News Update - 18 May 2012

RESIDENTIAL MARKET

Tampines site draws top bid of $417.86 psf ppr

THE Urban Redevelopment Authority's tender for a 99-year leasehold condo plot at Tampines Avenue 10 yesterday fetched three bids, with the highest at $417.86 per square foot per plot ratio (psf ppr), or $252.78 million.

The top bid - from a tie-up between Far East Organization, Frasers Centrepoint and Japan's Sekisui House - was 4.4 per cent more than the $242.1 million or $400.21 psf ppr offer from EL Development. The only other bidder, City Developments's White Haven Properties, offered $172.9 million or $285.82 psf ppr.

Analysts polled by BT when the plot was launched in March said that the top bids for the plot would be $350-465 psf ppr. While the top bid at yesterday's tender was within expectations, the tender participation rate was muted, noted property consultants.

The factors affecting tender response could be that the site is less centrally located within Tampines and also the presence of a reserve-list site next door.

Those interested would have considered the possibility of the reserve site being triggered and sold which would pose competition to the subject parcel.

Frasers Centrepoint said yesterday: "The partners will develop a condominium comprising 670 units spread over eight 15-storey blocks."

Based on the top bid, a new project on the site would break even at about $800-820 psf and is likely to be priced at around $900 psf on average.

Source: Business Times – 18 May 2012

Buyers of Paya Lebar condo complain to watchdog

A GROUP of buyers has claimed that marketing agents misled them over the completion date of a Paya Lebar residential development they invested in.

They allege the agents assured them the 99-unit Suites @ Paya Lebar in Upper Paya Lebar Road would be completed by as early as October, making the apartments that much more appealing. However, the development is unlikely to be completed by this year given the current stage of construction for the development.

The sales and purchase agreement (SPA) puts the expected completion date at before the end of 2014, which is the legally binding deadline. While developers often complete projects earlier than required, they are not obliged to.

Fragrance Properties said it did not instruct any of its agents to market Suites @ Paya Lebar as having an expected completion date of the end of this year.

It said that while there have been some site delays, they are not major and the work is ongoing, adding that buyers will be able to collect their keys by Dec 31, 2014, as indicated in the option to purchase and SPA.

Experts say the case highlights the need for buyers to know what is contractually binding and what might be marketing speak.

'Estate agents and salespersons must ensure that all materials that advertise or promote a property accurately describe (it),' said Ms Purnima Shantilal, CEA's director of licensing and investigations. 'The information in the advertisements, which may include the expected TOP, must not be inaccurate, false or misleading.'

Non-compliance of advertising guidelines might lead to disciplinary actions such as warnings, fines, or a revocation or suspension of licence or registration.

Source: The Straits Times – 18 May 2012

SINGAPORE

American int'l school plans $300m campus

A $300 million school - the largest ever such investment in the region - will soon be built by Stamford American International School.

The first phase of the K-12 facility, that is, a school that provides both primary and secondary education, will be launched in August at its Upper Serangoon Campus. It is due for completion in August 2014.

Aside from the one-off $300 million injection into the economy, the school looks towards a recurrent injection of several million dollars each year into the local economy.

This may also open up employment opportunities for locals, as while "most of the teachers are foreigners, it doesn't mean that we will not look to hire locals if they are qualified", said Brian Rogove, Cognita's chief executive officer of Asia Pacific pointed out. Cognita is the company behind Stamford, and the group runs over 58 other schools.

This expansion hopes to cater to the growing demand for international schools.

Moreover, Mr Rogove pointed out the expatriate demand that grew by 2,500 students during the financial crisis in spite of expectations that demand would fall. There are approximately 40,000 students in international schools in Singapore, and "that is expected to grow significantly over the next 5 to 10 years," he added.

"We do like Singapore, and if the market conditions are right, and the demand is there, with offerings that are considerable then we will consider expanding in Singapore," he said.

Source: Business Times – 18 May 2012