News Update - 31 Dec 2012

RESIDENTIAL MARKET
November prices of built condos up 1.9%

After lagging for most of this year, prices of completed private apartments and condos in Singapore's Central Region sprang to life in November, latest data from the National University of Singapore showed.

Its November flash estimate for the Singapore Residential Price Index (SRPI) series showed that the sub-index for the Central Region (excluding small units) rose 2.6 per cent from October.

This is double the 1.3 per cent gain over the same period posted by SRPI's sub-index for Non-Central Region (excluding small units).

NUS's Institute of Real Estate Studies (IRES), which minted the SRPI series, defines the Central Region as Districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime residential districts of 9, 10 and 11.

The Central Region outperformed even the sub-index for small units (up to 506 sq ft) islandwide, which appreciated 1.7 per cent month-on-month in November.

Overall SRPI for November was up 1.9 per cent from the previous month.

The SRPI series tracks prices of completed private apartments and condos but excludes executive condos, which are a public-private housing hybrid.

Asked about the sharp spike in Central Region prices in November, associate professor Lum Sau Kim of IRES told The Business Times that based on the transaction activity for the 370 projects in the NUS SRPI basket, there has been an increase in the proportion of turnover coming from the Central Region (excluding small units) of late.

"For example, Central Region units comprised about 25 per cent of the total volume in January 2012, but the proportion has now increased to around 35 per cent in October and November. We've noted a positive correlation between volume and price change as measured by the NUS SRPI. So we're probably seeing the same behaviour now (in Central Region)," she said.

Despite its sharp month-on- month gain in November, the Central Region has posted the weakest year-to-date increase of 0.4 per cent of the four SRPI sub-indices, reflecting a relatively weak showing in the January to October 2012 period versus December last year.

Prof Lum said that following the announcement of the additional buyer's stamp duty on Dec 7 last year, the SRPI for Central Region recorded its biggest monthly declines of 2.8 per cent for January and 3.1 per cent in February this year.

She cautioned that the 2.6 per cent monthly rise for the Central Region sub-index based on the November 2012 flash estimate was likely to be revised next month when more data is received. "It's too early to say if this rising trend will likely continue."

Year-to-date, the Non-Central Region has been the star performer, with the sub-index for the region appreciating 8 per cent. This outpaced an increase of 6.3 per cent for small units and the marginal 0.4 per cent rise for the Central Region.

Yesterday, IRES also released revised data for October, which showed month-on-month gains of 1.2 per cent for the Non-Central Region, 0.9 per cent for small units and 0.4 per cent for the Central Region.

Source: Business Times –29 December 2012

 

Strong start to CDL's Echelon launch

The launch of Echelon along Alexandra Road, the last one among residential developments for the year, appeared to have gone swimmingly yesterday.

Before the end of its first-day preview, 80 per cent of the 250 offered units had been snapped up.

The development will have 508 units in all.

With the early-bid pricing averaging at $1,700 per square foot per plot ratio (psf ppr), the prices of units in this 99-year leasehold private condominium start at $800,000 for a one-bedroom unit.

Two-bedders are going for $1.19 million.

Three-bedroom units, with prices starting at $1.34 million, come in four sizes: compact (861 sq ft), standard (1,001 to 1,130 sq ft), premium (1,292 to 1,313 sq ft) and suite (1,346 to 1,475 sq ft).

A four-bedroom suite starts at $2.13 million; the penthouse costs $7.15 million.

The joint project of City Development Limited (CDL), Hong Leong Group's Intrepid Investments and Hong Realty's Garden Estates was designed by SCDA architects. The 43-storey twin towers will have a glass facade, with the units offering views of the Alexandra precinct and Orchard Road.

Selected units will have a home-energy monitoring system, which will offer real-time management of energy consumption so home owners can make appropriate lifestyle adjustments and save on utilities.

Chia Ngiang Hong, CDL's group general manager, said of the take-up rate yesterday: "We are delighted with the overwhelming response. It is a great way for us to round up the year."

The project is slated for completion in 2016.

Source: Business Times –29 December 2012

 

Govt keeping close eye on ECs

The National Development Ministry (MND) has warned that it is closely watching developments in the executive condominium (EC) segment and will consider further measures if needed.

It was responding to The Straits Times' queries on whether sky-high prices for some EC units at recent launches are of concern.

The latest focal point in the EC debate is a huge 4,349 sq ft "presidential suite" at 514-unit CityLife @ Tampines, which will be the first EC unit to eclipse the $2 million mark if sold at its launch today. The penthouse unit, with a roof terrace of about 1,600 sq ft, is priced at about $2.05 million.

Lately, many ECs, a public-private housing hybrid, have come with million-dollar price tags. Some large, luxurious units come with fancy designs such as private pools, rivalling private homes.

"Minister for National Development Khaw Boon Wan has recently blogged about his concerns that the EC developers should observe the intent and spirit of the EC housing scheme when marketing their projects," a spokesman said.

Industry players have raised suggestions such as imposing a minimum number of units to be built on an EC site - or a maximum size for an EC apartment.

Source: The Straits Times –29 December 2012

 

Nearly 150 units snapped up at launch of Woodlands EC

Close to 150 units were sold at an executive condominium (EC) launch in Woodlands yesterday, property agents estimated.

A mixture of upgraders and first-time potential buyers showed up at the showroom for Forestville, a 653-unit development.

MCC Land said the average price was about $710 per sq ft, but declined to reveal sales figures.

The Straits Times understands from sources that the three-bedroom and four-bedroom dual-key apartments were the most sought after.

Dual-key units have two entrances, and separate living areas. They are designed to cater to grandparents, for example, who can live with the family but in a separate dwelling.

Owners can also rent out the separate unit, with its own kitchen and bathroom, for extra income.

Developed by Hao Yuan Investment but managed by MCC Land, Forestville comprises 14 blocks of 13-storey apartments, with 29 penthouse units. The project will have a mix of two-, three-, four- and five-bedroom units.

The largest penthouse, spanning 2,756 sq ft, was booked yesterday. About four of the 12 five-bedroom dual-key apartments were also snapped up.

Forestville is the first EC to be launched in Woodlands since La Casa in 2005.

It is expected to be completed in mid-2016.

Source: The Straits Times –29 December 2012

 

$2m Tampines EC penthouse sold in two hours

The much talked-about penthouse at CityLife@Tampines executive condominium was sold for $2.05 million within two hours when bookings began at 10am yesterday.

A woman who wanted to be known as Ms C. Koh and works in the banking industry said she had bought the 4,349 sq ft "presidential" penthouse by proxy for her 25-year-old younger brother and his wife, who are based in the United States.

Her brother will be back in Singapore next year, she said.

She was at the launch with her 56-year-old father, a businessman, who said that he would pay the bulk of the amount.

"My son can't afford it, he's only a salaried employee," he said in Mandarin. He said he owns several other private properties.

Ms Koh, who is in her late 20s, said that her family of seven, including her parents and two younger siblings, intends to live in the five-bedroom penthouse unit, which is on the 15th storey and has a 1,600 sq ft roof terrace. The penthouse is nearly as big as four HDB five-room flats.

The unit price translates to about $470 per sq ft but rises to $744 psf if only liveable space is counted.

The $2.05 million price tag has set a record for an EC and is the latest EC launch that comes with million-dollar price tags and fancy trappings such as outdoor terraces and jacuzzis.

The 514-unit CityLife, which is being built by Amara Holdings, Kay Lim Holdings and SingXpress Land, has 16 penthouses and six skysuite units with open terraces. The smallest penthouse is 1,335 sq ft.

ECs are a public-private housing hybrid and were introduced to meet the aspirations of the so-called "sandwiched class" who might not qualify for public housing but find private property beyond their reach.

Buyers of ECs, who enjoy government grants, must fulfil HDB criteria such as a $12,000 household income ceiling and must fulfil a minimum occupancy period before selling their units.

The launch of ECs with luxurious trappings has sparked a debate on whether the buyers should enjoy Housing Board grants.

Buyers at the launch said the Ci-tyLife EC was a value buy given its location in a mature estate with amenities such as the MRT station, the bus interchange and malls.

All the skysuites and penthouses were snapped up by noon and by the end of the day, 65 per cent of the development was sold.

CityLife is next to another EC project, The Tampines Trilliant, which was launched at an average $766 psf in February.

Source: The Straits Times –30 December 2012

 

Potential for profit drawing buyers to EC market

The buzz over the launch of a record $2.05 million "presidential penthouse suite" at a Tampines executive condominium (EC) yesterday has shone the spotlight on the market for such properties.

Interest in ECs has surged this year, with buyers drawn by potential price gains and fancy designs that rival those at private condos.

The record prices paid for new launches have also sparked controversy over whether buyers of expensive ECs should be entitled to Housing Board (HDB) grants.

Introduced in 1995, ECs were created to meet the aspirations of the so-called "sandwich class" who might not qualify for public housing but find private property beyond their reach.

Units at new EC launches are typically 20 to 25 per cent cheaper than comparable 99-year leasehold private condominiums, due to Housing Board restrictions on ECs such as a household monthly income cap of $12,000.

They can be sold to Singaporeans and permanent residents (PRs) after five years. After 10 years, they can also be sold to foreigners.

This is unlike HDB flats, which cannot be sold to foreigners who are not permanent residents for their entire tenure.

The price gap between ECs and private condos, however, is narrowing, analysts said, meaning that the investment gains from buying an EC could be smaller in future.

Analysts said investors see ECs as a value buy especially if the project has high-end features, since the price gap between ECs and private condominiums narrows as an EC approaches its 10-year mark, when it becomes fully privatised.

The most expensive EC is Bishan Loft, which was completed in 2003. Prices have climbed from between $379 and $491 per sq ft (psf) at launch, to $1,109 psf on average now.

Other projects that have fared well since launch include Whitewater in Pasir Ris. Prices were $313 to $423 psf at launch, but are now $825 psf on average.

However, prices have not risen as much at some other projects. At Yew Mei Green in Choa Chu Kang, the current average price of $717 psf is lower than the higher end of the price range at launch, which was $308 to $844 psf.

ECs have made a strong comeback since 2010 after a five-year absence. Newer projects such as Prive in Punggol, Belysa in Pasir Ris and Esparina Residences in Buangkok have sold out or have only one or two units unsold.

The location and convenience of some ECs means some buyers are likely to stay put, which cuts resale supply.

Source: The Straits Times –30 December 2012

 

EC developer was told not to sell units: URA

Property agents involved in the launch of executive condominium (EC) Forestville were told by the project's developer over the weekend to return cheques people had given them to book units in the development.

The move came after developer Hao Yuan Investment did not get approval from the authorities to sell units in the project, which was launched on Friday.

The Urban Redevelopment Authority (URA) told The Straits Times yesterday that Hao Yuan had not been authorised to sell any of the units in the development located in Woodlands.

"The developer of Forestville was given instructions from Controller of Housing (COH) on Dec28 not to proceed with sales for the EC project," said the URA spokesman. He did not elaborate on the reasons why Hao Yuan was not given approval.

Despite COH's orders, Hao Yuan went ahead with the launch but issued a "no-sale" instruction to agents. Agents were told not to collect any cheques, and prospective buyers were told that no Option-to-Purchase would be granted, said the firm.

Potential buyers could make only "expressions of interest" which Hao Yuan would honour.

But some said that agents operated normally during the launch and continued to collect cheques for bookings made.

On Friday, people had placed an interest in about 150 units in Forestville.

The latest incident comes in the wake of controversy over the high prices of EC units.

On Saturday, a 4,349 sq ft penthouse at CityLife@Tampines was sold for $2.05 million, a record high for an EC unit.

Forestville's 653 units are priced at an average of $710 per sq ft. Its biggest penthouse, with a floor area of 2,756 sq ft, has a price tag of $1.79 million.

It is unusual for developers to proceed with launches without approval to sell, said analysts.

There were about 6,500 EC units in the pipeline as at Sept30 with an additional 3,100 that could potentially go onstream in the first half of next year.

Source: The Straits Times –31 December 2012

 

COMMERCIAL MARKET

Rents for top-grade offices fall

Average rents of Grade A offices in the Central Business District (CBD) declined a modest 0.9 per cent in the fourth quarter, propped up by steady demand amid limited supply.

The creme de la creme office space, also known as Grade AAA, in the Marina Bay precinct once again showed the highest quarterly drop of 3.4 per cent to $10 per sq ft (psf) per month. This takes the fall for top-grade office space in Marina Bay to 14.9 per cent for the whole year.

On the other hand, other Grade A building rents softened by 3.3 per cent year-on-year on the back of healthy occupancy rates.

Overall, the monthly rents of all Grade A offices averaged $8.31 psf during the quarter, representing a dip of about 5 per cent from $8.72 psf a year ago.

Meanwhile, vacancy rates for CBD Grade A offices improved to 7.8 per cent from 8.1 per cent in the previous quarter.

Better occupancies were recorded in most areas, except for those around Beach Road and Middle Road as well as in the vicinity of City Hall. Beach Road offices saw vacancy rates edge up 0.5 per cent to 4.2 per cent by the end of this month, while City Hall suffered a sharp deterioration due to the more than doubling of vacant stock after Citibank vacated its premises in Millenia Tower.

Demand for CBD Grade A office space for the full year has been healthy, with a net take-up of almost 1.3 million sq ft.

This is equivalent to all the space at Marina Bay Financial Centre Tower 3 or half of the space at Suntec City office towers.

A total of about 2.5 million sq ft of office space, mainly from The Metropolis and Asia Square Tower 2, is expected to enter the market next year. So far, these new developments have a pre-commitment level of only about 20 per cent. As a result, the office leasing market is expected to face some challenges when these two developments are completed in the second half of 2013.

Demand for space may also come from tenants relocating from old buildings scheduled for redevelopment in the Robinson Road, Shenton Way and Tanjong Pagar areas in the coming years, like Keppel Towers, GE Tower, Robinson Towers and International Factors Building.

Source: The Straits Times –29 December 2012

 

INDUSTRIAL MARKET

Woodlands industrial plot on reserve list

A 3.9-HECTARE industrial plot at Woodlands Ave 12 has been made available for application on the reserve list of the Government Industrial Land Sales Programme.

Located next to OKH Holding's Woodlands Horizon, the site, which is zoned Business 1, can be developed for various uses, such as light industry, clean industry, utilities or telecommunications.

The 30-year leasehold site has a maximum gross floor area (GFA) of about 1,055,645.3 square feet (sq ft) and a maximum building height of 61 metres above mean sea level.

Under the government's reserve list system, the land parcel will be released for sale only if the criteria for triggering of the site are met. However, consultants say that it is unlikely the site will get triggered.

Located along Woodlands Ave 12 are three sites - Woodlands 11, which was sold to Boon Keng Developments in April 2010 (GFA 868,628 sq ft, abutting sites Woodlands Horizon and Primz Bizhub, which were sold to OKH Holdings in 2011 (combined GFA of about 1.06 million sq ft). All three sites have a 60-year leasehold tenure and are zoned Business 1.

Earlier this month, a site off Woodlands Ave 10 (GFA 288,069 sq ft) received a top bid of $31.7 million from Bohai Investments (Sengkang) and Punggol Drive Investments.

Source: Business Times –29 December 2012

 

New supply may dampen prices next year

Industrial property has enjoyed a red-hot year but whether this can continue next year remains a question mark.

Analysts point to an increase of new supply next year that could cool the sector that has logged one of its best years in recent times.

Take prices. Industrial property values easily overtook residential prices in terms of growth rate.

They shot up a startling 26.7 per cent from the start of the year to the end of the third quarter, based on the Urban Redevelopment Authority's (URA) industrial property price index.

Prices in the July to September quarter were 31.7 per cent higher compared with the corresponding period a year earlier.

Multi-user factory prices shot up 32.7 per cent in the third quarter compared to the same period last year and they are up by at least 27.9 per cent since the start of the year.

Prices for multi-user warehouses followed closely, climbing 27.9 per cent in the three months to Sept 30 over the preceding period last year. Prices in this segment rose 20.9 per cent in the first nine months of this year.

The contrast with the private residential market could not be starker with prices for new housing units up a minuscule 0.6 per cent year-on-year in the third quarter.

Office sector prices rose 1.9 per cent in the third quarter year-on-year while shop values were up 1.1 per cent.

The story for industrial rents was more subdued. They rose 6.4 per cent in the third quarter from the preceding year, and have climbed 6 per cent over the first three quarters of this year.

Sky-high industrial property prices mean rental yields have been severely compressed.

Despite industrial property's apparent popularity, the number of strata industrial transactions in the first 10 months of this year was lower than that in the corresponding period last year.

Notable industrial developments across the island include the 15ha Paya Lebar iPark, a pilot project by JTC that incorporates green spaces and specially designed buildings. There are also Alexandra Technopark and Mapletree Business City in the west, and projects such as UE Bizhub at Changi Business Park in the east.

Who is buying

Based on caveats lodged with the URA, around a quarter of the purchases made this year were by individual Singaporeans.

Companies accounted for 70.6 per cent of industrial property purchases as of October this year.

The URA caveats do not include transactions with incomplete information.

Some individuals use a goods and services tax-registered company to acquire strata industrial units so as to claim tax relief, he said.

Why prices are rising

The steep price rises for industrial property occurred as several rounds of cooling measures in the residential property market directed investors to look at alternatives.

But analysts say there were other reasons why investor demand for industrial properties has soared.

It is not just investors who are buying. Industrialists also want to purchase their own premises to gain more control and certainty over their real estate costs in the face of rising rentals when their leases expire.

The surge of interest from both investors and genuine industrialists has allowed sellers and developers to demand higher prices.

Outlook

The pace of price increases may slow next year if the Government acts further to rein in the runaway market, analysts noted.

The Government said in June this year that units must be at least 150 sq m in multi-user developments released under state tenders.

Another factor to watch out for is the upcoming supply, said Mr Lee, noting that more than 10 million sq ft of multi-user industrial space is expected to go on the market in the next few years and most of that will be completed next year.

The weak global economy could also weigh down manufacturing and exports, and make industrialists more cautious in buying up more factory space.

Source: The Straits Times –31 December 2012

News Update - 28 Dec 2012

RESIDENTIAL MARKETMore cash for elderly downsizing flat or selling lease

Elderly Singaporeans can now get as much as $100,000 in cash, plus up to $20,000 in cash bonuses, if they downgrade to a smaller home or sell the tail end of their Housing Board (HDB) flat lease back to the Government.

The hope is that these payouts will entice more low-income flat owners here to unlock the value of their homes in old age and be better funded for retirement.

The Ministry of National Development (MND) announced these changes to its Silver Housing Bonus and Lease Buyback Scheme yesterday.

Both schemes are targeted at the lower-income elderly, whom some commentators have termed "asset-rich, cash-poor".

Often, they own the flats they live in, but lack family and financial support, and need more cash to cope with daily expenses.

The Silver Housing Bonus is a new scheme announced in February. It aims to give a $20,000 bonus to elderly home owners who may no longer need a large flat, and choose to downsize.

However, before the scheme was even implemented, it was met with scepticism because rules dictated that to get the bonus, the net proceeds unlocked from the sale of a flat had to be used to top up the CPF Retirement Accounts of flat owners.

Because the top-up had to be sufficient to cover the CPF prevailing Minimum Sum, which currently amounts to $139,000 per person, or about $278,000 per couple, most flat owners would receive very little cash from the downsizing exercise. This, in turn, meant that the "Silver Bonus" of $20,000 was not a strong enough draw, said critics.

MND said yesterday that after receiving public feedback, it had decided that flat owners should need to top up only $60,000 into their Retirement Accounts per household, and be able to keep the next $100,000 of the net proceeds from the flat sale.

Any proceeds in excess of $160,000 will be used to top up CPF Retirement Accounts.

Yesterday, the Lease Buyback Scheme, implemented in 2009, was also made more accessible.

Under this scheme, elderly flat owners get to live in their homes for the next 30 years, but sell the remainder of their 99-year lease back to HDB. It has not been popular so far, with 466 households opting for it to date.

Previously, all net proceeds from the sale of the remaining lease - save for $5,000 in cash - went into the compulsory purchase of a CPF annuity.

Again, critics said this was not enough of a carrot for flat owners to take up the scheme.

MND said yesterday it has decided to allow flat owners to keep up to $100,000 of the proceeds in cash, so long as the specified top-up requirement in lessees' Retirement Accounts has been met.

The cash bonus for households has also been doubled - up to $20,000 - and eligibility rules relaxed so that former private property owners and those who have enjoyed more than one housing subsidy can also apply.

"We need to strike a balance between improving retirement adequacy by requiring a meaningful top-up to the CPF, and keeping schemes attractive by allowing adequate cash proceeds," National Development Minister Khaw Boon Wan said yesterday, giving the rationale for the changes.

Analysts said the schemes would likely attract more takers, now that less cash is locked away in forced savings.

Applications for the schemes will start in February.

Source: The Straits Times –28 December 2012

 

More help for seniors to monetise their flats

The Housing Board is stepping up efforts to help the elderly understand the various monetisation options available to them, including the two schemes which were tweaked yesterday following public feedback.

It will mail out brochures on the Silver Housing Bonus and the Lease Buyback Scheme, and hold financial counselling sessions at its branch offices for those who want to know more. A video will also be produced, to be broadcast in locations frequented by seniors, such as polyclinics.

Elderly flat owners who could benefit from the revised schemes said the changes would make them redo their sums, although they would not be too hasty in deciding as they wanted to understand the schemes better.

Both schemes, which target those earning $3,000 and below, will now require home owners to put less of their flat's sale proceeds into their Central Provident Fund (CPF) accounts, and will give out more cash upfront.

Those who opt for this scheme can get a $20,000 bonus, on top of a share of the net proceeds of the flat.

ERA Realty key executive officer Eugene Lim said that although the schemes are more attractive now, it is unlikely that the elderly will take them up in droves.

"The elderly are most times sentimental, and many would not want to leave the neighbourhood they are familiar with," he said.

Mr Lim noted that if more senior citizens take up the offer to downsize, it could mean more resale flats being placed on the market.

He estimates that the elderly own at least 237,000 flats which are four-room or larger. "This could free up the bigger flats for other home buyers, and also help the supply crunch," he said.

Source: The Straits Times –28 December 2012

 

Interest growing over $2m EC unit

The $2 million-plus price tag does not seem to have dampened interest among potential buyers for a spacious executive condominium (EC) that hits the market tomorrow.

At least 12 people have expressed interest in the "presidential suite" at CityLife @ Tampines.

The prized unit comes with 4,349 sq ft of space, including a roof terrace of about 1,600 sq ft, and can be yours for an EC price record of $2.05 million.

Other large apartments at the 514-unit project also garnered healthy interest yesterday, the second day of the showflat preview. Bookings open tomorrow, with average prices of $770 per sq ft (psf).

The overall prices of some of the larger units are also pushing price boundaries. The six skysuites range from $1.36 million to $1.7 million, while the 16 penthouses start at $1.07 million and shoot up to the presidentially priced $2.05 million.

Skysuites are just below the penthouse floor and have four or five bedrooms, with a living or dining room that opens out to a wrap-around open terrace.

Potential buyers of such units The Straits Times spoke to are mostly Housing Board upgraders or young couples receiving financial assistance from their parents. Many also indicated they are planning for multi-generational living.

Source: The Straits Times –28 December 2012

 

Woodlands EC draws keen interest

Another executive condominium (EC) project, Forestville in Woodlands, has attracted strong interest from buyers.

When online applications closed earlier this week, the development at the junction of Woodlands Avenue 5 and Woodlands Drive 16 had received 1,201 applications for its 653 units. That is a subscription rate of 1.8 times.

Average prices are expected to be $700 per sq ft with sales starting today. It will be the first EC to be launched in Woodlands since La Casa in 2005.

Developed by Hao Yuan Investment but managed by MCC Land, Forestville comprises 14 blocks of apartments. Each block is 13 storeys high. It will have a mix of two-, three-, four- and five-bedroom units. Dual-key units and penthouses will also be available. About 30 per cent of the project, to be completed in mid-2016, will consist of dual-key units.

ECs combine elements of private and public housing and often have premium facilities, but are subject to HDB rules specifying a monthly household income cap of $12,000. They are subject to a minimum occupation period of five years and can then be sold only to Singaporeans and permanent residents. They become private property after 10 years and can be sold to foreigners.

Source: The Straits Times –28 December 2012

 

INDUSTRIAL MARKET

JTC releases 3 industrial sites for public tender

JTC Corporation has put up for public tender the final batch of sites in the Confirmed List under the Industrial Government Land Sales programme for the second half of this year.

The latest three plots, among 16 released over that period, are in Ubi Avenue 4, Tuas South Avenue 10 and Tuas South Street 8.

The Ubi site is zoned for Business 1 development, usually intended for light and clean industrial use, while the Tuas sites are zoned for Business 2 development, which allows for heavier industrial use.

The plot in Ubi Avenue 4 is 0.35 ha in size with a lease of 30 years and a maximum permissible gross plot ratio of 2.5.

Analysts say this site is of note because of its favourable location and fair proximity to the Tai Seng and MacPherson MRT stations.

They expect offers ranging from $110 to $160 per square foot per plot ratio (psf ppr) from between five and 10 bidders.

The land parcel in Tuas South Avenue 10 is a 3.96-ha plot with a tenure of 30 years and a maximum permissible gross plot ratio of 1.4.

Top bids could come in at $50 to $95 psf ppr, market watchers noted, with three to eight offers.

The analysts mostly expect interest from developers.

 (The plot is roughly the size of five to six football fields.)

The final plot, a 0.3-ha parcel in Tuas South Street 8 referred to as Plot 10, will have a lease of 22 years five months and a maximum permissible gross plot ratio of 1.0.

Analysts expect bids of between $55 and $70 psf ppr with keen interest, going by the recent bidding activity for land in the area. Predictions ranged from five to 18 bidders.

The last two plots in Tuas South Street 8, awarded last week, drew 24 bids in all, JTC figures showed.

More than 70 offers were put in for eight other parcels of land in the vicinity in two tenders launched in June. Among them were the plots on either side of Plot 10, with winning bids of $34.58 psf ppr and $44.35 psf ppr.

The latest tender will close on Feb 7 at 11am.

Source: Business Times –28 December 2012

News Update - 27 Dec 2012

RESIDENTIAL MARKET

URA factors in shrinking condo unit sizes as it looks ahead

The Urban Redevelopment Authority (URA) seems to think that the average unit size of condos will shrink in its estimates of housing supply for the Government Land Sales (GLS) programme.

Based on BT's analysis of the first-half 2013 GLS programme, the average gross floor area (GFA) per home for typical private condo sites in Outside Central Region (OCR) and Rest of Central Region (RCR) has each been reduced by five square metres to 90 sq m and 80 sq m respectively compared with the H1 and H2 2012 slates.

For sites designated for executive condominiums (ECs), the average home size assumption has been kept the same at 100 sq m in OCR, which is where suburban mass-market homes are located.

Analysts note that the URA's move to clip its average home size assumption annually in the past few years reflects developers' strategy of minting smaller units to keep lump-sum prices affordable while jacking up per square foot prices.

BT selected sites by location and then divided each of their maximum GFA by the number of potential homes estimated by the URA to arrive at the average size assumed per home.

When contacted, the URA's spokesman said that it regularly reviews space standards - that is, average GFA per housing unit - used to estimate the number of homes that can be generated from GLS sites. It takes into account the sizes of units in housing projects (including ECs) which have obtained planning approvals in recent years.

"The most recent review, which covers residential projects in all locations, was done this year and the updated space standards were adopted for the H1 2013 GLS Programme. The space standards adopted for private residential sites in RCR and OCR in the H1 2013 GLS Programme are smaller than in the previous GLS Programmes," he added.

BT has observed that in the past few years, the URA has been updating space standards once a year, in the first-half GLS slate.

The URA highlighted that its estimates of the number of residential units for GLS sites is intended to serve as a guide only. "The actual number would depend on the decisions and development plans of the developers."

There's room for developers to squeeze in more units. Under a guideline announced in September, the maximum number of units allowed for sites Outside the Central Area is based on an average home size of 70 sq m.

Market watchers noted that for ECs, the URA has not shrunk its average unit size assumptions since H1 2011.

While the 90-sq-m and 80-sq-m average unit sizes in the latest revision for the H1 2013 list applies to typical private condo plots in OCR and RCR respectively, there are a few exceptions. "For the residential sites at Kim Tian Road, Faber Walk and Jalan Bunga Rampai, URA in consultation with Land Transport Authority will impose a more stringent space standard to ensure that the residential units from these sites do not generate excessive traffic flow that cannot be supported by the surrounding roads. This is reflected in the estimated housing units for these sites," said the URA's spokesman.

The URA has estimated that the Kim Tian plot can yield some 500 units (reflecting an average unit size of 88 sq metres). Had the typical RCR average unit size of 80 sq m been used, the estimated supply would have been more: 550 units. The more stringent space standard takes into account narrow roads in the area. It's a similar case for the Jalan Bunga Rampai plot, off Bartley Road and next to a landed housing estate with narrow roads.

Similarly, the Faber Walk site in OCR, with an estimate that reflects a larger than average home size of 100 sq m, will likely churn out fewer units as it is next to several landed housing estates which typically have small roads.

Analysts reckon the URA could end up stipulating its estimated number of units for these three sites as the maximum units, taking into account the tight road capacity in the locations.

Source: Business Times –27 December 2012

 

Analysts see sustained demand for HDB resale flats next year

Hot, robust and pulsating. Three words market watchers have used to describe the resale flat market this year, and it looks like they will be saying the same next year.

Resale prices for Housing & Development Board (HDB) homes could go up by between 3 and 8 per cent in 2013, and cash-over-valuations, or COVs, could rise 5 to 10 per cent, analysts told The Business Times.

They foresee sustained demand in the face of constrained supply and easy monetary conditions.

Prices for resale units gained 3.9 per cent in the first nine months of the year, the HDB's latest statistics showed. That is down from 10.7 per cent last year and 14.1 per cent in 2010, but prices are still at a record high.

Full-year growth could clock in at between 5 and 7 per cent, the consultants said.

Meanwhile, COVs have resumed their ascent after stabilising in the first half of the year. The median for this cash premium is now $34,000, based on the Singapore Real Estate Exchange's latest report, $2,000 shy of the record set last year.

A record number of more than 27,000 Built-to-Order (BTO) flats will be released this year, bringing the total to some 83,000 since 2009. The HDB also increased the allocation of BTO flats and executive condominiums (ECs) to second-time buyers in March.

Analysts are expecting between 22,000 and 27,000 BTO units for next year.

Sales volume for pre-owned homes fell from over 32,000 in 2010 to about 25,000 in 2011 and around 19,000 in the first nine months of 2012, he said.

"The fresh supply of resale flats is quite low," said Eugene Lim, key executive officer at ERA Realty.

One reason is the policies introduced in 2010 that required owners of private homes to sell them off if they buy HDB units, and extended the Minimum Occupancy Period (MOP) from three to five years.

This has made upgraders reluctant to sell as it meant they could not buy an HDB flat in future.

Property measures introduced this year were a mixed bag.

Restrictions on the number of shoebox units in private residential developments could chase demand back to resale flats.

Low borrowing rates this year continued to spur interest from second-time buyers and permanent residents (PRs) for whom monthly instalments can be lower than rents.

Analyst said that most of the same factors that contributed to the buzz this year will remain relevant next year.

The supply of resale flats will remain tight even as more BTO units roll out. A commitment to a new flat now means the unit is effectively eliminated from the market for eight years: assuming three years of construction followed by a five-year waiting period.

But there could be some relief as new flats and ECs released in 2010 near their completion.

Owners of both private and HDB homes could also offload their flats if they are unable to rent them out, or if yields are unattractive.

But ERA's Mr Lim added that rising prices for mass market private homes may keep upgraders away, who will instead look for a flat with a good location or just stay where they are.

Where housing policy is concerned, caution seems to be the watchword, with the consultants not advocating drastic measures.

Source: Business Times –27 December 2012

 

Eight private estates to get upgrading

More than 7,000 households are set to benefit from a $29 million facelift under the government's Estate Upgrading Programme (EUP). The properties, spread across eight private estates, will see the money spent on the upgrading of parks, playgrounds and widening of footpaths.

The Ministry of National Development (MND) announced yesterday that Goldhill, Mayflower Gardens and Yio Chu Kang Gardens, Cashew and Hazel Park Terrace, Greenleaf, Bartley Neighbourhood, Carmichael, Haig Road and Limau estates have been selected to benefit from the eighth EUP.

These older private estates are expected to benefit from the improved facilities when work will be completed in three to four years.

"There is high demand for upgrading and improvement works from private estates. When selecting a site for upgrading, we consider the age and physical condition of the estate, and scope for improvement," said Mohamad Maliki Osman, chairman of the EUP committee, and Senior Parliamentary Secretary for National Development.

Over the years, the EUP has seen the creation of parks, playgrounds and fitness corners to provide the community with a variety of recreational and fitness facilities.

Since its inception in 2000, the MND has spent $138 million in upgrading 46 private estates, comprising more than 34,000 households, in its seven previous batches. These include Serangoon Gardens, Hoover Park, Opera Estate and Hillview Estate.

Hillview Estate, which completed its facelift in July 2010, now boasts renovated playgrounds, covered drainage, a proper bus stop, a games court and four parks, including a community garden where residents cultivate plants.

The last EUP was administered in 2010 and saw 5,000 private households benefit from a $21 million facelift.

Source: Business Times –27 December 2012

 

Tampines EC 'presidential suite' to be priced at $2.05m

The monster 4,349 sq ft "presidential suite" at an executive condominium (EC) project in Tampines will be the first EC unit to eclipse the $2 million mark if sold at its launch this weekend.

The Straits Times understands that the penthouse unit at 514-unit CityLife @ Tampines, which comes with a roof terrace of about 1,600 sq ft, will be priced at about $2.05 million - or $470 per sq ft (psf).

The unit price rises to $744 psf if only liveable space is counted.

If sold, the overall price will set a new record for an EC - the latest in a string of sky-high prices that have raised eyebrows and led to a raging debate on whether buyers of such expensive ECs should be entitled to Housing Board grants.

These public-private housing hybrids are pushing size and price boundaries, with large, luxurious units that come with fancy designs, rivalling even that of private homes.

The current record is held by a 2,845 sq ft penthouse unit at Heron Bay in Upper Serangoon that fetched an eye-popping $1.77 million in October.

Potential home buyers thronged the showflat in Tampines Avenue 7 yesterday - the first day of the showflat preview - although bookings will start only on Saturday.

All three-bedroom units and smaller will be priced under $1 million with average prices at $770 psf.

This is slightly lower than the median price of $806 psf for the 26 units sold last month at The Tampines Trilliant, another EC project next to CityLife.

Average prices at The Tampines Trilliant, however, were $766 psf when the project was launched in February.

CityLife was more than three times subscribed with about 1,800 applications received by the deadline earlier this month.

About 30 per cent of sales hotline inquiries the project received were geared towards either the presidential suite or the six skysuites, its marketing agent said.

The project is being developed by a consortium comprising Amara Holdings, Kay Lim Holdings and SingXpress Land.

Source: The Straits Times –27 December 2012

 

AA set to quit River Valley site

A landmark on River Valley Road - the AA Centre - is set to change hands.

An offer of $61.8 million has been made for the site, which has been the headquarters of the Automobile Association of Singapore (AAS) since 1967.

But the offer from Starlite Land Development, a subsidiary of listed property giant Far East Organization, is well below the indicative price that the AAS set in June when it sought expressions of interest.

It was expecting $90 million to $100 million for the building, which sits on a 33,751 sq ft freehold plot in the prime district.

AAS members will decide on Jan 9, at an extraordinary general meeting, whether to accept the offer. The potential sale, however, does not include the residential units that occupy the top seven floors of the 14-storey building.

The owners of the 24 apartments and four penthouses have put them up for sale separately.

Their target price is about $2,000 per sq ft (psf).

The AAS sold these apartments to finance the redevelopment of its headquarters in 1984.

Its latest sale plan, however, was prompted by the need to expand its activities, especially its vehicle breakdown services, AAS chief executive Lee Wai Mun told The Straits Times.

Based on the 55,574 sq ft area of the first six floors of the AA Centre that the association owns - and which includes 32 serviced apartments - Starlite's offer works out to around $1,100 psf.

But based on the size of the plot, it works out to around $1,830 psf.

The potential deal is the AAS' biggest since it sold its vehicle inspection business in 2000 to Vicom for $23 million.

The Straits Times understands that the AAS, which turned 105 this year, had wanted for several years to sell the building.

In 2003, the AAS bought a 20,000 sq ft property at 2, Kung Chong Road for $9.3 million to build up its repair and towing operations.

In the AAS' advertisement seeking would-be buyers, it said the part of the building it owns could be converted into SoHo (small office/home office) units or serviced apartments. Starlite declined to comment on its plans for the site.

Source: The Straits Times –27 December 2012

 

Good-class bungalow prices up

The elite end of the residential property sector, the bungalow market, has slowed since last year after cooling measures and tighter financing rules came in.

But analysts said prices were relatively resilient despite weak market sentiment stemming from poor global economic conditions.

Fewer good-class bungalows (GCBs) changed hands this year but, on average, the selling prices were higher.

There are about 2,400 GCBs in Singapore in 39 gazetted areas, such as Nassim, Dalvey and Tanglin.

Some 49 sales had taken place as of the first week of this month, compared with 57 over the full year of 2011.

The total value transacted this year fell to $1.05 billion in this period, down from $1.16 billion for the whole of last year.

However, prices per sq ft (psf) have moved in the opposite direction.

The average price of GCB sales this year was $1,406 psf, about 10 per cent higher than the average of $1,276 psf recorded last year.

The loan-to-value ratio was also lowered from 70 per cent to 60 per cent for buyers with an outstanding mortgage.

This means that a buyer might have to fork out $12 million in cash for a $30million home.

Still, this year saw the most expensive sale in two years when a bungalow in Ridout Road changed hands in late March for $60.6 million, or $1,490 psf.

This is the highest overall price for a GCB since 3, Leedon Park was sold for a record $61.4 million in December 2010.

The Ridout Road seller was former Goldman Sachs banker Thomas Chan, who gained control of it last year after a protracted legal battle between the former owner Agus Anwar and another party to whom Mr Agus had earlier granted an option, said The Business Times (BT).

Mr Chan picked up the property for $37 million based on an option granted to him in

2009, and BT said Mr Chan is understood to have sold the property to Tecity Group, which is controlled by the family of the late OCBC Bank chairman Tan Chin Tuan.

The second most expensive sale this year was a GCB at Leedon Park for $33 million in October or $2,110 psf.

The third and fourth most expensive GCBs sold were in Binjai Park, and the fifth was in Chatsworth Road. All of them are freehold.

Source: The Straits Times –27 December 2012

 

Growing pool of seniors, singles 'could trigger housing rethink'

A new report suggests that the growing presence of senior citizens and singles here may prompt a rethink of housing options and policies by both developers and the Government.

Suggestions such as longer land tenures for retirement villages and a quota for allocating Build-to-Order (BTO) HDB flats to singles are prosed.

While senior citizens and singles are likely to remain minority groups here, their numbers are substantial enough to contribute significantly to potential housing demand.

The proportion of those aged 65 and older is expected to hit 15 per cent of the resident population by 2020 before ballooning to 20 per cent in 2030.

While some public sector housing options - such as rental flats and studio apartments on 30-year leases - cater to the elderly, less has been done by private developers.

Developers could consider serviced apartment style housing with long-term leases or purchase options for homes that come with services such as housekeeping, it said. They could also explore the feasibility of retirement villages.

Instead of shorter land tenures, however,  selling land for a retirement village on longer tenures of 99 years, or up to 120 or 150 years, could be considered.

The developer will have room to create a good quality product, with all of the necessary additional facilities and services that the elderly require. The developer can then sell the retirement village units to senior citizens on 15-year, 20-year and 30-year options, where the units will revert to the developer to resell to another set of retirees.

In this way, retirement village units' economic lifespan can be longer and the developer will be able to generate a reasonable return on shorter leases.

As for singles, the firm said a ratio or quota system could be used to allocate new BTO flats to them. Such an approach has worked fairly well for Singapore, the report noted.

Source: The Straits Times –27 December 2012

News Update - 20 Dec 2012

RESIDENTIAL MARKET

Expected to still sell: ECs benefit from bigger buyer pool

The many executive condominiums (ECs) heading to the market can be absorbed thanks to the expanded pool of buyers generated by changes to the income ceiling.

The Government increased the monthly household income ceiling from $10,000 to $12,000 in August last year so it is unlikely an oversupply will arise.

Figures from the 2010 Census show how this policy change has expanded the buying pool.

There were 72,065 households in Housing Board (HDB) four-room flats or larger earning between $8,000 and $10,000 in 2010.

This segment used to be the target market for buyers of ECs as the income ceiling for HDB flats was $8,000 then.

Department of Statistics figures, also from 2010, show that there were around 46,000 households in HDB four-room flats or larger that earned between $10,000 and $12,000.

The increased income ceiling means these 46,000 households are also eligible for ECs.

This enlarged pool of buyers can soak up the supply from the string of new launches since the EC segment was reintroduced in 2010, say experts.

There were about 6,500 EC units in the pipeline as at Sept 30 with an additional 3,100 potentially in the mix from sites that could be sold in the land sales programme for the first half of next year.

There had been concerns that the bumper supply of EC plots pushed out by the Government to cater to the so-called "sandwiched class" might lead to a glut.

But even Punggol and Sengkang, where almost half of the EC units in the pipeline are in, face little oversupply risk.

This is because the ratio of private homes to public ones in these two areas is still expected to be lower than the islandwide average in 2016 when the projects are completed.

There is no price difference between an EC and condo in the resale market if both have similar location and quality attributes.

That makes economic sense for buyers to get a new EC as the price gap will close when the initial restrictions are lifted five years after completion.

Competition for EC sites has become more aggressive recently.

If land costs keep rising, units in new EC projects will be more expensive, although mortgages will remain affordable.

 The mortgage repayment only becomes more taxing for units priced above $1.45 million if interest rates rise to 4 per cent eventually.

ECs combine elements of private and public housing and often have premium furnishings and facilities but are subject to HDB rules that specify a monthly household income cap of $12,000.

They are subject to a minimum occupation period of five years. They can then be sold only to Singaporeans and permanent residents. They become private property after 10 years and can be sold to foreigners.

Source: The Straits Times –20 December 2012

 

COMMERCIAL MARKET

Two commercial sites in Jurong, Cecil St released

The government has released the final two commercial sites for the second half 2012 Government Land Sales (GLS) programme.

One is a confirmed list site near Jurong East MRT Station that has been launched for sale by public tender, while the other is a plot at Cecil Street/Telok Ayer Street that is available for application for sale under the reserve list.

The Urban Redevelopment Authority (URA) said yesterday that the bulk of the space developed on both sites has to be set aside for office use. In addition, it is allowing strata sub-division of offices for the Jurong plot but not for the Cecil Street site.

On Venture Avenue in Jurong East, URA's 1.1-hectare confirmed list plot will be the site of the third major office development in the Jurong Gateway location to be released since 2010. This is part of URA's plan to create the biggest commercial hub outside the CBD.

The latest site can yield a 25-storey project with a maximum gross floor area of 694,939 square feet, of which at least 90 per cent must be for office use.

Property consultants expect the site to draw five to eight bids.

In June 2010, LendLease clinched a nearby white site for $650 psf ppr on which it is now developing Jem. In May 2011, CapitaMalls Asia (CMA), CapitaMalls Trust and CapitaLand teamed up to bag another white site nearby for $1,012 psf ppr, on which it is developing the Westgate project. Both projects are mixed office and retail developments.

For the Westgate and Jem sites, URA specified minimum office components of 40 per cent and 30 per cent, respectively.

URA said the latest site will contribute to the development of more affordable office spaces in Jurong to cater to users who do not need a central business district location.

However, market watchers expect moderate demand for the subject site owing to its less-than-optimum location and high quantum for commercial space.

A URA spokesman said the planning authority is allowing the flexibility to strata sub-divide for sale the future development on the Venture Avenue site to ensure there is a variety of office space available outside the CBD to meet different business needs.

"This will provide SMEs the opportunity to purchase their own office space to better manage operating costs," URA said.

It said that while there is no minimum office unit size control for the Venture Avenue site, the proposed office layout will be evaluated to ensure that it is in line with the typical quality office layout that meets the needs of genuine office end users at the development application stage.

URA also noted that the two earlier developments in the Jurong Gateway area, Jem and Westgate, will provide office space that will cater mainly to tenants with large space requirements.

However, URA is not allowing strata sub-division of individual units within the future project at the Cecil Street site.

Noting that the site is zoned for commercial and open space use, URA said a single owner can better integrate and manage the future commercial building with the public open space fronting the prominent Cecil Street/Telok Ayer Street junction.

The 0.8-ha plot, which can generate a 50-storey development with a maximum GFA of 830,510 sq ft, is situated just across the road from SBF Center (formerly known as The Index), which was sold in September 2011 for $882 psf ppr.

Within the CBD, an estimated 7.6 million sq ft of office space is expected to be completed from 2013 to 2017, she pointed out. M+S Pte Ltd, a consortium of Khazanah Nasional and Temasek Holdings, has committed to developing some 2.9 million sq ft of office space in Marina One (situated in Marina Way/Straits View) and Duo 2 (located in Ophir Road/Rochor Road), which are envisaged to be ready by H1 2017.

Source: Business Times –20 December 2012

 

INDUSTRIAL MARKET

Tighter building rules on sites for industrial use

Tighter development measures are being introduced for certain industrial sites, even as the government rolls out more land in an attempt to moderate industrial land prices.

Specifically, successful bidders of selected sites will be required to build a minimum number of large factory units to cater to the needs of SMEs who need larger industrial spaces, said the Ministry of Trade and Industry (MTI).

This announcement came on the back of MTI announcing that a total of 22 sites - comprising 13 sites on the confirmed list and nine sites on the reserve list - with total site area of 24.84 hectares has been set aside for industrialists.

This is comparable to the 19 sites - 16 sites on the confirmed list and three on the reserve list which totalled 23.72 ha - released in the second half of this year. In 2012, a total of 47.69 ha of industrial land was released; this is about 1.4 times than that released last year.

Of the 13 plots on the confirmed list, eight are less than 1.0 ha; six small sites (each less than 0.5 ha with a plot ratio of 1.0 and land tenure of 22 years) in Tuas South have also been released.

Tenders for this type of land plot in the last six months have attracted five-19 bids per site. Specifically, plots 9 and 11 in Tuas South Street 8 were sold between $35 and $44 psf ppr in September. The top bid rose to $68-78 psf ppr for Plots 8 and 18 on the same street by December.

There are nine sites on the reserve list. Notably, five small sites (on Tuas South Street 6 and Street 8) have debut on the reserve list.

Source: Business Times –20 December 2012