News Highlights



HDB’s portal signals change

The Housing Board is the latest agency to embrace digital disruption with a revamped portal that can halve the resale flat transaction time to eight weeks.

This will no doubt benefit savvy buyers or sellers, who will have a more user-friendly platform to take them through the resale process from start to finish when it kicks in on Jan 1. They will also spend less time making their way to the HDB Hub in Toa Payoh, as the number of appointments has been cut from two to one. Previously, they had to make one trip to have their financial documents and plans verified, but this will soon be conducted online instead.

The move signals that the Government is walking the talk in its Smart Nation push – by eliminating inefficiency, encouraging better use of technology and bringing convenience to Singaporeans.

But the change also threatens the livelihood of a handful of professional valuers or real estate agents who focus solely on the HDB resale market.

That is because the HDB will do away with professional valuations in most cases. Instead, it will rely on its extensive trove of transaction data to let buyers know if their proposed price is reasonable.

The improved platform may also encourage more buyers and sellers to go down the do-it-yourself path – an increasingly common trend.

But the reality is that many professional valuers have a large scope of work that goes beyond HDB valuations, such as for financial reporting and collective sales. For such firms, the revenue gained from HDB valuations is insignificant. The Singapore Institute of Surveyors and Valuers has also offered to help affected valuers who wish to diversify their skills.

The new portal will also relieve some of the administrative burden resting on agents’ shoulders so they can concentrate on what they are really being paid for: their ability to move a unit at the best price, in the shortest possible time.

In every digital revolution, there are winners and losers. But in HDB’s case, the advantages outweigh the cons. Not only will buyers and sellers save up to two months in what can be a lengthy process, but two industries will also become more efficient.

Adapted from: The Straits Times, 23 October 2017

China’s Logan Property buys Florence Regency for S$629m

Florence Regency, a privatised HUDC estate in Hougang, has finally found a buyer willing to match the independent valuation of S$629 million – Logan Property.

The Singapore-incorporated subsidiary of the Hong Kong-listed Chinese developer picked up the 336-unit development in Hougang Avenue 2 for S$629 million through a collective sale.

This marks the second land parcel in Singapore snapped up by Logan Property, which in May secured a site in Stirling Road with Nanshan Group under the government land sales (GLS) programme at a whopping S$1.003 billion or S$1,050.7 per square foot per plot ratio (psf ppr).

The public tender for the collective sale of Florence Regency closed on Sept 27 with three bidders but none agreed to raise their bid prices to match the independent valuation of S$629 million. The collective sale agreement drafted by law firm Lee & Lee required that the sale price be no lower than the valuation.

This is the first collective sale attempt by the owners of the development with 80 per cent approval attained in under three weeks.

Owners would expect to receive gross sale proceeds of S$1.84-$1.89 million per unit.

After factoring in the current estimated differential premiums of S$288.6 million payable to the state to top up the lease to a fresh 99 years, and to develop the 389,236 sq ft site to a gross plot ratio (GPR) of 2.8, the land price works out to about S$842 psf ppr.

The site is near the Hougang MRT station, which will become an interchange station when the planned Cross Island Line is completed, and the bus interchange of Hougang Mall. It is also within walking distance to Kovan MRT Station in Upper Serangoon Road.

The collective sale of Florence Regency follows that of two other former HUDC estates in the area – Rio Casa in Hougang Avenue 7 and Serangoon Ville in Serangoon North Avenue 1 to an Oxley Holdings-led consortium for S$706 psf ppr and about S$860 psf ppr respectively. The government had also sold a site in Serangoon North Avenue 1 in July to Keppel Land and Wing Tai for S$965 psf ppr.

These three sites alone can generate more than 3,000 units. Logan Property expects to build some 1,400 units at the Florence Regency site, its investor relations director Derek Lee told The Business Times on Friday.

Some analysts have cited potential competition in the Hougang/Sengkang region as a potential deterrence for other developers to raise their bids for Florence Regency. There were other developers looking at the site who decided not to submit firm proposals. But the valuation represents a fair price for the site, and its location is more favourable than the other three sites due to its greater proximity to an MRT station.

Logan Property’s Mr Lee said the land price for Florence Regency is comparable to the average cost of nearby sites that were sold recently.

“We also see that residential sales momentum is good even though there is quite a lot of supply in the area,” he said. The decline in property prices over the past three to four years also provided “an uptrend opportunity for us to tap”.

Logan Property will continue to focus on residential sites in Singapore through both the GLS programme and the en bloc market, even as it remains focused on the Greater Bay area of Guangdong, Hong Kong and Macao, Mr Lee told BT.

Other Chinese players that have scooped up sites through the collective sales market this year include Kingsford Huray Development and a joint venture between Singhaiyi and Huajiang International Corporation.

Adapted from: The Business Times, 21 October 2017

Mayfair Gardens in collective sale bid

Mayfair Gardens, a residential redevelopment site off Dunearn Road in Bukit Timah, is being launched for collective sale on Monday with a reserve price of S$265 million.

This translates to a land rate of S$1,058 per square foot per plot ratio (psf ppr), including an additional lease top-up premium of S$43.7 million payable to the state for a fresh 99-year lease.

With the inclusion of a 10 per cent bonus balcony gross floor area (GFA), the land rate may work out to about S$961 psf ppr, subject to the authorities’ approval.

With a site area of 19,368 sq m (208,475 sq ft), Mayfair Gardens has a residential gross plot ratio of 1.4. This allows redevelopment potential to reach up to a maximum permissible GFA of about 291,865 sq ft. The site currently houses six residential walk-up blocks of 124 apartment units ranging from 100 sq m to 200 sq m.

Based on the reserve price, each owner will receive gross sales proceeds of S$1.45 million to S$2.46 million. The tender for Mayfair Gardens will close on Nov 16.

The immediate vicinity is mainly surrounded by Good Class Bungalows, landed homes and condominiums. It is also near good schools and is well-connected to other parts of Singapore via major arterial roads and expressways.

With the opening of the Downtown Line, the Bukit Timah area has become extremely convenient and a more coveted address.

Some consultants are expecting a breakeven price of around S$1,600 psf and a selling price of above S$1,800 psf for the new project on the site. Some 300 units could be built in the new project if the average size is 90 sq m and around 387 units if the average size is 70 sq m.

So far, 18 collective sales worth S$6.72 billion this year comprising mainly residential developments have closed, with over 2,700 existing homes expected to be taken out of the market. Over 10,000 new homes are estimated to be built on these sites.

More potential collective sale sites are in the works.

Nearer to Botanic Gardens, owners at freehold Shelford Green are asking for S$$140 million or S$1,505 psf ppr with no development charge expected to be payable.

The 66,392 sq ft site has a gross plot ratio of 1.4 and now houses 33 apartments.

Although the land rate is rich, the projected quantum for Shelford Green is small enough for smaller developers to bite. Yet, due to the prime location, it is likely to draw established developers with strong branding in developing high-end projects such as Wing Tai, UOL Group and Allgreen. The breakeven pricing is estimated to be in the range of S$2,100-2,200 psf.

Adapted from: The Business Times, 23 October 2017

Park West condo owners eye S$750m in third try at collective sale

Owners of condominium project Park West are hoping that third time’s the charm in their collective sale attempt, this time at an expected selling price of S$750 million.

They saw a strong start on Saturday when signatures from around 30 per cent of owners by share value and strata area were collected on their first meeting to approve the collective sales agreement.

The asking price for Park West is lower than the indicative price of S$803 million during its 2011 en bloc tender, which received no bids. An earlier 2007 attempt did not achieve the requisite 80 per cent consensus among owners.

Frankie Lim, chairman of the Collective Sales Committee, noted that the 2011 attempt took place towards the end of an en bloc up-cycle but this time, market conditions are favourable.

“Now we can see that developers are hungry and looking for good sites. We also feel that Park West is one of the few sites available in the west zone and the government is going to launch the High Speed Rail terminal station in Jurong East,” he said. “There are good malls and the Ng Teng Fong General Hospital in Jurong East. The western region is also where the tertiary education institutions are mainly located.”

Including an estimated S$339 million in differential premiums for site intensification and lease top-up, the land rate for Park West site is estimated to be S$818 per square foot per plot ratio (psf ppr).

Located near Clementi MRT Station and Nan Hua Primary School, Park West condominium has 432 apartments and four shop units. The site spans 633,644 square feet, with 64 years left on the lease and a gross plot ratio of 2.1. Apartment owners are expected to bag around S$1.25 million to S$2.1 million each while the shop unit owners are each expecting to pocket S$1.1 million to S$1.5 million.

Elsewhere, the tenders for Florence Regency, a privatised HUDC estate in Hougang, will be launching on Aug 23 with a reserve price of S$600 million and freehold Amber Park condominium in the east on Aug 29 with a reserve price of S$768 million. This translates to a land rate of S$779 psf ppr for Florence Regency, inclusive of the differential premium of S$290 million for intensification of the site and lease top-up. The tender for Florence Regency will close on Sept 27.

For freehold Amber Park condominium, whose tender will close on Oct 3, its land rate is estimated to be S$1,284 psf ppr, with no development charges payable as its baseline gross plot ratio of 2.843 is higher than the plot ratio of 2.8 under the 2014 Master Plan.

So far this year, seven successful collective sales have chalked up a combined value of S$2.5 billion, far surpassing last year when only three deals worth S$1 billion were closed. These include residential projects One Tree Hill, Rio Casa, Eunosville, Albracca, Serangoon Ville as well as Goh & Goh mixed-use building and Citimac industrial complex.

Tampines Court, a privatised HUDC estate, is said to have received a bid of S$970 million with conditions attached but the deal is not officially closed yet.

More collective sale aspirants include former HUDC estates Laguna Park and Lagoon View and freehold condominium Faber Garden.

Adapted from: The Business Times, 21 August 2017


Bungalow market keeping up with last year’s momentum

The bungalow market in Singapore is humming along nicely, with transactions likely to equal if not surpass 2016’s volume.

Based on an analysis of caveats data, 23 transactions have been made in Good Class Bungalow Areas totalling S$480.6 million so far this year.

BT understands that options have been granted for a few more bungalows, although they have yet to be exercised.

In 2016, 37 bungalows in GCB Areas changed hands for a total of S$788.5 million.

Bungalows in GCB Areas are the most prestigious form of landed housing in Singapore with strict planning conditions laid out by the Urban Redevelopment Authority. Only Singapore citizens are allowed to buy landed homes in the 39 GCB Areas on mainland Singapore. However, in the waterfront housing district of Sentosa Cove, a foreigner (including a Singapore permanent resident) is eligible to seek approval to buy a landed home for owner occupation only.

A recent transaction on the mainland though not in a GCB Area involves a bungalow along Wilkinson Road in District 15, which was sold for about S$17.2 million. The price works out to some S$1,200 per square foot on the freehold land area of 14,300 square feet.

The built-up area is estimated to be about 8,900 sq ft across two levels and a basement.

The property has four bedrooms, two living areas, a dining area, dry and wet kitchens and a swimming pool. The basement contains an entertainment room. The bungalow is believed to be about 20 years old.

BT understands the buyer is Singapore Technologies Engineering chief executive Vincent Chong.

Another recent bungalow deal was along Oriole Crescent in the Raffles Park GCB Area where Macoline (S) Pte Ltd, a boutique developer and freight forwarder, sold a newly developed property for S$16.7 million or over S$1,600 psf based on the land area of about 10,300 sq ft.

The bungalow is spread over two storeys and an attic and has a swimming pool.

Meanwhile, 10 Sentosa Cove bungalows have been transacted so far this year for a total of around S$143 million based on caveats. However, there are at least four more deals totalling close to S$70 million at various stages that have yet to be caveated.

For the whole of last year, caveats were lodged for four deals worth S$64.5 million. However, on top of that, there was also a bulk sale of the remaining 10 bungalows on Pearl Island, one of the five man-made islands in Sentosa Cove. This transaction was structured through the sale of the entire equity of Ximeng Land (S) Pte Ltd, which developed the 19-villa project, which was completed, that is, received Temporary Occupation Permit, in 2012.

The equity was sold by a Liu family from Beijing to SRIF Pte Ltd, fully owned by Leslie Lim and Vincent Ong, the co-founders of Evia Real Estate.

The deal is said to have valued the 10 villas at about S$125 million or about S$1,500-1,600 psf on land area. Landed homes in Sentosa Cove have a 99-year leasehold tenure.

Messrs Lim and Ong told BT that the one of the 10 villas has been sold and the rest will be relaunched for sale in a fortnight.

The landscaping for all the homes has been redone. Two of the villas have been furnished – one with Fendi, and the other, Bottega Veneta, said Mr Ong.

“Our target pricing is between S$15 million and S$30 million per villa, or about S$2,500 psf on land area – inclusive of furnishings. Excluding furnishings, the price will be about S$2,350 psf.”

Pearl Island’s balance lease tenure is 89.5 years.

The bungalows have land areas ranging from around 6,500 sq ft to 11,500 sq ft.

Each villa comprises two storeys, a basement and an attic/roof terrace. All four levels are accessible by a private home lift.

The bungalows have five to seven bedrooms with en suite bathrooms.

The basement of each unit has a wine cellar, an entertainment room/lounge area, a semi-open garden as well as two spas (a “his” and a “hers”). The top floor houses an entertainment room, a gym and a roof terrace fitted with cooking and outdoor dining facilities.

Each villa is built with wet and dry kitchens fitted with Miele refrigerators, wine chiller, ovens and cooker hoods/hobs. Each villa has its own private berth (imported from France) and swimming pool.

In the heyday of the Sentosa Cove bungalow market back in 2010, the buyers were predominantly foreigners including Singapore PRs. These days, however, the buying action is dominated by Singapore citizens and a few PRs.

Foreign demand has fallen sharply due to the prohibitive 15 per cent additional buyer’s stamp duty (ABSD). As a result, it may not make sense for foreigners to buy a Sentosa bungalow – unless they live here. Many of them, if they are based here and contributing to Singapore’s economy, hope to get Singapore PR status before making their purchase – in order to qualify for a lower ABSD rate.

Market watchers estimate that prices of bungalows on the Cove have eased around 25 per cent to 45 per cent from the peak in 2010.

For Singaporean and PR buyers who are looking for bungalows up to say, S$15 million, they are seeing more attractive value at present market prices in Sentosa Cove – compared with mainland houses – because Sentosa has a nice waterfront ambience and 24-hour security.

Adapted from: The Business Times, 18 August 2017

Sentosa Cove home sales up as prices fall

Recent sale prices for bungalows in Sentosa Cove – one of the poshest addresses here – have fallen to levels similar to those of mass market condos on a per sq foot (psf) basis.

The declines, of nearly 20 per cent from a year earlier, reflect the slide in the broader luxury segment.

Eight Sentosa Cove bungalows sold in the first six months of this year went for an average of $1,541 psf.

That was an 18.1 per cent fall from the average selling price of $1,881 psf in the second half of last year.

By comparison, popular mass- market project Commonwealth Towers sold 47 units in June at a median selling price of $1,899 psf. Seaside Residences moved 10 units at a median selling price of $1,731 psf.

Lower asking prices likely prompted a rise in sales in Sentosa Cove as only four were sold in the second half of last year, and none in the first half of 2016.

Sentosa Cove property prices have fallen about 40 per cent from their peak, and are very attractive to buyers.

Another segment which drew buyers was apartments in the core central region, including districts like Orchard and Bukit Timah. A total of 170 caveats were lodged for units sold in the region in the first half of this year, up nearly 40 per cent from the 123 caveats lodged in the second half of last year.

The average selling price of luxury apartments above $5 million was $2,446 psf, about 2 per cent higher than the $2,396 psf for the second half of 2016.

However, it was 2.9 per cent lower than the average price of $2,519 recorded in the same period last year.

The 2.9 per cent decline was due to skewing caused by some projects with very strong sales.

In the first half of this year, the best-selling luxury project was Leedon Residence, which sold 44 units above the price of $5 million, translating to an average price of $1,993 psf. However, in the first half of last year, the top-selling luxury project was Ardmore Three, which had 35 caveats lodged at an average price of $3,217 psf.

The number of luxury homes sold this year will likely surpass that of last year, but prices will remain stable.

Luxurious apartments are likely to benefit most from the luxury market upturn, as seen from the good take-up rates of new projects like Martin Modern, which also increase inquiries in the area.

Sales of good class bungalows (GCBs), seen as the most prestigious properties here, were stable for the first half of this year.

A total of 22 properties were sold for $463.91 million, compared with 23 sold in the second half of last year for $490.17 million.

Average GCB prices fell 6.9 per cent from the second half of 2016 to $1,242 psf, based on land area in the first half of 2017.

Robust sales for luxury homes is expected for the rest of the year, as economic growth becomes more broad-based.

Singapore luxury homes appear increasingly attractive after falling (prices) for four straight years, compared to other markets such as Hong Kong, London and key cities in Australia, where prices are peaking or have peaked.

More foreigners were buying non-landed super penthouses, and that is expected to continue.

Freehold luxury apartments in the core central region could be the most attractive to buyers, given the scarcity and limited supply in the pipeline.

Adapted from: The Straits Times, 15 August 2017

Downside risk in HK property puts S’pore developers on upswing

Analysts see the Singapore property market on the cusp of a multi-year upswing, a trend that has seen shares of real estate developers rise 33 per cent over the past year, after four years of decline.

By comparison, Hong Kong’s market appears to be headed for a major correction, making property counters in the Chinese territory a less attractive option.

According to the Singapore Exchange, all 31 of Singapore’s real estate investment trusts with property assets, in addition to the six stapled trusts, have averaged a 17.6 per cent total return for the year through to Aug 4.

Local developer CapitaLand said that property investors see Singapore as more attractive than Hong Kong, London, or cities in Australia.

CapitaLand and City Developments both say that Singapore’s residential market may be “bottoming out”.

Hong Kong home prices have shot ever higher, bouncing back from the global financial crisis and periodic bouts of government cooling, while Singapore residential prices have declined 12 per cent from a peak, dropping for 15 straight quarters.

A 70 per cent divergence in home prices in Singapore and Hong Kong over the past six years is due for a reversal, according to Morgan Stanley. Singapore developers score better in terms of affordability for buyers, a tight home supply, and a potential easing of policy measures, the bank said in a note.

The bank’s analysts forecast Singapore residential property prices to rise 5 per cent next year. In contrast, Hong Kong’s multi-year price decline could start with a drop of 5 per cent this year, it said. “The consensus is that Hong Kong’s housing prices may have more downside risk than upside,” said Ms Joyce Kwock, an analyst at Nomura Holdings.

Adapted from: TODAY, 15 August 2017

Property market picking up: CDL’s Kwek

In recent weeks, property veteran Kwek Leng Beng has seen positive signs in the property market.

They have come in the form of text messages about rising unit sales from City Developments (CDL) group general manager Chia Ngiang Hong.

Mr Kwek, CDL executive chairman, said: “It shows that the market is moving. Every week, Mr Chia sends messages where I see sales move up from five to 10 to 30, 50 units. It’s a good indication. I’ve also noticed the high-end sales have been moving quite steadily, and at the low-end showrooms, people have been crowding around.”

Despite his growing confidence in the Singapore market, he noted that developers are constrained by Qualifying Certificate penalties for unsold homes, “especially foreign developers, and even developers listed on the stock exchange with only one foreign shareholder”.

Mr Kwek said: “Such penalties are heavy and erode all profit. I hope the Government reviews them again to steady the rate of growth in terms of price increase.

“If not, you can see every bid (for land) now is higher and higher than ever. Land is akin to raw material for a factory, and if we don’t have that, the factory will be doing nothing. Therefore, there’s no choice but to bid for the land. If you put in a cheaper bid because you think it’s the right price, you’ll get nothing.”

He noted CDL managed only one successful bid in Singapore last year and urged for a closer look at rules to prevent a bubble.

Adapted from: The Straits Times, 12 August 2017

Bungalows in the sky

Alibaba co-founder Sun Tongyu, Macau casino tycoon Stanley Ho’s son Lawrence, and Singaporean venture capitalist Tommie Goh have something in common in Singapore: they own penthouses.

Back in 2006, a consortium linked to the Ho family bought six penthouses at Marina Bay Residences for about S$90 million, including the uber penthouse on the top three levels of the 55-storey project. It is believed that the consortium continues to own most of the units, which are said to be where the Hos put up some of their high net worth clients when they visit Singapore.

Over in prime district 10, Mr Sun paid S$51 million for the sole penthouse spread across 13,573 square feet on the top two levels of Wing Tai’s freehold Le Nouvel Ardmore two years ago – the biggest amount paid for a penthouse in Singapore at the time.

SC Global Developments recently smashed that record when it sold the 10,300 sq ft super penthouse at Sculptura Ardmore for more than S$60 million or in excess of S$6,000 per square foot. The luxury residential developer could set another record when it finds a buyer for the 17,642 sq ft penthouse on the top three levels – 23, 24 and 25 – in the Signature Tower at The Marq on Paterson Hill. SC Global says that the unit is not for sale, but according to the grapevine, the indicative price for the plush residence is S$128 million – translating to S$7,255 psf.

An eye-popping price this would be to most folks, but some ultra high net worth global investors may find the pricing palatable for what it buys: an exquisitely furnished residence with super-sized living spaces including five bedrooms, a private pool on the roof terrace, a dedicated lift and four designated carpark lots.

A top-of-the-range penthouse overseas could cost much, much more. In Monaco, for example, the developer of Tour Odeon is asking for 400 million euros (S$640 million) for the unit on the top five levels of the 49-storey development overlooking the Mediterranean Sea. The price works out to US$13,296 psf or about S$18,000 psf.

What makes a penthouse?

Most people in Singapore think of a penthouse as a large residential unit at the top floor of a development in the prime districts. However, the word penthouse has a certain prestige attached to it. Or, as veteran property consultant and academic Steven Choo puts it: “Penthouses exude exclusivity, scarcity and have snob appeal.”

Most people get blown away with penthouses because of the views. You have no neighbours living above you.

That said, penthouses draw their value not just from the views – a by-product of being right at the top of a development – but also because of their scarcity as there can be only one “top floor”.

Another attraction of penthouses is that typically, the floor-to-ceiling height is more than a normal apartment’s in the same development; this, coupled with the double-volume spaces in the living and dining areas, makes the residence appear bigger and brighter.

In the early days, a penthouse used to be on a single level. Over time, developers stacked more floors and now there are two-storey and three-storey penthouses as well.

At the higher end of the spectrum, penthouses have become larger and more luxurious, resulting in what are called super penthouses or uber penthouses – with bigger living spaces, entertainment area and a roof terrace with a private pool.

The master bedroom will have a walk-in wardrobe, double basins (a “his” and “hers”), steam bath, sauna or rain shower.

These “bungalows in the sky” are often decked out with superior finishes and equipment, befitting their status.

The origins of high-rise penthouses are widely believed to be in New York, during the 1920s, or the “Roaring Twenties”. Even before that, some European cities had exclusive residences on the upper floors of buildings such as hotels, although these were not high-rise buildings – at least not by today’s standards.

In Singapore, too, the earliest residential penthouses were believed to be atop office buildings in the Central Business District (CBD). Examples include Shing Kwan House, Robina House and UIC Building, which were developed on sites in the second Sale of Sites Programme in 1968 by the Urban Renewal Department (now known as the Urban Redevelopment Authority or URA), and Marina House and International Plaza, developed on sites in the third Sale of Sites Programme in 1969.

These were meant to be commercial sites and did not have any residential component when they were offered for sale in 1968 and 1969 respectively. However, the government later decided to give the sites bonus floor area for incorporating some apartments – to inject more life in the CBD.

Bowling alley inside

At Shing Kwan House, built by Singapore Land, the sole residential penthouse unit on the 22nd storey of the building was where the company’s then-chairman, SP Tao, lived. In the case of Robina House – which used to stand on the current One Shenton site – developer Robin Loh had even incorporated a bowling alley into his penthouse.

Subsequently, most of the residences on the top levels of office buildings in the CBD were converted to offices – but there were exceptions. International Plaza continues to have apartments. At Shing Kwan House, Mr Tao retained his penthouse until the building was torn down in the late 1990s to be jointly redeveloped with the next-door ICB (Industrial & Commercial Bank) Building into what is today SGX Centre along Shenton Way.

The earliest penthouses in private residential projects would have appeared in the 1970s – such as the freehold Beverly Mai and Pandan Valley and the 99-year leasehold Pearl Bank Apartments.

Since then, penthouses have come a long way. The tallest residence on Singapore’s skyline today reaches 290 metres – or 64 storeys. This is for a 21,108 sq ft triplex unit at Wallich Residence, which is part of Tanjong Pagar Centre, a mixed development project by GuocoLand on a 99-year leasehold site. Wallich Residence occupies the top 26 levels of the development’s 64-storey tower; below the apartments are the offices, known as Guoco Tower.

Of course, there are taller residences abroad, such as 432 Park Avenue in New York, with a height of 425.5 metres.

However, a race to the top is unlikely to catch on here, suggest property analysts.

Singapore – unlike some neighbouring countries, for instance – is unlikely to engage in a race to have the tallest building or residence. The planners here are pragmatic and mindful of sustainability. When there are very tall, dense buildings, congestion sets in; it creates urban heat trap because air flow is blocked.

It is improbable that there would be buildings much higher than the 290 metres allowed for Wallich Residence, in the near future. Our built environment is restricted by our small size and especially when we have a very limited flight path. At the same time, a large proportion of the south of our city centre – Marina Bay and Marina South, for instance – is built on reclaimed land and it may be too early to further increase the height control for buildings in these areas.

Agents say that penthouses, especially the super variety, are primarily bought by foreigners, who, unlike Singapore citizens, do not qualify to buy that creme de la creme of the landed housing market – Good Class Bungalows (GCBs).

Some property consultants consider the Ardmore Park condo, developed from 1997 to 2001 by Marco Polo Developments, now known as Wheelock Properties (Singapore) – as a major milestone on the Singapore penthouse scene. The 330-unit freehold project in District 10 comprises 324 four-bedroom apartments of 2,885 sq ft each and just six luxurious penthouses of 8,740 sq ft each – very large by standards at the time – on the top two levels of the three 30-storey towers.

The penthouses have five bedrooms and a large terrace, with just two penthouses in each tower. “And the penthouses were at the highest point at the time in the prestigious Ardmore/Draycott area, and yet just a short distance from the prime Orchard Road shopping belt,” says Dr Choo, chairman of property consultancy VestAsia Group and adjunct associate professor in the Department of Real Estate at the National University Singapore.

Room at the top

In the past decade or so, penthouses in Singapore have taken off in two different directions. On the one hand, in very prime locations, you still have very large penthouses and their luxury elements have been heightened vis-a-vis the normal apartments in a development.

On the other hand, especially outside the prime areas, some developers took to minting penthouses as a convenient way to bolster saleable floor area by adding private roof terraces to the units on the top floors, but with a twist that these penthouses were smaller units – two-bedders and sometimes even one-bedders. The idea is to cap pricing at affordable lumpsum levels.

The reason developers adopted this strategy was because private roof terraces were not counted as part of gross floor area (GFA) and hence considered “free area” for developers to sell; the private roof terrace could be a relatively big portion of a small penthouse unit’s saleable area.

Small penthouses started appearing as a follow-on to a general trend of developers carving smaller apartments in a bid to keep lumpsum quantums affordable amid rising psf prices.

The phenomenon of small penthouses was more pronounced in the suburbs while projects in the prime areas or Core Central Region (CCR) still retained the trend of having larger penthouses to meet demand from wealthier buyers including foreigners.

In January 2013, the URA announced a rule change, stipulating that private roof terraces (as well as private enclosed spaces) in non-landed residential developments are to be counted as part of the 10 per cent maximum bonus GFA, and subject to payment of development charges/differential premium.

As the private roof terrace is no longer free to developers, the whole argument of having two-bedroom penthouses with big private roof terraces becomes harder to execute – and the market is going back to the earlier days when penthouses tended to be large.

Roxy-Pacific Holdings built small duplex penthouse units – with one or two bedrooms and a roof terrace – in projects such as Spottiswoode 18, WhiteHaven in Pasir Panjang and Jade Residences in Lorong Lew Lian. But ever since the URA rule change, Roxy has stopped doing so as it no longer makes economic sense, according to its executive chairman, Teo Hong Lim.

This whole episode also illustrates that the term “penthouse” is not a planning typology regulated by URA. It’s a marketing term that developers use for units on the top levels of some projects.

While there are no new micro penthouses being built for now, developers will continue to offer units on the highest floors of suburban condos and even executive condo (a public-private housing hybrid) projects that they call “penthouses”. So the prestige of the word “penthouse” may be diluted, lament some market watchers.

That said, “super penthouses” still can be found in the prime districts, because this is where foreign ultra high net worth individuals buy real estate.

In the suburbs, big penthouses do not work, as buyers are mostly local and if they have the budget, would go for landed housing, rather than a big penthouse.

Developers of some upscale projects in prime districts have created other large-format choices that have the look and feel of a penthouse, except for the “top of the world” views, of course.

The Marq’s Signature Tower, for example, has an interlocking design for the apartments which are over 6,000 sq ft each, so that even units on lower floors feel like penthouses – with double-volume ceiling height in the living and dining area and a private pool for each apartment.

GuocoLand’s 381-unit Leedon Residence not only has 12 deluxe penthouses (ranging from 5,694 sq ft to 7,718 sq ft) on the top two levels and roof terrace of the 12-storey project, but also 24 duplex five-bedroom apartments of 4,704 sq ft on other levels and six duplex garden homes (on the first two levels), ranging from 6,566 sq ft to 8,051 sq ft.

Like the penthouses, the duplex garden homes and apartments have double-volume living and dining areas as well as private pools.

There are more choices now, but the ‘super penthouse’ is still rare because you can have only one at the top floor.

Or, as Dr Choo argues: “The top-grade or ‘Class A’ penthouses still occupy the apex of the non-landed housing type, just like GCBs in relation to the landed housing segment.”

Adapted from: The Business Times, 12 August 2017

GuocoLand looks to rise in private home prices

Developer GuocoLand has trimmed the number of units put up for sale at its latest condominium, Martin Modern, in what is seen as a bet on private residential prices reversing course after years of decline.

Other developers also appear to share the same sentiments.

Earlier this week, Chinese developer Qingjian Realty said it is holding back the second phase of sales launch at its Le Quest project in anticipation of possible upturn in the property market.

Lendlease had also put off placing new units at Park Place Residences at PLQ on the market after launching 217 apartments for sale in March – in the hope of pricing the remaining units at a higher price subsequently.

GuocoLand told The Straits Times that it sold 110 of the 450 units at luxury condo Martin Modern in Martin Place within about two weeks of its launch last month. The developer said there is potential to raise the selling price next year.

“We have already started to moderate the releases… You want to achieve a good start so there is confidence in the project. I think we have already achieved that. We should not be selling too much too fast,” said Mr Cheng Hsing Yao, group managing director of GuocoLand (Singapore).

Average selling prices at Martin Modern, the first major launch in the Robertson Quay neighbourhood in eight years, range from $2,009 psf to over $2,500 psf.

Mr Cheng declined to speculate by how much the prices might rise next year but he acknowledged there will be “pressure for prices to go up” in view of recent aggressive land bids and fewer condo completions.

“The margin is already quite thin among developers, and land constitutes 60 per cent to 70 per cent of total cost, so when the land cost goes up so much, it is not a choice for the developers not to sell higher.”

GuocoLand is seeking opportunities to acquire plots, with a focus on mixed development as well as good-quality sites for homes. However, Mr Cheng said the firm will “keep a level head” on land bids.

The developer has three other projects with unsold units: the ultra luxe Wallich Residence at Tanjong Pagar Centre, Leedon Residence off Farrer Road and Sims Urban Oasis in Aljunied.

The 99-year leasehold Wallich Residence, which will be ready in the fourth quarter, is spread across levels 39 to 64 in Singapore’s tallest building. The project caught the public eye recently after news broke of its $108 million super penthouse.

Mr Cheng said 19 apartments at the 181-unit luxury condo project have been sold at an average price of $3,100 psf. The 21,108 sq ft super penthouse is not ready for sale.

The Straits Times understands that the super penthouse, spanning three floors, will have a dedicated lift and is highly customisable.

Below the Wallich Residence sits 890,000 sq ft of Grade A office space, Guoco Tower, of which 93 per cent has been leased. The firm is in talks to lease the remaining office space, including 27,000 sq ft on level 37, at higher rents.

Property consultants have been forecasting a bottoming out of rents in the commercial property market this year as sentiment improves.

“A lot of the tenants at Guoco Tower are MNCs with regional headquarters here, and they are growing. Less than a year into moving here, five tenants are already expanding,” said Mr Cheng.

About 40 per cent of tenants at Guoco Tower are in the technology, media and telecoms sectors, and they include Uber and Agoda.

Adapted from: The Straits Times, 10 August 2017

Normanton Park to be put up for en bloc sale at a minimum S$800m

Normanton Park condominium is slated to be launched for collective sale on Aug 22 at a minimum price of S$800 million after more than 80 per cent of owners by share value and strata area approved the collective sales agreement (CSA) byWednesday.

It is probably a record for a project of this scale with 488 units to garner sufficient signatures from owners within 11 days.

The estimated differential premium for intensification of the site is S$225.3 million, while the lease top-up is estimated to cost another S$220.64 million. This will translate to a land rate of S$898 per square foot per plot ratio (psf ppr.

Owners are expected to pocket gross profit of between S$1.62 million and S$1.8 million.

Elsewhere, privatised HUDC estate Florence Regency in Hougang and freehold Amber Park condominium have also crossed the 80 per cent consensus for their collective sales agreements, BT understands.

Minutes of a collective sales committee meeting for the 336-unit Florence Regency this month released on a blog shows the reserve price being raised to S$600 million.

For Normanton Park, obtaining the requisite approval for the CSA in 11 days is considered a major feat. “This shows that a majority of the owners are in complete agreement with the terms in the CSA and are further keen to see the en bloc successfully done as soon as possible,” said SS Chopra, who chairs the collective sales committee.

In fact, some 30 per cent was obtained on July 29, the same day the CSA was approved by the general body unanimously at an extraordinary general meeting, added Mr Chopra, a retired navy colonel.

This is the second attempt at an enbloc sale by owners of Normanton Park, after their first attempt in October 2015 with the same reserve price.

The 99-year leasehold project has 59 years left on its tenure. Under the Urban Redevelopment Authority’s Master Plan 2014, the 660,999 square foot site is zoned for residential use with a 2.1 plot ratio.

Normanton Park is near Kent Ridge Park, the National University of Singapore, National University Hospital and businesses in the one-north development. Future owners or occupiers of the new project on the site would likely be professionals working in the vicinity as well as families whose children are studying in the education institutions nearby, along with those who would love to frequent a park, Mr Chopra said.

There is no comparable site like Normanton Park for high-rise residential development available for sale now, so there is no competing supply in the near term.

So far this year, there have already been seven successful collective sales worth S$2.5 billion; for the whole of last year, only three deals worth S$1 billion were closed.

Market watchers expect another few billion dollars worth of deals to close this year as the collective sales market roars back to life, fuelled by transactions-led property recovery and limited land up for grab in state tenders.

The en bloc fever has prompted more projects to kick-start the collective sales process.

The latest to hop onto the bandwagon are Sutton Place, a 44-unit condominium off Farrer Road, and Faber Garden, a 233-unit freehold condominium near Upper Thomson Road. Both are in the midst of appointing their marketing agents.

Hawaii Towers, a 135-unit freehold development at Meyer Road, is said to be trying its luck again at a collective sale.

Those already put up for en bloc tender include the 12-unit freehold Villa D’Este condominium in prime District 10 where owners are asking for S$96 million, as well as the 12-unit freehold Dunearn Court in the prime District 11 where owners are asking for S$38.8 million.

At 560-unit Tampines Court, owners of the privatised HUDC property are asking for S$960 million, which could be the largest since Farrer Court fetched the highest price of S$1.34 billion in 2007.

Adapted from: The Business Times, 10 August 2017

Roxy to build River Valley block with more than 100 units

Roxy-Pacific Holdings plans to redevelop a freehold plot in River Valley Road, which it bought for S$110 million, into an apartment block of at least 18 storeys and housing more than 100 units.

The price paid by the developer for the 28,798 sq ft site opposite the Yong An Park condo works out to about S$1,582 per square foot per plot ratio (psf ppr), inclusive of an estimated development charge of S$17.6 million.

Under the Urban Redevelopment Authority’s 2014 Master Plan, the site is zoned for residential use with a 2.8 plot ratio (ratio of maximum gross floor area to land area).

The transaction is an estate sale.

The site is about 200 m from the proposed Great World City MRT station exit, which is to be located at the junction of River Valley Road and Leonie Hill Road.

Roxy-Pacific executive chairman Teo Hong Lim told BT that the group was still reviewing the unit mix for the project, but added that it is likely to comprise predominantly two and three-bedders.

“We’ve not decided whether to have any one-bedders. We expect to launch the project in the second half of next year.

“We are taking the view that freehold prime district residential properties are relatively undervalued – in view of bullish land bids recently of around S$1,000 psf ppr for 99-year leasehold sites outside the city.”

Roxy is on the prowl for more sites for freehold residential projects in the prime districts, he added.

Last year, the group took the majority stake in a joint venture that acquired an old freehold apartment block at 120 Grange Road. The group plans to redevelop that property into an 18-storey apartment block with more than 50 units.

“Between the River Valley and Grange projects, we can try to reap economies of scale, for instance, by appointing the same contractor, as well as when it comes to buying things like kitchen equipment and sanitary ware,” said Mr Teo.

“We might also have the same marketing agents for both projects and get them to cross-sell the two developments.”

Adapted from: The Business Times, 8 August 2017

Inaugural sale of unsold HDB flats oversubscribed

The first batch of unsold public housing units from past Sale of Balance Flats (SBF) exercises that were put up for sale again was highly oversubscribed when it closed at 5pm on Monday (Aug 7), with 5,587 applicants vying for 1,394 units.

Almost half of the interested buyers — or 2,647 — are first-time applicants, while another 2,175 are second-time applicants. The rest include singles as well as seniors who have applied for a public housing flat at least twice previously.

Under this new Re-Offer of Balance Flats (ROF) exercise launched by the Housing and Development Board (HDB) on Aug 1, there were a variety of units on sale.

They included 110 two-room flats from the Flexi Scheme for Singaporeans aged 55 and older, 384 three-room flats, 624 four-roomers, 260 five-roomers, seven “three-generation” units and nine executive flats.

These apartments are located in 26 housing estates, including Ang Mo Kio, Bedok, Bukit Batok, Clementi, Hougang, Serangoon and Woodlands.

When the sale was announced, the HDB said this re-release of unsold flats would help those with more urgent housing needs, and/or those who are less particular about location and attributes, to quickly get a flat.

Property experts interviewed by TODAY said that they expected robust demand for these flats because past applicants may not have been able to get homes previously through the other modes of sale by the HDB, namely the Build-To-Order (BTO) or SBF exercises.

The SBF exercises have always received more applications than BTO exercises.

By introducing the ROF, if a buyer was not successful in the last BTO or Sale of Balance flats (bid), they would go in for this one again because some of the flats are, maybe, in good locations or some are available in a shorter period of time compared to BTO flats where you have to wait longer.

70 per cent of the flats under the ROF exercise are “ready”.

It is probably indicative that there are some families whose needs are a little bit more urgent and they cannot wait for four years for a BTO flat.

In the latest BTO sales launch that also opened on Aug 1 and closed on Monday, there is keen interest among buyers as well, with 6,187 applicants vying for 3,897 new flats.

They comprised 1,397 apartments located in two Bukit Batok projects (Sky Vista and West Scape) and 2,500 units in Sengkang (Rivervale Shores).

On offer were two-room Flexi flats, as well as three- to five-room flats.

Four-roomers at West Scape in Bukit Batok are the most highly subscribed, with 771 applicants for 340 units.

Consultants put it down to Jurong being a neighbouring area that is due to be revitalised into a new regional centre by the authorities.

There has been no BTO sales launch in Bukit Batok for a while — the last one was in February last year — so it would especially attract those living in the vicinity or those who want to get a home close to their parents who are living near Bukit Batok.

Adapted from: TODAY, 8 August 2017


En bloc, huge deals push S’pore up on list of most active markets in Asia-Pac

Singapore climbed to its highest position in five years on a list of most active big-ticket real estate market makers in the Asia-Pacific with US$5.8 billion worth of sales volume in the first half of 2017, data released by Real Capital Analytics (RCA) on Monday showed.

Several large deals, such as the S$2.2 billion acquisition of Jurong Point shopping mall and sales in the residential en bloc market, powered Singapore’s ascent to the fourth position, behind Hong Kong, Tokyo and Shanghai. Singapore was ranked sixth on the list in 2016 and seventh in 2015.

Hong Kong surpassed Tokyo for the first time as the region’s top investment market in the first six months, boosted by growth in Chinese capital flow into Hong Kong.

Sales volume for Hong Kong rose 5 per cent year on year to US$8.3 billion for H1 2017, while deal count at mid-year was almost twice that of a year ago.

Petra Blazkova, RCA’s senior director of analytics for Asia-Pacific, said: “The Hong Kong market has reached a new peak in property pricing while attracting huge inflows of Chinese capital as well as demand from the territory’s own robust investor base. There were six megadeals involving development sites in the first half, which highlights how scarcity of land in Hong Kong is driving the market.”

RCA defines a megadeal as any transaction exceeding US$1 billion. RCA’s Asia-Pacific Capital Trends report uses data based on office, retail, industrial, hotel, apartment and development site properties and portfolios US$10 million and greater unless otherwise stated.

Chinese investors have thus far invested US$9.5 billion into the Asia-Pacific’s real estate – a 46 per cent rise year on year – with more than half of that amount going to Hong Kong.

Chinese investments into Japan, Singapore and South Korea also grew threefold in H1 2017 versus a year ago, despite news about changes to capital regulations.

Ms Blazkova said controls introduced by the Chinese authorities to keep money onshore in mainland China will have a ripple effect across the Asia-Pacific and beyond.

Tokyo, however, lost its position as the market leader for the first time since 2007. It saw a 33 per cent drop in investment in H1 as high prices and a shortage of suitable stock slowed investment activity.

“Investors have struggled to place capital in the city and activity migrated to secondary cities such as Yokohama and Osaka. Yokohama climbed to the seventh spot on the list, a record for this market,” the report said.

Singapore’s investment market activity is set to strengthen, with an additional US$4.6 billion of deals in contract, even as sales volume jumped 50 per cent in H1 2017.

Of the string of completed property deals in the Asia-Pacific, Jurong Point’s acquisition by Mercatus Co-operative, an NTUC social enterprise, was the top transaction in H1 2017.

Outbound investments from Singapore to Japan surged 334 per cent year on year to US$3.3 billion in the second quarter of 2017, while capital flow to China rose 174 per cent to US$3 billion.

But capital flow from Singapore to Australia shrank by 34 per cent to US$2 billion, as activity in the Australian market slowed due to high pricing and a lack of available stock.

Said Ms Blazkova: “Record prices mean investors are content to sit out the market until cheaper buying opportunities arise, while owners are unwilling to sell assets at a perceived discount. The stand-off in the Australian market is unlikely to change any time soon and we can expect to see record high pricing with low transaction volumes to remain a feature going forward.”

Adapted from: The Business Times, 8 August 2017

Le Quest sells all units launched on first day

Le Quest, a Qingjian Realty (South Pacific) Group mixed development project in Bukit Batok, sold 280 units on its first day of sales on Saturday.

The take-up was an oversubscription as only 200 were initially released for sale. The developers said studio to three-bedroom units were the more popular units.

Comprising 516 studio and one- to four-bedroom units and over 6,000 sq m of commercial space, Le Quest is the first mixed-use development in Bukit Batok West, and the first new private development in Bukit Batok in over a decade.

Deputy general manager of Qingjian Realty Yen Chong said: “The enthusiastic response gives us confidence that Qingjian Realty is delivering what homebuyers want – fuss-free, convenient living empowered by technology.” The residential units were sold at an average of S$1,280 per sq ft and homebuyers were drawn to “living in the up-and-coming Western region at affordable prices”.

One of the first to buy a unit on Saturday was Ms Chen Si, 26, who planned to live in a three-bedroom unit with her parents.

“We are attracted to living close to new developments like the Jurong Lake District and Tengah. The price is reasonable, considering the convenience of having everything we need in the development,” she said.

An analyst said that Bukit Batok is an area with large growth potential – with Le Quest and the full slate of plans for the West of Singapore. Not many new developments are expected to launch in the area in the short term, so that is definitely a main factor in buyers’ consideration.

The Bukit Batok location is a huge draw, with its proximity to up-and-coming projects like the Singapore-KL High Speed Rail Terminus and the rejuvenation by the Urban Redevelopment Authority (URA) Master Plan.

Details on the next phase of sales will be announced later. Temporary Occupation Permit (TOP) is expected by end-2021.

Adapted from: The Business Times, 7 August 2017

S’pore’s property market is bottoming out: CapitaLand CEO

The Republic’s biggest developer, CapitaLand, detects signs that the city’s residential property market is “bottoming out” after a run of price declines, said CapitaLand CEO and president Lim Ming Yan.

Many investors are seeing Singapore as relatively more attractive when compared with Hong Kong, London or Australian cities, said Mr Lim in an interview on Thursday (Aug 3) with Bloomberg. Extra liquidity was a factor in higher transaction volumes and slower price declines in recent months, he said.

“For a rebound to take place on a more sustainable basis, there has to be overall improvements in the fundamentals,” said Mr Lim.

The Government’s efforts to cool a red-hot property market have triggered a record 15-quarter decline in home prices, in contrast with cities such as Hong Kong, where property prices keep soaring to record levels.

In March, Singapore eased some restrictions, but cautioned that those adjustments did not signal any bigger unwinding of curbs.

Singapore’s restrictions are “a very stringent policy”, so further tightening is not likely, said Mr Lim. “At the same time, given the current market conditions, it’s unlikely that we will see a relaxation, certainly not this year.”

Home sales jumped 72 per cent during the first half from a year earlier as developers sold 6,567 units, compared with 3,814 units in the same period a year ago, according to the Urban Redevelopment Authority. Housing prices continued to fall in the second quarter, drawing buyers back into the residential property market in droves to drive transaction volumes to their highest levels in more than four years.

Both the developer and resale segments of the market registered higher levels of activity, although the secondary market saw more buzz.

Last month, at least two public housing units in the Design, Build and Sell Scheme project at The Peak @ Toa Payoh were sold for more than S$1 million.

Resale prices of Housing and Development Board flats eased 0.1 per cent in the second quarter from the first, to mark the third straight quarter of decline, showed data from the public housing authority. Volume surged 32.5 per cent to 6,001 transactions from 4,530 over the same period.

In Singapore, CapitaLand recently announced the sale of Wilkie Edge and the divestment of a 50 per cent stake in One George Street, as well as the S$1.82 billion redevelopment of Golden Shoe Car Park into a 51-storey landmark in the CBD.

With a gross floor area of about one million sqf, the integrated development will feature 29 floors of premium Grade A office space on the top floors spanning 635,000sqf of net lettable area, an eight-storey, 299-unit serviced residence to be managed by The Ascott, five floors of parking and 12,000sqf of ancillary retail space.

Adapted from: TODAY, 4 August 2017


4,000 BTO flats launched in Bukit Batok, Sengkang

Nearly 4,000 Build-To-Order (BTO) flats in Bukit Batok and Sengkang were yesterday launched for sale, as part of the August BTO exercise.

Analysts expect the main draw this round to be affordability. Prices are lower given that the flats are in non-mature estates.

A total of 2,500 flats at Rivervale Shores in Sengkang East Drive, near Serangoon Reservoir, are up for grabs. These range from two-room flexi to five-room flats.

Over at Bukit Batok, 1,397 BTO flats are being offered. The bulk of these – 1,140 units – will be in West Scape, which is bounded by Bukit Batok Road and Bukit Batok West Avenue 2. These range from two-room flexi units to five-room ones.

The rest, comprising two-room flexi and three-room units, are at Sky Vista, in Bukit Batok West Avenue 6.

In its statement, the Housing Board said it encourages home buyers to apply for a BTO flat in non- mature towns, so as to have a higher chance of securing a flat and more grants.

ERA Realty Network’s key executive officer Eugene Lim said the flats are affordable.

Prices start at $4,000, $84,000, $192,000 and $312,000, after grants, for two-room flexi, three-room, four-room and five-room flats respectively.

He expects the Bukit Batok flats to be popular because of their proximity to Jurong Lake District and Tengah New Town.

Meanwhile, the Sengkang flats are close to the Bakau and Rumbia LRT stations, and flats facing the river will also enjoy a relatively unblocked view.

Although the relatively close distance to Paya Lebar Airbase might be a deterrent, the airbase’s relocation by around 2030 should serve as a consolation, Mr Lim said.

The Bukit Batok flats will likely see about three applicants to each available unit, while the Sengkang flats could see about two applicants per available unit.

In the upcoming November BTO exercise, the HDB will offer some 4,800 flats in Geylang, Punggol, Sengkang and Tampines, concurrently with a Sale of Balance Flats exercise. This will bring the total BTO supply this year to around 17,500 units.

Adapted from: The Straits Times, 2 August 2017

1,394 balance flats available on re-offer

Home buyers in urgent need of flats now have 1,394 units to choose from – of which 393 are in popular mature estates such as Toa Payoh, Ang Mo Kio and Queenstown.

But there is a catch: These are flats which were not taken up in previous sales exercises, for various reasons.

They were made available again yesterday in the first Re-offer of Balance Flats (ROF) exercise, which pooled all balance flats last offered in November last year.

Altogether, more than 5,200 Build-To-Order (BTO) and ROF flats were launched for sale yesterday. Applicants may apply for a flat under either exercise, but not both.

Unlike the existing Sale of Balance Flats exercise, the ROF groups all available balance flats in a common pool, and home buyers do not have to indicate their preferred flat type and estate in their application.

Under the ROF, home buyers – based on their balloted queue numbers – pick their preferred unit from the pool.

The Housing Board was not able to specify how long the ROF units had been on the market. But these flats could cater to buyers with more urgent housing needs who are less particular about location. Some 71 per cent of the flats have been completed, so buyers can move into them sooner.

The ROF will take place every August and February.

The flats offered in this first ROF exercise comprise 110 two-room flexi units, 384 three-room units, 624 four-room units, 260 five-room units, seven three-generation units and nine executive flats.

HDB will set aside at least 95 per cent of the flat supply for families buying a flat for the first time, and up to 5 per cent for families purchasing for the second time.

Seniors may apply if they meet the eligibility conditions to buy a two-room flexi flat.

Property agents said some of the flats could still be on the market because of their small size or their location on lower floors. The different ethnic quotas for the flats could also pose limitations.

Less desirable flats may snowball and go over to the next round of the re-offer. If there are still no takers, the Government may have to decide to relax the ethnic quota or lower the price.

Strong demand is expected for the ROF units, partly because buyers could move into them more quickly than BTOs.

Furthermore, they are priced about 20 per cent to 30 per cent lower than resale flats in the same areas.

Applications for new flats launched in this month’s BTO and ROF exercises can be submitted online on the HDB InfoWEB until next Monday.

Adapted from: The Straits Times, 2 August 2017

More ex-HUDC estates trying to sell en bloc

En bloc fever is getting even hotter with privatised HUDC estate Florence Regency in Hougang likely to be put up for collective sale soon.

The approval level from owners at the 336-unit project is over 75 per cent. The Straits Times understands three other former HUDC developments – Laguna Park, Pine Grove and Ivory Heights – have also started the collective sale process.

Six residential projects, including three privatised HUDC estates – Rio Casa, Eunosville and Serangoon Ville – have been sold en bloc since May in a resurgent market.

Florence Regency in Hougang Avenue 2 will likely hit the market in the coming months. Consent from at least 80 per cent of owners must be obtained for a collective sale tender to be called.

Florence Regency has a land area of 389,236 sq ft, with a remaining lease term of 71 years. The estate was privatised in 2014, and this is its first shot at selling en bloc. Property agents say several privatised HUDC estates – built under the Housing and Urban Development Company scheme in the 1970s and 1980s – are jumping on the en bloc bandwagon, given the rising optimism in the property market and developers’ hunger for sites.

Of the 18 HUDC estates, which have all been privatised, 10 have been sold en bloc. Farrer Court fetched the highest price at $1.34 billion when it was sold in 2007 to CapitaLand. HUDC developments appeal to developers because most of them are in established residential estates, which means there will be demand for the (new) projects when they are launched.

A tender for the 560-unit Tampines Court in Tampines Street 11, closing in two weeks, will offer the latest indication of the market for the collective sale of former HUDC estates. Owners at Tampines Court had asked for $960 million for the property, which would be the biggest such collective sale in a decade if the deal goes through.

Three other developments have elected their collective sale committee: the 660-unit Pine Grove near Ulu Pandan Road, the 654-unit Ivory Heights in Jurong East Street 13 and the 516-unit Laguna Park in Marine Parade Road. The Straits Times understands that owners at the 136-unit Chancery Court in Dunearn Road will be holding an extraordinary general meeting later this month to appoint a sales committee to start the en bloc proceedings.

A consultant said, if you look at the public land tenders, there are consistently 13 to 14 bids each time. Those who don’t win will still be out there looking for sites, therefore residential land sales should remain quite active for the rest of the year.”

Adapted from: The Straits Times, 2 August 2017

Much to cheer in property sector

Analysts have been tipping on and off for years that the property market is about to break out of the doldrums, but it finally looks like their optimism is well placed. Second-quarter figures released last week by the Urban Redevelopment Authority (URA) showed a more comprehensive set of data, proving definitively that prices are close to the bottom and will start to increase soon.

The headline figure prompting the sentiment was the 0.1 per cent fall in private home prices in the second quarter. While still a decline, it was the smallest one in 15 straight quarters.

The sliver of a dip also beat the URA’s earlier estimate of a 0.3 per cent decline, suggesting a big buying boost in the past month as flash estimates are compiled using data gathered up until mid-June.

The inventory of unsold property continued to fall, despite already recording several all-time lows, while total sales volumes, including the primary and secondary markets, surged 64 per cent to 12,107 private homes sold in the first half of this year.

Even the sleepy resale market was roused from its slumber, posting a 70 per cent surge from the first quarter to hit 3,698 transactions.

The cheer spilled over into the public housing market, which recorded the highest number of resale transactions since the second quarter of 2013.

The boom in transactions and likely imminent price recovery validates the Government’s policy in not rolling back cooling measures despite persistent calls to do so.

Tempting as it might be to don rose-tinted glasses, some factors must be taken into account. The rental market remains soft, although the 0.2 per cent fall in the second quarter was much less than the 0.9 per cent in the previous quarter. Macroeconomic factors like the cooling measures, slow economic growth and uncertain employment and wage growth could also delay the return of rising property prices.

But for the rest of this year, developers and sellers have plenty to cheer about as all analysts seem to agree that the sales momentum will continue, driven by FOMO (fear of missing out) fever.

Adapted from: The Straits Times, 1 August 2017

Super penthouse at Sculptura Ardmore sold for over S$60m

Prices in the Core Central Region may be relatively soft compared to peak levels but Simon Cheong’s SC Global Developments is understood to have sold the super penthouse at Sculptura Ardmore at an eye-popping price of over S$6,000 per square foot.

Going by the strata area of about 10,300 square feet, the absolute price works out to more than S$60 million – busting the S$51 million that Alibaba co-founder Sun Tongyu paid for the sole penthouse at Wing Tai’s Le Nouvel Ardmore in 2015, based on caveats data.

That deal translated to S$3,757 psf on the 13,573 sq ft strata area spread over the top two levels of the 33-storey freehold project.

SC Global declined to comment when contacted about the penthouse sale at the completed Sculptura Ardmore. The 36-storey freehold project has 34 units. The penthouse of about 10,300 sq ft comes with a cantilevered private pool.

Information on the unit is scant, with SC Global keeping details private and allowing viewings only after it screens potential buyers.

The penthouse is understood to take up levels 35 and 36.

To date, no caveats have been lodged for units in the freehold project.

The penthouse of the freehold development is the highest point in Ardmore Park.

The price of more than S$6,000 psf is the highest ever achieved in the Ardmore Park locale.

The highest prices in Ardmore Park have never crossed S$5,000 psf, and that too for relatively smallish units sold on an individual basis by developers.

However, the psf price at which SC Global is selling the penthouse of the Sculptura Ardmore is probably shy of the record S$6,840 psf that the developer achieved back in 2011 at another of its projects, The Marq on Paterson Hill.

But that transaction did not involve a penthouse. It was a 3,003 sq ft, four-bedroom apartment on the 20th storey of the development’s Premier Tower. The absolute quantum worked out to S$20.54 million.

The appeal of Sculptura Ardmore’s penthouse, besides its posh address and freehold tenure, would be the privacy – of not being overlooked by any other residence in the area because it is at the highest point of Ardmore Park.

The buyer is most likely to be a foreigner as a Singaporean would most likely go for a Good Class Bungalow.

Wealthy foreigners can buy a villa on Sentosa Cove, but these are on 99-year leasehold land. For those who prefer a freehold property, their choice would be a super penthouse in the prime districts.

Adapted from: The Business Times, 1 August 2017

Two DBSS units at The Peak @ Toa Payoh resold for over S$1m

At least two housing units in the Design, Build and Sell Scheme (DBSS) project at The Peak @ Toa Payoh were sold for more than S$1 million, two months after the five-year minimum occupation period ended.

The five-room units were sold at S$1.12 million and S$1.01 million respectively, and are located on higher floors. At 117 sq m, the price works out to S$890 per sq ft (psf) at the upper end of the range.

Developed by Hoi Hup Realty, the five-block public housing development has a total of 1,203 units. It is not surprising to see prices going past the S$1 million mark because DBSS units tend to be priced at a premium compared to regular Housing Development Board (HDB) flats, and are in high demand.

DBSS flats are developed and sold by private developers, not the HDB, and provide condominium-style homes. The scheme was suspended after 2011, and units can only be sold after their five-year minimum occupation period ends.

Earlier this year, a penthouse in the DBSS project in Natura Loft at Bishan was sold for a record S$1.18 million. Last year, a City View @ Boon Keng DBSS unit went for S$1.1 million in August, while an apartment at the Pinnacle @ Duxton fetched S$1.12 million in September.

Since meeting the minimum occupation period in May, at least 19 units at The Peak have been sold on the resale market, including 15 five-room flats at prices ranging from S$825,000 to S$1.12 million.

For a mature estate like Toa Payoh, it is a good entry into a highly sought after area. For an equivalent-sized unit, private properties in the area would go for anything between S$1.8 million and S$2 million.

Mr Neo Yiren, 39, an accountant who has been staying at The Peak for five years and bought his five-room flat for S$600,000, said he has no intention to sell his property.

“This is not an investment, but a home to me. I have no intention to sell as I am too used to living here. The price is reflective of the area … The location is the thing that most people hold on to — as it is across from a hawker centre, and not too far from the interchange and MRT. It is also next to the highway, easy to commute and very convenient.”

Mr Theron Lam, 35, finance professional, a resident of The Peak who lives in a five-room unit on the 17th floor, said his flat is special.

“It has a full-length balcony which you do not get a lot from public housing units. The view is also great, and you can see the MacRitchie Reservoir from some units,” he said. He has been getting flyers almost every day from agents trying to rent or sell. “There are a lot of agents and advertisements. I see agents bring in prospective buyers almost on a daily basis.”

While he has heard that several of his neighbours are trying to sell their units, Mr Lam has no intention to do so. “Not that I think the price is no good, but if I were to sell, with S$1 million, I would have to sacrifice the location or size to get a unit with the same price.”

Some blocks at the Clementi Town Centre, which are not part of the DBSS development projects, such as 441A and 441B Clementi Avenue 3, have also reached their minimum occupation period.

A total of three units at Block 441A, Clementi Avenue 3, crossed the million-dollar mark in the last 12 months. The first was an 18th floor five-roomer which was transacted for S$1.005 million last August. In April this year, two more units were sold for S$1.02 million and S$1.04 million.

However, the number of HDB flats that change hands for over S$1 million is relatively small.

It is unusual to see public housing units going for such high valuations. For S$1 million, an alternative option could be an executive condominium with private car parks, tennis courts, swimming pools and barbeque pits.

The public flats that sell for over S$1 million are likely to be outstanding — whether in location, views, condition or design. An analyst said that only 0.1 per cent of all public housing transactions can achieve those levels, or one in a thousand. Sellers should be realistic about pricing before using this as a benchmark.

Adapted from: TODAY, 1 August 2017


Private home sales in primary, secondary markets surge

Latest official data shows a surge in private home sales across both primary and secondary market, which is seen as supporting a firming in prices.

Data from the Urban Redevelopment Authority (URA) released on Friday also showed smaller quarter-on-quarter declines in prices and rentals of private homes, offices and retail space. Vacancies continued to rise for office and retail space, however, but held steady for the residential segment.

The total number of private homes sold in both the primary and secondary markets reached 6,905 units in Q2 this year; this was the highest quarterly sales figure since Q2 2013, when 6,945 units were transacted before the total debt servicing ratio (TDSR) framework was introduced in late-June that year.

Analysts said that the broad-based moderation in price and rental declines for private residential property, coupled with improvement in transaction volume and falling unsold inventory, could signal an imminent bottoming out, possibly by the next one or two quarters in private home prices in general.

The 6,905 private homes sold in the second quarter reflected increases of 32.7 per cent quarter on quarter and 51.8 per cent year on year.

In the first half of 2017, the transaction volume in both the primary and secondary markets was 12,107 units, up 63.7 per cent from H1 2016.

Driven by the perception that the market is close to the bottom, as well as prices having fallen to more attractive levels, buyers have been flocking back to the market. This trend is expected to continue into the second half of the year, with demand remaining upbeat as buyers try to catch the market before it turns around.

The full year’s total transaction volume is forecasted to be between 23,000 and 25,000 units, surpassing the 22,719 units in 2013.

Buyers are starting to see value and making the decision to purchase – for fear of catching the wrong side of market growth. The price-recovery story has nudged fence-sitters, some of whom could have waited on the sidelines for a few years, to take action.

On the price front, URA’s benchmark overall private home price index dipped 0.1 per cent quarter on quarter in Q2 2017, a smaller decline than the 0.3 per cent fall reflected in URA’s Q2 flash estimate released earlier this month.

The dip in the index in the second quarter is the smallest of the 15 consecutive quarter-on-quarter declines since the peak in Q3 2013. The index is now 11.6 per cent below the high.

In the leasing market, URA’s overall rental index for private homes shed 0.2 per cent quarter on quarter in Q2, again a smaller dip than the 0.9 per cent slide in the previous quarter. The rental index is now 12.5 per cent below its recent peak in Q3 2013.

In 2018, consultants expect home prices to appreciate by 1 to 3 per cent. What is likely to bring up prices is the improvement in market sentiment, especially on the back of higher land bids and stronger developer sales. There is pent-up demand from buyers who have been waiting for an opportunity.

That said, the magnitude of price increases will be kept in check by uncertainty of how much interest rates on Singapore home loans will increase, as well as reiterations by the authorities that the cooling measures are here to stay.

Home prices will also be supported by growth in Singapore’s economy and a more benign supply outlook.

From the record 20,803 new private homes completed last year, the figure is forecast to ease 20 per cent to 16,544 units this year, and halve to about 8,400 units annually for next year and the year after.

As the leasing market is still over-supplied, a turnaround in rents is expected only next year, when supply moderates significantly and expected economic improvement lifts demand.

The island-wide vacancy rate for private homes was 8.1 per cent at end-Q2 2017, unchanged from three months before. The figure has eased from the recent high of 8.9 per cent in Q2 2016, when the market was in the throes of escalating home completions.

URA data shows that the stock of unsold private homes – comprising completed as well as uncompleted units – had fallen to 16,929 as at end Q2 2017, from the most recent high of 40,430 at the end of 2011.

Of significance is the unsold stock of 5,956 units in the suburbs or Outside Central Region (OCR), which appears to be at a low inventory level compared to the recent take-up rate. Primary market sales in OCR during H1 17 was 3,732 units. Assuming a doubling to 7,464 units for the full year, this figure would exceed the unsold stock. This phenomenon could contribute to prices stabilising sooner, leading to an eventual turnaround.

URA’s price index for landed homes dipped by 0.3 per cent in Q2 this year, a smaller drop than the 1.8 per cent fall in the previous quarter. Prices of non-landed properties dipped 0.1 per cent, after remaining unchanged in the previous quarter.

URA also provided a breakdown of non-landed property prices by region, with the sub-index for the prime areas or Core Central Region (CCR) shedding 0.5 per cent in Q2, compared with the 0.4 per cent decrease in the previous quarter. Prices of non-landed properties in the city fringe or Rest of Central Region (RCR) rose 0.6 per cent, compared with the 0.3 per cent increase in the previous quarter. In the OCR, prices fell 0.3 per cent, against an increase of 0.1 per cent in the previous quarter.

Adapted from: The Business Times, 29 July 2017


HDB Q2 resale transactions jump 32.5% despite flat prices

Public housing data for the second quarter (Q2) of the year showed resale flat prices inching down 0.1 per cent – dipping lower than the index in first quarter (Q1). It dwindled from 133.9 in Q1 to 133.7 in Q2.

Despite that, the Housing and Development Board (HDB) resale market saw a spike in transaction volume in the last quarter, it said in a press release on statistics for its resale and rental market in the second quarter of the year.

The number of transactions rose by 32.5 per cent to 6,001 in the April to June period, from 4,530 in the period between January and March.

The 0.1 per cent quarter-on-quarter decline in price reflected the varying dynamics in the secondary market for public housing. Flats in choice locations are in demand and their values may appreciate. Separately, older flats are facing a slowdown in demand as buyers are concerned about the expiring lease. Notwithstanding, larger units near to developments that have successfully completed a collective sale are likely to see stronger demand and an increase in price.

ERA Realty key executive officer Eugene Lim expected demand for resale flats to continue being strong, regardless of the recently introduced shorter waiting time for some Build-To-Order (BTO) flats and the Re-Offer of Balance Flats (ROF) to help young couples get their new homes sooner.

“This is because there will always be a group of buyers who do not want to wait for a flat, or are looking for a flat in a particular location. Also, many first-timer buyers will want to make use of the considerable grants available to them. These buyers will continue to form a strong support base for resale flats and as such, we are expecting transactions for 2017 to range between 21,000 and 22,000,” he said.

More homeowners are also subletting their flats. There were 53,540 HDB flats being sublet as at June 30, an increase of 0.3 per cent from the 53,360 in the first quarter. The number of approved subletting applications also went up by 9.5 per cent from 9,981 to 10,929.

Mr Lim said that HDB flats remain attractive to tenants who prioritise location over product, as HDB flats offer value. He added that shorter leases are still common, with many tenants opting for a 12-month lease “as they bet on further rental decreases”.

“However, as the supply glut passes in the private residential market, it will only be a matter of time before the HDB rental market starts recovering. This could happen in late 2018 or 2019. For 2017, rental transactions are expected to range from 41,000 to 43,000,” he said. In its announcement, the HDB also said that it will be offering 3,850 BTO flats in Bukit Batok and Sengkang and 1,394 unsold balance flats in its first ROF exercise in August. The unsold balance flats were from the Sale of Balance Flats (SBF) exercise last November.

Adapted from: The Business Times, 29 July 2017


EC demand tipped to stay buoyant

Executive condominiums (ECs), a hybrid of public and private housing, have also been swept up in the resurgent property market.

Demand for ECs was brisk in the second quarter as developers shifted 954 new units even though no fresh project went on sale.

And that was before Hundred Palms Residences in Hougang sold all 531 units in just seven hours on July 22 – meaning bumper third- quarter figures are also likely.

In the second quarter, home buyers picked up the units from previous launches, running down the unsold uncompleted EC stock to the lowest level in more than four years at 2,742 units, as at June 30.

Figures from the Urban Redevelopment Authority (URA) yesterday showed that a total of 2,026 new ECs were sold in the first half of the year, a hefty increase of 8.5 per cent over the 1,867 moved a year earlier.

Analysts told The Straits Times that EC buying interest will remain buoyant amid tight supply of such units, more affordable prices and improving market sentiment.

ECs tend to be priced 20 to 30 per cent lower than a comparable private condo and, hence, would be the more economical option for the middle-income young families.

However, demand for ECs is not uniform across the board. Looking at the sales of various projects, it seems demand for ECs in the northern region is not as strong as compared to other regions.

The other EC project launched this year – the 497-unit iNz Residence in Choa Chu Kang, which launched for sale in March – still had 233 unsold units at the end of June.

The success of Hundred Palms is not solely due to the lack of upcoming supply of ECs, but it is also attributed to its location, which is within a mature HDB estate and there is a lack of competition of ECs.

New EC supply is set to be limited with only one site offered under the government land sales programme for this half of the year, in Sumang Walk – yielding up to 815 units.

Another factor that could support EC demand is the little changed resale prices of HDB flats, which will restrict the amount upgraders can pay for their next home.

With HDB resale prices staying flat and prices of new condos possibly inching up, HDB upgraders will unlikely pocket enough to pay $1.5 million or more for a condo. They may look at ECs, which are more affordable.

Adapted from: The Straits Times, 29 July 2017

Dunearn Court eyeing $38.8m in collective sale bid

The 12 owners of the Dunearn Court condominium have put the property on the market for $38.8 million, with substantial gains likely from the sale.

The tender comes hot on the heels of a slew of collective sale deals sealed in recent months amid rising optimism in the private residential market.

The asking price works out to a land rate of about $1,443 per square foot (psf) per plot ratio.

Dunearn Court, in Dunearn Road in prime District 11, has a site area of 1,784 sq m (19,203 sq ft) and comprises just 12 apartments.

Each owner stands to receive in excess of $3 million from the sale, depending on the size of their apartments, which range from 1,356 sq ft to 1,561 sq ft.

The price would be around 75 per cent above the open market value if the owners were to sell their units individually.

The large premium stems from the fact that Dunearn Court – built in 1993 – is a walk-up block with no condo facilities and the units fetch lower prices on the open market.

The site has a gross plot ratio of 1.4 and is zoned for residential use.

The eventual buyer could configure the maximum permissible gross floor area of about 26,884 sq ft into 32 apartments with an average size of 753 sq ft, Mr Loh added.

Amenities nearby include Nanyang Primary School, Nanyang Girls’ High School, Hwa Chong Institution and National Junior College.

The site is about 500m from the Tan Kah Kee MRT and Botanic Gardens MRT stations.

Adapted from: The Straits Times, 31 July 2017


Signs of turnaround in office property market

There may be light at the end of the tunnel for the office property market this year, but retail is still in the doldrums.

Conditions for retail and office spaces continued to be challenging, although declines in prices and rents appear to be easing, according to Urban Redevelopment Authority data.

Overall office prices fell 1.4 per cent in the second quarter from the previous three months. This was a slower decline than the 4 per cent fall in the first quarter from the final three months of last year.

Office rents fell 1.1 per cent from the first quarter to the second. This followed a decrease of 3.4 per cent in the first three months of the year from the last quarter of last year.

The stock of office space increased by 76,000 sq m in the second quarter, edging up the overall vacancy rate to 12.4 per cent, up from 11.6 per cent in the first three months of this year.

While the figures paint an uncertain picture of the office market, analysts are still optimistic.

The net employment increase of 3,300 workers for the financial and insurance sectors in the first quarter was more than the increase of 2,800 workers for all of last year.

Price recovery will be led by premium buildings, such as new developments in Marina Bay.

Taking into account these factors and the improvement in local and global economic growth, the office rental index is likely to reach an inflexion point and rebound in the second half of this year.

The retail space continued to post sluggish numbers.

Property prices fell 3.2 per cent in the second quarter from the previous three months and followed a quarter-on-quarter dip of 4 per cent in the first three months of the year. Rents declined 1.2 per cent, a slower slide compared with a 2.9 per cent dip in the previous quarter.

Overall vacancy rates rose 8.1 per cent, up from 7.7 per cent for the previous quarter.

Retail rents have declined for 10 straight quarters. However, suburban malls brought cheer to the retail sector, as demand in the suburbs of 15,000 sq m in the first half of the year exceeded the net new supply of 13,000 sq m.

This is in line with the continually strong interest for retail space in suburban malls, proving their resilient nature despite the persistently weak consumer sentiments.

Suburban malls have attracted the expansion of beauty shops such as Innisfree in Bedok Mall and Sulwhasoo in Westgate.

While the entry of Amazon Prime into Singapore may exert downward pressure on retail sales, the impact may not be immediate on bricks-and-mortar malls.

More online shops have been seen entering malls as the e-commerce scene becomes more crowded.

Adapted from: The Straits Times, 29 July 2017


KepLand, Wing Tai tie-up top bidder for Serangoon North site

Keppel Land (KepLand) and Wing Tai teamed up to place the top bid at a state tender on Thursday for a 99-year-leasehold private housing site along Serangoon North Avenue 1.

Their S$446.28 million bid, which translates to S$964.81 per square foot per plot ratio (psf ppr), was 6.6 per cent higher than the second highest offer of S$418.7 million (S$905.19 psf ppr) from Frasers Centrepoint’s FCL Residences.

It was also nearly 16 per cent higher than the S$835 psf ppr that an Oxley Holdings-led consortium is paying for the nearby 2.76-ha Serangoon Ville collective sale site.

This unit land price is based on the S$499 million purchase price for Serangoon Ville announced on Wednesday and an estimated S$195 million that the consortium will have to pay to the state to top up the site’s lease to 99 years and for the rights to redevelop the site, to 2.8 gross plot ratio.

The Oxley-led consortium was the seventh highest bidder at Thursday’s tender by the Urban Redevelopment Authority (URA) for the 1.72-ha Serangoon North Avenue 1 site. It bid nearly S$393.18 million or about S$850 psf ppr.

A Singapore Land-UOL tie-up was in third place at S$901.94 psf ppr. City Developments was fourth, at S$901.27 psf ppr. The second to fourth highest bids were within a 0.4 per cent margin, reflecting the tight competition. In all, the tender drew 16 bids, a testament to developers’ prevailing strong appetite for land.

A KepLand spokesman, when asked about the group’s bid price, said: “We believe we have put in a commercially viable bid, befitting the site’s good location and strong attributes, and having taken into consideration the market conditions.”

KepLand and Wing Tai plan to develop over 600 homes on the site.

“We are confident that this new development will see positive demand as there have been few new condominiums launched in recent times in the popular Serangoon Garden area,” said KepLand chief executive Ang Wee Gee.

KepLand and Wing Tai also teamed up to bid for URA’s tender for the Woodleigh Lane private residential site which closed earlier this month. There they were in second position, pipped by a joint-venture between Chip Eng Seng, Heeton Holdings and KSH by a narrow margin of just 0.8 per cent.

As for Thursday’s tender for the Serangoon North Ave 1 site, analysts termed the top bid as aggressive. The developers of this project would need to launch the residential units at above S$1,600 psf, which is significantly higher than the recent private condo launches in the vicinity.

This shows an expectation of the market to be on the recovery path. Analysts were not surprised by the top bid. After the recent Stirling Road and Woodleigh Lane tenders which both fetched more than S$1,000 psf ppr, optimistic bids seem to be the market norm.

The strong turnout of 16 bidders could be an indication that developers have accepted that the trough of the market is here.

Last October, City Developments, Hong Leong Holdings and TID launched the Forest Woods condo, which is much closer to Serangoon MRT Station and nex mall compared to the latest site, at an average price of S$1,400 psf. They sold nearly two-thirds of the project, or 337 of its 519 units, on the first weekend.

While Forest Woods is nearer Serangoon MRT Station, in terms of residential character the Serangoon North Avenue 1 site is in a better vicinity, being next to Kensington Park Condo, which enjoys good demand in the secondary market, and near the established Serangoon Gardens landed housing estate and its conveniences such as Chomp Chomp Food Centre.

Analysts also point to the site’s proximity to educational institutions – including Rosyth School, Zhonghua Primary and Lycee Francais De Singapour (French International School).

Last weekend’s sellout of the Hundred Palms Residences executive condo a short distance away may also have boosted developers’ confidence in bidding for the URA site.

Other bidders at Thursday’s tender included China Construction (about S$869 psf ppr), GuocoLand (S$850 psf ppr), a Hoi Hup-Sunway tie-up (S$825 psf ppr), OUE in partnership with Qingjian Realty (S$819 psf ppr), Allgreen Properties (S$780.46 psf ppr) and Kingsford (S$780.44 psf ppr). Chip Eng Seng teamed up with Roxy-Pacific for a S$773 psf ppr bid while Sing Holdings partnered Wee Hur (S$772 psf ppr). Greatview offered S$765 psf ppr for the site and Sim Lian Land, S$746 psf ppr.

EL Development was the lowest bidder, at S$730.72 psf ppr.

Market watchers noted that the URA site garnered more interest – 16 bids – versus only five for the Serangoon Ville collective-sale tender and a much higher unit land price. That may partly have to do with the bigger total investment quantum to be expected for the Serangoon Ville site.

It has a much bigger land area and a slightly higher plot ratio, translating to a bigger gross floor area of 831,349 square feet – compared with 462,557 square feet for the URA site. With a bigger deal size, the risks are higher.

Moreover, the turnaround for a development on the URA site will be quicker vis-a-vis Serangoon Ville, which being a collective sale will be subject to mediation/court approval and other processes.

Adapted from: The Business Times, 28 July 2017


Prices and rentals of industrial space continue to moderate in Q2

Prices and rentals of industrial space continued to moderate in tandem with occupancy rates, according to JTC’s latest quarterly market report of industrial properties released on Thursday.

In Q2 2017, the price and rental indices for the overall industrial property market fell by 1.6 per cent and 0.8 per cent respectively compared to the previous quarter. The price and rental indices fell by 8.2 per cent and 4.1 per cent from a year ago.

About 1.4 million sqm of industrial space, including 311,000 sqm of multiple-user factory space, is estimated to come on-stream in Q2 2017. In the past three years, the average annual demand for industrial space was around 1.3 million sqm while supply was around 1.8 million sqm. JTC said that this is likely to exert further downward pressure on occupancy rates, prices and rentals, translating to reduced business costs for industrialists.

There were about 1,100 units in uncompleted strata-titled developments that remained available for sale at the end of the second quarter of 2017. These totalled about 244,000 sqm of space, representing around 2 per cent of the existing multiple-user factory stock, which JTC said can provide options for industrialists to site or relocate their operations in these strata-titled developments.

Occupancy rate for the overall industrial property market is relatively steady as it fell by 0.7 percentage point on both quarter-on-quarter and year-on-year bases to 88.7 per cent. For multiple-user factory space, the occupancy rate decreased by 0.6 percentage points on a quarter-on- quarter basis and 0.5 percentage points on a year-on-year basis to 86.4 per cent.

The transaction volume continued to fall on a year-on-year basis. Based on the number of caveats lodged for industrial properties, the transaction volume fell by around 28 per cent in Q2 2017 compared to a year ago, and 51 per cent from three years ago.

In the second half of 2017 and 2018, about 2.5 million sqm of industrial space is estimated to come on-stream. This is about 5 per cent of current industrial stock. For multiple-user factory space, about 311,000 sqm and 463,000 sqm are estimated to come on-stream in the second half of 2017 and in the whole of 2018 respectively.

Earlier this month, the government announced plans to increase the supply of industrial land to 13.9 hectares (ha) in the second half of the year, about a 24 per cent increase from 11.25 ha in the first half.

With supply being more than demand, the industrial market remains generally subdued. The business park segment remains a bright spot due to the lack of a visible supply pipeline.

Rentals for the business park segment increased by 2.1 per cent in Q2 2017 from a year ago while occupancy rate was up by 1.7 per cent. The business park segment recorded the most notable increases across all segments.

More supply is anticipated further downstream to ensure a sustainable market. Moving forward, rents are expected to remain soft despite a recovery in the manufacturing sector. The growth in demand for industrial space is likely to be driven by the electronics and information & communication sectors.

Rents for business parks in the CBD fringe and outlying areas recorded S$5.80 psf/mo and S$3.89 psf/mo respectively in the quarter.

Adapted from: The Business Times, 28 July 2017

Oxley-led consortium acquires Serangoon Ville for S$499m in collective sale

A consortium led by Oxley Holdings has acquired Serangoon Ville, a former HUDC estate in Serangoon North Avenue 1, for S$499 million in a collective sale.

Offers of S$400 million to S$430 million had been expected.

This collective sale brings the year’s number so far to seven, in deals worth S$2.5 billion; for the whole of last year, only three deals worth S$1 billion were closed. The rest of the year is likely to yield another few billions more as the collective sales market roars back to life, amid a transactions-led property recovery and limited land up for grabs in state tenders.

Oxley takes up a 40 per cent stake in the consortium; the balance is equally split among Lian Beng Group, Unique Invesco Pte Ltd and Apricot Capital. Unique Invesco is a 37.5 per cent indirect associate of KSH Holdings; Apricot is the private investment firm of Super Group’s Teo family.

Speculation is now rife that the Oxley-led consortium will take part in the public tender for the Serangoon North Avenue 1 site offered under the confirmed list of the government land sales (GLS) programme. This tender closes on Thursday.

The four companies – Oxley Holdings, Lian Beng Group, KSH Holdings and Apricot – had in May teamed up to acquire Rio Casa, a former HUDC estate in Hougang, in a collective sale for S$575 million.

The purchase price for Serangoon Ville works out to a land rate of close to S$835 per square foot per plot ratio (psf ppr), given the estimated differential premium of S$195 million payable to the state for a top-up to a fresh 99-year lease and for the intensification of the 296,913 sq ft site to a gross plot ratio of 2.8.

Owners at the 244-unit Serangoon Ville are expected to pocket S$2 million on average, said ERA Realty, which brokered the deal.

Locational attributes were key considerations for the bid, Oxley Holdings executive chairman and chief executive Ching Chiat Kwong said.

Some 1,200 units are expected to be built on the site. “The project will provide affordable condominium housing for the masses,” he added.

Notably, Serangoon Ville is near Hundred Palms Residences, the 531-unit executive condominium along Yio Chu Kang Road which sold outwithin seven hours on Saturday.

The purchase price for Serangoon Ville has been described as aggressive and bullish, reflecting the sentiment for Singapore’s property market.

ERA Realty key executive officer Eugene Lim said: “This serves as yet another indication that developers are of the view that the property market’s down cycle is almost over.”

Having diversified actively outside of Singapore in recent years, Oxley is making a swift comeback in the Singapore market, where it has acquired three other plots this year.

Besides snapping up Rio Casa through a consortium, it acquired in May a property at 494 Upper East Coast Road from its owner for S$10.5 million; this month, it acquired a freehold property at 231 Pasir Panjang Road for residential redevelopment for S$121 million.

Consultants say that the en bloc fever will go on for a while as developers still cannot find sufficient land. The second-half 2017 GLS is probably not enough to satisfy their appetite. Former HUDC sites tend to be popular with developers, since their locations are preferred by upgraders, who now form the majority of the end-buyers.

Owners at another privatised HUDC estate, the 336-unit Florence Regency in Hougang, as well as at the freehold Amber Park condominium have crossed 70 per cent consensus for their collective sales agreement.

Owners of the 12-unit freehold Dunearn Court in the prime District 11 are asking for S$38.8 million in a tender to be launched the following day. This will translate to a land rate of around S$1,443 psf ppr.

Redevelopment sites are now highly sought after, particularly boutique redevelopment sites with gross development value (GDV) of below S$100 million.

Of Dunearn Court, the purchaser could potentially configure the maximum permissible gross floor area (GFA) of approximately 26,884 sq ft into 32 apartment units with an average size of 753 sq ft, subject to the Urban Redevelopment Authority’s approval.

Already up for sale is the freehold Villa D’Este condominium in Dalvey Road. Owners are asking for S$96 million for the prime District 10 property comprising 12 apartments; this translates to about S$1,730 per sq ft on the land area of 55,480 sq ft.

At Tampines Court, which is also launched for sale, owners of the privatised HUDC property are eyeing S$960 million, with each owner standing to receive about S$1.7 million from the sale.

The revival in the en bloc market has stoked more property owners into thinking of making a windfall from their ageing homes.

Normanton Park owners are due to meet this Saturday to approve the collective sale agreement with a reserve price of S$800 million, unchanged from its initial attempt in October 2015, said S S Chopra, who chairs the collective sales committee.

Over at the iconic Pearl Bank Apartments in Outram, owners are looking at a reserve price of S$728 million for the 288-unit building.

Owners of Lakepoint condominium near Lakeside MRT station are said to have formed a collective sale committee, a news report from online portal PropertyGuru said on Wednesday.

Adapted from: The Business Times, 27 July 2017


City Plaza unit owners looking to sell en bloc

Collective sales fever is spilling into the commercial sector as many City Plaza unit owners prepare for their first annual general meeting in yearson Saturday, to discuss a sale with a possible price tag of as high as $1 billion.

The 18-storey freehold building near Paya Lebar MRT station was completed in 1972 and is known for its wholesale shops, which mainly sell apparel.

The building has 531 units, including 66 residential units, according to Mr Derrick Chan, a City Plaza unit owner who called for the meeting.

Mr Chan told The Straits Times yesterday that he did so as “it is the right time now”.

He said: “There is en bloc fever now and Paya Lebar is developing into a business centre. The building is over 40 years old. If we do not go en bloc now, the cost of maintenance will be extremely high.”

Mr Chan, a businessman who owns six units at City Plaza totalling 5,400 sq ft, said most of his units were tenanted, but he did not think that the “trend of wholesale clothing is in our favour”.

“Retail sales are suffering, and wholesale retail is being taken over by (Chinese online site) Taobao. It is not economical to have a shop space and rental is very low.”

Mr Chan added that unit owners are eyeing a sale price of between $800 million and $1 billion. More than 100 people are expected at the meeting. He hopes a collective sales committee can then be formed.

More than half of the unit owners he has spoken to have expressed interest in a collective sale, he said.

One of them, Mr James Tan, said rentals have been falling. He bought his 20 sq m unit in the early 1990s and collected a monthly rental of about $1,200. At the peak, he was getting $1,800 but lately, tenants have been seeking rentals of $1,000 to $1,200.

“Rental rates today are going back to those of the 1990s,” he said, adding that even if he were to sell the unit, he did not know if the buyer could get a rental rate that would cover the instalment.

Interest in collective sales of residential properties has spilt into the commercial sector, as seen from the successful collective sale of Citimac. The freehold industrial complex near Tai Seng MRT station is reportedly being sold for $430.1 million.

Katong Shopping Centre also launched a collective sales bid earlier this year, but did not manage to meet its reserve price of $630 million.

The Paya Lebar area is likely to become a new growth cluster, with Paya Lebar Quarter catalysing the development of the area. Hence, there will be keen interest for City Plaza.

However, the asking price range of $800 million to $1 billion is on the high side, as developers have other viable options.

Adapted from: The Straits Times, 27 July 2017


Qingjian Realty to launch condo in Bukit Batok

Qingjian Realty (South Pacific) Group said on Wednesday it is launching its first mixed-use development in Singapore.

Located in Bukit Batok, the development offers 516 residential units and 6,000 square metres of retail space. While the developer had yet to confirm estimated average rental price for its retail space, it said the average price for its residential units was S$1,280 per square foot (psf).

The 99-year-leasehold’s sales launch will be on Saturday, and construction is expected to be completed by November 2021.

Qingjian Realty (South Pacific) deputy general manager Yen Chong said Koufu and NTUC FairPrice Finest were the two anchor tenants for Le Quest, and hopes to partner close to 100 tenants for its retail segment.

She expects more than 40 per cent of the retail units to be taken by food and beverage outlets, and the remaining space to be taken by other shops.

While the average price of S$1,280 psf may seem high for a Bukit Batok property, Ms Chong said: “It’s a fair price for homeowners. This is what we think is a good price that people can afford.”

She added that the site was near Jurong Lake District and the upcoming Jurong Innovation District.

One of the development’s selling points is its use of technology to integrate the living and commercial units for homeowners.

For example, Koufu managing director Pang Lim said in Mandarin that he intended to integrate technologies such as robotics into the Koufu in Le Quest, potentially automating delivery services from Koufu to residents of the property.

When asked about the viability of the retail venture, Ms Chong noted the lack of commercial options in the development’s vicinity meant there would be little competition for Le Quest’s retail outlets. “There’s really nothing else nearby. So far we’ve received a good mix of interested tenants, ranging from cafes to pharmacists to enrichment centres for children.”

In May last year, Qingjian paid S$301.16 million – or S$637.57 per square foot per plot ratio (psf ppr) – to secure the 1.5-hectare site.

An analyst said that it is becoming more common to see residential properties in the outer regions costing above S$1,100, like this one.

The developer may have priced this property higher because they feel homeowners would pay more for a property if it is sitting atop a commercial centre.

He explained that even though the average price was comparatively high, it may be attributable to the large number of studio and one-bedroom units.

Qingjian said that of its 516 units, 36 are 431-sq-ft studio apartments, and 96 are 495-sq-ft to 614-sq-ft one-bedroom apartments.

This means close to a quarter of the units on offer are considered small units, and it means that the average price is higher since smaller units tend to cost more per square foot.

There have not been any property launches in the Bukit Batok area in at least a decade, the most recent one being the 280-unit The Jade condominium which launched in 2002.

This has caused a lack of supply in the immediate area, and this could work in the developer’s favour.

Even though it is located quite far from central Singapore, there could still be demand in the form of Bukit Batok residents wanting to upgrade and move into better houses in the same area.

In the future, the market may accept the S$1,280 per sq ft price and it could even become the new norm for that region.

Adapted from: The Business Times, 20 July 2017



Young couples to get flats sooner: HDB

Putting down roots and building a love nest used to take young couples typically between three to four years.

Not anymore. They can get their new homes sooner – about 2.5 years from the time they apply to purchase the flats.

The Housing and Development Board (HDB) announced on Wednesdaythat it will offer some Build-To-Order (BTO) flats with shorter waiting time, and introduce the Re-Offer of Balance Flats (ROF), a new sales mode, in August.

HDB said in a press release that it will start building selected BTO projects ahead of their sales launch, slashing the waiting time for young couples buying their first homes.

Tender for the construction of the first batch of 1,000 flats will be called this month and works are expected to start in the fourth quarter.

The flats in the non-mature estates of Sembawang, Sengkang and Yishun will be launched for sale in the second half of next year and the flats are expected to be completed between the fourth quarter of 2020 and the first quarter of 2021 – about 2.5 years from the time young couples apply for the purchase of the flats.

First-timer families will enjoy higher priority when applying for these flats, with at least 95 per cent of the four-room and larger flats set aside for them. This is a 10 per cent-point increase from the current quota of at least 85 per cent in the non-mature estates.

Under the new ROF exercise, HDB will pool together all flats that remain unsold at the conclusion of the previous Sale of Balance Flats (SBF) exercise. This will help those with more urgent housing needs and/or are less particular about location and attributes to have quicker access to a flat.

The first ROF exercise will be held in August, in conjunction with the BTO sales launch. HDB will be offering 1,394 units of unsold balance flats from the November 2016 SBF exercise, setting aside at least 95 per cent of the flat supply for first-timer families and up to 5 per cent for second-timer families.

For a start, ROF exercises will be held twice-yearly, in February and August, alongside BTO exercises. Together with the two SBF exercises held together with the other two BTO exercises in May and November, home-seekers will now have four chances to apply for a balance flat in a year.

The two measures were announced by National Development Minister Lawrence Wong during the Budget this year.

In his blog on Wednesday, Mr Wong said the government will “do a review and consider whether there is a need to adjust the frequency” after the initial few rounds.

“I hope the wider range of options and more regular offer of flats will help homebuyers find a home that best suits their needs,” he added.

Key executive officer of ERA Realty Network Eugene Lim said while the two schemes, together with the enhanced grants for first timers buying resale flats announced earlier in March, is a concerted effort by HDB to ensure that first timers can choose from a wide range of choices for their first home, it is “unlikely to supercede resale flats, as the waiting time of purchasing a resale flat (a few months) is still much shorter than the 2.5 years”.

Mr Lim pointed out: “With the very much stabilised resale HDB market, we have been seeing increasingly more first-timers as they are able to leverage on, where applicable, the increased CPF Housing Grants of S$40,000 to S$50,000; Proximity Housing Grant of S$20,000 and Additional Housing Grants of up to S$40,000; to further subsidise the already low resale HDB prices.”

Mr Lim added that the location of the first round of flats under this scheme – the non-mature estates of Yishun, Sembawang and Sengkang – is what he termed as “slightly less popular”, which could be why HDB is offering them with a shorter waiting time and a higher priority for first timers.

“Nonetheless, these flats are expected to be popular among first timers, given their combination of affordability, shorter waiting time and higher probability of success,” he noted.

Adapted from: The Business Times, 20 July 2017


Singaporeans’ interest in Australian property wanes

Singaporeans are still buying property in Australia but their interest has dwindled slightly, given the abundance of residential options back home.

Julian Sedgwick, head of sales and marketing for high-end property developer Crown Group Australia, said that if the recent sales performance at the group’s mixed-use project, Waterfall, is a good proxy, Singaporeans seem to be holding back from international property purchases partly due to the abundance of options in their own domestic property market.

In a recent interview with The Business Times, he said: “Singapore is a tougher market at the moment for international property. Having said that, we did 10 sales out of the launch (from Singaporeans). People are just more conservative about where they are investing. There are a lot of options around.”

That was 10 units sold out of a total of 331 apartments. Of the units sold, a quarter came out of Asia, mostly from China, Jakarta, Singapore and Hong Kong. The project, launched on June 17 simultaneously in Sydney, Singapore, Hong Kong and Jakarta, has about 30 units left.

What could deter them further is a a new capital gains tax of 12.5 per cent for properties worth more than A$750,000 for foreigners that kicked in from July 1 this year.

The response from Australian buyers for the project, however, was “phenomenal”, said Mr Sedgwick, bearing testament to the still-growing demand for Sydney properties locally.

Part of the reason for this is the inadequate supply of homes to meet growing demand in Sydney. This is due to lengthy planning processes and height restrictions that deter the construction of high-rise towers there. This has led to chronic undersupply. At the same time, prices are rising due to the increasing population as more people, both from overseas and other parts of Australia, move to Sydney.

So far this year, house prices in Sydney have risen 13 per cent from a year ago, and apartment prices 8.6 per cent year on year, making the average increase across all dwellings to be 12.2 per cent.

Mr Sedgwick remains confident in the demand from Singapore buyers, which was why the company opened its office in Singapore in 2014, first at Suntec Tower Two, before moving to the newly completed CapitaGreen in 2016.

Its current office is a serviced office. The group is still looking for a permanent place, preferably a more spacious Grade-B office in the Orchard Road area that can accommodate more marketing displays and show suites and hold events as well.

But Crown Group has spared no effort in fitting out its current 500 square foot serviced office with wall-to-wall displays of the group’s current and completed projects. A model of Waterfall sits in the middle of the room, with one tower slightly leaning off-centre. Mr Sedgwick explained that it has been on a few rough flights.

He maintained that he is pleased with the results that the group has gotten out of the Singapore market. “We have a very strong following of investors from Singapore, but I think with what’s going on in the local residential market which seems to be recovering, people have sort of sat back to wait and see.”

Crown Group’s Singapore sales for its projects Down Under have increased 25 per cent over the last 12 months, but this is coming from a soft base in 2016, following a particularly strong 2015.

Mr Sedgwick said that the group settled close to A$800 million (S$846 million) of sales for the last financial year ended June 2017, but he declined to shed more light on the company’s revenue and earnings as it is a private company.

Crown Group’s Singapore office is the second in Asia after it opened an office in Indonesia in 2013. Indonesia was a natural choice, given that both its Chairman and Group CEO, Iwan Sunito, and CEO Paul Sathio, were originally from Indonesia. They later studied and now live in Australia, but their connections back home remain strong.

Asked if buyers from different countries have nuanced differences in their preferences, Mr Sedgwick said not really, but noted that Singaporean buyers are much more savvy investors.

“They will do their homework; they really do take their time to understand the development. Every time I meet different buyers, they know the area, the bus routes, the educational institutions (nearby). They know everything.

“In Indonesia, you have to spend more time with the buyers. There is more handholding needed, because it’s a newer thing for them. But we do still do great volumes out of Indonesia. And I think it is also because there are not so many launches every weekend in Jakarta, not so much offering out there.”

While its two offices have been sufficient to oversee sales within the region thus far, there is also a clear indicator to him that China and Hong Kong are promising buyer markets and the group may consider setting shop there next, he said.

Adapted from: The Business Times, 20 July 2017



Property-bound Singapore capital now prefers home turf

The capital flight to greener pastures abroad from Singapore has slowed to a trickle, amid a turnaround in the property market at home.

Data shows that the number of outbound investment deals dwindled to 34 in the first half of 2017. The figure was 144 for last year, and 503 in 2015.

The transaction value of deals done in the first half of the year also slid – to S$6.7 billion, from S$14.6 billion last year and S$37.7 billion in 2015.

In 2015, there was an exodus of capital abroad from a poorly-performing domestic property market, as capital values of Singapore homes and commercial properties fell steadily in reaction to the government’s measures to cool the market.

As a consultant puts it, two years ago, when Singapore was relatively quiet, locally listed players were rethinking what to do with the money, which was why they ventured offshore to look into recurring income assets.

But since then, capital values in these markets have appreciated, and somehow, in many major cities, some sort of protection and stamp duties against foreigners have been introduced. Some of these investors have chosen to take profit in these overseas destinations. What then to do with the money? Meanwhile, Singapore is looking good.

Indeed, there are initial signs that the residential property market in Singapore is bottoming out. In the primary market, developers sold 6,388 private homes in the first six months of this year – just 20 per cent shy of the 7,972 units they moved in the whole of last year.

Private home prices also appear to be close to their trough, with the 0.3 per cent fall in the official benchmark price index in Q2 being the smallest of the 15 quarters since the peak in Q3 2013.

There has also been a pick-up in collective sale activity. Four deals have been done this year – One Tree Hill Gardens, Goh & Goh Building, Rio Casa and Eunosville – for about S$1.5 billion. The latest to be put on the market is Villa D’Este condominium in Dalvey Road, for S$96 million. The en bloc sale of two more condominiums, Dunearn Court and Normanton Park, are in the pipeline.

As for the increase in foreign investors’ tax burdens, Australia in July introduced a capital-gains tax for foreigners, at 12.5 per cent for properties worth more than A$750,000. States such as New South Wales, Victoria and Queensland have also raised the stamp duty for foreign property buyers.

London has also in recent years imposed a capital-gains tax on foreigners, and raised the stamp duty for buy-to-let properties.

The change in investment sentiment in Singapore’s property market has caused other countries to sit up; in recent months, many have started to pump money into the sector.

Inbound investment data shows that in the first half of this year, the number of deals closed that involved foreign entities buying Singapore land or properties was 14, compared to 21 for the whole of last year.

Transactions in the first half of this year were worth a total of S$5.5 billion, against S$8.9 billion in 2016.

Much of this capital came from China and Hong Kong, and went into purchases of development sites in particular. This drove up bids and prodded local developers into raising their stakes in their bids.

Many of these foreign bidders succeeded in clinching the sites. For instance, in May, Hong Kong-listed developer Logan Property, with Chinese conglomerate Nanshan Group, placed a S$1.003 billion bid for a housing site near Queenstown MRT station in Stirling Road.

In June, Fantasia Investment (Singapore), a subsidiary of Chinese property developer Fantasia Holdings, won a residential land parcel in Hougang for S$75.8 million.

Chinese companies have been able to invest overseas despite the country’s curbs on capital outflows because they likely have overseas capital, either in foreign currency reserves or in offshore entities, including in Hong Kong.

Guanxi, or connections with the authorities, also helps big institutions to get approval for their investments more easily.

Late last year, Malaysia’s IOI Properties Group also shook the market with an aggressive S$2.57 billion bid in a hotly contested tender for a mixed-use Marina Bay site at Central Boulevard.

Adapted from: The Business Times, 20 July 2017


Afro-Asia Shipping, Shimizu to rebuild Robinson Rd office block

Afro-Asia Shipping (AAS) and Shimizu Corporation Investment and Development Division on Tuesday announced their joint venture (JV) to redevelop Afro-Asia Building, an office block at 63 Robinson Road in Singapore’s Central Business District.

The approximately 60-year-old building will be redeveloped into a new Grade-A office building.

AAS will be transferring its lease rights to the JV, Robinson Development, while retaining a controlling interest in the JV company.

The total cost for the entire project is more than S$320 million. Robinson Development will fund the construction costs with loans.

Shimizu will carry out demolition this November and construction is expected to start in April 2018, with completion scheduled for mid-2020.

The redevelopment will bring in the latest eco-friendly designs and technology from Japan, as well as flexible and efficient space “with a modern touch”, Shimizu said.

It will also adopt green technologies such as efficient air-conditioning management, cleaning and maintenance services, as well as a rooftop garden. There are also plans to get the development certified under the Green Mark Platinum and LEED Platinum standards.

The current building is seven storeys high with a four-storey annexe. It will be redeveloped into a 19-storey development with a total gross floor area of 16,908 square metres (sqm). It will also have a food and beverage component on the ground floor, with office spaces from levels seven to 18.

Analysts noted that demand for new Grade-A office space in the CBD is picking up momentum and the new development should appeal to mid-sized office occupiers.

There will be approximately 137,000 sqm of Grade-A office space completing in the CBD in the next three years, and all these developments, with the exception of 63 Robinson Road, are designed for larger office occupiers.

Adapted from: The Business Times, 19 July 2017

Lian Beng doubles down on investment property

THE year 2013 was a seminal one for property developers. That was when the URA private residential price index scaled new heights in 2Q2013, surpassing the two previous peaks of 2Q2008 and 2Q1996. At end-June 2013, the Monetary Authority of Singapore sprang the mother lode of macroprudential policies — the total debt servicing ratio (TDSR) loan framework — which when combined with the punitive property cooling measures, triggered a downslide in private residential property prices for 14 straight quarters.

In early 2013, however, even before prices peaked, the Ong family of Singapore-listed construction and property development company Lian Beng Group had already begun to feel uneasy about the property market. “We didn’t know how long the good times were going to last,” says Matthew Ong, executive director of Lian Beng Realty, a wholly-owned subsidiary of Lian Beng Group. “We thought it was [the right time] to find an alternative income stream.”

Thus began the group’s quest for investment property with recurring income that would provide stability for its balance sheet, especially since margins for construction contracts have thinned and the risks in residential property development have increased, owing to the property cooling measures.

It was also in early 2013 that the Ongs decided to look beyond Singapore’s shores for investment property, at Australia and the UK. Ong, who had been heading business development at Lian Beng Realty since April 2012, was put in charge of growing the group’s portfolio of investment properties.

Ong, 35, is the son of Ong Pang Aik, Lian Beng Group executive chairman and managing director, as well as a substantial shareholder of the company. Pang Aik’s siblings — Ong’s aunts Lay Huan, Lay Hoon and Lee Yap, as well as uncles Pang Hoo and Pang Hui — are also directors of the firm. Ong’s elder sister, Sui Hui, joined Lian Beng Group in July 2012 as a contracts manager.

Commercial assets — office and retail still favoured

Under Ong’s watch, Lian Beng’s portfolio of investment properties grew to S$616 million (RM1948 million) as at 2QFY2017 ended November 2016, from S$438.5 million six months earlier. The increase was attributed mainly to the acquisition of four retail properties last July. They are worth S$151 million and located in the mature HDB heartland centres of Ang Mo Kio Central, Bukit Merah Central, Clementi Central and Toa Payoh Central. The properties are fully leased, with anchor tenants such as Courts electronics and home furnishing store at Clementi Central, and NTUC Fairprice supermarket at the other three malls.

All four are located within walking distance of an MRT station, bus interchange and shopping mall. “Such large-format retail stores in mature HDB estates are virtually impossible to find and highly sought-after,” says Ong. “We are looking for similar assets, with good long-term tenants and immediate rental income.”

Steven Ming, managing director of Savills Singapore, who brokered the sale of the four retail properties to Lian Beng, has noticed more developers hunting for investment properties with recurring income. Ming says, “[This trend is partly the result of] a more challenging development climate — a residential market that continues to be beleaguered by both supply and demand policies and a highly competitive land-bidding environment that does not show signs of abatement in land prices to reflect increased market risks.”

Earlier, in February 2016, the group acquired retail asset Broadway Plaza for S$51.5 million. The five-storey commercial property sits on an 18,450 sq ft site and has a remaining lease of 60 years.

Broadway Plaza was purchased for long-term recurring income as well, says Ong. The building can be redeveloped into a new commercial complex, although subdivision into strata units for sale will not be allowed.

Focus on yield

Last October, Lian Beng purchased Khong Guan Industrial Building, an eight-storey freehold building on Mactaggart Road, for S$31 million. Based on the gross floor area (GFA) of 57,019 sq ft, the purchase price translates into S$544 psf. The light industrial building sits on a freehold site of 21,123 sq ft, is zoned for “Business 1” use and has a plot ratio of 2.5, according to URA Master Plan 2014.

The investment properties acquired by Lian Beng so far have an average yield of 5%, says Ong.

Opportunistic divestments

For now, investment property has yet to make a significant contribution to Lian Beng’s bottom line partly because of the group’s opportunistic divestment of assets when an attractive offer came along, concedes Ong.

One example is Midlink Plaza, a nine-storey commercial building on the corner of Middle Road and Queen Street, which Lian Beng and its joint venture partners — Centurion Properties (property arm of Centurion Global), coffee shop operator Chang Cheng Group and a private vehicle of Jason Lee of JForte Holdings — acquired en bloc for S$126.8 million in 2011. Lian Beng held a 19% stake in the JV through its associate company Millennium Land.

The consortium had intended to redevelop Midlink Plaza into a 396-room hotel with strata retail space, but in early November 2014, privately held Chinese conglomerate Nanshan Group — controlled by the Song family — purchased the property for S$270 million on a turnkey basis.

Around the same time, the Lian Beng-led consortium called Epic Land purchased a 92.8% stake in the 30-storey Prudential Tower for S$512 million (S$2,219 psf) from Keppel REIT. The building has 79 years left on its 99-year lease. Epic Land comprises Lian Beng (with a 32% stake), KSH (28%), KOP (25%) and Centurion Global (15%).

In mid-January, Epic Land sold 17 strata office units with a total strata area of 79,459 sq ft at Prudential Tower for S$206.59 million, or S$2,600 psf. The buyer was relatively new private-equity fund management group One Tree Partners, set up by Tan Shern Liang and Roy Tan. The bulk purchase was brokered by CBRE director of investment properties Galven Tan in a private treaty.

Following the bulk purchase, the consortium still holds 60,000 sq ft of strata office space, out of a total of 230,703 sq ft purchased in 2014. Almost 170,000 sq ft strata space had already been sold over the past two years at S$2,740 psf to S$3,000 psf, estimates Tan, who brokered the strata sales at Prudential Tower as well. This included the sale of 36,585 sq ft to China Shipping in August 2015 for S$100.6 million (S$2,749 psf).

Renewed investor interest in office space

“The strata office market went through a consolidation in 2014 and 2015, and most of the buyers were end-users,” observes CBRE’s Tan. “Last year, demand started to shift, with more investors looking at quality office assets for recurring income.”

Interest picked up noticeably after significant deals were made towards 2H2016. This includes the sale of the 43-storey Asia Square Tower 1 — with 1.2 million sq ft of Grade-A office space — to Qatar Investment Authority for S$3.4 billion in June, which was jointly brokered by CBRE and JLL.

BlackRock, the vendor, also put Asia Square Tower 2 up for sale by expressions of interest, which closed at end-January. The market indicative price is said to be at least S$2.2 billion.

Meanwhile, the adjacent 99-year leasehold white site on Central Boulevard was sold to Malaysian group IOI Properties Group for S$2.57 billion (S$1,689 psf ppr) last November. The site was the highest bid for a government land site in Singapore in terms of absolute and psf ppr prices. At least 100,000 sq m, or 70%, of the GFA of 141,309 sq m is designated for office space.

Two other significant office deals towards the end of last year were the sale of a 50% stake in Capital Square for S$475.5 million (S$2,455 psf) to ARA Asset Management in November, and 77 Robinson Road to CLSA Capital Partners for S$530.8 million (S$1,810 psf). In February, DBS Bank sold the 28-storey PWC Building on Cross Street to Canadian insurance company Manulife for S$746.8 million (S$2,100 psf). While the PWC Building and 77 Robinson Road deals were brokered solely by CBRE, the sale of Capital Square was brokered jointly with JLL.

Last month, the newly refurbished GSH Plaza — located just across the road from Prudential Tower — was sold to Fullshare Holdings, a Hong Kong-listed investment holding company controlled by mainland Chinese billionaire Ji Changqun, whose businesses span property development, building and healthcare services. Fullshare paid S$750 million for Plaza Ventures, the holding company that owns GSH Plaza and that valued the building at S$2,900 psf. The building has 72 years left on its original 99-year lease from 1989.

“These transactions have been good for the market,” says CBRE’s Tan. “Demand from Asian buyers has also picked up significantly.” He attributes the spate of transactions to the lack of good-quality strata office space in the Raffles Place financial district, with the exception of GSH Plaza, Prudential Tower and the adjacent Samsung Hub, which is 999-year leasehold and therefore commands a slight premium in pricing. The three buildings are linked underground, with Prudential Tower connected to CapitaGreen across Cecil Street, and to Samsung Hub and GSH Plaza across Church Street.

As such, Epic Land is open to offers for the remaining 60,000 sq ft of office space at Prudential Tower, says Ong.

Investments in Australia

It is not just in Singapore that Lian Beng is willing to divest an asset if the right offer comes along. In May 2015, for example, Lian Beng acquired a historic office building at 247 Collins Street in the Melbourne CBD for A$23 million. The seven-storey sandstone building called Newspaper House is famous for the mural on its façade. “We bought it as an empty building, and then we leased it out,” says Ong.

Today, the building is fully leased, with new tenants such as Bupa healthcare group and Discover English education provider. The average lease period of the building’s tenants is said to be 7½ years.

Market expectation is that the sale price of Newspaper House will be above S$35 million. “We had a couple of offers from local and offshore buyers,” says Ong. The building is also located directly opposite Melbourne’s latest upscale mall, St Collins Lane. CBRE and Knight Frank Australia are jointly handling the sale of the building.

Lian Beng’s latest purchase in Melbourne was a freehold office property at 50 Franklin Street in the CBD last November. The 18-storey office building had eight strata lots occupied by a single tenant — the Australian Stock Exchange-listed multichannel marketing firm Salmat, which is relocating from the building. The property has a total NLA of 11,447 sq m (123,216 sq ft), and was purchased for A$51.5 million (S$54.8 million). The purchase price translates into A$4,500 psm, or A$418 psf.

According to Ong, 50 Franklin Street is an ideal location for student accommodation, as the building is adjacent to the Royal Melbourne Institute of Technology University. Lian Beng has been approached by student accommodation developers and operators interested in converting the office building into student housing. “It’s a property sitting on more than 20,000 sq ft of freehold land in the CBD,” he says. “Student accommodation is one of the permutations we’re looking at.”

Lian Beng plans to launch its first residential project in Melbourne by 3Q2017. The project at 596 St Kilda Road will be developed into a 170-unit upscale apartment block designed by Bates Smart, one of Australia’s most established architectural firms. Lian Beng acquired the site on St Kilda Road from 19 vendors for A$24.35 million in October 2015.

Joint investments in UK hotels

As part of its diversification strategy, Lian Beng ventured into the UK with JV partners, Singapore-listed Heeton Holdings and KSH Holdings, in 2015. “Back then, it was very hard to find good value assets in Singapore, so we cast our nets wider, and we have ownership stakes in one serviced apartment block and four hotels in the UK,” says Ong. “We see the UK as a very stable and transparent market, which is very similar to Australia, and therefore ideal for finding investment properties with long-term recurring income.”

In March 2015, the Heeton-led consortium acquired a hotel-cum-serviced apartment property in London’s Hammersmith; four months later, it bought a 106,722 sq ft, mixed-use development site near Leeds city centre. Ryobi Kiso’s subsidiary Leeds Investment and Development joined the consortium for the Leeds purchase.

Last August, the consortium received the green light from the city council of Leeds for the first phase of its proposed master plan. It involves the refurbishment and extension of the existing office building, as well as its conversion into a 182-room hotel with ancillary restaurant and gym. The consortium has been in discussions with internationally renowned hotel brands to manage the upcoming hotel.

The second phase of the masterplan will feature 780 apartments, cafés and creative workspaces within five new towers of 11 to 41 storeys, set within extensive green spaces. Likewise, it is subject to approval from the local authorities in Leeds.

In February last year, the Heeton-led consortium acquired two more hotels — managed by international French operator AccorHotels — in the UK: an 87-room budget hotel near the centre of Bradford City; and a 127-room hotel in Gloucester City.

Then, in April, the consortium acquired their fifth hotel property in the UK: a 12-storey, 147-room hotel in Manchester’s city centre managed by InterContinental Hotels Group under the Holiday Inn Express brand.

Lian Beng is open to buying commercial properties in the UK. The group continues to see “good value” there as the British pound continues to weaken from Brexit jitters, but economic fundamentals remain strong over the long term, says Ong.

Property development, construction

The group has continued to embark on development projects in Singapore, but they have been mainly industrial properties. For instance, Oxley and Lian Beng launched T-Space, a new ramp-up industrial development on Tampines North Drive 2, in the vicinity of IKEA Tampines, Giant hypermarket and Courts Megastore. T-Space is a 30-year leasehold complex with 260 strata-titled units spanning nine floors, and scheduled for completion by 2019.

The first phase of 90 strata industrial units was launched in March last year, and has been fully sold. The second phase of 90 units was released for sale this week.

Meanwhile, eco-Tech @ Sunview, another joint industrial development by Lian Beng and Oxley, is fully sold. The B2 light industrial building has 424 strata units and a 30-year lease as well. Other smaller industrial developments include food factory Mandai Foodlink and M-Space, a freehold industrial property at Mandai Industrial Estate.

Still, construction remains Lian Beng’s core business. On March 6, the group announced that it had secured its largest construction contract — worth S$435 million — from HDB for a high-rise, multi-user industrial complex called Defu Industrial City on Kim Chuan Road. The latest contract boosts Lian Beng’s order book to S$644 million as at March 6.

“We aim to have 20% to 25% of our annual income from property investments,” says Ong.

This article first appeared in The Edge Property Singapore, a pullout of The Edge Singapore, on March 13, 2017.

Lian Beng’s Q3 net profit down 5.3%

LIAN Beng’s net profit for the third quarter ended Feb 29, 2016, dipped 5.3 per cent to S$17.4 million, from S$18.4 million in the year-ago period. Revenue dived 49.8 per cent to S$101.6 million, from S$202.3 million.

For the nine months ended Feb 29, net profit rose 34.7 per cent to S$72.6 million, from S$53.9 million. Revenue dropped 35.6 per cent to S$367.2 million, from S$569.9 million.

In Q3 FY2016, the group secured a S$117.6 million construction contract to build an industrial building project, T-Space, at Tampines North Drive 1. With this new project, the group’s order book increased to S$384.5 million as at Feb 29. This is expected to provide the group with a sustainable flow of activities through FY2019, said Lian Beng.

The group’s 40 per cent owned joint venture, United E&P Pte Ltd, also secured a S$176.3 million civil engineering subcontract for asphalt pavement works.

The construction of 49 per cent-owned Westlite Papan dormitory is completing soon, and the facility is expected to commence operation in mid-2016. This new dormitory, when in operation, will contribute to the group’s share of associates’ profit in a recurring manner.

Looking ahead, Lian Beng said it expects the construction industry to remain challenging with labour cost remaining high. The group will continue to leverage its established track record and reputation, and proven capability to tender for more projects, it said.