Property News!

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Jun 1, 2010
Waterfront, city homes still a hit in resale market
By Joyce Teo

Resale deals like Sentosa Cove (above) are hot while new launches like The Minton have had a cooler response. --PHOTOS: W SINGAPORE SENTOSA COVE, KHENG LEONG GROUP



WATERFRONT and prime city homes continue to be popular choices in the resale market, which could mean more conversions of office space into homes, property consultancy ** Richard Ellis (CBRE) says.

Its latest report says the total value of resale deals for these homes in Districts 1, 2 and 4 - where the Marina Bay, Shenton Way and Sentosa Cove areas are located - hit $470.2 million from January to May.

The 246 units sold in these upmarket districts in the first five months of this year make up 51 per cent of the total for all of last year. Although the value of these deals pales in comparison to the full-year 2007 peak of $2.08 billion for these districts, it compares relatively well with full-year sales of $750.8 million last year and average annual resale values of $737.8 million from 2005 to 2008.

CBRE's executive director for residential properties Joseph Tan said an ongoing, sustained demand for residential units in these areas could prompt developers to convert or redevelop older office blocks into high-end residential use.

One example is the conversion of the Ong Building site at 76 Shenton Way into a 202-unit residential project. This project sold out in March.

CBRE estimates 1.3 million sq ft of offices will be converted to mainly residential use from now to 2013, he said.

Office buildings that have received planning approvals for conversion to residential use include VTB Building, into 148 units; UIC Building, into 593 units; and Marina House, into 155 units.

On new launches, the euro zone crisis has made investors more cautious while the Government's large release of sites for sale could have dampened sentiment among owner-occupiers, says an industry source. He expects transactions and prices to cool to a more sustainable level.

The largest new release over the holiday weekend was the 1,145-unit condominium in Hougang - The Minton.

About 300 units were released, of which some 180 were sold at an average price of $850 per sq ft.

Property experts had reportedly said sales could have been more brisk if the condo had been launched earlier.

Developer Kheng Leong said 5 per cent of the buyers were foreigners, with the rest being locals or permanent residents.

The most popular were the two-bedroom units, it said. They accounted for some 35 per cent of the units purchased at the 99-year leasehold condo.

The one- and three-bedroom units each made up 25 per cent of the sales.

'The one-bedroom units didn't move as fast as the two-bedroom units. It shows that a lot of people are buying units to live in, rather than for investment,' said Knight Frank's managing director for residential services Peter Ow.

One-bedders have been popular with investors as they are deemed affordable.

 

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un 3, 2010
China firm places bullish top bid for Upper Serangoon site
By Joyce Teo, Property Correspondent

THE tender for a plum 0.5ha residential development site near Potong Pasir MRT station yesterday drew 15 bidders and a higher-than-expected top bid.

This keen interest came despite a recent announcement by the Government that it would release a record amount of development land in the second half year.

China-based Qingdao Construction (Singapore) put in an aggressive bid of $607.20 per sq ft per plot ratio (psf ppr) or $113.74 million. It came in just above the second highest bid of $590.50 psf ppr or $110.6 million from Malaysia's SP Setia International.

Apart from these two top foreign bids, the rest of the bids were largely within or even below expectations.

The 99-year leasehold site, sandwiched between Upper Serangoon Road and Pheng Geck Avenue, has a maximum gross floor area of 187,313 sq ft.

Analysts had said that it could fetch $450-$560 psf ppr or $84 million-$105 million. With its proximity to an MRT station, it was expected to be very popular.

It is the second land tender to close after the Government announced a record release of sites for sale in the second half.

The first - an executive condo (EC) plot in Sengkang - attracted a record top bid for EC land last week, though the other bids were within expectations.

Given the ample upcoming residential supply, the response of 15 bids is above market expectations and the quantums of the top few bids are bullish, said CBRE Research executive director Li Hiaw Ho.

'The relatively smaller size of the site, compared to the previous sites offered by the state, is an advantage because it does translate to a lower price quantum.'

Colliers International director for research and advisory Tay Huey Ying said the top bid is the second highest ever received for a non-landed housing plot in a city fringe area. It is just 5 per cent off the $639 psf ppr bid for the Ascentia Sky site in Alexandra Road in late 2007.

Other bidders included Koh Brothers, Far East Organization, Allgreen Properties and MCL Land. Hong Leong Holdings unit Kingston Development made the lowest bid of $320.70 psf ppr or $60.1 million.

Qingdao Construction, experts say, was a lot more aggressive as it had failed to win any sites in a few recent tenders.

Its managing director Zuo Hai Bin told The Straits Times it would have missed out had it made a lower bid. He said it plans to build about 150-160 units, mostly two- to three-bedroom units. The break-even cost is about $950 psf.

The Qingdao group has, through Qingjian Realty, previously developed Natura Loft, a HDB design, build and sell scheme project in Bishan. Apartments on the Upper Serangoon site could sell for possibly $1,100-$1,200 psf, experts said.

In January-April this year, sub-sale units in nearby 8@Woodleigh and Woodsville 28 went for $880-$1,130 psf.

'The top two bidders are foreign players eager to gain a foothold in Singapore's growing property market,' said DTZ's head of South-east Asia research, Ms Chua Chor Hoon. Local developers are unlikely to bid as keenly given that the property market has quietened down last month and with the record government land release, she added.

The Upper Serangoon site was on the confirmed list, which means that it was scheduled for tender without developers having to indicate interest first.

 

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ERA agents reminded to be careful in choice of words in written communication
By Joanne Chan | Posted: 03 June 2010 1739 hrs






SINGAPORE: Real estate firm ERA has reminded its property agents to be careful in their choice of words when it comes to written communication.

In an email to its more than 3,000 agents on Tuesday, ERA's associate director of Asia Pacific, Eugene Lim, said agents have a responsibility to communicate the latest property market information to customers.

But agents are not to "twist the information and use them as scare tactics on customers".

The email added that agents should "never use overly strong words like the market is going to crash".

This follows a story carried by MediaCorp on May 31 that some agents are employing "scare tactics" to close deals.

Emails forwarded to MediaCorp earlier, detailed how some agents are using the government's recent land sales as a bargaining tool to lower client expectations of property prices.

One agent disclosed that a deal was closed after telling the client that the "market is going to crash".

ERA said it has investigated the alleged complaint.

It found that the transaction was sealed at market price, fully supported by a bank valuation.

The property firm added that no scare tactics were involved.

As such, no disciplinary action will be taken against the agent.

 

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Jun 14, 2010
CAI JIN
Directors' property buys: Building up confidence
Their support of own property firm's projects keeps investors assured
By Lee Su Shyan , ASSISTANT MONEY EDITOR

An artist's impression of The Interlace. CapitaLand disclosed recently that its group president and CEO had paid about $3.74 million for a penthouse on its 23rd level. -- PHOTO: CAPITALAND

CAPITALAND disclosed recently that its group president and chief executive officer Liew Mun Leong had paid about $3.74 million for a penthouse on the 23rd level of The Interlace, a development at the junction of Depot Road and Alexandra Road.

Having directors of property firms snap up units is not unusual. Many transactions are not picked up in media reports even though the property companies have disclosed the purchase on the Singapore Exchange website.

Property consultants see such purchases by directors and interested persons as a vote of confidence in the project.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said: 'When the market is hot, directors and their immediate family members usually get onto the VVIP list and are able to pick the choice units.'

He added: 'On the other hand, when the market is slower, or the sale of the project is not progressing as fast as expected, some directors may buy units, and sometimes even at a bullish price, to give confidence to buyers and investors.'

Under Singapore Exchange listing rule 910, the sale of a unit developed by a listed company to its own director must be disclosed, partly because directors may get a discount. The disclosure of the purchase will inform shareholders about the terms a director has received.

In essence, such disclosures and the review of the purchase terms by the company's audit committee are to show that the sale has not hurt the interests of the minority shareholders or the company, for example, by the sale of a unit at a rock-bottom price to the director.

Indeed, companies generally disclose fairly detailed information nowadays: the name of the purchaser, the relationship to the director if it is not the director making the purchase, and the price, terms and even the unit number of the project.

At the expense of an even greater loss of privacy for directors, more disclosure in this area could well be something to consider.

For instance, what about when a director sells a unit?

Currently, no such disclosure is required. The rationale is that these are open market transactions with no impact on the company involved.

However, disclosure advocates argue that in a hot market, if a director sold a unit a few months after making the initial deposit, shareholders would be none the wiser unless they had taken various tedious steps to check if the unit had been sold.

So consider this: Shareholders or other buyers might pile into the project, thinking it must be a good buy, based, at least in part, on the disclosure that a company director had bought a unit.

But in the meantime, the director or his immediate family members could well be pocketing a tidy profit, having quietly exited the project.

And they have a strong incentive for trying to sell, as the directors usually get the best pickings of the units on offer - which are likely to yield the best selling prices.

Of course, there are arguments for why disclosure of a director's sale would be going over the top.

For instance, if the unit is sold to an unrelated third party as is usually the case, the sale has no direct bearing on the listed company which is what minority shareholders would be concerned about.

Another argument is that the unit could be sold for strictly personal reasons, such as the need to raise cash. The public or investors, unaware of these personal factors, might read too much into a director selling off a unit he had just bought a few months ago.

Also, since each purchase involves large sums, it is unlikely that any one director could commit himself to many transactions, which tends to diminish the force of the case for public disclosure.

But with many of these purchases, the same group of directors is likely to be involved. As property firms have a pipeline of projects, these same buyers are likely to feature over and over again so their buying patterns would be of some interest to investors.

The sale of properties soon after purchase at the time of a launch could be seen as analogous to the sale of shares by key shareholders soon after an initial public offering.

These disclosure questions give rise to another possible change that would offer greater certainty to shareholders: encouraging companies to put a moratorium on sales by their directors until the property obtains a temporary occupation permit.

That would offer a clear assurance to investors that directors who make purchases are committed to the project.

sushyan@sph.com.sg

 

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Jun 12, 2010
Wanted: Feedback on changes to Property Tax Act
THE Ministry of Finance is seeking public feedback on proposed changes to the Property Tax Act.

The proposals are aimed at improving tax administration and providing greater clarity to taxpayers, the ministry said in a statement yesterday.

A total of 12 changes have been proposed in the draft Property Tax (Amendment) Bill.

One proposal is to streamline reporting requirements of property owners by removing the obligation for them to inform the Inland Revenue Authority of Singapore of certain events, such as when a building is completed, rebuilt, enlarged, altered or improved.

Another proposal is to shorten the time for the tax authorities to recover outstanding property tax and refund excess property tax paid from six to five years.

This is in line with the term applying to income tax and goods and services tax.

The ministry also suggests that interest payable on the refund of excess funds pursuant to court orders be computed from the date of the order - similar to income tax matters.

At present, the Property Tax Act does not specify how interest in such matters is to be computed.

The public feedback exercise started yesterday and ends on June 25.

Consultation documents can be accessed at the ministry's website and the Reach consultation portal.

HARSHA JETHNANI

 

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Jun 13, 2010
PROPERTY
Showflats & their telling displays
Would-be buyers should be aware of optical illusions and custom-built fittings
By Joyce Teo

Showflats may have mirrors, custom-made smaller-size furniture or fewer walls to make the space look bigger than it really is. -- ST FILE PHOTO

Visiting showflats on weekends is very much a Singaporean pastime. Many who throng the showflats are not buyers, but browsers with noisy families in tow.

But for those who are thinking of putting down some hard-earned cash for a brand new home, this seemingly leisurely activity is actually the homework they should do carefully before they commit themselves to a purchase.

They should scrutinise every nook and corner in the showflat and be clear that they may not get all that they see.

Showflats, after all, are done up by interior designers engaged by the developers to make them look as attractive or as spacious as possible.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak advises potential buyers to take note of 'optical illusions' employed to make the units look bigger.

For instance, glass partitions are often used instead of walls to separate the bedrooms from the living area. This gives the illusion of more space than there actually is.

Glass partitions are also thinner than actual walls, and thus take up less space.

A buyer can always do the same for his own unit, but may then have to compromise on privacy.

It is common for developers to remove the non-structural wall of the bedroom nearer the living area to make the unit look bigger and allow more space for visitors, said EL Development managing director Lim Yew Soon.

'In such instances, buyers should ask whether the wall can actually be removed,' he said.

'Another question they should ask is whether all the appliances - for instance, the non-standard ones like dishwashers and washing machines - are provided or are there for interior design purposes.'

Wall mirrors are also often employed to give the living area the illusion of spaciousness, experts say.

'The buyer can also use a wall mirror in his own home, but the key is where is the best place to put it. And that depends on the individual unit,' said Mr William Ong, executive chairman of Axis ID.

'Showflats do give you an indication of what you can put into the unit.

'When you do up your own unit, you have to first think about how much furniture you need and how much storage you need.'

Where furniture is concerned, the key is in having it in the right scale, said Mr Ong.

Another expert, who declined to be named, warns that some small projects may use very small customised furniture. For instance, a supposed double bed in a bedroom may be much smaller than an actual double bed.

When checking out the bedrooms, Mr Mak says, potential buyers should ignore the furnishings and try to imagine if they can comfortably fit in a normal- size single or queen-size bed, a desk and a wardrobe.

Also, experts say buyers have to consider how efficient the layout is. A square or rectangular- shaped room is always easier to manage.

For odd-shaped apartments, it may be a good idea to engage an interior designer who can help to maximise space.

'The smaller the apartment, the more you need expert help to help you maximise space,' said Mr Ong.

Some home hunters have complained about having to pay for bay windows and planter boxes when they have no use for them.

For instance, the actual living space in a 1,200 sq ft unit that includes bay windows and planter boxes is much smaller than 1,200 sq ft.

But, under a new government ruling from January last year, developers - although they can still build bay windows and planter boxes - no longer have the incentive to do so because they will have to pay for the space for these features. Previously, they did not have to.

One good thing about showflats is that they are chockful of design ideas.

And as Mr Ong said: 'Whatever developers show in the showflat is usually achievable. The ideas are there to make the space look bigger but they are doable ideas.'

joyceteo@sph.com.sg

Showing the way

'Whatever developers show in the showflat is usually achievable. The ideas are there to make the space look bigger but they are doable ideas.'

MR WILLIAM ONG, executive chairman of Axis ID

 

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Jun 13, 2010
$36m home could be S'pore's most expensive
Chinese national buys 99-year Sentosa Cove bungalow, complete with berth for yacht
By Irene Tham

The two-and-a-half-storey bungalow faces a waterway, with a berth for a yacht. It also has a private pool. The house was first sold by its developer Ho Bee in April 2007 for $18.1 million. -- BT FILE PHOTO

A Chinese national is believed to have set the record price for a bungalow here, forking out a handsome $36 million for a luxury home in Sentosa Cove.

The property in Paradise Island was sold last month in the resale market at $2,403 per sq ft (psf), based on latest Urban Redevelopment Authority (URA) caveat records.

The house has a land area of 14,983 sq ft and a built-up area of about 17,000 sq ft.

It is probably the most expensive bungalow in Sentosa Cove in terms of the total amount paid and its per sq ft price, going by URA's caveat records.

At $2,403 per sq ft, it is also possibly the most expensive bungalow in Singapore, property agents say.

Mr Steven Tan, OrangeTee executive director (residential), pointed out that it is also on a 99-year leasehold tenure, unlike many bungalows in prime areas in mainland Singapore like Nassim Hill and the Holland area, which are freehold.

In May last year, China-born action star Jet Li paid $19.8 million for a 22,723 sq ft good class bungalow in Bukit Timah.

Sentosa Cove is a gated community comprising more than 2,000 homes, of which 400 are landed. The rest are condominium units.

Paradise Island is located in the northern part of the cove. The other developments in Sentosa Cove include Sandy Island, Coral Island and Quayside Isle.

The Business Times reported yesterday that the sellers of the $36 million bungalow are understood to be Singaporeans, with the deal brokered by DTZ. The Chinese buyer is a Singapore permanent resident.

The house was first sold by its developer Ho Bee in April 2007 for $18.1 million ($1,208 psf). It was resold for $20.18 million ($1,347 psf) in September last year.

This makes the Chinese national the third owner of the property, which received its temporary occupation permit (TOP) in May last year.

The two-and-a-half storey bungalow faces a waterway, with a berth for a yacht. It also has a private pool.

The high price can be explained by its features, said property agents.

'This is truly resort-style living,' said Mr Tan.

Ms Margaret Thean, executive director of DTZ, said: 'Many high net worth individuals appreciate the privacy of a gated community, waterfront facing and having a berth for a yacht. This could be their second, third or fourth home around the world.'

Landed home prices on Sentosa could have also been driven up by the fact that foreigners are allowed to buy them, said property agents.

This opens the market to the entire world, although such sales are still subject to approval from the Singapore Land Dealings (Approval) Unit.

Landed homes on the mainland can be bought only by citizens and permanent residents.

Also, foreigners buying a landed home in Sentosa Cove do not have to hold the property for three years before they can sell it - which they have to do when buying a landed property on the mainland.

But whether on the mainland or in Sentosa Cove, foreigners may own only one landed property in Singapore at any time. Also, they cannot rent out the home.

The Sunday Times understands that properties on Sentosa attract mostly foreigners, with Chinese nationals growing in numbers.

Take Kasara - The Lake collection at Sentosa Cove from YTL Corporation.

The Sunday Times understands that of the 13 units launched in December last year, more than half were bought by Chinese nationals.

The Business Times reported yesterday that four members of a Liu family from Liaoning bought a bungalow each at Kasara in March.

The prices range from $15.9 million to almost $26 million a bungalow. This translates to $1,731 to 1,780 psf (on land area). The bungalows are expected to receive their TOPs in June 2012.

'Buyers from China have in the past year been more prominent in snapping up homes in Sentosa Cove,' said DTZ executive director (consulting) Ong Choon Fah.

'This is a result of China's exuberant economic growth,' Mrs Ong said.

Traditionally, the foreigners who buy landed homes here are Indonesians and Malaysians.

itham@sph.com.sg

On a roll

'Buyers from China have in the past year been more prominent in snapping up homes in Sentosa Cove... This is a result of China's exuberant economic growth.'

 

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Jun 15, 2010
Clemenceau Ave site up for hotel tender
99-year leasehold plot next to Central Mall and near S'pore River to be put up for sale in 2 weeks
By Joyce Teo

A HOTEL site suitable for a medium-size development, at the junction of Clemenceau Avenue and Havelock Road, will be put up for sale in two weeks.

Yesterday, the Urban Redevelopment Authority said an unnamed developer has committed to bid at least $40.9 million for the 0.55ha site, thereby triggering the tender process.

The 99-year leasehold site is next to Central Mall and is within walking distance of the Singapore River and Clarke Quay. It is also close to the financial district.

The site can yield a maximum gross floor area of 11,555 sq m and can be built up to seven storeys.

A hotel on the site would attract mostly business travellers, said Cushman & Wakefield managing director Donald Han.

He expects bids to come in at between $480 and $500 per sq ft per plot ratio (psf ppr). The trigger bid was $328 psf ppr.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak expects bids of $380 to $430 psf ppr.

The Clemenceau Avenue site has been on the Government's reserve list since March 2008. Under this list of development sites, a site will be put up for tender only after a developer commits to a bid that reaches a minimum level set by the Government.

Mr Han expects more investor interest in Singapore's hotel market, which, he said, is the Asia-Pacific's star performer.

Singapore Tourism Board data shows that average hotel occupancy rose to 85 per cent in April, up 15 percentage points from last year. Average room rates rose by 12.2 per cent to $211, while revenue per available room surged 36 per cent to $179.

In a separate announcement, Credo Real Estate said that Hoi Hup Realty had recently agreed to buy Pender Court in a collective sale for $95 million.

This price works out to $1,007 psf ppr, based on a plot ratio of 1.44. The owners of the 48-unit estate stand to reap an average of $1.98 million per unit.

Meanwhile, the freehold 32-unit People's Mansion in Geylang has been launched for collective sale.

 

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Jul 2, 2010
Prices of private homes hit new peak
Experts expect more rises this year but at a slower rate
By Joyce Teo

PRIVATE home prices in Singapore are now at their highest level ever, eclipsing even the previous 1996 peak.

Official estimates show prices rose a higher-than-expected 5.2 per cent in the second quarter after a 5.6 per cent jump in the first. That means private home prices have risen 11.1 per cent so far this year.

Prices, now 1.5 per cent above the 1996 high, are expected to continue to edge up this year given the positive economic outlook, property experts forecast.

But the rises should moderate as the market is no longer feverish, having slowed to a more sustainable level with many more sites on the way, they said.

** Richard Ellis' executive director, residential, Mr Joseph Tan, said the ample supply of residential land to be released by the Government will ensure a more stable supply in the longer term. 'As sales momentum becomes less frenzied, home prices will stabilise,' he said.

The Government has lined up a record amount of land for sale in the second half of the year and yesterday released three sites for sale.

One is an executive condominium site in Jurong West which can yield about 460 units. The other two sites are in Miltonia Close and Bedok Town Centre. Together, they can yield about 1,300 homes.

Other data out yesterday showed that Housing Board resale prices rose 3.8 per cent to a new record high in the same period, giving strong support to 'mass market' private homes - generally the less expensive private homes. This came after HDB this week offered 2,696 build-to-order flats in its largest ever single launch.

In the private mass market, buyers such as HDB upgraders are increasingly reluctant to pay sky-high prices, noted Colliers International's director of research and advisory, Ms Tay Huey Ying.

Preliminary estimates released yesterday by the Urban Redevelopment Authority (URA) showed that mass market non- landed private homes rose at a faster clip of 5.7 per cent to a new high, compared with 4.3 per cent in the first quarter.

These prices are now a hefty 14.2 per cent above the previous 2008 peak.

Mr Tan said this could be attributed to higher price levels set at new launches such as Tree House and The Minton, as well as rising prices of resale deals in areas where several government sites had been sold in the past six to nine months.

In central Singapore, non-landed home prices moved up 5.1 per cent, from 4.4 per cent in the first quarter. It was only in city fringe areas that prices of non-landed homes rose at a slower 4.5 per cent, compared with a furious 7.9 per cent first-quarter jump.

'Individual sellers on the resale front, especially those who had bought their properties before the 2007 boom, are now making capital gains in the region of 80-90 per cent,' noted ERA Asia Pacific associate director Eugene Lim.

Since late May, there has been a sales slowdown owing to the euro zone crisis, a lacklustre stock market and high asking prices, but home prices have generally remained firm. Sales of new, private homes halved to 1,078 units in May, from April.

Mr Lim said developers are unlikely to cut prices for new launches to sell more units as most have strong balance sheets.

Still, the slower sales will affect sentiment, said Cushman and Wakefield managing director Donald Han. The pace of price rises will slow down with the resale market first to be hit. The full effects will be felt from this quarter, he said.

For the whole year, property experts are mostly looking at price increases of about 15 per cent. Estimates range from 12 per cent to as much as 20 per cent.

'After the football World Cup season, people will look at whether the West is coping well and Singapore's economic growth and policies. Economists revising higher their growth estimates means that prices are likely to rise,' said Knight Frank chairman Tan Tiong Cheng.

'On the other hand, ample supply has translated to developers being more selective in bidding for sites. Land costs would come off and that would mitigate price rises six months down the road.'

Looking further ahead, Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the risk of a price correction could grow if uncertainties in global financial markets hurt market sentiment, and if the large impending supply of government land leads to a private home glut.

URA will update its second quarter price data in four weeks.

 

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Jul 2, 2010
Admiral Hill developer dropped
SLA to look for new developer, gives Yess' sub-tenants until early next year to move out
By Jessica Lim

Yess won the SLA tender to develop Admiral Hill in 2007, but the project was plagued by problems from the start. An illegal school and a workers' dormitory operating there were ordered shut last year. -- ST PHOTO: JOYCE FANG

ADMIRAL Hill was to have been the Dempsey Hill of northern Singapore, a lifestyle hub with a country club, rock-climbing facilities, a golf driving range and beauty and health businesses, among other attractions.

But the future of the project is in doubt: The landlord of the site, the Singapore Land Authority (SLA), has terminated the contract of developer Yess Resorts & Country Club (Yess) for failing to pay the rent.

The SLA will shop for a new developer, and Yess' sub-tenants have until early next year to clear out.

The jury is out, however, on whether there will be new takers for this 4ha site in far-flung Sembawang. Admiral Hill was to have come up around Old Admiralty House, which was built in 1939 to accommodate Royal Navy officers and declared a national monument in 2002.

The project was dogged by problems from the get-go.

Yess clinched the SLA tender to develop the place in 2007 by offering to pay $40,000 a month in rent and on the strength of its proposed plans.

But instead of a 'lifestyle hub', an illegal school and a workers' dormitory came up. Both were ordered shut last year.

When The Straits Times visited the site this week, it was in a state of neglect. Units sat empty and weeds had overrun the place.

Sub-tenants there now were apparently given the impression that Yess was forging ahead with the lifestyle hub.

Mr Al Lim, 39, who owns Chinese restaurant House Kitchen, said Yess claimed it had the SLA's clearance to take on more sub-tenants, so he signed a two-year lease in March and poured more than $100,000 into renovations.

He was thus shocked when the SLA told him two months later that he had to move out this month. He appealed and was given a reprieve until early next year.

He said that when he met Yess last month, it claimed to have been in the dark about the SLA's plans to terminate its contract.

Mr Alan Poh, who opened steamboat restaurant Fat Fish there a year ago on a two-year lease, has a similar tale - and some regrets to go with it, since his business is just starting to take off following an advertising campaign, he said.

A third sub-tenant, Sembawang Family Enrichment Network, signed up for a three-year lease in April last year and put $200,000 into renovations. Its manager Daniel Sum, 56, is now looking for another site. 'It has happened and there's nothing we can do about it,' he said.

The Straits Times understands Yess signed agreements with these new sub-tenants without first asking the SLA for consent, which is illegal.

They are only the latest ones to feel short-changed. Two former sub-tenants who signed contracts with Yess in 2007 have sought legal advice.

Yess refused to comment yesterday.

The Accounting & Corporate Regulatory Authority (Acra) lists it as a 'live company' and names a Mr Lee Kiang Hong as its director. The company is fully owned by the Yess Group.

An SLA spokesman said the Government was not party to sub-tenancy agreements between Yess and its sub-tenants, and that the parties would have to sort out the disputes among themselves.

She urged prospective sub-tenants of state properties to run checks on the tenant. They should also ask the tenant to produce the SLA's written consent for sub-tenancy agreements and seek legal advice before signing a contract.

The spokesman said this is to avoid the scenario in which sub-tenants commit themselves, only to find that their intended business activity is not an approved one for the property, or that the tenure falls outside that of the main tenancy.

With Yess out, the future of Admiral Hill looks none too certain, going by the assessment of Country City Investment, which successfully developed Dempsey Hill in Tanglin Village.

Admiral Hill's problem is its lack of drawing power, said Country City's general manager Nicholas Ng.

Still, how successful it can be will depend on the uses for the plot and the rental, he said; its rundown state, short tenancy agreement and its inaccessibility are factors against it. He said: 'It's not impossible, but it would take a lot of work and capital to make it successful.'

City Country, which lost the 2007 bid to Yess, has no plans to put in a bid again, he added.

 

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Jul 6, 2010
Prices of prime district homes at new high
Outlook for rest of year less rosy as uncertainty in global economy likely to keep buyers away
By Jessica Cheam

PRIME property prices are at record highs having surpassed the peak seen in the first quarter of 2008, according to Jones Lang LaSalle (JLL).

Prices of prime homes - in Districts 9, 10 and 11 - shot up 8 per cent in the second quarter, hitting an average of $1,350 psf.

However, prices for luxury prime properties - those in the same districts but at least 3,500 sq ft in size and with ultra-luxurious fittings - are still about 8.4 per cent below the last peak in 2008, at about $2,500 psf.

Early government estimates last week said private home prices rose a higher- than-expected 5.2 per cent in the second quarter after a 5.6 per cent jump in the first.

JLL's report yesterday noted that price growth has been supported by an improved rental market.

Prime rentals have grown by an average of 10.8 per cent over the first half of the year, supported by increased demand from expatriates in the financial and petrochemical sectors, said JLL.

Investment sales also appear healthy.

DTZ Research said in a separate statement yesterday that investment sales for the second quarter posted a 64.1 per cent increase over the previous three months to hit $4.71 billion, of which 58.3 per cent were from residential transactions.

This was driven by a record-breaking quarter in sales of government sites earmarked for residential use. These totalled $1.85 billion in the second quarter, surpassing the $1.51 billion record set in the last quarter of 2007.

However, the outlook for the rest of the year is not as rosy.

JLL's head of research, South-east Asia, Dr Chua Yang Liang, noted that until buyers can predict the impact of the euro zone crisis on the property market, there will be further slowdown in both sales volume and price growth for the next six months.

JLL said the uncertainty in the global economy has kept buyers at bay: 3,127 caveats were lodged in the second quarter, a 21.6 per cent drop from the previous quarter.

Still, this is 78.4 per cent above the average of 1,753 units sold per quarter from 2000 to last year, noted JLL, whose figures are based on Urban Redevelopment Authority (URA) data as of June 26.

Its report found that the number of foreign buyers are falling - down 28.3 per cent to 898 in the second quarter compared with the previous quarter, while the number of local buyers slid by 21 per cent to 2,112 over the last quarter.

Chinese buyers are proving the most resilient.

They accounted for 18.5 per cent of caveats lodged by foreigners for resale private apartments in the second quarter - up from just 6.2 per cent in the first quarter of 2007.

JLL's head of residential, Ms Jacqueline Wong, noted that increasingly, 'Chinese buyers are climbing up the price ladder and buying up properties in the prime market which is traditionally dominated by the rich Indonesians and Malaysians'.

These are high-net-worth individuals who can spend at least $2.5 million, she said.

The caveats lodged by Chinese buyers for resale units priced $1.5million and above are more common today than a year ago, she added.

jcheam@sph.com.sg



--------------------------------------------------------------------------------


RESILIENT

'Chinese buyers are climbing up the price ladder and buying up properties in the prime market which is traditionally dominated by the rich Indonesians and Malaysians.'

Jones Lang LaSalle head of residential Jacqueline Wong

 

[jq75]

Jul 13, 2010
China property prices fall due to govt curbs
BEIJING: Chinese property prices last month recorded their first monthly fall since February last year, providing further evidence that a government drive to let the air out of an inflated market is working.

Average prices in 70 cities edged down 0.1 per cent from May, lowering the annual property inflation rate to 11.4 per cent last month, from 12.4 per cent in the year to May and April's reading of 12.8 per cent, the National Bureau of Statistics said yesterday.

Coming on the heels of much slower import growth and a controlled moderation in bank lending, the figures reinforced the conviction of many economists that no further policy tightening is on the cards.

However, with surprisingly resilient exports offsetting softer domestic investment, the consensus is that Beijing will not be rushed into relaxing policy until clearer signals emerge from the all-important property and construction sectors.

The government, determined to squeeze out speculators, refuses to back down by reversing curbs imposed in April; developers do not want to waver because they paid high prices for land last year and have a bullish long-term outlook; and home buyers are sitting on the sidelines, said Mr Dong Tao, chief China economist at Credit Suisse in Hong Kong

Engineering a soft landing in the housing market is critical. To prick a bubble that had developed in big cities such as Beijing and Shanghai, the government in April raised down-payments, ended mortgage discounts, tightened rules on loans to developers and made it harder to buy multiple homes.

Although annual property inflation has fallen for two months in a row, underlying demand remains strong and few home buyers expect a sharp decline in prices, said Mr Zhang Huadong, a property analyst with Xiangcai Securities in Shanghai.

'It's very unlikely that the government will relax its policy of curbing demand,' he said. 'If policy were relaxed, there would be another surge in property prices. It would be a disaster for the market.'

 

[jq75]

Jul 13, 2010
Property tax not based on market rental forecasts
MR PAUL Chan ('Surprised by sharp tax hike on owner-occupied homes'; July 3) was under the impression that the Inland Revenue Authority of Singapore (Iras) estimates the annual value of properties in advance of market trends. He also felt that increases in the annual value of a property based on market rentals were not right for owner-occupiers.

His view reflects a frequent misconception about property tax. It is in fact a tax on property ownership, and is levied irrespective of whether the property is tenanted. This is unlike income tax, which is imposed on only properties that are rented out.

The property tax is pegged to the annual value of the property, which is determined based on market rentals of similar properties prevailing at the time of assessment. It does not take into account any forecast or estimate of future movements in market rentals.

Iras' practice is consistent with that in places such as Britain, the United States, Hong Kong and Australia, which also levy property tax based on prevailing market values rather than on the actual receipts derived from renting out a property.

Iras reviews annual values each year. It will increase or decrease annual values based on prevailing market rentals. The reliance on market rentals leads to less volatility in estimates of annual value and hence, the property tax payable, compared to relying on the market price of properties bought and sold, which tends to go through more pronounced cycles.

The annual value of Mr Chan's property was in fact reduced in past market declines, the most recent one being last year.

The Government introduced in Budget 2010 a progressive property tax schedule for owner-occupied residential properties from next year. Under the new progressive schedule, all HDB flat owners and the vast majority of residential property owners will enjoy an effective property tax rate lower than 4 per cent of annual value.

Deanna Choo (Ms)
Director (Corporate Communications)
Inland Revenue Authority of Singapore

 

[jq75]

Jul 16, 2010
Sales of new private homes cool further
By Joyce Teo

The Minton in Hougang proved to be last month's top seller, moving another 173 units at a median price of $871 per sq ft. -- PHOTO: KHENG LEONG GROUP

SALES of new private homes slowed further last month as World Cup fever seemed to take its toll on buyer interest.

Homehunters bought 847 units in June, compared with 1,083 units in May and the near-record 2,208 units in April, according to Urban Redevelopment Authority (URA) data released yesterday.

The June figure brings new home sales to 8,518 units for the first half of the year - averaging 1,420 units per month and ahead of last year's average monthly sales volume of 1,224 units, noted CBRE Research.

The URA figures show that launches were also down last month, with 1,010 units released, against 1,135 in May.

Property experts had factored in a quiet June, given that the four-week-long South Africa World Cup, school holidays and the euro zone crisis were likely to divert the attention of potential buyers.

About half of the sales in June were for homes in suburban areas, according to URA, while prime areas proved to be the quietest, accounting for 17 per cent of sales.

Colliers International sees the geographical breakdown of new sales volumes showing intensified price resistance in June.

It points out that mid-tier units in city-fringe areas - or what the URA calls Rest of Central Region - dipped by a sharp 74 per cent to just 275 units from April's peak level of 1,044 units.

The firm's director of research and advisory, Ms Tay Huey Ying, said that this was not surprising, considering URA preliminary data had showed prices in that region gaining the most in the first half, compared to prices in the city centre or suburban areas. And overall, the prices have crossed the previous peaks.

The Minton in Hougang proved to be June's top seller, moving another 173 units at a median price of $871 per sq ft. CBRE Research said that this was higher than the median price of $849 psf reported for the first 204 units sold in May.

A new launch, Waterfront Gold, had a weaker showing with 157 units launched and 77 units sold at a median price of $996 psf.

Jones Lang LaSalle said the total quantum demanded at the project - more than $1 million for a three-bedder - was possibly larger than what the market was willing to absorb.

At the 84-unit La Brisa in Geylang, where most of the units range from 409 sq ft to 689 sq ft, buyers snapped up 82 units at a median price of $960 psf.

Looking ahead, experts expect to see stronger sales in July, noting that already two new launches - 368 Thomson and Terrene in Bukit Timah - have done well.

Yesterday, NOL Group reported selling more than 100 units at Terrene since a private preview started on July 8.

Buyers could come out to buy before the inauspicious Hungry Ghost Festival in August, they said.

Still, CBRE Research predicts buying interest will remain selective, and depend on location, product attributes and price points.

Jones Lang LaSalle said a more moderate buying mood backed by conservative global economic conditions, and hence a continual slowdown in price growth, can be expected.

 

[jq75]

Jul 20, 2010
Prestige bungalows soar in price
Good class bungalow sales in first half pass $1b mark, and demand unlikely to flag: Report
By Joyce Teo

The typically large size of the properties, such as the 18,000 sq ft this Leedon Park home occupies, and their rarity contribute to their high price tags. -- ST FILE PHOTO

THE priciest homes just keep getting pricier, with the values of upmarket, prime-area bungalows rocketing this year, and sales totalling more than $1 billion in the first six months.

And just to underline the boom in what are called 'good class bungalows', a Nassim Road house sold in April for $43.5 million, that is $1,800 psf and just shy of the record $1,899 psf set in 2007 for a plot along the same road, according to a Savills Singapore report.

The most expensive bungalow sold this year in terms of overall price was a sprawling Leedon Park plot that went last month for a whopping $59.4 million, or $1,419 psf.

Good class bungalows tend to be big and exclusive, and are arguably Singapore's most coveted landed homes.

They typically sit on plots of at least 1,400 sq m, or 15,070 sq ft, and can be found in 39 prime gazetted areas such as Nassim Road.

In the first half of this year, sales of good class bungalows reached about $1.12 billion, which is about 81 per cent of the value done last year, said Savills.

There were 54 deals done in the first six months, compared with 24 in the same period last year, it said.

Prices have continued edging higher on the revived demand from well-heeled buyers, added Savills.

The average price of good class bungalows rose from $928 psf in the first quarter to $1,082 psf in the second and is now 36 per cent higher than a year ago.

'This year we are seeing more demand from ultra-rich, new citizens and PRs in the market, which could possibly have resulted in the higher volume and prices,' said the firm's director of prestige homes and investment, Mr Steven Ming.

An agent who declined to be named added: 'Some new citizens from China are still looking for good class bungalows.'

He said the market has quietened down a bit recently as the gap between buyers' and sellers' price expectations widens.

** Richard Ellis director (luxury homes) Douglas Wong said: 'Good class bungalow prices have continued to rise since 2007 and through the global financial crisis. Owners' expectations are still high due to the limited supply.'

Some sellers have been asking for higher prices after hearing talk of a Cluny Road bungalow achieving a record price of slightly over $2,000 psf, agents said.

Buyers may be sitting on the sidelines but they are likely to come back to market soon when they realise that prices are not going to fall, Mr Wong said.

The managing director of RealStar Premier Property, Mr William Wong, said he has already seen some local investors returning to the good class bungalow market recently.

But foreign buyers are few and far between. They need special permission and must be permanent residents to own landed property.

Foreigners who are not permanent residents can buy landed homes in Sentosa Cove, subject to government approval.

In recent years, the typically smaller landed homes in the 99-year leasehold gated residential enclave have also seen exceptional prices.

Average prices of Sentosa Cove bungalows rose 55 per cent to $1,959 psf in the second quarter over the same period a year ago, said Savills.

In the first half, there were 35 caveats lodged for bungalows in Sentosa Cove compared with 36 for all of last year, it said.

Just over half of this year's bungalow caveats were lodged by Singaporeans.

China accounted for 10 deals, the largest of the foreign buying contingent.

But Mr Ming said that good class bungalow prices are looking more attractive than the prices of leasehold Sentosa Cove bungalows.

He added that good class bungalow prices may rise by a further 5 to 10 per cent this year, given the more robust economic recovery and the fact that the buyer base has expanded.

 

[jq75]

Jul 23, 2010
Private home prices up
By Joyce Teo

In the landed home segment, prices rose by a slower rate of 6.2 per cent in the second quarter, compared with 8.3 per cent in the first. -- ST PHOTO: ALPHONSUS CHERN

PRIVATE home prices rose 5.3 per cent in the second quarter, compared with 5.6 per cent in the first quarter, said the Urban Redevelopment Authority.

Non-landed home prices climbed 5 per cent in the second quarter, compared with 4.9 per cent in the previous quarter.

In the landed home segment, prices rose by a slower rate of 6.2 per cent in the second quarter, compared with 8.3 per cent in the first.

Prices of detached, semi-detached and terrace houses rose by 6.8 per cent, 6 per cent and 5.6 per cent respectively.

The other property sectors also saw prices increases in the second quarter.

Office prices were up 4.6 per cent, shop prices up 3.9 per cent and prices of industrial properties up 5.7 per cent.

 

[jq75]

Jul 24, 2010
Private home sales slower, but prices up
Prices hit new high, could rise further with economic recovery
By Joyce Teo
SALES of private homes slowed towards the end of the second quarter but prices still kept heading north into record territory.

Prices rose 5.3 per cent in the second quarter - above the preliminary estimate of 5.2 per cent and not far from the first quarter rise of 5.6 per cent.

According to Urban Redevelopment Authority (URA) data released yesterday, prices are up 11.6 per cent since January and are expected to continue climbing although the pace may ease, said analysts.

Prices are now at record levels, eclipsing the 1996 peak, after shrugging off a dip in sales that began in May when Europe's debt crisis rocked global stock markets, observers said.

Rents were also rocketing - up 5.9 per cent in the second quarter to take the half-year rise to 10.9 per cent. Rents fell by 14.6 per cent last year.

'The continuing recovery in the economy facilitated the increased hiring of expatriate staff, which in turn, drove the rental market,' said Mr Li Hiaw Ho, CBRE Research's executive director.

Cushman and Wakefield managing director Donald Han added: 'In the second half of last year, prices went up more than 20 per cent but rents fell. So, there was some fear of a bubble forming.

'But prices are now moving in line with rent rises. As long as rents go up, the price rise should be supported.'

Non-landed home prices rose the most in suburban areas, up 5.7 per cent, from a 4.3 per cent increase in the first quarter.

City-fringe home prices were up 4.6 per cent while city-centre ones rose 5.4 per cent.

Prices of landed homes also continued to surge, climbing 6.2 per cent in the second quarter after jumping 8.3 per cent in the first quarter.

Luxury homes are the only sector yet to reach record heights, experts noted.

Yesterday's URA data also showed that 4,033 new homes were sold in the second quarter, down about 8 per cent from the first.

As at the second quarter, there were 61,831 private residential units in the pipeline. Of these, 32,630 units were still unsold. The URA said: 'This number is equivalent to about three years of supply based on the average take-up of about 11,300 units per year over the last three years.'

While some buyers hesitate, others have been snapping up property.

Copywriter Daryl Lee, 34, said: 'The last thing I want is to lock my cash up in a mortgage when all people are doing is chasing higher prices to pay higher asking prices.'

Another potential buyer Alex Wee, 37, said: 'On the one hand, things are pricey. But on the other hand, we're afraid that if we don't buy, we will miss the boat.'

Accounts executive Kris Lau, 33, who bought a small investment unit at a newly released project, 368 Thomson, after selling her HDB flat, said: 'It's a good time to cash out and upgrade.'

Jones Lang LaSalle's head of residential project sales, Mr David Neubronner, told The Straits Times: 'Prices... should take a breather. But given the current backdrop where our economic recovery is generating wealth, they are likely to continue to rise this year.

'Quite a lot of people are parking their money in property for the long term. In the worst-case scenario, I think prices may stay flat.'

Ngee Ann Polytechnic real estate lecturer Nicholas Mak believes private home prices will continue to rise this year and possibly into next year but at less than 5 per cent a quarter as sales slow.

The level of speculation now is within manageable levels, he felt.

URA data shows that sub-sales fell to 723 units in the second quarter, from 996 in the first.

Mr Li said the surprisingly strong economic growth in the second quarter will help keep market sentiment positive.

'However, as the Government is also anticipating a slowdown in the growth momentum for the rest of the year, the residential market is likely to move at a more moderate pace,' he said.

Sales of new homes may still reach 14,000 units this year - below last year's 14,688 units while home prices may rise by 12 to 15 per cent, he said.

Mr Mak is looking at a price rise of 16 to 21 per cent this year.

Meanwhile, office rents rose 1.1 per cent in the second quarter compared with 0.4 per cent in the first quarter.

Rents for shops and industrial properties rose by 0.5 per cent and 1.3 per cent respectively in the second quarter.

 

[jq75]

Jul 24, 2010
Causeway Point to get $72m facelift

The 30-month upgrading of Causeway Point - Frasers Centrepoint Trust's crown jewel - is aimed at increasing net property income by 22 per cent to $51.5million. -- PHOTO: FRASERS CENTREPOINT TRUST

CAUSEWAY Point is embarking on a $72million facelift to better serve the 300,000 residents in Woodlands.

The 12-year-old mall at the Woodlands regional centre is part of the portfolio that makes up Frasers Centrepoint Trust (FCT), which yesterday reported record third-quarter earnings.

For the three months to June 30, FCT achieved a 34.6per cent rise in income available for distribution to $16.3million. This translates to a 6.7per cent rise in distribution per unit to 2.07 cents.

During this period, gross revenue rose by 44.7per cent to $30.7million, while net property income climbed by 46.3per cent to $21.5million.

The upgrading of Causeway Point - FCT's crown jewel - will boost income and 'provide further organic growth in years to come', said Dr Chew Tuan Chiong, chief executive of the manager of FCT.

Opened in 1998, the seven-storey mall has a net lettable area (NLA) of about 418,500 square feet. To unlock value, space occupied by 'big box' tenants, for example, Metro department store, will be reduced to 50per cent of NLA from 65per cent currently.

'As specialty tenants pay higher rentals in view of their smaller footprint, this will help to raise average rental at the mall,' the FCT manager said.

To improve visibility of shops and create new retail space in prime locations, escalators at the mall will be moved to more convenient areas. A new food and beverage cluster on level five will be created.

Overall, the 30-month upgrading is aimed at increasing net property income by 22 per cent to $51.5million.

A review of its third-quarter results showed that FCT was successful in raising rents. Rental from renewal and replacement leases commencing during the quarter at Causeway Point and Anchorpoint saw an average increase of 8.5 per cent over expiring leases. The occupancy rate of all its properties remains at 99.4 per cent.

FCT units yesterday fell one cent to $1.39.

 

[jq75]

Jan 20, 2011
NEW PROPERTY MEASURES
Uncertainties buyers must navigate
THE measures aimed at cooling the property market have introduced an element of uncertainty for home buyers ('New measures to curb property speculation'; last Friday).

The measures will increase a seller's stamp duty, payable for up to four years from the date of purchase of the property. This will effectively reduce the amount available to the owner to settle the bank loan and have a surplus.

Although the Government may consider waiving the stamp duty in hardship cases, especially if they are health-related, a waiver is unlikely if a forced sale is precipitated by the owner's loss of job, inability to rent or increased interest costs.

For example, an owner who must sell his property in the first year of purchase must deduct the seller's stamp duty of 16 per cent from the proceeds. If he had obtained a loan of 80 per cent of the purchase price, he would have only enough to pay off the housing loan. His equity would be almost wiped out.

The new rules also imply another aspect to an owner's uncertainty. A loan-to-valuation ratio of 80 per cent does not mean the bank has a 20 per cent security margin during the first four years of the loan.

The seller's stamp duty will force banks to live with a razor-thin margin of 4 per cent for the first year, and the hope that property prices remain buoyant enough to improve the margin over four years.

But such an uncomfortable margin may affect a bank's willingness to lend as it will not enjoy the usual security buffer, as it did previously in the initial four-year loan period.

Currently, the valuation of properties is very close to the purchase price, but banks may well turn conservative if prices are expected to soften.

Apart from a lower valuation, banks could insist on a bigger margin to preserve their security margin.

Banks could also become stricter and more cautious in approving borrowers, to avoid potential default during the initial loan period. So marginal borrowers could be weeded out or be unable to obtain a loan at the desired amount.

The net result: Buyers may be asked to fork out more cash upfront to make up for the difference in valuation and purchase price and to enhance the bank's security margin.

So it is vital for buyers to do their sums scrupulously to ascertain their debt-servicing ability. They should seek a firm commitment from the bank on the loan quantum, to avoid nasty surprises arising from the valuation of the property offered as security and the margin of financing.

Kuo How Nam
President
Credit Counselling Singapore

 

[jq75]

Jan 21, 2011
3 leasehold residential sites up for tender
DEVELOPERS will have the chance to react to the new property cooling measures with three residential sites released today.

The plots - in Bishan, Sengkang and Choa Chu Kang - could accommodate more than 1,600 units in total.

They are 99-year leasehold sites and part of the government land sales (GLS) programme for the first half of this year.

Cushman & Wakefield's senior manager for Asia-Pacific research, Mr Ong Kah Seng, said that while developers' interest in GLS sites is likely to remain cautious, the three plots will still attract bidders interested in centrally located land.

The sites could also attract the attention of developers looking to stock up their land banks, said Mr Ong.

The condominium plot, in Bishan Street 14, was first made available under the reserve list in November 2007.

The tender process for the land was finally triggered after a developer committed to a bid of $189.8 million on Jan7.

The plot is near the Bishan MRT station and bus interchange. It has a maximum gross floor area (GFA) of 5.9ha and can yield about 650 units.

Mr Ong estimated that bids could hit $303 million or $480 per square foot (psf) per plot ratio (ppr).

Tenders close on Feb 24.

The other condominium site is at the corner of Sengkang Square and Compassvale Road and near the Sengkang town centre. The 1.77ha plot has a maximum permissible GFA of 5.31ha and can accommodate 530 units.

The tender will close on March 15, with Mr Ong estimating it could fetch a maximum of $217 million based on a psf ppr value of $380.

The 1.8ha plot in Choa Chu Kang Road is designated for an executive condominium, and can house an estimated 490 units. The tender closes on March 22 with a four-year deadline for completion.