PRIVATE home prices in 2011 could fall by up to 5 per cent but will be largely stable, says a new report by DTZ Research.

The firm expects recent government cooling measures to reduce sales volume, but not cause a significant fall in prices.

Sales volume is expected to fall as short-term speculators will be weeded out by the hefty seller's stamp duty (SSD) of up to 16 per cent within the first year of purchase. However, not all investors will withdraw from the market as some may find the 4 per cent SSD by the fourth year of sale to be surmountable. They could shift their focus to buying uncompleted units with completion dates three to four years later, said DTZ.

The property consultancy expects prices this year to be underpinned by economic growth, low interest rates, strong holding power of developers, the appreciation of the Singapore dollar and inflow of foreign purchasers due to the property market clampdown in mainland China and Hong Kong.

In particular, landed homes, small apartments and high-end apartments will be be less affected by the measures, said DTZ's executive director for residential, Margaret Thean.

'Small units with their low price quantum will continue to attract investors with spare cash or singles wanting their own units. The four-year seller's stamp duty will have little impact on landed homes as most purchase them for long-term owner-occupation. And high-end apartments will continue to see foreign interest,' Ms Thean said.

But DTZ does not rule out the possibility of more government measures should demand remain at a high level after a period of cooling off.

The report also noted other challenges in the form of a spike in the number of completed units in a few years' time as the government is releasing a record high number of homes through the public housing and government land sales programmes. There is also uncertainty over the strength of recovery of the major western economies. If they recover well, interest rates will increase and reduce the affordability of mortgage payments. On the other hand, if they continue to languish, sentiment in Singapore's property market could eventually be hit.

Published January 28, 2011

By UMA SHANKARI

Source: www.businesstimes.com.sg

Published January 25, 2011

JTC launches tender for Ubi site


(SINGAPORE) JTC yesterday launched a 60-year leasehold industrial site at Ubi Road 1/Ubi Avenue 4 for sale by public tender.


According to its announcement last month, a developer has committed to a bid price of not less than $29.38 million, or $88 per square foot per plot ratio (psf ppr) for the site.

The 1.24 hectare site on the reserve list under the Government Land Sales Programme has a maximum permissible gross plot ratio of 2.5. It is zoned for Business 1 development, which means light and clean industry and warehouse uses are allowed.

According to Colliers International industrial director Tan Boon Leong, the site is 'an attractive plot', due to its size and proximity to MRT stations. 'This site is much smaller in hectares, therefore it is more bite-sized. It is also between two MRT stations - Tai Seng and MacPherson.'

In addition, the site is close to the 3.5 ha industrial site won last August by Oxley Rising, which offered a bid of $158.1 million, or $169 psf ppr.

The Oxley Rising site, which has a 2.5 plot ratio and is also zoned for Business 1 development, had 11 bidders, including companies like Qingdao Construction (Singapore) and Sim Lian Holdings.

Mr Tan said the Oxley Rising site has a better frontage, but the size of the Ubi Road 1/Ubi Avenue 4 plot will make it popular. He expects competition for this site to be 'hot', as 'current sentiment is good for doing industrial work'.

The tender for this site will close at 11am on March 7.


Source: www.businesstimes.com.sg

While the Government has to act to prevent the property market from getting beyond the reach of most Singaporeans, I am however not very comfortable that the latest steps - announced last week - are the best means of dealing with the issue.

Not only are the measures fairly drastic, they appear to be dealing more with curbing demand than raising supply.

The Government has claimed that there is no shortage of supply. It points out that the sites awarded last year under the Government Land Sales Programme (GLS) will yield about 13,300 units. For the first half of this year, it says it will make available sites that would be able to yield about 14,300 units.

Further, as at the end of the third quarter of last year, there were about 64,400 uncompleted units in the pipeline, of which roughly half were still unsold. These compare with the annual take-up rate of about 12,700 units between 2007 and last year. Unfortunately, there is a lag period between the site award and the sale of the property.

The latest attempt to cool the property market may have the unintended effect of reducing supply as developers decide to take a wait-and-see approach. They might be even willing to pay the penalties for missing completion deadlines rather than sell at a loss. It could also see the bigger developers with the financial muscle to hold being able to take advantage of those who can't hang on to their sites.

And will the new rules which took effect the day after they were announced - Jan 13 - force buyers to give up options, now that financing will be more difficult to obtain?

Under the new rules, financial institutions can only grant loans amounting to half the value of the properties purchased by non-individuals, such as companies, trusts and collective investment schemes. Individuals with existing outstanding mortgages can now borrow only up to 60 per cent of the value of their next property purchase.

Another unintended effect could be that those who have the financial resources will be able to get more properties on the cheap - to sell when prices recover later.

But should the Government be overly concerned with private-sector housing? Should it be going all out to prevent a fool from parting with his money?

Despite numerous warnings about the dangers of a property bubble bursting and that the current low interest rate regime might not last for too long, property prices, prior to the latest measures, continued to climb.

I believe the Government should be more concerned about housing the masses. It has done a marvellous job, having built more than one million units since the Housing and Development Board (HDB) was established. At present, some 900,000 units house more than four-fifths of the population. For the vast majority of newly-weds, their first home is likely to be an HDB flat. These are the people whom the Government has to be concerned with.

The Government has said it will be building more HDB flats - up to 22,000 Build-To-Order flats this year - to accommodate the masses. Will these be enough?

It should perhaps also get out of building executive condominiums (EC) units which provide condo-like facilities and the Design, Build and Sell Scheme (DBSS) units. The HDB says land for some 8,000 of these could be launched this year. Why should the HDB be catering to the needs of this select group?

Look at what is happening to the estates that were built by the HUDC for an earlier group of the so-called sandwiched class. Some like Farrer Court, Amberville and Bedok Reservoir, have been sold en bloc to private developers. The remaining ones - Shunfu, Braddell Heights, Pine Grove, Laguna Park, Neptune Court, Chancery Court and Eunosville - have been privatised or are in the process of being privatised in anticipation of en bloc sales. Why must public funds be used to cater to such profiteering?

Rather than be all things to all people, the Government should concentrate on housing the masses.

by Conrad Raj
05:55 AM Jan 21, 2011

Conrad Raj is editor-at-large with Today.

Source: www.todayonline.com

SINGAPORE - The Housing and Development Board is launching today the tender for three 99-year leasehold residential sites under the Government Land Sales Programme for the first half of this year.

The first site, at Bishan Street 14, has an area of almost 12,000 sq m and can potentially yield 650 dwelling units. The site is located near Bishan MRT Station and Junction 8 Shopping Mall, Raffles Institution and Catholic High School.

The land parcel under the Reserve List has been put up for tender after a developer committed to bid at least $189.8 million. The tender will close on Feb 24.

The second site, located along Sengkang Square and Compassvale Road, has an area of 17,700 sq m and can potentially yield 530 dwelling units. The site is located near Compass Point shopping mall, Sengkang Community Club and the Tampines Expressway. The tender will close on March 15.

The third land parcel is located at Choa Chu Kang Drive and has an area of 17,589.8 sq m with a potential yield of 490 dwelling units. The site is located near Lot 1 shopping mall, Yew Tee Square and Choa Chu Kang Stadium. This tender will close on March 22.

05:55 AM Jan 21, 2011

Source: www.todayonline.com

Published January 19, 2011

Plot near Bartley MRT triggered for release
99-year leasehold site can be used for condo project

By KALPANA RASHIWALA

IT'S only January and a second 99-year leasehold private housing site has been triggered from the government's reserve list for the first half of this year - a plot next to Bartley MRT Station which can be developed into a new condo project with about 620 units.


This follows the successful application for the site's release by an unnamed developer that has agreed to bid at least $191.78 million or about $288 per square foot per plot ratio (psf ppr) for the site.

Earlier this month, the government announced that a reserve list plot near Bishan MRT Station was triggered for release with the successful applicant committing to pay at least $189.8 million or $300 psf ppr.

Analysts note that while the government has ample sites on the confirmed list - where sites are released according to a prestated schedule regardless of demand - for the current half, most of them are far from the city in locations like Choa Chu Kang, Tampines, Upper Changi, Sembawang and Punggol.

So they were probably drawn to the Bishan and Bartley plots which are closer to the city and near MRT stations. 'The Bartley plot is just one MRT stop away from Nex mall,' observed Knight Frank's head of consultancy and research Png Poh Soon.

While the successful applicants for the Bishan and Bartley reserve list plots would have submitted their applications before last week's property cooling measures were announced, some analysts say they would not be too surprised if developers continue to trigger a few more sites from the reserve list. 'It could be an opportunity to replenish their landbanks with new sites bought at less aggressive prices compared with before the latest cooling measures,' suggests Credo Real Estate executive director Ong Teck Hui.

Market watchers pointed to at least two remaining sites in the reserve list - two adjoining plots at Stirling Road near Queenstown MRT Station which can be developed into condominiums - that could be on developers' trigger watchlist.

Projects on sites in or closer to the city are more likely to enjoy investment demand from buyers thinking of leasing out the units. And usually developers can carve out smaller units from such projects and thus achieve higher psf prices.

Urban Redevelopment Authority also launched yesterday a confirmed list plot facing Bedok Reservoir that can be be developed into a five-storey project with about 640 units. Allowable developments include condominium/flats and serviced apartments.

Knight Frank's Mr Png expects top bids for the plot to be in the $450-500 psf ppr range and selling prices to be about $1,000 to $1,050 psf given the site's choice location near the future Bedok Town Park MRT Station under the Downtown Line.

Credo's Mr Ong has a lower land price expectation of about $280-320 psf ppr, with the top end of that range reflecting a breakeven cost of about $700 psf - to factor in a safety margin in case of price softening following the recent cooling measures.

BT understands that nearby, Frasers Centrepoint and Far East Organization are currently selling units at Waterfront Key and Waterfront Gold at average prices just shy of $1,000 psf.

On the other side of the reservoir, Sim Lian has been selling units at its Waterview condo at about $838 psf on average. It is developing the condo on a 99-year leasehold plot bought last year for $421 psf ppr.

As for the Bartley plot, Mr Ong predicts top bids could be in the $320-360 psf ppr range - with the upper end of the range translating to a breakeven cost of about $750 psf, again to leave a 'safety margin' for potential price declines.

He estimates a new condo project on the site could today sell for an average price of about $900 psf.

'Bidders would be cautious and factor in some cushion in case of a softening in private home prices. This will result in land bids being lower than those before the cooling measures were introduced,' said Mr Ong.


Source: www.businesstimes.com.sg

Published January 21, 2011

Govt launches tenders for 3 housing sites
All three plots are near MRT stations in Choa Chu Kang, Sengkang and Bishan

By KALPANA RASHIWALA

THE government yesterday launched tenders for three 99-year leasehold housing sites near Choa Chu Kang, Sengkang and Bishan MRT stations.


This includes two plots on the confirmed list - an executive condo (EC) plot in Choa Chu Kang next to Mi Casa condo, and a private condo site near Sengkang MRT Station.

The third parcel, near Bishan MRT Station, was triggered from the reserve list as announced on Jan 7.

The EC plot at Choa Chu Kang Drive, which is near Choa Chu Kang MRT Station and Lot 1, can generate about 490 housing units. Cushman & Wakefield senior manager of Asia Pacific research Ong Kah Seng estimates top bids for the site at about $260-280 per square foot per plot ratio (psf ppr), translating to a breakeven cost of about $550-580 psf and average selling price in the $600-630 psf range.

Credo Real Estate executive director Ong Teck Hui expects three to five bids with the highest in the $220-240 psf ppr band, reflecting average selling price expectations of about $610-620 psf.

ECs are a hybrid of public and private housing with ownership and resale restrictions in the first 10 years.

The Sengkang plot can be built into a private condo with about 530 units. Both consultants predict the top bid could come in at $350-380 psf ppr and a resulting breakeven cost of about $700-740 psf and average selling price in the $800 psf region.

The calculation factors in the possibility of price softening; one MRT stop away, at Buangkok, units in The Quartz are selling at about $900 psf.

The Sengkang plot launched yesterday is a stone's throw from the bustling Sengkang Town Centre, bus interchange, MRT/LRT stations and Compass Point mall.

On January 7, the government announced that the Bishan plot had been triggered from the reserve list, following a successful application from an unnamed developer that had agreed to bid at least $189.83 million or $300 psf ppr.

Credo's Mr Ong predicts six to 10 bids for the land parcel, with the highest offer around $550-580 psf ppr; this would result in a breakeven cost of about $950 psf and an average selling price of around $1,100 psf.

Cushman's Mr Ong forecasts five to seven bids, with the top in the $450-480 psf ppr range and reflecting an average selling price expectation of about $920-950 psf.

Market watchers expect developer interest for Government Land Sale sites to be cautious following the Jan 13 cooling measures, although overall economic fundamentals remain good.

The tender for the Bishan site closes on Feb 24, followed by the Sengkang plot on March 15, and the Choa Chu Kang EC plot on March 22.


Source: www.businesstimes.com.sg

by Jonathan Peeris
05:55 AM Jan 19, 2011

SINGAPORE - Two more residential sites are now available, potentially yielding about 1,260 units that will offer homebuyers with more housing choices.

The Urban Redevelopment Authority (URA) yesterday put up for tender a land parcel at Bedok Reservoir Road, the first residential site to be sold through the Confirmed List under the Government Land Sales Programme for the first half of this year.

At about 4.6 hectares, the site will have a maximum permissible gross floor area of over 63,000 sq m and can yield about 640 housing units.

The site is well connected to major expressways and is close to the future Bedok Town Park MRT Station on the Downtown Line. The tender will close on March 3.

The URA will also make available a residential site at Bartley Road and Lorong How Sun. The tender was triggered after the URA received an application from a developer who committed to bid not less than $191.7 million. This land parcel has been on the Reserve List system since November 2009.

The site has an area of about 2.21 hectares and a maximum permissible gross floor area of over 61,000 sq m. It can potentially yield about 620 housing units.

The URA will launch the public tender for the site in about three weeks.

Source: www.todayonline.com

Plot near Bartley MRT triggered for release
99-year leasehold site can be used for condo project

By KALPANA RASHIWALA

IT'S only January and a second 99-year leasehold private housing site has been triggered from the government's reserve list for the first half of this year - a plot next to Bartley MRT Station which can be developed into a new condo project with about 620 units.

This follows the successful application for the site's release by an unnamed developer that has agreed to bid at least $191.78 million or about $288 per square foot per plot ratio (psf ppr) for the site.

Earlier this month, the government announced that a reserve list plot near Bishan MRT Station was triggered for release with the successful applicant committing to pay at least $189.8 million or $300 psf ppr.

Analysts note that while the government has ample sites on the confirmed list - where sites are released according to a prestated schedule regardless of demand - for the current half, most of them are far from the city in locations like Choa Chu Kang, Tampines, Upper Changi, Sembawang and Punggol.

So they were probably drawn to the Bishan and Bartley plots which are closer to the city and near MRT stations. 'The Bartley plot is just one MRT stop away from Nex mall,' observed Knight Frank's head of consultancy and research Png Poh Soon.

While the successful applicants for the Bishan and Bartley reserve list plots would have submitted their applications before last week's property cooling measures were announced, some analysts say they would not be too surprised if developers continue to trigger a few more sites from the reserve list. 'It could be an opportunity to replenish their landbanks with new sites bought at less aggressive prices compared with before the latest cooling measures,' suggests Credo Real Estate executive director Ong Teck Hui.

Market watchers pointed to at least two remaining sites in the reserve list - two adjoining plots at Stirling Road near Queenstown MRT Station which can be developed into condominiums - that could be on developers' trigger watchlist.

Projects on sites in or closer to the city are more likely to enjoy investment demand from buyers thinking of leasing out the units. And usually developers can carve out smaller units from such projects and thus achieve higher psf prices.

Urban Redevelopment Authority also launched yesterday a confirmed list plot facing Bedok Reservoir that can be be developed into a five-storey project with about 640 units. Allowable developments include condominium/flats and serviced apartments.

Knight Frank's Mr Png expects top bids for the plot to be in the $450-500 psf ppr range and selling prices to be about $1,000 to $1,050 psf given the site's choice location near the future Bedok Town Park MRT Station under the Downtown Line.

Credo's Mr Ong has a lower land price expectation of about $280-320 psf ppr, with the top end of that range reflecting a breakeven cost of about $700 psf - to factor in a safety margin in case of price softening following the recent cooling measures.

BT understands that nearby, Frasers Centrepoint and Far East Organization are currently selling units at Waterfront Key and Waterfront Gold at average prices just shy of $1,000 psf.

On the other side of the reservoir, Sim Lian has been selling units at its Waterview condo at about $838 psf on average. It is developing the condo on a 99-year leasehold plot bought last year for $421 psf ppr.

As for the Bartley plot, Mr Ong predicts top bids could be in the $320-360 psf ppr range - with the upper end of the range translating to a breakeven cost of about $750 psf, again to leave a 'safety margin' for potential price declines.

He estimates a new condo project on the site could today sell for an average price of about $900 psf.

'Bidders would be cautious and factor in some cushion in case of a softening in private home prices. This will result in land bids being lower than those before the cooling measures were introduced,' said Mr Ong.

Published January 19, 2011

Source: www.businesstimes.com.sg

Published January 15, 2011

CapitaLand chief expects home prices, sales volume to fall

By UMA SHANKARI

CAPITALAND chief executive Liew Mun Leong expects private home prices and sales volume to fall following the latest round of government measures to cool the property market.

But he said he is 'not too unhappy' with the measures as it will make it easier for the group to win land parcels in government tenders.

Describing Thursday's measures as 'incremental', Mr Liew, who helms Singapore's largest listed property group, said some developers are driving up land prices by bidding very aggressively. He was speaking at a lecture at the National University of Singapore yesterday.

'We are amazed at the prices that come out (in government land tenders),' he said. 'Not that we are jealous ... but when we look at the numbers, we know that we can't do it ... So in a way, we agree that there is some speculative chasing for land.'

CapitaLand will go ahead with its plans to launch 1,700 mostly upmarket homes in 2011 as it will be 'business as usual'. The units will come from five projects - The Nassim, Urban Resort Condominium, The Interlace, d'Lee-don and the residential component of a new development at Bedok Town Centre.

The group last week said it expects private home prices to rise by 5-10 per cent in 2011 after climbing 17.6 per cent in 2010. In the high-end segment, prices could climb by 10-15 per cent this year, it said. But yesterday, Mr Liew said prices will fall following the new measures. However, he is still upbeat about the high-end and luxury market, which draws cash-rich investors.

Looking ahead, he said the measures will separate serious developers from speculators: 'These types of measures will differentiate the real estate developers who helped with Singapore's urbanisation from the speculators, who build shoebox apartments.'

But he added that he hopes that just as the government has been quick to act in a property upcycle, it will also work to fine- tune its policies in a down-market when demand tapers off.


Source; www.businesstimes.com.sg

In a changed market, there is little, if anything, to be excited about

by Ku Swee Yong

05:55 AM Jan 14, 2011

Several articles have been published in the media and by property analysts in recent months about the frenzy surrounding en bloc deals and the increasing values of these collective sales.

Some of these are really bullish about the potential for such transactions this year.

I cannot see where the excitement is because I understand the hurdles to en bloc deals have increased.

Several things have changed since the last peak of the en bloc market in 2007. The most obvious one has been highlighted by some of the articles: The average size of residential en bloc deals last year was about $50 million and only one exceeded $100 million. In comparison, more than 20 of the 200 residential en bloc deals in 2007 exceeded $100 million in value, as shown in Table 1.



THE DEVELOPERS

There are several reasons for the current lack of interest in large en bloc offerings - that is, those over $100 million in value - even though many developers are actively building up their land banks.

From the developers' point of view, the economics of an en bloc deal are less attractive today than in 2007 because of the following reasons:



a) The Government Land Sales (GLS) programme was at a record high in 2010. And, given the seemingly-insatiable demand from property investors and upgraders, the GLS will be at least as high in 2011. Developers participate in the GLS as it is a straightforward way to purchase 99-year leasehold land. It is hassle-free compared to the process of purchasing from an en bloc sale (unless there is 100-per-cent agreement from the owners of the en bloc development).

An en bloc sale requires clearance from the Strata Titles Board and the subsequent relocation of the existing owners of the project. Developers do not want to risk their investment cashflow being delayed by potentially lengthy appeals. The Land Titles (Strata) Act was last amended in the middle of last year to improve en bloc rules, making the process more transparent but more onerous.



b) From January 2009, planters within a residential unit and bay windows in all developments are not exempted from gross floor area (GFA). Based on this rule change, the uplift from the en bloc development's current plot ratio to the new buildable GFA is more limited compared to that during 2007.

For example, Tulip Garden was sold en bloc for $516 million in mid-2007 (although the buyer did not follow through the following year). At that time, developers were betting on launching new projects at Farrer Road upwards of $1,600 per sq ft. Additional profit margins for the developers could be derived from the sellable GFA of bay windows and planters (exceeding the plot ratio limit).

Today, without the additional GFA, developers would have to launch at higher prices in order to maintain their 15- to 20-per-cent profit margin. As a comparison, Tulip Garden is asking for $650 million in the current 2010 en bloc exercise.



c) Development Charge (DC) rates have gone back up to just below 5 per cent of the peak levels of March 2008. Average DC rates for September last year are 2 per cent below those of September 2007, 53 per cent above July 2007 and 114 per cent above March 2007.

Given the last few months of strong sales, particularly when looking at prices achieved in the mass market residential segment, I believe DC rates will increase in March this year, possibly exceeding those of March 2008 in many of the sectors.



d) Construction cost estimates, according to RLB, a global property and construction consultant, are higher in Q3 2010 than in Q3 2007, as shown in Table 2.



Developers now face higher costs from the DC impost and with less strata area to sell, even as market prices are about the same as those in 2007 for the Holland Road stretch.

For developers to view en bloc deals as economically viable investments, the reserve/asking prices cannot go too high up. En bloc sellers need to be realistic if they want to achieve a win-win deal for themselves and the developers.



THE FINANCIERS AND LENDERS

However, the biggest dampener to the fever of the en bloc market is the drastically reduced access to financing. This point has escaped the discussion of all the recent articles.

In 2007, there were many sources of financing - debt funds, hedge funds, etc. Developers could also choose to partner with investment banks such as Lehman Brothers, Goldman Sachs, Wachovia or hedge funds such as Citadel, etc. In addition to getting senior debt at up to 70 per cent of the price of the land and construction, developers/investment funds may also avail themselves of another 20 per cent more in junior debt, mezzanine financing or convertible bonds, and so on.

A lot depends on the credit standing of the developer, but it does mean that, to buy Pine Grove en bloc, a top notch developer could require as little as $170 million, or about 10 per cent of equity.

Today, we are left with simple, senior debt (normal straight loans from banks) and the lending ratio may be capped at 60 per cent - which means the developer wishing to buy Pine Grove en bloc would need to invest well over half a billion dollars of equity. And, on top of that, the developer has to put up even more cash for development charges and construction costs, which are now also subject to lower loan limits.

Most real estate consultants will only look at the developer side of the equation. But we cannot forget that the lenders play a big role. Without credit and financing, the real estate market can at best stroll at a leisurely pace. And for the en bloc market to continue to grow actively, we need financial institutions and debt funds, especially the non-bank lenders, to regain their appetite for real estate risks.

Otherwise, the success of large en bloc deals such as Hawaii Tower, Pine Grove, Pandan Valley, Tanglin Park and Tulip Garden will remain a dream.



Ku Swee Yong is the founder of real estate agency International Property Advisor (IPA), which provides services to high-net-worth individuals.

Source:www.todayonline.com

Published January 8, 2011

Bishan residential site up for tender

By EMILYN YAP

THE Housing & Development Board will be launching a 99-year leasehold residential site at Bishan Street 14 for tender in about two weeks' time.

Consultants expect to see as many as eight bidders for the plot, which is located near Bishan MRT station.

The 1.2 ha site on the reserve list, with a maximum gross floor area of 632,764 square feet, can yield an estimated 590 condominium units.

An unnamed developer triggered the sale when it committed to pay at least $189.8 million or $300 per square foot per plot ratio (psf ppr).

The plot is within walking distance of Bishan MRT station and Junction 8 shopping mall. It is also near several education institutions - ITE College Central (Bishan) is next door while Raffles Institution is a few streets away. A few other parcels of state land surround the site.

Cushman & Wakefield senior manager of Asia-Pacific research Ong Kah Seng believes that the top bid might come in at $450-480 psf ppr, which could translate to selling prices of $920-950 psf.

According to caveats lodged with the authorities, units at Bishan 8 nearby went for $852-955 between August and October last year.

There is likely to be moderate demand from developers because of the site's location, Mr Ong said. The winning developer will get a headstart in offering condominiums in that area, and could potentially acquire the surrounding plots when the government includes them in the land sales programme, he added.

SLP International Property Consultants' research executive director Nicholas Mak expects some of the higher bids to reach $460-530 psf ppr.

Although many residential sites on the confirmed list will be rolled out for sale in the first half of this year, this plot at Bishan remains attractive because of its location, he said.

Besides, mass-market homes should continue to enjoy demand even if price growth may be limited this year, he added.


Source: www.businesstimes.com.sg

05:55 AM Jan 07, 2011

SINGAPORE - The Urban Redevelopment Authority (URA) yesterday launched the tender for a 99-year leasehold hotel site at Robertson Quay.

The land parcel has been available for sale through the Reserve List system since last April. The tender was triggered after a developer committed to a bid of not less than $51.5 million. The 0.45-hectare site can generate a maximum permissible gross floor area of over 12,000 sq m (129,167 sq ft).

It is located within Robertson Quay, along the historic Singapore River, amid a well-established hotel cluster comprising developments such as Studio M Hotel, Park Hotel Clarke Quay and The Gallery Hotel. It enjoys direct access to the Singapore River promenade, with many popular entertainment, food and beverage and lifestyle outlets along Robertson Quay, Clarke Quay, Boat Quay and Mohamed Sultan Road.

The tender for the site will close at noon on March 8.

On Wednesday, the URA announced that Royal Group Holdings had submitted the highest bid of $86 million for a hotel site at Robinson Road and Boon Tat Street. The URA had closed the tender after receiving eight bids.

Royal Group's bid translates to about $11,543 per sq m. The next highest bid of $72 million came from developer Oxley Vibes. The 1,800-sq-m site is being offered for sale on either a 30-year or 60-year lease.

The URA said it would decide on the winning bid at a later date.

Source: www.todayonline.com

Published January 6, 2011


For sale: two housing plots, industrial site
Kaki Bukit tender in 2 weeks; Whitley Heights, Residence 81 go en bloc


By EMILYN YAP

THE new year has brought with it a slew of residential and industrial sites for developers to invest in.


Two private home developments are up for collective sale. One is the freehold Whitley Heights, located off Whitley Road, which occupies a land area of 130,165 square feet.

The owners are asking for $185-210 million, which works out to around $1,421-1,613 per square foot (psf) of land area.

Whitley Heights is more than 20 years old and has 45 walk-up apartments in three three-storey blocks. Under the 2008 Master Plan, the site is designated for two-storey mixed landed houses upon redevelopment.

This means that the buyer can choose to build a combination of conventional terraces, semi-detached and detached houses, strata terraces, strata semi-detached houses and strata bungalows.

Credo Real Estate is handling the tender for Whitley Heights, which closes on Jan 26. It notes that the project could be the first site with an area of more than 100,000 sq ft to be sold en bloc for landed development in more than three years.

According to Credo, the buyer could build as many as 80 strata terrace houses or around 60 strata semi-detached houses on the site.

'Supply for landed sites has been few and far between,' said Credo managing director Karamjit Singh. 'The dearth of supply can only result in price escalation for landed homes.'

Credo found that from 2000 to 2010, barely 4,000 units were added to the stock of landed homes, leading to an increase of less than 6 per cent.

As a result, the stock of landed housing as a proportion of all private residential homes has dropped to 27 per cent last year from 35 per cent in 2000.

Over at Telok Kurau, the freehold Residence 81 is up for auction with an indicative price of around $25.1 million, which translates to $950 psf of strata floor area.

The five-year-old property has a single owner and will be sold with vacant possession. BT understands that the owner is part of the Hotel 81 group, and the sale is the result of a property portfolio reorganisation.

Residence 81 sits on a site measuring 15,455 sq ft and has a total strata floor area of 26,446 sq ft. There are 21 strata-titled units, of which two on the ground floor have been reconfigured into a communal area.

Colliers International is handling the auction, scheduled for Jan 19. According to its deputy managing director Grace Ng, the buyer can apply for naming rights for the development and put the individual units up for sale.

The buyer can also rent the units out. 'Leasing demand is expected to stay robust in 2011, partly supported by the projected increase in hiring, especially by financial institutions,' she said. 'Rents for private residential homes can be expected to climb further by 8 to 12 per cent on average in 2011.'

While the sale process is just beginning for some home owners, residents of Maison Royale have bagged $46 million for their freehold estate in Newton. The buyer, Giant Land, may have to pay another $2.55 million in development charge, leading to an overall price of around $1,230 psf per plot ratio (psf ppr).

In the industrial sector, an unnamed developer has committed to pay at least $18 million or $68 psf ppr for a 30-year leasehold state land parcel at Kaki Bukit Road 4.

The 2.45-hectare site on the reserve list, zoned for Business 2 development, will be launched for tender in two weeks' time

Source: www.businesstimes.com.sg

Published January 6, 2011

Jurong public housing site attracts top bid of $131.6m

By FELDA CHAY


A TIE-UP between Hoi Hup Realty, Sunway Developments and SC Wong Holdings has put in the highest bid of $131.6 million for a public housing site on Yuan Ching Road in Jurong.

This is 5 per cent above the second highest tender from Yuan Ching Development. Six bids were put up for the site, which can potentially yield 580 flats. The lowest bid was $68.5 million.

The top bid translates to a per square foot per plot ratio (psf ppr) price of $192 for the site under the Design, Build and Sell Scheme (DBSS), which is 'within expectations', said Ong Kah Seng, senior manager of Asia-Pacific research at Cushman & Wakefield.

This is, however, 'considerably lower than that of recent DBSS sites awarded, which are at least $200 psf', said Mr Ong. This could be due to the less central location of the plot of land, as compared with previous DBSS sites located in Upper Serangoon and the Bedok Reservoir area.

Overall moderation in home- buying sentiment in the public residential sector could also have played a part, Mr Ong added.

Credo Real Estate executive director Ong Teck Hui said the six bids put up for the site showed there was 'fair interest' in the tender. 'Going forward, bidders would be mindful of the supply of DBSS sites coming into the market. Response in terms of bid prices and participation level will depend on the locations and attributes of the sites,' he said.

The 2.1 hectare Yuan Ching plot is near Jurong Lake and the Jurong Country Club golf course, as well as education institutions such as Jurong Secondary School. Both Lakeside and Boon Lay MRT stations are several bus stops away.

The land parcel has a maximum allowable gross floor area of 684,574 sq ft and carries a lease term of 103 years (including a four-year construction period).

The Housing and Development Board (HDB) said it will evaluate the tender bids and announce the final results within the next two weeks

Source: www.businesstimes.com.sg

Published January 6, 2011

Ogilvy site draws $86m top bid
Royal Group leads with offer of $1,072 psf ppr, with plans for 200-room hotel

By EMILYN YAP

OGILVY Centre, the landmark conservation building at the junction of Robinson Road and Boon Tat Street, is set to get a makeover. Built to the neoclassical style, the property will soon have at least 200 hotel rooms, as well as upmarket restaurants and retailers on the ground floor.

Royal Group Holdings - linked to Asok Kumar Hiranandani of Royal Brothers - has big plans for the site opposite Lau Pa Sat, after putting in the top bid of $86 million or $1,072 per square foot per plot ratio (psf ppr) in a state tender.

This is one of the highest bids seen for hotel plots recently, and markedly exceeded expectations.

Seven other property players were in the fray when the tender closed yesterday. Oxley Holdings submitted the second highest bid of $72 million or $898 psf ppr, which is 16 per cent less than the top bid.

RB Capital - led by Mr Hiranandani's nephew Kishin - was the third highest bidder with an offer of $71.1 million or $887 psf ppr.

The other bidders were Fragrance Group, Sin Heng Chan, a unit of Far East Organization, and a unit of Overseas Union Enterprise.

All the tender participants chose to bid for the site on a 60-year lease term even though the 30-year option was available.

Royal Group has plans for a five-star hotel with at least 200 rooms. Daily room rates could be at least $280-300, while rents for retail space could range from $20-30 psf.

The location of the plot and the scarcity of conservation sites for hotel use justified the aggressiveness of the bid, Mr Hiranandani told BT. 'The only competition I have for this product is going to be Fullerton Hotel and Fullerton Bay Hotel,' he said.

Mr Hiranandani's son Bobby will be overseeing the project, and the hotel could be ready in two years' time.

The site has a maximum permissable gross floor area of 80,191 sq ft. The developer will have to retain the existing four-storey conservation building, but the rear part of the building may be demolished, redeveloped, and integrated as a new five-storey extension.

When an unnamed developer first triggered the site for sale in October last year, the market had expected the top bid to perhaps cross $50 million. Yesterday's results far exceeded the estimates - five of the eight bids exceeded that figure.

The historical value of the site could have led to the high bids, said Knight Frank head of consultancy and research Png Poh Soon. In addition, with visitor numbers growing, 'people are more willing to go ahead with such tender prices.'

Competition for hospitality assets seems to be heating up, he added. In August last year, the top bid for a hotel site at Clemenceau Avenue was $101.1 million or $813 psf ppr, far surpassing analysts' projections.


Source:www.businesstimes.com.sg

Published December 24, 2010


Robertson Quay hotel site up for tender
Industry watchers expect to see keen demand for the land parcel

By EMILYN YAP

THE Urban Redevelopment Authority (URA) will be putting a hotel site at Robertson Quay up for tender, after a developer committed to pay at least $51.5 million or $378 per square foot per plot ratio (psf ppr) for it.

Industry watchers expect to see keen demand for the site, even as several other hotel plots enter the market.

Interest in hotel development has grown this year along with swelling tourism numbers and a smooth economic recovery.

The 99-year leasehold land parcel at Robertson Quay is 0.45 hectare big and has a maximum gross floor area of 136,174 sq ft. URA estimates that it can yield 350 hotel rooms.

The site is near the Singapore River and is located within a hotel cluster which includes developments such as Gallery Hotel and Studio M Hotel. It is also next to residential projects such as Rivergate and Robertson 100.

In addition, food and beverage and entertainment outlets at Robertson Quay and Clarke Quay are within walking distance.

URA will launch the tender for the hotel plot in two weeks' time. Cushman & Wakefield Singapore vice- chairman Donald Han believes there will be a 'healthy dose of demand' for the site, with bids going up to $750-$800 psf ppr.

That estimate comes close to the price fetched by a hotel site nearby at the junction of Clemenceau Avenue and Havelock Road in August. The top bidder had paid $101.1 million or $813 psf ppr.

The Robertson Quay plot does not enjoy the same road frontage as the one at Clemenceau Avenue/ Havelock Road, but that may make the former suitable for building some residential units, and the residential play could enhance the value of the site, Mr Han said.

Under zoning guidelines, developers can use up to 40 per cent of a hotel site's total floor area for commercial or residential use, subject to official consideration.

Although developers have triggered the sale of a number of hotel sites this year, demand should stay strong if the economy does well and visitors keep coming, Mr Han said. He added that several hotel operators are still trying to gain a foothold in Singapore.

CBRE Hotels Asia-Pacific executive director Robert McIntosh believes that the site will fetch a 'good price' and attract some five to 10 bidders.

Hotel room rates and occupancies in Singapore have been rising this year and the outlook remains 'pretty positive' even with more supply coming on stream, he said.

According to a CBRE Hotels report, revenue per available room gained 24 per cent to about $181 in the first nine months of this year, and room rates rose 11 per cent to around $211.

With sentiments improving, developers have gotten hungrier for hotel sites this year. Two other hotel sites are still up for tender - one at Gopeng Street/Peck Seah Street and another at Ogilvy Centre.

Sites with a mandatory hotel component have also been sold this year, such as that at Peck Seah Street/ Choon Guan Street and another at Stamford Road/ North Bridge Road.


Source; www.businesstimes.com.sg

Tuan Sing unit top bidder in strongest tender response in six months

by Jo-Ann Huang Limin 05:55 AM Dec 15, 2010SINGAPORE - A residential land parcel at Seletar Road attracted a whopping 11 bids at the close of the Urban Redevelopment Authority's (URA) public tender yesterday.

This is the highest number of bids for a Government Land Sales site since the 15 bids for the Upper Serangoon Road/Pheng Geck Avenue tender that closed more than six months ago.

The top bid for the Seletar Road site of $123 million came from Asplenium Land, a wholly-owned subsidiary of Singapore-listed property developer Tuan Sing Holdings. This works out to $468 per square foot per plot ratio for the 99-year leasehold site.

The second highest bid of $122.1 million, just 0.7-per-cent below the top bid, was from Fragrance Global.

The remaining bids ranged from $88 million to $115.8 million.

Located beside Seletar Hills, a private residential enclave, the site has an area of 17,455 square metres and a maximum allowable gross floor area of 24,439 sq m. Ideal for a low-rise housing development, the site is within 10 minutes drive of Yio Chu Kang and Sengkang MRT stations and close to Seletar Reservoir, Yio Chu Kang Sports Stadium as well as a number of country clubs.

Mr Nicholas Mak, executive director of research at SLP International, said the site could potentially be developed into landed housing.

"The strong demand for landed housing, which is expected to continue next year, probably attracted developers to this tender," he said.

To maximise on the allowable gross floor area, the developer may choose to build a low-rise apartment complex.

"The top-bidder may develop this site into an apartment project with about 270 units," said Mr Mak.

He added: "With a land price of $468 psf ppr and assuming the developer will build a five-storey apartment project, the breakeven price is estimated to be between $800 and $830 psf. The new condominium on this site can potentially be sold between $850 and $900 psf."

CBRE Research executive director Li Hiaw Ho said the future development would likely attract middle-income households and investors targeting those who work at Seletar Aerospace, an aerospace industrial park due for completion in 2018.

Source: www.todayonline.com

Published December 15, 2010


Tuan Sing top bidder for Seletar site
Offer of $123m just 0.7% above next highest; 99-year plot drew 11 bids

By KALPANA RASHIWALA

TUAN Sing yesterday made a rare appearance at a state tender, and that too as the top bidder. Its offer of $123 million for a 99-year leasehold low-rise private residential site at Seletar Road works out to about $468 per square foot per plot ratio (psf ppr).


While that was below a seasoned property consultant's prediction that the top bid would be in the $550-600 psf ppr range, the 11 bids that the plot drew yesterday surpassed his earlier prediction of 4-8 bids. The turnout was one of the best showings at state tenders this year.

Tuan Sing unit Asplenium Land's top bid was just 0.7 per cent above the next highest offer of $122.1 million or $464 psf ppr by a unit of Fragrance Group.

'Developers still have a strong appetite for choice residential sites like this, in the established Seletar Hills residential estate and next to the future retail facility at Greenwich V,' said Credo Real Estate executive director Ong Teck Hui. 'However, at the same time, developers are cautious with their bids, bearing in mind the cooling measures put in place on Aug 30, the substantial state land sales programme for H1 2011 and a lingering fear of whether there'll be further property cooling measures.'

Also bidding yesterday was Malaysia's SP Setia International, which offered about $440 psf ppr. Far East Organization - which in September last year clinched an adjacent plot which it is now developing into Greenwich V shops and The Greenwich condo - teamed up with Japan's Sekisui House to emerge as the fourth highest bidder yesterday at about $433 psf ppr.


The lowest bid of about $335 psf ppr was from Meadows Investment (controlled by Tiong Aik Group executive director Neo Tiam Boon). The tender also drew bids from Hong Leong Group/City Developments, Centurion RE and EL Development, among others.

The 1.7-hectare site can be developed into a five-storey condo or two-storey landed/strata landed homes. Property consultants' estimates of Tuan Sing's breakeven cost for a new condo are $800-900 psf.

Mr Ong noted that at The Greenwich next door, smallish units have fetched $1,300 psf upwards and normal-sized units $1,100 psf upwards in recent months. Given these price levels, he described yesterday's tender bids as 'not bullish'. He attributes this to the latest site being 'landlocked', sandwiched by the Greenwich development, a SingTel telephone exchange and landed estates.

CB Richard Ellis executive director Li Hiaw Ho reckons that a new condo on the plot is likely to attract middle-income households in the location as well as investors targeting the labour force in Seletar Aerospace Park.

Far East had paid $376 psf ppr for its plot. Up to 15.3 per cent of the maximum gross floor area of Far East's site was set aside for commercial development. That tender attracted a dozen bids.

SLP International Property Consultants executive director Nicholas Mak said that the 11 bids at yesterday's tender was the highest for a private housing site offered at a state tender since June this year, when a plot at Upper Serangoon Road/Pheng Geck Avenue drew 15 bids.

Property market watchers were surprised by Tuan Sing's participation at yesterday's tender. The group, controlled by the Nursalim (also known as Liem) family from Indonesia, has been keeping a low profile in the Singapore property market of late. Earlier this year, it completed the sale of Katong Mall to a consortium of investors for $247.6 million.

A Tuan Sing unit is developing Mont Timah, a 99-year leasehold project comprising 32 strata cluster homes in Upper Bukit Timah, boasting views of Bukit Timah Nature Reserve

Developers keep the faith, make big bets
by Conrad Raj
05:55 AM Dec 03, 2010
The recent purchases by GuocoLand of a roughly 160,000 sq ft site at Peck Seah Street/Choon Guan Street and the Far East Group of the Paramount Hotel and Shopping Centre along East Coast Road are further reaffirmations of our developers' faith in the Singapore property market.

GuocoLand, the local property arm of Malaysian tycoon Quek Leng Chan, is paying a staggering $1.7 billion for the 99-year leasehold site, or $1,006 per sq ft per plot ratio (psf ppr). The bid is 12 per cent, or $180 million, more than the next highest bidder, a consortium comprising Keppel Land, Hongkong Land and Cheung Kong Holdings. The site will cost at least another $1.3 billion to develop.

The Far East Group, the largest locally-owned private property developer and founded by the late Ng Teng Fong, is buying the 102,685 sq ft Paramount site for $214 million. This translates to $1,178 psf ppr, including a development charge of $40.1 million for residential use at a plot ratio of 2.1; or $736 psf ppr, including a $12.8 million development charge for a mix of hotel and commercial use at a 3.0 plot ratio.

There were nine other bidders for the site, which again indicates that there is no shortage of risk takers, both among developers and investors, in the property market.

Why are GuocoLand and Far East willing to pay such hefty prices in the face of government action to cool the property market?

For one, GuocoLand has to replenish its dwindling land bank, having been unsuccessful in its bids for other large sites on which the Marina Bay Financial Centre and Ion Orchard now sit. The developer also appears to be confident that the property market will continue to be buoyant in the three to five years the project will take to complete. It will have to devote at least 60 per cent of the gross floor area of 1.7 million sq ft to offices, another 10 per cent to build a 300-room hotel, with the remainder to go to apartments.

According to property analysts, the office market is picking up once again. And the proposed residences are expected to cater to the office crowd who will have ready access to public transport, given that the site sits on top of Tanjong Pagar MRT Station, the second-busiest in Singapore.

The apartments, which are expected to be largely between 800 and 1,500 sq ft and which will occupy the topmost floors of a 78-tower building, appear ideal for the yuppie Singaporean and the expat crowd working in the city. The site is near enough to various entertainment and cultural centres, including cinemas, museums, the Esplanade and the two integrated resorts.

GuocoLand has gambled big before and won big. It bought the former Casa Rosita site near Newton Circus in April 2006 for $280 million or $706 psf ppr. It has named the project on the site, Goodwood Residences and has sold about half the 210 units it plans to build for an average $2,500 psf. According to some observers, the development is expected to bring in profits of around $500 million when fully sold.

Both developers have the resources to hold on to their properties should the market soften. They are among the few companies who will be able to bear the penalties under the current rules that call for stricter enforcement on deadlines for projects or the sale of finished developments.

After all the property market behaves in cycles. In Singapore, the property market is said to have an 11-year price cycle.

The Government's recent measures are meant to cool the market, stabilise housing prices and ensure home ownership remains affordable for the majority. There are still plenty of buyers out there, while interest rates are at their lowest levels in ages and are expected to remain relatively low in the next few years.

Source: www.todayonline.com

Time to build up land banks


Land prices stabilising as they have reached their peak: Analysts

by Jo-Ann Huang Limin
05:55 AM Nov 26, 2010

SINGAPORE - The time is ripe for real estate developers to build up their land banks as land prices are stabilising, according to analysts.

According to Nomura's latest Singapore property report, the recent tender for the 13,000-sq-m Upper Serangoon View site attracted "very tight" bids.

The top bid, put in jointly by Frasers Centrepoint, Far East Civil Engineering and Japanese developers Sekisui House, was $156.8 million, or $320 per square foot (psf) per plot ratio (ppr).

The next highest bid, tendered by unlisted developer Centurion, was around $152.9 million - a difference of only 2.6 per cent.

"The bids received were among the tightest for government land sales tenders since August last year and this could suggest developers' expectations of land prices are approaching common ground," the Nomura report said.

The narrowing of bids came despite the relatively lukewarm response to the tender. The Upper Serangoon View site attracted four bids, compared with six for the 15,630-sq-m Hougang Avenue 7 site.

The highest bid for the Hougang Avenue 7 site was $160 million, or $340 psf ppr, by Sim Lian Land.

Land prices are stabilising as they have reached their peak, noted Mr Colin Tan, head of research and consultancy at Chesterton Suntec International. They have tapered off from mid-year levels of $450 to $600 psf to about $350 to $400 psf, analysts say.

Now that the Ministry of National Development has announced the Government Land Sales programme for the first half of next year, future tenders may also see fewer bids as developers "conserve their resources for the new sites", said Mr Nicholas Mak, executive director of research at SLP International.

On the other hand, competition for land could become more intense with the rising influx of foreign developers, analysts say.

Chinese developer MCC Land launched an executive condominium, The Canopy, in Yishun early last month.

Meanwhile, Japanese developers Sekisui House and Mitsui Fudosan have collaborated with local partners, a trend which will likely continue as this is the easiest way to break into a new market, analysts say.

"As foreign developers see less upside in their own home markets, they will be tempted to invest overseas," said Mr Tan.

The rising Singapore dollar is also an attraction, as it translates into higher capital values for Singapore properties.

Allowing foreign developers to bid for land could also benefit home buyers.

"They could bring in new ideas. Greater competition could produce better products or lower prices for consumers," said Mr Tan.

Source: www.todayonline.com