo

Thursday, November 18, 2010

Published November 19, 2010

Some 200 units sold at Waterview condo
Sim Lian has so far released 348 units of the development

By KALPANA RASHIWALA

SIM Lian Group is understood to have sold about 200 units at its Waterview condo at Bedok Reservoir since it began previewing the project on Tuesday this week. The average price is $838 per square foot.

On the other side of Bedok Reservoir, along a stretch boasting a more scenic view of the water, Frasers Centrepoint and Far East Organization are selling units at their Waterfront Gold project at about $980 psf and at Waterfront Key at around $1,000 psf.

Sim Lian has so far released about half or 348 units of the 696-unit Waterview condo.

The 99-year leasehold project will be officially launched today, accompanied by an advertising campaign.

Units in the 15-storey development range from two- to four-bedders; there are also six-bedroom penthouses. Sizes range from 786 sq ft for a two-bedroom apartment to 4,768 sq ft for a penthouse.

The project is at the corner of Tampines Avenue 1 and 10, next to The Tropica.

Sim Lian is developing the project on a site that it clinched at a state tender in March this year for $421 psf of potential gross floor area.

Most of the units in the Waterview's 12 blocks face the reservoir, Tampines Quarry or swimming pools in the development.

The condo's walls will be washed white and have blue glass windows to reflect the water theme for the project.
















Source: www.businesstimes.com.sg

Pine Grove to en bloc, $1.7b reserve price: report

Tuesday, November 16, 2010

Published November 17, 2010

Pine Grove to en bloc, $1.7b reserve price: report


THE 99-year leasehold Pine Grove in Ulu Pandan could be up for collective sale again with an estimated reserve price of $1.7 billion, said Channel NewsAsia yesterday.


The deal, if successful, would be the largest in the collective sales market since Farrer Court changed hands for $1.34 billion in 2007.

Channel NewsAsia said that property agents have been gathering residents' signatures since November last year, and they have amassed 80 per cent of votes for the collective sale to start. A cooling period is now in place in case residents change their minds.

The 660-unit Pine Grove is a former HUDC estate. Several discussions had taken place between agents and residents to sell the estate in the last few years. The en bloc fever was particularly strong in 2007 as the property market heated up and developers snapped up several estates.

But not all residents in Pine Grove were keen on a deal then. A 'Save The Pine Grove' group was even formed to stop the sale process.

The collective sales market took a breather during the financial crisis and has revived recently, but deals have involved mostly smaller estates with more affordable price tags.

Sources: www.businesstimes.com.sg

First Yishun DBSS project to be launched after CNY

Published November 17, 2010


First Yishun DBSS project to be launched after CNY

By KAREN NG


ADORA Green, for which a groundbreaking ceremony was held yesterday, will be the first design, build and sell project in Yishun under the Housing & Development Board's DBS Scheme. 'The development will be launched next year after the Chinese New Year season,' said Guthrie SK Land executive director Michael Leong. 'The price of the flats is expected to range from $450-500 per square foot.'

The project, at the junction of Yishun Avenue 11 and Yishun Central, will comprise about 800 apartments. Some 65 per cent will be four-room flats, 15 per cent will be five-room flats and the remaining 20 per cent three-room flats. Sizes range from 67 square metres for a three-room flat, 92 sq m for a four-room flat and 112 sq m for a five-room flat. Costs will be $300,000-400,000 plus for a three-room flat, $400,000-500,000 plus for a four-room flat, and $500,000-600,000 plus for a five-room flat.

Under DBSS, private developers build public housing flats with condo-like finishes. Adora Green will comprise six 16-storey blocks, with recreational facilities such as fitness stations and barbecue pits, as well as commercial facilities such as a mini-mart, shops, an eating house and childcare facilities.

At yesterday's ground-breaking ceremony, Minister for Law and Home Affairs K Shanmugam said: 'One of these measures was to allow eligible first-time households with a monthly income between $8,000 and $10,000 to buy new DBSS flats with a CPF housing grant of $30,000. This revision will be applicable to DBSS projects launched for public sale after Aug 30, 2010 which includes Adora Green.'




Source: www.businesstimes.com.sg

UOL to release 80 more units at Spottiswoode

Published November 17, 2010


UOL to release 80 more units at Spottiswoode


UOL Group said it is releasing another 80 units at its Spottiswoode Residences for the project's official launch today after finding buyers for 130 of the 150 units released last week during the project's preview.


The units sold thus far have achieved prices ranging from $1,720 psf to $2,150 psf. Four of the project's seven penthouses were sold, with one fetching $1,850 psf.

'Of the buyers, 86 per cent were Singaporeans who snapped up the higher-priced units which command sea views. They include doctors, professionals, bankers and businessmen . . . ' UOL said.

The freehold 36-storey development comprises 351 apartments - mostly one- and two-bedroom apartments. It is near Outram MRT Station.

The 130 units sold include about a dozen bought by former owners of apartments in the two developments that used to stand on the site - Spottiswoode Apartment and Oakswood Heights.

UOL acquired the two adjoining sites through separate collective sales in 2007. It paid $740 psf per plot ratio for Oakswood Heights; no development charge was payable for this site.

UOL bought the next-door Spottiswoode Apartment site for $732 psf per plot ratio including a development charge based on an earlier media report.


Source: www.businesstimes.com.sg

GuocoLand aims for the sky with 78-storey homes

It submits highest of 6 bids for site above Tanjong Pagar MRT Station, plans $3 billion mixed-development project

By KALPANA RASHIWALA

Published November 17, 2010


(Singapore)

MALAYSIAN tycoon Quek Leng Chan's GuocoLand is planning to build Singapore's tallest residences, up to 78 storeys high, within a $3 billion mixed-development project on a site above Tanjong Pagar MRT Station.

The $3 billion development cost includes the $1.708 billion or $1,006 per square foot per plot ratio (psf ppr) that Singapore-listed GuocoLand will pay for the 99-year leasehold plot. It placed the highest of six bids for the 'white' site, which was offered at a state tender which closed yesterday.

GuocoLand is required to allocate at least 60 per cent of the maximum 1.7 million sq ft gross floor area (GFA) to offices and another 10 per cent for hotel use, under the rules for the site set by Urban Redevelopment Authority.

GuocoLand Singapore managing director Trina Loh says that with a maximum height of 280 metres above mean sea level the proposed development will join Republic Plaza, UOB Plaza and OUB Centre in Raffles Place as Singapore's tallest buildings.

'Within the Tanjong Pagar area, it will be the tallest project and we'll also offer the tallest residences in the whole of Singapore,' Mrs Loh added.

The group plans to develop two towers, possibly with a mix of uses. In addition to offices, a hotel and apartments, there will also be ground-floor retail space. 'What makes this site very exciting is that it can be a truly, fully-integrated development above the MRT Station, plus the height of the project.

'And as the winner of two BCA Green Mark Platinum awards, we'll ensure this latest proposed development will also be eco friendly,' she added.

GuocoLand bid 11.8 per cent or about $180 million more than its closest rival. The partnership comprising Keppel Land, Hongkong Land and Cheung Kong Holdings which is developing the Marina Bay Financial Centre was the second highest bidder at yesterday's tender. It offered about $1.53 billion or $900 psf ppr.

Frasers Centrepoint teamed up with Far East Organization and Japan's Sekisui House to emerge as the third highest bidder, at around $1.43 billion or $844 psf ppr. The other bidders were CapitaLand group ($777 psf ppr), Malaysia's IOI Properties Berhad ($730 psf ppr) and Lippo-unit Overseas Union Enterprise ($362 psf ppr).

In addition to these six offers, URA received a submission from a tenderer that was disqualified - Wee Jong Dit.

A person bearing the same name received the Public Service Medal at the 2002 National Day Awards. He is understood to be a former banker (involved in forex dealing).

Typically, a bidder at a state land tender would be disqualified if he does not fulfil tender conditions, the most important of which is that the submission must be accompanied by a tender deposit (of at least 5 per cent of the bid price).

GuocoLand has been on the lookout for a mega development site in Singapore for years. It was unsuccessful in its bids for the plots that have since been developed into Marina Bay Financial Centre site and Ion Orchard/Or- chard Residences.

BT understands that some overseas parties are keen on teaming up with GuocoLand for the proposed Tanjong Pagar project.

The group's bid was above market expectations; property consultants polled in late July when the site was launched had forecast bids of up to $1.4 billion.

However, Cushman & Wakefield Singapore vice-chairman Donald Han said yesterday that GuocoLand's bid was 'still workable'. 'Singapore Grade A office rents have been recovering nicely and investors' appetite in completed office buildings has also returned. GuocoLand may sell the Tanjong Pagar project's office portion after completion. The group has experience in developing residential and office properties. And its sister company, Thistle Hotels of UK, may get an entry to manage a Singapore hotel,' he added.

CBRE Research executive director Li Hiaw Ho said: 'In order to obtain this top bid of $1,006 psf ppr, the gross development value for the 60 per cent office component is estimated at $2,200-2,300 psf.

'The mandatory 10 per cent of GFA for hotel use would translate into 330-350 rooms with each room estimated at $800,000-900,000. Based on the top bid, condo units at this mega development could possibly transact at $2,400-2,500 psf when ready for launch.'



Source: www.businesstimes.com.sg

Developers sell 1,058 private homes excluding ECs in Oct

Monday, November 15, 2010

November 15, 2010, 12.43 pm (Singapore time)

Developers sell 1,058 private homes excluding ECs in Oct

By KALPANA RASHIWALA

Developers sold 1,058 private homes excluding executive condominium (EC) units in October, up 16.1 per cent from the 911 units they sold in September, according to latest developers' monthly sales data released by Urban Redevelopment Authority on Monday.


Developers also sold 529 ECs in October (against nil sale of ECs in September), taking their total sales for October to 1,587 units.

In the first 10 months of this year, developers have sold 13,109 private homes excluding ECs - against 14,688 units in the whole of last year.

Source: www.businesstimes.com.sg