RESIDENTIAL MARKET
Dairy Farm Rd residential plot attracts top bid of $244.32m
A partnership between First Shine Properties and Meadows Bright Development has placed the top bid for a 99-year-leasehold private housing site on Dairy Farm Road.
Their bid of nearly $244.32 million works out to $616 per sq ft per plot ratio (psf ppr), ahead of earlier market expectations since the launch of the site in July.
The top bid was 9.9 per cent higher than the next highest bid of $560.49 psf ppr from UOL Group unit Secure Development.
The tender attracted nine bids in all, with the lowest from a partnership between Capital Development and ZACD Investments at just under $420 psf ppr.
First Shine Properties is a fully owned unit of mainboard-listed Hock Lian Seng Holdings, which is involved in civil engineering, property development and investment.
Meadows Bright has three shareholders, namely Sino Holdings (S'pore), King Wan Development and Far East Distillers. Sino Holdings is a unit of TA Corporation, which is involved in property and construction and was listed on the mainboard late last year.
Based on the top bid, property consultants' estimates of the breakeven cost for a new condo project range from $950 to $1,100 psf, and the likely average selling price at $1,200 to $1,300 psf.
The Urban Redevelopment Authority had postponed the close of the tender for the site by a week to give potential bidders more time to do their sums following this month's introduction of a development control guideline which stipulates that the maximum number of units in non-landed private housing projects outside the central area will be capped based on an average area of 70 sq m. Going by the formula, the Dairy Farm Road site can be developed into no more than 526 units.
The 188,861.2-sq-ft site on Dairy Farm Road has a maximum gross floor area (GFA) of 396,617.4 sq ft and a maximum building height of part five storeys and part 15 storeys, subject to 140 m above mean sea level.
Property consultants noted that yesterday's top bid was 3.5 per cent lower than the $638 psf ppr that the nearby Hillview Avenue site fetched in March.
The latest site is about 600 m from the future Hillview MRT Station on the Downtown Line.
Others who bid at yesterday's tender include Han Chee Juan's Teneriffe Development ($550 psf ppr), a Hong Leong Holdings-City Developments partnership ($507.35 psf ppr) and a Fragrance-Aspial tie-up ($467.52 psf ppr).
Sim Lian Land offered $461.40 psf ppr. Far East Orchard Limited joined forces with Frasers Centrepoint to bid $456.81 psf ppr.
Source: Business Times – 19 September 2012
RETAIL MARKET
Sale in the offing for Mandarin hotel and gallery?
A sale could be in the offing for the landmark Mandarin Orchard Singapore and the adjoining Mandarin Gallery which were valued at $1.18 billion and $520 million at the end of last year.
Owner Overseas Union Enterprise (OUE) is said to have been receiving interest from potential buyers particularly for the hotel for some time now and has maintained that it will sell the property if it receives a price too good to refuse.
Now, market talk is that OUE has given exclusivity to a potential buyer to perform due diligence. Some sources point to a US property fund manager - possibly Pramerica - teaming up with a Middle Eastern player, which some suggest could be Abu Dhabi Investment Authority.
In July, a fund linked to Pramerica Real Estate Investors (Asia) sold a half stake in nex mall here next to Serangoon MRT Station for $825 million. Pramerica Asia is the real estate investment management arm of Prudential Financial. The deal valued the mall at $1.65 billion, or about $2,679 per square foot (psf) based on the current net lettable area.
However, there have also been suggestions that Saudi Prince Alwaleed's Kingdom Holdings has looked at the Mandarin Orchard hotel. Earlier this year, Toronto-based hotel chain Fairmont Raffles Hotels International, in which Kingdom has a stake, completed the sale of the historic Raffles Hotel on Singapore's Beach Road to the Qatar National Hotels Company.
Mandarin Orchard's $1.18 billion valuation in OUE's books works out to around $1.12 million per key for the 1,051-room property. If a transaction materialises at this price or higher, it would be a record for the Singapore hotel market.
While the hotel has been achieving strong cash flow aided by Singapore's tourism boom, analysts note that both the hotel and Mandarin Gallery are on a site with a remaining lease term of about 44 years. The reversionary interest in the land is held by Ngee Ann Kongsi.
The hotel comprises two towers of 37 and 39 storeys. Last year, it achieved an average room rate of about $277.
Mandarin Gallery - completed in late 2009 and boasting a 152-metre long frontage on Orchard Road - has a gross floor area of 196,337 sq ft.
OUE is controlled by Indonesia's Riady family, which owns the Lippo Group. The Riadys are not averse to selling their investments. In 2008, Lippo sold its 29.99 per cent stake in homegrown retail group Robinson to Al-Futtaim Group.
OUE also owns DBS Building Towers One and Two along Shenton Way, which have around 900,000 sq ft let nettable area. It plans to convert the podium into a retail mall that will boast a 262-metre-long pedestrian frontage along Shenton Way.
The group also owns the Crowne Plaza Changi Airport Hotel, which it acquired in July last year for $299.5 million.
For the second quarter ended June 30, 2012, OUE posted a 13.3 per cent rise in net profit to $22.8 million, on the back of a stronger topline. Revenue for the April-June quarter came in at $96.7 million, up 33.8 per cent, mainly driven by increased contributions from the group's hospitality and property investment divisions.
Source: Business Times – 19 September 2012
INDUSTRIAL MARKET
Upper Paya Lebar industrial building going for $32mA freehold industrial building at 14 Little Road, has been put up for sale with an indicative price of $32 million, or $513 per square foot per plot ratio.
The existing development, Tropical Industrial Building, is located off Upper Paya Lebar Road. The eight-storey building has parking spaces for 20 cars in the basement.
It comprises eight strata-titled units with total strata floor area of some 50,289 sq ft and total gross floor area (GFA) of 62,375 sq ft.
Although the building sits on a land area of some 22,126 sq ft, with plot ratio of 2.5, no development charge is payable if a developer chooses to redevelop the site to its full potential of 62,375 sq ft (GFA).
The subject site is situated close to private and public housing estates and eateries are readily available at the shophouses at the junction of Upper Paya Lebar Road and Little Road.
More amenities will also be available at The Commerze@Irving when it is completed in 2015 and at the Reserve Site on JTC's land sale list at Tai Seng Link zoned "Business 2-White" when it is triggered and awarded.
Source: Business Times – 19 September 2012
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