RESIDENTIAL MARKET
SDP proposes a class of 'non-open market' HDB flats
The Singapore Democratic Party (SDP) yesterday unveiled a housing policy paper proposing a new class of flats that they say could be priced as low as $70,000.
These "non-open market" (NOM) flats would be priced by the Housing Board only to recover the cost of administration and construction.
That is, the land that the flats are built on should not have to be paid for by flat-buyers, said the paper, launched at an event at the Quality Hotel.
The SDP calculated that NOM flats could be priced at $70,000 for a two-room unit and up to $240,000 for a five-room. It said these prices would allow a family to pay off a housing loan over nine to 15 years, on payments of no more than 20 per cent of gross monthly income.
Currently, an average five-room flat costs about $380,000 and a 30-year loan can be paid off with payments at about a quarter of a median monthly household income of $5,600.
NOM flats could only be sold back to HDB, said the SDP, with no chance of capital gains.
Separately, open-market flats - that is, akin to normal flats now - would continue to be built. These would continue to be priced on the basis of recovering land costs as well, and would be allowed to be bought and sold for capital gains.
The party also said the new system would be phased in slowly so as not to crash the current market. Existing flat-owners would be given the option to convert their flats to NOM ones - and receive cash and CPF reimbursements from HDB on the amount they have paid above the new flat prices.
Aside from NOM flats, the SDP paper also called for the Housing Board to build a buffer stock of flats to meet unanticipated demand, and to give priority in the ballot to families with young children.
The policy paper was written by four SDP volunteers: PhD student Jeremy Chen, 30; doctors Leong Yan Hoi and Toh Beng Chye, both 48; and property consultant and accountant David Goh, who is in his early 50s. They argued that the surge in the housing market over the last half-decade has put it on an unsustainable trajectory in the light of Singapore's rapidly ageing population. Demographically, they said, Singapore is at a point similar to Japan in 1990 at the peak of its housing boom.
Economic Society vice-president Yeoh Lam Keong said the NOM flat proposal would help delink first-time buyers from the market system. "If we continue with the current system, HDB prices will keep increasing... and the Government will have to keep increasing subsidies."
But, he cautioned, the two types of flats could create a "class system" among flat-owners, with some unable to gain from property appreciation.
Source: The Straits Times – 5 November 2012
Developers unfazed by deadline
New rules limiting the number of shoebox units a developer can build on suburban sites kicked in yesterday but there was little sign of a scramble by developers to submit last-minute projects.
One reason is that the authorities had already been clamping down on projects with these popular tiny homes, usually 50 sq m or smaller, for some time.
Developers said that for the past year, the Urban Redevelopment Authority (URA) has been stricter in granting approvals as the number of new shoebox units sold soared.
Developments with too many shoebox units were encouraged to increase the size of their units before provisional permission for the project was given, they added.
Industry players also pointed out that the rules do not completely stop the building of such units. They are merely a cap on the maximum number of such units. This gives developers flexibility to decide on the unit mix for each development.
Many developers had already expected a first round of rules introduced last year to be extended.
Those rules set minimum plot sizes for apartment blocks and restricted the number of homes built on certain sites such as plots in Telok Kurau.
Mr Teo Hong Lim, executive chairman of Roxy-Pacific Holdings, said that "there has not been a real panic situation", where developers are rushing their submissions before the deadline.
"Actually, the main challenge now is securing land and replenishing our landbank in this competitive environment," he added.
EL Development managing director Lim Yew Soon said that with the new rules, URA is just formalising and making official the guidelines it was probably already applying.
In September, the Government unveiled a new policy to discourage the fast-rising number of tiny shoebox homes of typically less than 50 sq m being built outside the central city area that could lead to a strain on infrastructure.
It announced plans to place a cap on the number of homes built at each private non-landed development outside this area.
The maximum number of units that can be built is obtained by multiplying the site area by its allowable gross plot ratio, and then dividing that by 70 sq m. This works out to an average unit size of 70 sq m. The central area is unaffected.
But an even tighter cap, already in place in Telok Kurau, is being extended to Kovan, Joo Chiat and Jalan Eunos, where the average unit size is 100 sq m. These rules took effect yesterday.
A URA spokesman said the guidelines have been calibrated judiciously.
"We anticipate that the new development proposals will have a good mix of unit sizes after the guidelines come into operation," he added. "We will continue to monitor and review the guidelines periodically to ensure that the supply of housing units can cater to the diverse needs of all segments of the market."
But do not expect small units to be a thing of the past just yet.
Source: The Straits Times –5 November 2012
Balestier freehold site up for sale
A freehold mixed-use redevelopment site along Balestier Road is up for sale by tender, with a guide price of between $68 million and $75 million.
The 21,219 square foot site has a gross plot ratio of three, which gives it a potential gross floor area (GFA) of about 63,657 sq ft.
Based on the guide price and factoring in an estimated development charge, the cost of the plot works out to between $1,088 and $1,198 per sq ft per plot ratio (psf ppr) for redevelopment up to a GPR of three.
Under the 2008 Master Plan, it is designated for commercial and residential use. URA guidelines state that the commercial space can take up no more than 40 per cent of the maximum allowable floor area for the development.
Currently, a six-storey industrial building built in the 1970s sits on the site, which is next to the upcoming integrated hotel-park development comprising Zhongshan Park, Zhongshan Mall and two new hotels.
The tender for 520 Balestier Road will close on Dec 13 at 3pm.
In addition, there is the sale by tender of a freehold residential redevelopment site at 241 Pasir Panjang Road.
Its owners are expecting offers of between $12 million and $13 million, which works out to a land rate of about $928 to $1,005 psf on the 12,933 sq ft land with a GPR of 1.4.
The tender for the site will close on Dec 5 at 3 pm.
Source: Business Times – 6 November 2012
RETAIL MARKET
19 retail units at Crown Centre for sale
Nineteen freehold strata retail units on the ground floor of Crown Centre in Bukit Timah have been put up for sale. The price tag is about $32 million, or $4,131 per square foot of the units' total strata area of 7,746 sq ft.
BT understands that based on the current average rent being achieved for the units - which are fully tenanted - the price tag reflects a net yield of just 1.8 per cent. However, there is significant rental upside for investors looking to spruce up the asset and reposition its tenant mix.
Talk in the market is that ground-floor food and beverage outlets in Coronation Shopping Plaza nearby are fetching monthly rents of about $15-19 psf. Assuming similar rents can be attained on an average basis for the 19 units on offer at Crown Centre, the net yield based on $4,131 psf and taking into account the cost of sprucing up the asset may be closer to 4 per cent.
Of the 19 units, 18 are held by a family investment company while the remaining unit is owned by an individual.
Crown Centre is a three-storey mixed use development with triple frontage - along Queen's, Bukit Timah and King's roads.
Besides the 19 retail units on the first floor which are for sale, Crown Centre has 21 retail units on its second level and six apartments on the third level. The building has 33 basement carpark lots.
Citing some price comparisons, third-floor units in the nearby freehold Coronation Shopping Plaza have achieved $3,376 psf while units on the second level of Bukit Timah Plaza (further away and on a site with a balance lease term of 63 years) have exceeded $3,400 psf on strata area recently.
There may also be potential for an en bloc sale at Crown Centre.
The 19 units on offer are equivalent to 39.7 per cent of the share value of the building.
Crown Centre, which was completed in the mid-1980s, is on a site with land area of 18,081 sq ft. Under Master Plan 2008, the site is zoned for commercial and residential use, with a plot ratio (ratio of maximum permissible GFA to land area) of three.
Market watchers say that there is strong demand for space for cafes, banks and supermarkets in that stretch of Bukit Timah Road.
Crown Centre is located in the affluent District 10 Bukit Timah neighbourhood and is about 350 metres from both the Botanic Gardens and the upcoming Tan Kah Kee (Downtown Line) MRT stations. In addition to Coronation Shopping Plaza, other nearby landmarks include King's Arcade and Serene Centre as well as schools such as Hwa Chong Institution, Nanyang Girls' High, National Junior College and St Margaret's Secondary.
Its expression of interest exercise closes on Nov 28.
Source: Business Times – 6 November 2012
INDUSTRIAL MARKET
Fusionopolis Phase 5 project kicks off
Ascendas Land Pte Ltd and its joint venture partner, Mitsui & Co Ltd, yesterday broke ground for Fusionopolis Phase 5, a $370 million project touted as the first development to introduce a "work office home office" (Woho) concept.
The new development in the heart of Fusionopolis in one-north is a 75:25 venture between Ascendas and Mitsui. The venture, Ascendas Fusion 5, was established as a special-purpose company (SPC) under Japanese law.
Fusionopolis Phase 5 comprises a 17-storey building with 59,300 square metres of business space, a separate five-storey office block featuring 2,690 sq m of "Woho concept" units, and 5,500 sq m of retail space. Its gross floor area totals 67,490 sq m.
"The Woho units range between 32 and 96 sq m, and provide a live-in component for two to six employees comfortably," said Ascendas.
It said that it "has not commenced marketing for the spaces, but (envisions) that the Woho concept will appeal greatly to the infocommunication technology and media start-up companies and SMEs (small and medium enterprises), in line with (its) overall marketing strategy to craft out a media infocomm enclave."
BT earlier reported that Ascendas would work closely with Mitsui on a pipeline of potential tenants for the new development, especially Japanese companies looking for business space in Asia.
Woho tenants have the flexibility to customise and configure these spaces for their work and living needs, and thus can enjoy a work environment that nurtures creativity and innovation, Ascendas said.
Ascendas has also taken care to incorporate optimal energy-efficiency and environmentally friendly features into the design of Fusionopolis Phase 5, and hopes that it will meet the criteria of the Building and Construction Authority (BCA) Green Mark Platinum certification.
Such features include water-efficient sanitary ware and fittings, efficient light fittings, an efficient chiller plant, good thermal performance of its building envelope, an efficient air distribution system, motion sensors for staircases and toilets, and equipment and materials.
In addition, Fusionopolis Phase 5 has wide open green spaces and an observation deck, both of which "seamlessly (integrate) quality business space with natural landscape and lifestyle conveniences", said Ascendas.
Said Ascendas president and CEO Chong Siak Ching: "Fusionopolis Phase 5 is the sixth project that the Ascendas Group will undertake in one-north, totalling our stable of quality business space here to close to 210,000 sq m. We will have three buildings in Biopolis, one in Mediapolis and two in Fusionopolis."
She added that with these spaces, Ascendas would be able to cater to customers across various industries, such as life sciences, information technology, and media.
The project is expected to be completed in the fourth quarter of 2014.
Ascendas wants to leverage on Mitsui's strong network, owing to the latter's diversified investments in various industries, including in the development of major international infrastructure.
Mitsui's pan-Asia footprint in 33 cities across 10 countries will also help Ascendas reach out to regional companies seeking to expand their business activities here, it said.
Source: Business Times – 6 November 2012
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