RESIDENTIAL MARKET
Home prices 'likely to remain stable'
HOME prices are likely to flatline over the next six months, with falling interest from foreign home buyers eliminating the need for more cooling measures, according to CapitaLand bosses yesterday.
President and chief executive Liew Mun Leong said the additional buyer's stamp duty of up to 10 per cent introduced in December last year has met its aim of dampening foreign demand.
Foreign buyers and companies accounted for only 7 per cent of the private home market in the first half of the year, down from 20 per cent for all of last year.
Mr Wong Heang Fine, chief executive of CapitaLand Residential, told the meeting that "strong fundamentals" will keep home prices stable for this half of the year.
Developers sold almost 12,000 new homes in the first half of the year, 48 per cent more than in the same period last year.
But CapitaLand sold just 259 homes here in the first half, with a total value of $467 million, in projects such as Sky Habitat, The Interlace and d'Leedon. Mr Wong said new units will continue to be released at its launched projects, which should lead to more sales in the second half.
Broadly, it will be looking to build up its residential land bank, particularly in Singapore, but also in China, in the value-homes segment. It will also look at developing or acquiring more malls.
Source: The Straits Times – 2 August 2012
56% stake in Southbank on sale for $63m
REAL estate investor Chan Heng Fai of SingXpress Land is selling 32 Soho units and a retail outlet at Southbank for $63 million.
The properties constitute 56 per cent of Southbank Soho Block - a mixed development project built by UOL Group, comprising a 40-storey residential tower, 20-storey Soho (small-office home office) block with 16 shops on the first floor.
Of the 32 Soho units, 29 are duplex loft units. The duplex loft consists of units from 883 sq ft to 1,593 sq ft. Three are single level units ranging from 463 sq ft to 603 sq ft. The shop is 129 sq ft.
The development currently enjoys views over the Kallang River and Kallang Basin. The Urban Redevelopment Authority plans to rejuvenate the Kallang area to make it a lifestyle hub with offices and waterfront residences.
The asking price works out to $1,812 per sq ft and should mean a sizeable gain for Mr Chan and his investment holding firm Hong Kong-listed Xpress Group, the parent company of Catalist-listed SingXpress Land, as the properties were accumulated between 2006 and 2010.
The sale may attract those investors who want to avoid paying the Additional Buyer's Stamp Duty or Seller's Stamp Duty.
As the Soho block is zoned commercial, these stamp duties will not apply.
Source: The Straits Times – 2 August 2012
Tender triggered for Victoria St hotel site
THE buoyant tourism sector has spurred interest in a hotel site near Lavender MRT station. A tender for the 0.84ha site was triggered after a developer committed a minimum bid of $148.7 million.
This works out to $446 per sq ft (psf) per plot ratio (ppr) for the reserve list site at the junction of Jalan Sultan and Victoria Street.
Sites on the reserve list are put up for tender only if developers make an acceptable initial offer.
Experts say the tourism boom has led to a number of reserve list sites being triggered for sale in the past year, as investors hunt for well-located hotel sites.
For instance, a hotel site in Rangoon Road was triggered in February. It sold for $151 million in April to RB Capital group.
Analyst expects the top bid to come in at between $650 psf ppr and $700 psf ppr, or from $217 million to $233 million.
This estimate is based on the assumption that a three-star hotel with about 500 rooms is built.
However, the hefty overall quantum might limit the number of bidders to about six.
Developers will have a few options at hand as to their plans for the site, as it has been zoned for either hotel or commercial and residential use. However, both have a minimum hotel component.
If hotel use is chosen, at least 60 per cent of total gross floor area (GFA) must be for hotel rooms and hotel-related uses. The remainder can be used for commercial and/or residential purposes.
But opting for commercial and residential use still requires a minimum of 30 per cent of the GFA to be kept for hotel use. A minimum of 60 per cent must be for homes, while commercial use can take up a maximum of 10 per cent.
Source: The Straits Times – 2 August 2012
COMMERCIAL MARKET
Orchard malls decking up to stay ahead
In a bid to outdo their competitors, several mall owners are resorting to splashing out more to enhance their retail assets along the prime Orchard Road shopping belt.
Even relatively new malls such as CapitaLand's three-year old Ion Orchard are working at improving its offerings. It plans to create a new beauty cluster, which will comprise South-east Asia's first standalone Yves Saint Laurent Beaute boutique store and several new-to-market brands such as VMV Hypoallergenics, among others.
Jasmine Chua, director of retail management at Ion Orchard, said: "The introduction of a dedicated beauty cluster will further enhance our unique retail mix of international flagship brands and new-to-market concept stores.
A CapitaLand spokesperson revealed that Ion Orchard's basement Food Hall has been earmarked for a revamp, which will be completed later this year.
Just next door, Wisma Atria, owned by Starhill Global Reit, is undergoing refurbishment works for around a quarter of its net lettable area.
Aimed at enhancing the mall's positioning along Orchard Road, the improvements - in the shape of an updated facade and the introduction of several new-to-market labels - are expected to be completed around September. Earlier this year, popular lifestyle brand Tommy Bahama and luxury lifestyle label Tory Burch opened at Wisma Atria.
Other established shopping malls such as The Heeren and Tangs Orchard are also expected to dish out new offerings by the end of 2013 and 2015 respectively, while the integration of Plaza Singapore and The Atrium @ Orchard is slated to be completed by the year's end, according to the Orchard Road Business Association (ORBA).
Despite the flurry of upgrading activity going on along Orchard Road, some consultants expect spending by mall owners to slow down as demand and rents start to weaken along the prime retail belt.
Reflecting this, prevailing rents along Orchard Road have stopped rising, with monthly prime ground floor rents in the locale dipping 1.9 per cent quarter-on-quarter to $37.58 per square foot in the second quarter after being unchanged in Q1.
Source: Business Times – 2 August 2012
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