RESIDENTIAL MARKET
Why new rules will tame developers' bids
Last Friday's property cooling measures will have serious implications on how much developers will be prepared to pay for residential land, as well as the continued survival of popular lifestyle concepts like private roof terraces with swimming pools or jacuzzis.
First, the various measures to curb investment demand for residential properties - such as higher additional buyer's stamp duty (ABSD) rates, lower loan-to-value (LTV) limits and bigger cash downpayment - will reduce the pool of buyers for developers to sell units in their housing projects to.
Also giving developers reason to trim their land bids is the move to exclude private enclosed spaces (PES) and private roof terraces (PRT) in condo developments from the computation of gross floor area (GFA). Industry players say these features make up roughly 4-8 per cent of strata saleable area in high-rise condo developments and an even higher proportion for low-rise projects.
Under the rule change announced last Friday, PRT and PES now have to be carved out from the 10 per cent bonus gross floor area (GFA) allocation that also includes balconies. Development charges are payable for this bonus GFA. Given a choice between developing balconies and PES/PRT within the 10 per cent bonus GFA allocation, financially it makes more sense to opt for balconies.
Roxy-Pacific Holdings executive chairman Teo Hong Lim explained: "Most buyers and developers will be more receptive to balcony space than private roof terraces and private enclosed spaces. From my experience, you can sell PES and PRT at maybe 35-40 per cent of price charged for internal or built-in space, whereas you can price balcony space at the same rate as internal space."
"So private pools and jacuzzis on penthouse rooftops could become a thing of the past," he reckoned.
Another factor that is expected to dampen developers' appetite for big residential sites is the increase in the ABSD rate payable on residential land purchases - from 10 per cent to 15 per cent.
To qualify for upfront remission of ABSD, developers have to undertake to finish developing the project on the site and selling all the residential units in it within five years of the date of contract or agreement to buy the site, among other conditions. If they fail to do so, ABSD with interest (at 5 per cent per annum, compounded) becomes payable immediately upon expiry of the five-year deadline.
Source: Business Times –17 January 2013
COMMERCIAL MARKET
21% stake in Orchard Towers up for sale
A 21 PER CENT strata interest in Orchard Towers comprising prime freehold retail and office space is up for grabs by tender, with an asking price of about $190 million.
Selling the stake is a subsidiary of Sinarmas Land Ltd (previously known as Asia Food & Properties) called Golden Bay Realty, which is looking to part with the stake as a whole, or split it into three components: the retail space, offices in the front tower, and offices in the rear tower.
If purchased in whole, the stake would represent the single largest interest in Orchard Towers, which is made up of two towers and also has residential spaces.
The stake offered here comprises 21 retail units and 37 office units with a strata area of 7,449 square feet and 70,536 sq ft, respectively, which are located at the front tower along Orchard Road.
A single strata title of 50,084 sq ft of office space is located at the rear tower, along Claymore Road.
For parties interested in just the retail space, Sinarmas is hoping to sell it at about $3,000 per square foot (psf). For the office space, it hopes for a price just under $2,000 psf.
Orchard Towers was completed in 1973. The property has an existing strata area of 595,066 sq ft over 25 floors and 361 carpark lots.
The tender exercise will close on Feb 27 at 3pm.
Source: Business Times –17 January 2013
Office space likely to draw investor interest: Report
Office space is likely to attract interest from investors in an uncertain year for property here, a new report said.
The overall outlook is cautious given the uncertain global economy and last week's tough new property cooling measures.
It said investors may look to office space given the "compelling low interest rate environment" and high policy risks in the residential sector.
The sound financial structure, business-friendly policies and Singapore's status as a financial hub are also likely to spur investor demand for office space here, it added.
On the industrial front, the market is expected to take a step back to assess the impact of the new seller's stamp duty imposed by the Government on industrial properties sold within three years of purchase.
The duty, ranging from 5per cent to 15 per cent, was introduced last week to rein in industrial property prices and discourage short-term speculation.
Sales in the retail space market are expected to be uncertain, as a tighter labour force and weaker discretionary spending by locals amid the bearish economic outlook would put a lid on retailers' expansion - softening demand for retail space.
Rents of prime retail space in the shopping district of Orchard Road are also expected to decline by 3 per cent to 5 per cent this year, as 340,000 sq ft is set to be added to the supply of retail space there.
The report added that investment activity would be led by the sale of government land sites, as 54 land parcels were earmarked for the first half of the year under the Government Land Sales programme.
Source: The Straits Times –17 January 2013
No comments:
Post a Comment