RESIDENTIAL MARKET
CDL makes top bid for Buangkok condo plot
THE state tender for a 99-year-leasehold private condo plot about 100m from Buangkok MRT Station has fetched a top bid above expectations.
However, a participation rate of just five bids could point to the playing field in the broader Punggol, Sengkang and Buangkok vicinity getting crowded, suggest some market watchers.
Developers may also be saving their bullets for tenders for choicer sites - at Farrer Drive and Pheng Geck Avenue (near Potong Pasir MRT Station) - closing later this month.
At yesterday's Buangkok tender, City Developments Ltd (CDL) unit White Haven Properties bid $301 million or $508.22 per square foot per plot ratio (psf ppr), slightly exceeding the upper range of forecasts - $320-$500 psf ppr - for the site's top bid made by property consultants polled by BT when the plot was released in April. The plot can potentially yield about 600 homes.
CDL's bid yesterday was 3.7 per cent higher than the second highest offer of $490.12 psf ppr from a tie-up between Frasers Centrepoint unit Opal Star and Lum Chang's Binjai Holdings - which in turn was followed closely by UOL unit Flamegold's offer of nearly $481 psf ppr.
CDL's break-even cost for a new project on the Buangkok site is estimated at $900-950 psf. Pricing for the project would be similar to that of The Luxurie, near Sengkang MRT Station, which is selling at $1,040 psf on average.
Source: Business Times – 13 June 2012
INDUSTRIAL MARKET
Cuts to industrial land tenures may crimp funding: UBS
CUTS to industrial land tenures announced on Monday, while cushioning a rise in prices, may make it harder for industrialists to get funding, UBS analysts said.
The Ministry of Trade and Industry said that all sites to be sold in the industrial Government Land Sales programme from next month to December will be capped at 30 years.
Previously, industrial sites sold had tenures of as long as 60 years.
Banks could become more cautious about providing financing for such industrial properties, as shorter leases will be more vulnerable to market swings, and therefore riskier.
Financial institutions may also cut the maximum loan-to-value financing from 80 per cent now.
That is to say, while industrialists can now get a loan of up to 80 per cent on the value of their properties, they might have to fork out more cash upfront when buying industrial units with shorter leases.
Banks might also increase the mortgage rates for such properties, the UBS analysts said.
However, the move to shorten leases is unlikely to affect rentals, they said, as that would be a function of demand and supply.
Source: The Straits Times – 13 June 2012
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