RESIDENTIAL MARKET
20 projects could benefit from new extension rule
About 20 residential properties could enjoy an extended project completion period under new rules announced by the Singapore Land Authority (SLA).
Usually, developers with any foreign shareholder have up to seven years to sell all the units in a new project - or they could face hefty charges for an extension.
But the rules are being relaxed as the developers concerned had responded to a government call in 2008 to defer the redevelopment of collective sale sites.
They had rented out the properties to alleviate a rental housing supply crunch then, the Ministry of Law told The Straits Times.
No charge will apply to extensions granted under the new rule.
City Developments' project on the former Lucky Tower site in Grange Road is one project for which an extension has been sought. The site was sold in May 2006 for $383 million but construction started only last year.
The Straits Times understands GuocoLand's Leedon Residence also qualifies for the extension.
GuocoLand is developing Leedon Residence on the former Leedon Heights site which it clinched in a collective sale in 2007 for $835 million.
Industry players say that some of the projects that might benefit are high-end collective sale sites that were largely sold during the en bloc boom in 2006 and 2007.
This extension, if awarded, will be a relief for developers as the luxury market has seen tepid volumes and languishing prices.
The SLA said in a circular last month that the Land Dealings (Approval) Unit will grant a one-time extension of the project completion period upon application, commensurate with the period of tenancy, without charge. But applicants will have to submit documentary proof for consideration, the circular from SLA noted.
Under the Residential Property Act, housing developers whose shareholders and directors are not all Singaporean are required to get a qualifying certificate (QC) to buy residential property for development.
This is imposed to control foreign ownership of land here.
The rule gives developers up to five years to build the project and requires them to sell all the units within two years of obtaining the temporary occupation permit. They are not allowed to rent out unsold units.
To ensure compliance, a developer has to put up a banker's guarantee of 10 per cent of the purchase price of the property, which may be forfeited if the developer fails to fulfil the QC's conditions.
Source: The Straits Times –10 January 2013
Villa Des Flores up for collective sale again
Villa Des Flores, a freehold development on Whitley Road has been put up for collective sale again, after two previously unsuccessful attempts last year.
The indicative price range remains unchanged at $160 million to $165 million or $1,533 to $1,581 per sq ft (psf).
The 41-unit condominium sits on a 104,370 sq ft land parcel and comprises 13 townhouses and 28 apartments.
Previous bids for the site did not meet the indicative asking price.
According to Master Plan 2008, the site can be developed into two-storey mixed landed housing.
The developer has the option to build detached, semi-detached, terrace housing or a combination of such, either based on conventional housing types or as a cluster housing development.
The tender closes on Jan 30 at 3pm.
Source: Business Times –10 January 2013
INDUSTRIAL MARKET
Investors make a bundle from trading in strata factories
About 60 per cent of the 618 units of 60-year strata factories sold in the secondary market last year and for which previous sale records could be traced, had been last sold in 2010 or 2011.
5.8 per cent of the 618 units (36 units) changed hands faster: they were bought last year and resold or subsold before the year was out.
By going through the Realis' caveats database of the Urban Redevelopment Authority (URA), 1,136 caveats involving secondary-market transactions last year that were resales and subsales of 60-year strata factory units.
Nearly all those who bought and then sold the 618 units - 99.7 per cent - made money. Only two transactions (0.3 per cent) incurred a loss.
The two loss cases involved units that had been bought in 2011.
The profit or loss was calculated as the difference between the sale and purchase price, without taking into account transaction costs and other expenses.
Among the 616 profitable deals, the average profit was 47 per cent, or $262,636.
The biggest gains were made by investors who waited the longest before selling their units last year: The owners of the 73 units bought in 2007 gained, on average, 85 per cent or $406,160.
This group was followed by those who bought their units during the 2009 economic downturn and divested their properties last year, reaping an average gain of 64 per cent or $366,208.
The elevated prices paid for the 177 units bought in 2011 and offloaded last year at a gain trimmed profits for their sellers to 27 per cent or $166,795 on average.
Finally, investors who bought the 36 strata factory units last year and flipped them in the same year all managed to make a gain, but their profit margin thinned to 15 per cent or $86,797 on average.
The industry makes a distinction between subsales and resales in secondary-market deals. Subsales are sale transactions for projects which have yet to receive a Certificate of Statutory Completion (CSC) and where property titles for units sold have yet to be transferred to the buyers; resales refer to transactions involving projects for which CSCs and titles have been issued.
The most popularly traded project in the secondary market last year - at least among those for which caveats of previous transactions could be traced - was Harvest @ Woodlands in Woodlands Industrial Park E5, with 58 units.
Rounding off the top four developments were Midview City in Sin Ming Lane, Tradehub 21 in Boon Lay Way and Northstar@AMK, with 43 deals each.
The most profitable secondary-market deal among the 618 was for a unit in Woodlands Bizhub. This was bought in July 2009 for $1.01 million and transacted again last February for $2.47 million, yielding a gain of $1.46 million.
With fourth-quarter deals still to be fully counted, 4,392 caveats had been lodged for 2012; the final quarter could bring the final tally to around 4,700, still shy of the 5,183 in 2011.
Data from the URA indicates that around 27 million sq ft gross floor area of industrial space is expected to be completed this year.
The major projects expected to be completed this year include North Spring Bizhub (1.25 million sq ft) and Woodlands 11 (869,000 sq ft).
Source: Business Times –10 January 2013
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