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Published February 2, 2011

Developer shoots for moon on Capitol site but braces for chill

By KALPANA RASHIWALA

(SINGAPORE) The $750 million mixed development project that will come up on the Capitol site will include some 60-70 luxury apartments which are expected to be launched in the third or fourth quarter of this year.

The consortium developing the project has secured debt financing from OCBC. Market watchers reckon the project's gearing ratio could be about 70 per cent.

Internal rates of return will be 'very fantastic... more than the teens', Pua Seck Guan, CEO of Perennial Real Estate Pte Ltd, told reporters yesterday. He and his co-investors hold a 40 per cent stake in the consortium developing the retail/theatre, hotel and residential project that will be developed on the Capitol site.

The historic Capitol Theatre, Capitol Building and Stamford House will be conserved and restored for adaptive re-use while a new 15-storey structure will be built on the existing Capitol Centre site.

The other members of the consortium - Chesham Properties (controlled by members of the Kwee family who own Pontiac Land Group) and Sukmawati Widjaja's Top Global - each hold a 30 per cent stake.

Mr Pua said the consortium is in 'a very comfortable position' with regard to its breakeven costs for all components of the project, given the competitive price it paid for the site - $250 million or nearly $461 per square foot per plot ratio.

'We can make very good money from this project, but it's not just about making money. We must do justice to this project,' he said.

The final pricing for the apartments, which are slated for launch later this year, will depend on market conditions prevailing at the time. For now, the pricing expectation has been clipped to about $2,500-3,000 per square foot from an initial range of $3,000-3,500 psf following the introduction of the Jan 13 property cooling measures, according to Hano Maeleo, CEO of Top Global.

The apartments will range from 1,200 sq ft to over 2,000 sq ft and likely comprise two- to four-bedroom units. They will be housed on the third to 15th levels of the building that will be built on the current location of Capitol Centre.

Levels one and two, and basements one and two, of the same building will house retail space. The existing street between Capitol Theatre and Stamford House/Capitol Building will be transformed into a glass-covered pedestrianised galleria lined with eateries.

There will also be an underground mall link to City Hall MRT Station, and retail space on the ground floors of Capitol Building and Stamford House.

The development will have at least eight flagship retail and 30 F&B stores, and at least 40 per cent of total retail space in the project will be dedicated to new-to-market brands, revealed Mr Kwee Liong Seen, director of Chesham Properties.

Said Mr Pua: 'We will be different because this site is unique and deserves a lot of our careful attention and effort to make it different. So if you are just another Bugis Junction, I think we will fail and we will not have done this site justice.'

The $750 million total development cost includes the land price of $250 million, construction costs (inclusive of at least $30 million to restore Capitol Theatre) and the cost of fitting out a luxury hotel with about 200 rooms on the second to fourth levels of the four-storey Capitol Building and Stamford House.

A building agreement was signed yesterday between the consortium members and the Singapore government, which sold the Capitol site to the consortium in 99-year leasehold tenure.

Capitol Theatre will be restored and upgraded into a single-screen cinema with about 800 seats and alternate as a performance theatre. Ground level access will enable the hosting of a wide range of activities from first-run screenings to red carpet movie premieres, to in-house theatre and dance productions.

The project is slated for completion by end-2014.

Richard Meier, managing partner of the eponymous US firm that is the design and concept architect, said: 'The new structure will complement the existing historical architecture, creating a new civic centre that will look to the future while it is respectful of the past.'

The consortium's bid was selected following a dual-envelope tender last year, which drew 14 bids. The winning consortium offered the highest land price among the three bidders that were shortlisted based on their concept proposals.



Source: /www.businesstimes.com.sg

CapitaLand Residential expects continued demand, price rises for private residential housing

by Jo-Ann Huang Limin

05:55 AM Jan 10, 2011

SINGAPORE - CapitaLand Residential will sell 1,700 private residential units this year out of its existing inventory of 2,500 ready-to-launch homes that it has yet to release for sale, chief executive officer Wong Heang Fine said in his first presentation to the media.

The units that will be sold this year will be from some of CapitaLand Residential's most high-profile developments, such as d'Leedon, The Interlace, Urban Resort and The Nassim, said Mr Wong, who joined the CapitaLand Group in 2006 and was named in July last year to succeed Ms Patricia Chia as CEO of CapitaLand Residential.

As many as 750 units of the 1,715-unit d'Leedon, the former Farrer Court, will be launched this year. MediaCorp understands that another 300 units will be launched next week, after 93 per cent of the initial 250 units launched last month were sold.

The residential unit of CapitaLand, South-east Asia's largest property developer, will also release the remaining 390 apartments at The Interlace for sale this year, Mr Wong, a UK-trained mechanical engineer who was formerly the CEO of SembCorp Engineers and Constructors, said in his briefing. The developer has sold 94 per cent of the initial 650 units that it launched last year.

The Urban Resort and The Nassim, which are luxury developments located in the core central region, will also be launched this year.

Homes at the new Bedok Town Centre site will also be up for grabs. The site will be developed into a mixed retail-and-residential property with 500 apartments, three levels of retail space and a bus interchange.

CapitaLand sold 15,025 units in total in the first 11 months last year, a marginal increase from the 14,688 units sold in 2009. But the developer reported better per-unit sales value than its rivals - its average sales value amounted to $2.3 million per unit, higher than the industry average of $1.52 million per unit. Overall, total residential sales rose 54 per cent to $1.85 billion last year, compared with $1.2 billion in 2009.

In the first 11 months of last year, buyers took possession of 629 CapitaLand homes, including 127 units at Latitude, 327 apartments at The Seafront on Meyer and 175 units at The Orchard Residences.

CapitaLand expects demand for private residential housing to sustain this year, buoyed by robust economic performance, land scarcity and increasing wealth in the region.

It will also be a year of land banking for the developer. The company said it would continue looking at sites in city-fringe areas and near MRT stations. It may tap both the government land sales programme and the collective sale market to acquire land, Mr Wong said.

"We will, of course, bid for the sites at a price we think is consistent with our margin," said Mr Liew Mun Leong, chief executive officer of CapitaLand, who was also present at the media briefing.

CapitaLand expects private home prices to increase by 5 to 10 per cent this year, with the high-end residential segment experiencing gains in the region of 10 to 15 per cent.

The developer also aims to market its iconic projects such as d'Leedon and The Interlace overseas, especially to buyers from China and India, which are emerging as CapitaLand's key new foreign markets.

Foreign buying may become a sizeable chunk of CapitaLand's sales. For example, wealthy Chinese investors have been looking for homes priced at $10 million and above, said Mr Liew.

However, market watchers have expressed concern over foreign ownership and its increasing influence on the private property market in Singapore.

Mr Liew believes that any further Government measures to cool the property market should not target foreign buyers.

"Singapore is an open economy and it will have to attract professionals and expatriates," he said. "I will consider it unprogressive to say that foreigners cannot buy housing here," he added.


Source: www.todayonline.com

Published January 4, 2011

Luxury home prices defy market lethargy

Overall price growth for private homes, HDB resale flats slowed in Q4 but high-end hit new high

By UMA SHANKARI

(SINGAPORE) A surge of interest in high-end and luxury homes pushed prices in the segment, which has underperformed the rest of the market over the last two years, to a fresh all-time high in Q4 2010.

But in the rest of the market, prices of private homes as well as HDB resale flats grew more slowly in the fourth quarter compared to the first three quarters of last year.

Flash estimates released by the Urban Redevelopment Authority (URA) yesterday show that overall private housing prices edged up 2.7 per cent in Q4 to a fresh record high.

Private home prices in Singapore first surpassed the former all-time peak achieved in 1996 in Q2 2010, and then continued to inch upwards in Q3 and Q4. For the whole of 2010, prices climbed 17.6 per cent.

But the gain in fourth-quarter prices was the smallest in six quarters, URA's data shows.


The high-end market was a notable exception. Non-landed home prices in the Core Central Region (CCR) micro-market, which includes the prime districts Marina Bay and Sentosa Cove, rose 2.3 per cent in Q4, faster than the 1.6 per cent growth seen in Q3.

This pushed luxury home prices to a new all-time high, outstripping the previous peak in Q1 2008.

By contrast, the price index for Rest of Central Region (RCR) rose by 1.7 per cent in Q4, down from 2.3 per cent in Q3. And in the Outside Central Region or OCR (where suburban condos are located), prices climbed 1.6 per cent in Q4 after increasing 2.2 per cent in Q3.

Analysts attributed the slowdown in price growth in the RCR and OCR areas to resistance from buyers for increasingly expensive projects.

Price growth in the CCR region, by contrast, rose on the back of the prevailing strong economy and low interest rates, which once again enticed foreign investors to pick up luxury homes in Singapore.

'In 2010, much of the activity was focused on the mass and mid-market segments,' said Joseph Tan, CBRE's executive director for residential. 'Foreigners stayed away, thinking that the lack of transaction activity in the high-end segment would lead to a fall in prices and allow them to buy the properties for less.'

But since most high-end home owners proved to have 'holding power', the anticipated fall in luxury home prices did not occur and foreign buyers are slowly returning to the luxury market, Mr Tan said.

The number of foreign home buyers rose by 14 per cent in 2010 compared to 2009, said Knight Frank's head of consultancy & research Png Poh Soon.

'The tightened regulations in Hong Kong and aggressive anti-speculation rules in China caused some investors to shy away from those markets and directed them to Singapore,' Mr Png said. 'High net worth foreign buyers would definitely consider the Singapore property market to park their money.'

Analysts also noted that while the latest round of cooling measures introduced by the government on Aug 30 have not dampened transaction volumes, they appear to have at least moderated price growth. A record 15,500-16,500 new private homes are estimated to have been sold in 2010, despite demand-side and supply-side measures introduced periodically throughout the year.

CBRE's Mr Tan said that transaction volumes were still high in 2010 as many potential buyers are still out looking for units.

But the price growth has slowed as these buyers - especially those house-hunting in the mass-market segment - are sticking to a budget.

Over at the HDB market, prices of resale flats rose 2.4 per cent in Q4 2010 - a slower rate of growth than the 4 per cent increase in Q3 2010 - according to flash estimates from the Housing & Development Board.

But while the resale price index was pushed to yet another all-time record, the transaction volume fell.

The resale volume declined by about 21 per cent in Q4, HDB said. And the median cash-over-valuation (COV) amount is also estimated to have fallen by $7,000 or 23 per cent, from $30,000 in Q3 2010 to $23,000 in Q4 2010.

In fact, COV levels declined progressively over the last three months of 2010, according to data from PropNex.

The firm's chief executive, Mohamed Ismail, said that according to monthly transactions handled by his company in Q4 2010, the median COV fell from $26,000 in October to $23,000 in November and to $20,000 in December.

But overall resale prices are still climbing in spite of falling COV levels due to a time lag, he explained

'Valuations for resale flats that were transacted in Q4 2010 were based on prevailing caveats for flats in the vicinity,' Mr Ismail said.

'There is therefore a certain lag time of about two months and hence the (HDB) prices overall are still climbing.'

Looking ahead, growth in private home prices may slow to anywhere between 3 per cent and 10 per cent in 2011, analysts predicted.

But most are more bullish on luxury home prices, which some said could climb by up to 15 per cent this year.

In the mass-market segment, the ample supply of new homes coming onstream from the beefed-up 2010 Government Land Sales programme should help to keep price growth to less than 5 per cent, analysts said.

And in the HDB resale market, prices are expected to grow by 5-10 per cent in 2011. The overall median COV level should also fall to about $18,000 to $20,000 in Q1 2011, said Mr Ismail.

Source: www.businesstimes.com.sg

by Chris Howells
05:55 AM Dec 29, 2010

SINGAPORE - It has been a good year for agents selling luxury properties to foreigners in Singapore. Ms Jasmine Png, an associate director with real estate agency OrangeTee, says she has never before seen as many earnest buyers from China.

What's drawing them here are "the tightening measures in China and Hong Kong, which have actually made the Singapore residential market look appealing," said Ms Png. The "relative ease in obtaining financing for purchasing Singapore properties" is also helping, she added.

Credit is getting costlier in China. The central bank raised the benchmark interest rate by 25 basis points to 5.81 per cent last Saturday, the second increase since October. Analysts expect another 100-basis-point increase in the first half of next year. They say that the People's Bank of China (PBOC) is still behind the curve in combating inflation and will likely employ a slew of measures next year to contain rising consumer prices and cool the overheated property market.

The authorities in Beijing have already banned mortgages for third-home purchases and restricted developers from pre-sales of properties. These steps, along with the threat of a property tax, have driven some buyers to overseas markets.

According to Singapore's Urban Redevelopment Authority, Chinese nationals have snapped up 1,474 private properties so far this year, surpassing the 1,448 purchases made by Indonesian buyers.

Chinese nationals have accounted for 5.3 per cent of the local private housing market this year. Among foreigners, they are second only to Malaysians, who make up 6 per cent.

In the third quarter, Chinese buyers accounted for 20 per cent of all foreign purchases in Singapore's housing market, the highest ever, according to property consultancy DTZ. Although Singapore, too, has taken steps to damp speculative fervour in the property market, the low borrowing costs here are attracting foreigners, especially the Chinese, who are expecting a significant increase in their home-country interest rates next year.

In the PBOC's previous tightening cycle from March 2006 to August 2008, the central bank raised the lending rate by 189 basis points to 7.47 per cent and increased the reserve requirement ratio for banks by 1,000 basis points, to 17.5 per cent.

After Saturday's increase, the lending rate is currently at 5.81 per cent, though at 18.5 per cent, reserve requirement ratios are already above pre-crisis highs.

Source: www.todayonline.com

Published December 29, 2010


High-end condos can't keep pace with mass-market hikes
Prices in Non-Central region top pre-crisis high, Central region 3.7% below peak


By KALPANA RASHIWALA

(SINGAPORE) The latest flash estimates for November from the National University of Singapore (NUS) show that prices of non-landed private homes in Singapore's Central region (districts 1-4 and 9-11) have appreciated 7.9 per cent in the first 11 months of this year from end-2009.


Over the same period, the Singapore Residential Price Index (SRPI) sub-index for the Non-Central region rose at a faster clip of 12.9 per cent. As a result, the overall SRPI increased 10.7 per cent year to date.

SRPI, compiled by the NUS Institute of Real Estate Studies, covers only completed properties.

The Central region sub-index for November is still 3.7 per cent shy of its pre-Global Financial Crisis peak in November 2007. On the other hand, the sub-index for the Non-Central region in November has already surpassed its January 2008 pre-crisis peak by 15 per cent. As a result, the overall November 2010 index is about 7.6 per cent above its November 2007 pre-crisis high.

The latest indices from NUS tally with what property agents have been reporting from the ground - that mass-market condo prices have scaled fresh records this year while prices of prime and luxury condos have yet to touch their 2007 records.

DTZ executive director (consulting) Ong Choon Fah said that entry-level suburban condos have enjoyed strong demand this year, riding on upgrader demand amid a buoyant HDB resale market.

'In addition, the trend of developing a higher proportion of smaller units in private residential projects has spread from the prime districts (where rental demand is stronger) to the suburbs - and this has also helped to boost sales of mass-market projects by making the lump sum investment more palatable to buyers.'

Mrs Ong also pointed out that these days, developers of suburban projects are offering some of the innovative features which in the past were available only in prime district projects - such as sky gardens.

Knight Frank chairman Tan Tiong Cheng said that the increase in high-end condo prices had not been so sparkling this year due to more subdued foreign buying compared with the previous bull run in 2007.

'The foreign buying back then was from a wider spectrum. These days, buyers from the West, Middle East and Russia seem to be out of the equation. Also Western bankers were a significant buying contingent in 2007 but post-crisis, banks are less generous with remuneration.'

Month on month, the overall SRPI dipped 0.2 per cent in November. The sub-index for the Non-Central region too eased 0.3 per cent but the Central region sub-index was flat.

Since the last round of property cooling measures on Aug 30, the Central region sub-index has eased 0.4 per cent while the non-Central index has strengthened 0.9 per cent. As a result, the overall index in November was 0.4 per cent ahead of the August level.

Despite being proven wrong with their earlier forecast of stronger price appreciation for high-end condos compared to mass-market ones for 2010, analysts continue to predict the same trend in 2011, pointing to the already substantial price hikes posted in the mass-market segment. And if the government succeeds in taming HDB resale prices, that will also have an impact on upgrader demand for entry-level condos. Also, any interest rate hike, as well as further property cooling measures, is likely to make a bigger dent on demand in the mass-market segment than on upmarket condos

Source: www.businesstimes.com.sg

Published December 22, 2010

Landed homes' capital values rise faster than apartments, condos
Average cap value of prime resale freehold landed homes up 5.1% in Q4

By KALPANA RASHIWALA


AVERAGE cap values of landed homes in Singapore have risen at a faster clip than those of private apartments/condos in the fourth quarter as well as the whole of this year, show latest figures from DTZ.

DTZ's analysis referred only to resale landed and non-landed homes, that is, properties that had already obtained Certificate of Statutory Completion.

'The limited stock of landed homes has made them prized assets, especially those in the prime districts. Landed homes currently account for about 26 per cent of Singapore's total private housing stock (including executive condos), with very limited supply in the pipeline. In contrast, the supply of non-landed private homes is injected at a faster pace via the Government Land Sales programme and collective sales,' says DTZ's Southeast Asia research head Chua Chor Hoon.

The average capital value of prime resale freehold landed homes stood at $1,693 per square foot (psf) on land area in Q4 2010, up 5.1 per cent from the previous quarter, taking the full-year increase to 17 per cent. For suburban freehold landed houses, the average capital value increased 4.3 per cent quarter on quarter to $993 psf in Q4, resulting in a full-year appreciation of 15.5 per cent.

In the non-landed segment, the average cap value for 99-year suburban condos remained unchanged at $660 psf on strata area in Q4 2010, taking the appreciation for the whole of 2010 to 8 per cent. The average price of prime freehold condos increased 0.4 per cent quarter on quarter to $1,520 psf in Q4, also reflecting an 8 per cent full-year price gain.


DTZ said prices in these two segments are hitting resistance, having risen by about 18 per cent and 36 per cent since their respective Q1 2009 troughs following the global financial crisis. The latest cap values are also above the respective Q4 2007 peak levels, it noted.

'Greater prudence is also being exercised on buyers' part following the latest property cooling measures introduced on Aug 30. Buyers are more selective and prefer projects with good location attributes such as proximity to MRT stations, schools or the central business district,' DTZ said.

On the other hand, the Q4 2010 average cap value of freehold luxury condos (above 2,500 sq ft) in the prime districts was $2,630 psf, about 6 per cent shy of the Q4 2007 peak of $2,800 psf. The latest Q4 figure was unchanged from the preceding three months while the full-year 2010 increase was 9.6 per cent.

'With a limited pool of buyers being able to afford these luxurious units which require a large quantum sum, this segment has seen more subdued purchasing activity,' DTZ said.

The firm's executive director (residential) Margaret Thean said: 'Although there's less activity in the high-end segment, we're still seeing strong interest from Chinese and Indian nationals, and increasingly from institutional investors such as funds. They have confidence in future price growth due to Singapore's strong economic fundamentals. As for individual foreigners buying for owner occupation, completed developments near renowned schools particularly interest them.'

Ms Chua predicts that resale prices of 99-year suburban condos are likely to remain flattish next year while those of prime freehold condos could rise by up to 5 per cent if there is more buying from foreigners due to the clampdown on property purchases in their home countries.

She expects prices of landed homes to continue to outperform those of apartments and condos due to their relative scarcity appeal.

Source: www.businesstimes.com.sg

Published December 21, 2010


KOP Properties upbeat on luxury home market
Prices in segment still 20% below pre-crisis peak: CEO

By UMA SHANKARI

KOP Properties is upbeat about the prospects of Singapore's luxury residential market, said the company's chief executive Leny Suparman yesterday.

'We are quite positive about the outlook for next year,' Ms Suparman said.

While prices of private homes in Singapore have climbed since the financial crisis ended, the gains have been seen mostly in the mass market and mid-tier segments, she said.

Prices in the high-end segment, by contrast, are still some 20 per cent below the pre-crisis peak. And while prices in that segment might not climb to the same high again, there is still a gap that could be closed next year, Ms Suparman added.

She was speaking at the 'topping out' ceremony of KOP's Cairnhill Road project The Ritz-Carlton Residences, Singapore.

Guests and staff gathered on the roof of the 36-storey development's penthouse to witness the pouring of the final bit of cement.

The 58-unit Ritz-Carlton Residences is about 40 per cent sold and units are now selling for about $3,300 per square foot (psf) each, Ms Suparman said.

According to official data from the Urban Redevelopment Authority (URA), 17 out of the 58 units in the project had been sold at end-November.

Ms Suparman said that sales will pick up as the project nears completion, which is targeted for June next year: 'We are quite confident that sales will be brisk from now on and that the project will achieve the price that it deserves.'

The developer's other project, the 56-unit The Hamilton Scotts, is also about 40 per cent sold, Ms Suparman said. URA's data put the number of units sold by end-November at 18. KOP Properties is part of KOP Group, an integrated real asset investment company. KOP Group is 51 per cent owned by Dubai Group, a unit of Dubai Holdings.


Source: www.businesstimes.com.sg

by Jo-Ann Huang Limin
05:55 AM Dec 17, 2010

SINGAPORE - More top-end condominiums in the core central region (CCR) have been changing hands - at higher prices - with each passing month. Yet, deals above $4,000 psf are still rare. Analysts say that this shows the luxury segment still has room for capital appreciation.

November saw only one such transaction - a Scotts Square unit which sold for $4,358 psf, according to the Urban Redevelopment Authority (URA). In October, a Boulevard Vue unit sold for $4,800 psf.

Back in 2007, a unit at Orchard Residences went for as high as $5,094 psf, while one at the Marque on Paterson Hill fetched $5,262 psf. In all, 13 units sold at higher than $4,000 psf in the second half of 2007. So far, in the second half of this year, there have been only five such sales.

Investors are still not paying top dollar for extra exclusivity - a sign that they have been cautious on luxury homes in the current property cycle. Prices of mass-market homes, meanwhile, have already surpassed their 2007 peaks.

Even then, analysts say it's only a matter of time before prices of luxury properties catch up with - and exceed - their 2007 peak.

"There's room to grow a further 5 to 8 per cent to reach 2007 price levels," said Dr Chua Yang Liang, head of research, South-east Asia at Jones Lang LaSalle.

Sales of new luxury homes have also been volatile, according to the URA's data. Sales in the CCR in November fell to 213 from 335 units in October. In September, following the government's Aug 30 measures to cool the property market, CCR sales were as low as 84 units.

But investors need not worry about the erratic sales volumes, analysts say.

"Luxury property sales tend to see some volatility because there are fewer luxury property developments compared with mass market ones," said Dr Chua. "High-end property developers launch their projects more sporadically."

With China clamping down hard on the property market in its tier-one cities, ultra-rich investors are likely to move capital to Singapore, analysts say.

"High-end residential properties in Singapore, which traditionally enjoy significant foreign home buying interest, may benefit as a number of investors from across the world are looking at diversifying their investments geographically," said Mr Ong Kah Seng, senior manager of research at Cushman & Wakefield.

Credit Suisse says investors should exit the residential real-estate market in China and move their money to the residential and commercial property markets in Singapore, Hong Kong and Japan.

The bank expects residential property prices in Singapore to increase 5 per cent in each of the next two years, on top of an estimated 15 per cent gain this year.

Still, analysts warn that the policy risk going into next year remains high for all types of properties, including luxury units that are typically unscathed by measures that seek to curb leveraged home-buying.

They said harsher cooling measures may be introduced - such as a tax on profits from property sales after URA data this week showed that 1,909 private residential units were sold last month,a surprising 80 per cent jump from October's 1,058 units.

Source: www.todayonline.com

Published December 17, 2010

Developers hold back on luxury projects in Q4
This despite higher buying interest for high-end homes in October, November


By UMA SHANKARI

DEVELOPERS continued to hold back on launching new luxury projects in the fourth quarter even as buyer interest in such projects grew slightly in October and November.

No new luxury projects were launched in the fourth quarter, noted CB Richard Ellis (CBRE) in a report yesterday.

This was even though there was increased buying interest for high-end homes - that is, units that sell for more than $2,000 per square foot (psf) - in both October and November.

Around 230 units were sold in this segment in October and another 160 units last month. By comparison, the number of new homes that cost more than $2,000 psf did not cross the 100-mark from June to September 2010.

And for units priced at above $3,000 psf, the number sold doubled to 12 units last month compared to October. Analysts also noted that older launches such as Paterson Suites, The Trizon and The Laurels also saw renewed buying interest in November.

But despite this, most of the launch activity was centred in the mass market segment as developers capitalised on the strong demand from upgraders for cheaper private homes.

'Contrary to expectations that developers would look to unload previously accumulated land for high-end properties to ride on the building up of buying momentum for such properties, developers have only launched 9 per cent more of high-end homes in November,' noted Colliers International's director of research and advisory Tay Huey Ying. 'Instead, developers have surprised many by launching primarily mass-market homes in November.'

The 1,638 units of new mass-market homes released by developers last month was more than triple the 513 units launched in October and accounted for 70 per cent of all new homes released in November.

Buyers responded well, picking up 1,229 mass market units last month - 64 per cent of the 1,909 private homes sold in the month. The strong demand took total sales volume for this year to 15,025 units - even higher than the record 14,811 new private homes sold in 2007.

'Projects located close to MRT stations remain popular among homebuyers,' said Joseph Tan, CBRE's executive director for residential. 'Besides location, other selling points include government plans for future development and new transport network, amenities, tenure and product attributes.'

The trend was true for the first 11 months of the year as well. Data compiled by CBRE shows that out of the 10 best-selling projects, eight were in the outside central region (OCR), which is a proxy for mass market locations.

The three projects that drew the most buyer interest were: UOL Group's 616-unit Waterbank at Dakota (all but one unit sold as of end-November); MCL Land's 608-unit The Estuary (fully sold); and Kheng Leong's The Minton (482 units out of 1,145 sold).

The lack of activity in the high-end segment has also kept prices of such homes dampened despite gains in other categories.

The official URA private residential price index, which already went up 14.4 per cent in the first three quarters of this year, is expected to register another marginal climb in the final quarter, translating to a total rise of 15 per cent to 16 per cent for the whole year.

But most of the growth has been led by mass market homes, analysts noted.

'Overall, prices for prime, mid-tier and mass-market homes have more or less caught up with the peak levels in end-2007. However, prices of new luxury properties were still lagging behind by around 15 per cent,' said Mr Tan.

Equity analysts are getting increasingly wary of residential stocks with large exposures to the mass market segment on concerns that the government could announce more policy measures to cool the market.

'With sales activity largely centred on mass market condos, we believe this will lead to more demand-side and supply-side tightening measures ahead,' said DMG & Partners Research analyst Brandon Lee. 'As such, we are maintaining our preference towards high-end developers, which are less susceptible to policy concerns.'

He reiterated his 'buy' calls on Wing Tai Holdings and SC Global Developments.

DBS Group Research, on the other hand, said in a fresh report that it prefers companies with greater office exposure and laggards such as Keppel Land, UOL Group and Singapore Land, which have the largest office content in their revised net asset values.


Source: www.businesstimes.com.sg

05:55 AM Dec 07, 2010
SINGAPORE - CapitaLand and its partners have sold 82 per cent of the 250 units released during the initial launch of its d'Leedon development.

The units sold include 52 apartments that were purchased by former Farrer Court owners who had sold the development's site en bloc in 2007.

CapitaLand said that the units were priced at an average of $1,680 per sq ft.

The development is the first condominium in Singapore to be designed by Pritzker Architecture prize winner Zaha Hadid and has a total of 1,715 units.

The developer said the apartments would be spread over seven residential towers, with facilities tailored to the lifestyles of different groups of residents.

Source: www.todayonline.com

Published December 7, 2010

New home projects draw out buyers
All but penthouses at Robinson Suites sold; 205 units of d'Leedon taken up

By KALPANA RASHIWALA

SEVERAL new residential projects sold well last week. All but the five penthouses at the 167-unit freehold Robinson Suites are said to have been sold over a three day period last week beginning on Thursday. Three shop units on the ground floor of the 42-storey project have also found takers.

Robinson Suites: The apartments were sold at prices in $2,600 psf to $3,300 psf range
BT understands that 132 residential units and the three shops were released on Thursday. Of these, everything was sold by Saturday, except for the five penthouses.

The remaining 35 apartments on the lower floors are believed to have been sold to a fund.

All the apartments in the development are either one-bedroom-plus-study units or two-bedders. Unit sizes start at 484 sq ft.

The apartments are said to have sold at prices ranging from $2,600 per square foot to $3,300 psf. In lumpsum quantum, prices began at $1.2 million for a one-bedroom-plus-study unit and $1.5 million for a two-bedder.

In addition to this relatively affordable lumpsum investment size, buyers were drawn to the pitch for the project as the first freehold apartments at Robinson Road. The units face the low-rise Lau Pa Sat and will enjoy a relatively unblocked view.

Robinson Suites will rise on the former VTB Building site; the project is being developed by a consortium whose shareholders include Cheong Sim Lam (whose family developed International Plaza), Fission Holdings, Tan Koo Chuan and Saw Pik Kee.

Analysts suggest that the strong sales achieved at Robinson Suites may inspire Kwek Leng Beng's City Developments, which owns the next-door City House office block, to similarly redevelop its site into apartments.

Meanwhile, over in the Farrer Road location, CapitaLand and its partners sold a further 153 units last week at d'Leedon on the former Farrer Court site. This takes total sales to 205 apartments, inclusive of the 52 units sold the previous weekend (Nov 27-28) when sales were open to former owners of Farrer Court.

Singaporeans have picked up 80 per cent of the units sold so far.

The developers have released 250 of the 1,703 apartments in the 36-storey, 99-year leasehold project. They have yet to release six pairs of strata semi-detached houses in the development.

The 250 apartments released have been priced at $1,680 psf on average. A typical one bedroom- plus-study apartment of 635 sq ft costs about $1.1 million. A typical two-bedder of 1,055 sq ft is priced at about $1.5 million.

The condo also has three- and four-bedroom apartments as well as penthouses.

Wong Heang Fine, CEO of CapitaLand Residential Singapore, said: 'We are pleased with the strong buyer interest in d'Leedon. It is a development that has no comparable given its iconic design by Zaha Hadid and prime District 10 location. We are confident that we will continue to see robust interest in the project, especially from homebuyers who are currently away for the December holidays.'

Meanwhile, in the executive condominium (EC) market, 823 applications had been received as at 5 pm yesterday for the 680 units available at Prive, a 99-year leasehold project at Punggol Road being developed by NTUC Choice Homes and Chip Eng Seng. Applications opened on Dec 3 and will close today.

Eligible applicants will be balloted for entry into the showflat on Dec 10, when sales bookings will commence.

The average price will be $660-690 psf on a normal progressive payment scheme. Buyers who opt for a deferred payment scheme will have to pay 2 per cent more

Source: www.businesstimes.com.sg

Tips for investing in high-end homes

by Jacqueline Wong
05:55 AM Dec 03, 2010

Despite the numerous Government policies to cool the property market in Singapore, the high-end residential segment has not been adversely affected.

To begin with, the Government measures implemented thus far are targeted at the mass market, which has seen property values rising ahead of economic recovery.

Based on Jones Lang LaSalle estimates, the average resale capital value for areas outside the prime residential districts in 3Q2010 is 10.1 per cent above its last peak in 1Q2008; in contrast, the high-end properties are still trading at some 8.4 per cent below, on average.

In addition, the anti-speculative measures that have ranged from the earlier measures of raising investment costs through additional purchase outlays (higher loan-to-value ratios, seller's stamp duty) to the most recent restriction on buyers from speculating in both the public and private housing markets (particularly during the minimum five-year occupation period) have not affected the high-end buyers.

These buyers are usually long-term investors, if not owners, with strong financial standing. Furthermore, many are foreigners who mostly do not have a stake in the local public housing market.

While the high-end has not picked up as much as the rest of the market, latent demand remains in the former.

Besides the Indonesians, who form our traditional base of foreign buyers, an increasing number of buyers from China, India, Russia and the Middle East are now looking into the Singapore market.

Meanwhile, local investors have been looking beyond Singapore properties to overseas markets as well. The key motivation for many local investors is distinctively practical - acting on parental instincts to provide a roof over their children's heads while they pursue an overseas education, saving on rental expenses and enjoying a potential capital upside when the children finally finish school.

Additionally, further upside of these offshore investments could come from an anticipated recovery in the values of this asset class and the strengthening of the host countries' currencies. Australia, particularly Sydney and Melbourne, as well as the United Kingdom, are the traditional markets in which Singaporean investors are active.



INVESTMENT OPPORTUNITIES abroad

Within the Asia-Pacific region, excluding Hong Kong and Japan, there are many buying opportunities as home prices are generally more affordable than those in Singapore. However, foreign ownership usually comes with restrictive conditions which investors should spend time understanding before diving into these overseas markets.

Take Australia, for instance, where prices are comparable to Singapore's. Foreigners are prohibited from buying a property to be let out or used as a holiday home, although temporary residents may own a home during their residency in the country, subject to approval.

The UK and the Maldives remain the most open to foreign home ownership. Foreigners who own residential homes in the UK are allowed to lease out their properties and this offers an added income yield on top of potential capital appreciation. The Maldives is also very attractive - investors need only pay a transfer fee of US$3,000 ($3,900) to US$5,000 when buying residential properties in the country.

Increasingly, well-heeled investors have been buying holiday homes instead of conventional residential ones. A holiday home has an edge over a conventional residential one as it is managed by a hotel operator, which frees the owner from maintenance hassles. The investor also gets to enjoy the holiday home, along with the facilities, for typically six to eight weeks a year, in addition to the income generated from letting the asset out for the remaining months of the year. The owner typically splits 50-50 with the hotel operator, subject to a bed tax.

Jones Lang LaSalle has successfully marketed projects such as The Bulgari Residences at Bulgari Hotels and Resorts in Bali, yooPhuket in Thailand, The Tower in Central London and 12 Blues Resort & Spa in the Maldives.



INVESTING IN A PROPERTY

There are several basic but important factors that one needs to consider when investing in property.



Do your sums

Besides having sufficient funds for the downpayment of a property, you need to ensure that you have a sound cashflow once you exercise the option to purchase. Increasingly, governments are abolishing the "no payment till physical completion" or what is commonly known in Singapore as the deferred payment scheme, to reduce the default risk.



Know your market

Understanding the market you are putting your money in is essential as property values may be influenced by many factors - from economics to politics. Even the construction site that sits right across the road can affect your investment positively or negatively; validating the mantra of "location, location, location" in property investment. Given the uniqueness of each property, market research is all the more important. Jones Lang LaSalle provides a wide range of advisory services such as feasibility studies, market advisory and portfolio analysis for financial institutions, government agencies and high net worth individuals.



What unsettles you?

Knowing your risk appetite helps you determine a market that is most suitable for you. You would not want to engage in panic selling during price corrections. An individual's risk appetite is largely influenced by the holding power fuelled by his or her financial background. When investing abroad, there are the additional risks to consider:

- Distance - this means that you are unable to keep a close watch on your property and are thus less sensitive to developments that affect property values

- Exchange rate volatility - adverse currency movements will result in a lower return

- Ill-informed/unreliable agents - they cause you to miss out on opportunities simply by giving poor advice




INVESTMENT STRATEGIES

The conventional wisdom in investment is to buy low and sell high. If you had bought a typical prime property in Singapore during the last cycle, you would have earned a good 40 per cent capital gain when you sell your property today. Buying based on cycles would guarantee a profit regardless of the property you buy. However, this is often difficult in practice.

The residential market is very sentiment driven. Many investors act on a herd instinct - they buy into the market when everyone else is already in there. This usually means the gains are typically less as the market is quite heated. In addition, many buyers tend to be emotional in their purchases and this will affect their judgement and handicap their decision-making skills.

Speaking to seasoned investors and advisers will allow you to leverage on their insights into the market and help you avoid herd-driven behaviour.

As you look for your ideal property, bear in mind the importance of value investing. While mass market projects tend to be cheaper on a total quantum basis, high-end properties remain timeless given the quality finishes, comprehensive facilities and higher leasing demand.

For example, based on an analysis of the caveats lodged, the median price of a unit in Seasons Park located along Yio Chu Kang Road today has grown by about 9 per cent since it was first launched in 1Q1996; in comparison, the Regency Park along Nathan Road commands a median price that is 59-per-cent above its initial launch despite it being a much older project.

A new property mantra then should be: "Location, location, quality."



The writer is head of residential, Jones Lang LaSalle Singapore. She is supported by Tan Yali, senior analyst, research and consultancy.


Source: www.todayonline.com

Published December 1, 2010

Hawaii Tower up for en bloc sale
$700m reserve price works out to $1,401 psf ppr for the freehold site on Meyer Road

ONE of the biggest collective sale sites in dollar terms so far this year is expected to be launched for sale next week.

Hawaii Tower, on Meyer Road, has a reserve price of $700 million. This works out to about $1,401 per square foot per plot ratio (psf ppr) inclusive of a development charge (DC) of about $55 million. The all-in investment for the successful developer of the 192,340 sq ft freehold site is expected to be around $1 billion.

Based on the unit land price of $1,401 psf ppr, the breakeven cost for a new luxury condo project on the site could be about $1,950-2,100 psf. A 25th floor unit at the nearby Aalto was transacted at $2,373 psf this month. Over at Seafront@Meyer, units on the 17-20th floors have traded at $1,875-2,051 psf in the past few months.

The Hawaii Tower site is zoned for residential use with a 2.8 plot ratio (ratio of maximum gross floor area to land area) and height of up to 36 storeys. The plot may potentially be developed into a new condo project with about 345 units of an average size of 1,500 sq ft or 430 units averaging 1,200 sq ft.

A new development on the site will boast unobstructed views towards the sea, Marina Bay Sands and the city skyline as well as the Mountbatten landed housing estate. The regular-shaped plot has frontage of over 130 metres along both Meyer Road and the East Coast Parkway.

CB Richard Ellis is marketing Hawaii Tower's collective sale through a tender which will close on Jan 26.

Owners controlling slightly over 80 per cent of share values and strata floor area have signed the collective sale agreement. They stand to receive about $5-million-plus per apartment and $8.8-million-plus per penthouse. Hawaii Tower comprises three blocks holding 129 apartments of about 2,200 sq ft each and six penthouses of about 4,300 sq ft each.

Market watchers pointed to two land deals in the vicinity earlier this year - two adjacent bungalows at Margate Road that sold for $1,023 psf ppr including DC, and 16 terrace houses at Fort Road which fetched about $1,080 psf ppr including DC and the estimated cost of buying a cul-de-sac from the state.

For Hawaii Tower, this would be the third attempt at an en bloc sale. The two previous attempts were in 2007. The initial effort began in the first half of that year, starting at $700 million and rising to $800 million; about 70-odd per cent consent level from owners was secured before the deadline for obtaining the minimum consent passed.

Another attempt was launched in late 2007 at $800 million but this soon petered out as market sentiment began to weaken and developers lost their appetite for land.

Data from Credo Real Estate shows that 31 en bloc sales (involving multiple owners coming together to sell their properties) have been sealed so far this year for a total $1.5 billion.

Source; www.businesstimes.com.sg

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

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