RESIDENTIAL MARKET
November prices of built condos up 1.9%
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
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