Complete Property Market Updates of Singapore

August 7, 2008

18th floor of Peninsula Plaza sold for $15m

Filed under: Commercial,General,Land Sale — Propertymarketupdates @ 3:23 am

THE 18th floor of Peninsula Plaza near City Hall has been sold to a Taiwanese trading company for $14.9 million.

The price works out to $1,750 per sq ft (psf) of strata area. This is just below the last sale in the 999-year leasehold building – a single 1,485 sq ft office unit that went for $1,800 psf in January.

It is also well below what the seller Novelty Department Store, part of the Novelty Group, wanted – $17.5 million or $2,050 psf of strata area.

The six units have a total floor of about 8,500 sq ft and were put on the market in early March through an expression of interest exercise.

Rising rents here prompted the buyer, which has not been named, to buy the floor, said marketing agent Shaun Poh, a senior director at DTZ.

The firm will occupy two or three of the units when the tenancies expire in a few months.

The six units are tenanted at about $4 psf, but rents in the building have risen to as much as $8 psf so the firm can look forward to a better return when the time comes to renew the other leases.

The market for strata-office units has remained fairly active, considering how quiet the residential market has become.

While office rent increases have started to moderate, rents in general are still supported by demand from expanding firms and tight supply.

Source : Straits Times – 11 Jun 2008

July 10, 2008

Saved… but it’s a numbers game

Filed under: General,Land Sale,Property Deal — Propertymarketupdates @ 4:46 am

Once the tallest building in S-E Asia, the old Asia Insurance Building was saved when its new owners were granted an extra 14 per cent in floor area

IT WAS the first modern high-rise building in the Collyer Quay area and once the tallest building in Southeast Asia. Yet the groundbreaking Asia Insurance Building faced an uncertain future a few years ago.

Its original owner, the Asia Insurance Company, opposed the Urban Redevelopment Authority’s suggestion to conserve the property because that could hurt its chances of a sale. The 53-year-old, 20-storey building was eventually sold to service residence operator The Ascott Group in 2006 for $110 million.

That gave the building a second lease of life.

Ascott chose to ride on the building’s heritage and refurbish it to provide 146 serviced apartments for top business professionals. The URA sweetened the deal by allowing it to expand its floor space by 14 per cent. This let it make enough adjustments to add 6 per cent more floor space and squeeze in about 20 more units, a substantial bottom-line boost, given daily rates ranging from $780 for a studio to $2,300 for a two-bedroom apartment.

This made conserving the building a no-brainer for Ascott.

Designed by the late architect Ng Keng Siang, it had a brass mail chute similar to one found in the historic Waldorf Astoria hotel in New York. Large parts of its facade were clad in Italian Travertine marble. Its stone panels at street level were made of Nero Portaro, a black marble from Sicily that comes with gold and whitish veins.

It would have been hard to build something as iconic within the tight 969 sq m site at the junction of Finlayson Green and Raffles Quay, Ascott’s senior vice-president for product and technical services, Mr Jean-Claude Erne, tells The Straits Times. Demolishing it for a new one would also have added up to a year in the construction process.

Refurbishment turned out to be no mean feat though. First, the old building had two separate lift cores, which had to be carefully moved to a centralised area for more efficient access for residents.

The 1950s brass-handled window panes were too thin to block out noise from the busy junction. Instead of replacing the windows entirely, Ascott mounted thicker glass on the original frames and hired a specialist to seal them securely.

The original building also had no carpark, and Ascott needed to cater to its car-owning clientele. It got around the problem by carving out a new driveway at its ground-floor entrance and offering valet parking instead.

No luxury residence would be complete without a swimming pool. Ascott put one on its rooftop by reinforcing the structure to take additional weight.

Finally, Ascott wanted to the tie its interior decor to 1950s Singapore without being too kitschy.

It commissioned artwork from local artists like Han Sai Por, Goh Beng Kwan and Tan Kian Por in the lobby as well as rooms, keeping sepia-toned pictures of old Singapore to lift lobbies on the building’s upper levels.

All in, Ascott spent about $60 million refurbishing the building, which opens for business in October.

While Mr Erne expresses pride about the final product, he admits its success came about ultimately because the numbers worked out in Ascott’s favour.

He says: ‘It’s almost an organic process. Whatever the building or site has, you see how best to make it work, and (from the) extra gross floor area that comes about as part of the process, we try to maximise every inch that we can sell to customers.’

DIFFICULT TO TOP

It would have been hard to build something as iconic within the tight 969 sq m site. Demolishing it for a new one would also have added up to a year in the construction process.

Source : Straits Times – 7 Jun 2008

July 8, 2008

Little choice but to offer less choice sites

Filed under: Developer News,General,Land Sale — Propertymarketupdates @ 4:59 am

Developers fear oversupply; the govt must offer some sites but may not waste prime sites

THE six-monthly Government Land Sales (GLS) programme announcement is just around the corner, and property industry players are once again voicing the familiar calls for the government to reduce its quantum of land sales, and to halt sales through the confirmed list – except for strategic reasons – and to instead offer sites only through the reserve list.

The players wanted this even when the market was buoyant. Given the subdued conditions now, they may have a stronger case for moderating the GLS programme in the second half of 2008.

But numbers alone won’t do. The focus must also be on the quality of sites on offer. The 99-year leasehold private residential sites offered by the state in H1 2008 yielded a mixed bag of results. Some have attracted numerous bids at high prices while others did not. In one case, the bids were too low for the government to make an award.

In other words, certain sites are in demand, others are not.

What kind of sites does the market want now?

There is enough supply of high-end private residential sites, so the government need not bother about supplying land in the prime districts.

As for the mid and mass markets, the locations in demand are near MRT stations, and/or with water views, in close proximity to major shopping centres, good schools and other amenities.

A site’s location could decide whether it’s likely to be sold under current cautious market conditions. A tender that closed in March for a condo site facing West Coast Park and overlooking the sea drew a dozen bids. In contrast, there were only two bids for a landed housing plot at Jurong West and the Government decided against awarding it.

These days, developers will only be drawn to land parcels with strong selling points.

Clearly, more waterfront housing sites will be welcome – a point catered for in the draft Master Plan 2008 revealed last month.

And given the rising private transportation costs, homes near MRT stations will probably command an even bigger premium than they do today.

Unattractive sites may attract bids that are too low for the Ministry of National Development to make an award. This could affect the already-fragile sentiment in the residential market. So the MND should focus on choice plots in its H2 2008 list, the argument would go.

CBRE’s update of the MND’s H1 2008 programme shows that five private residential sites have been sold so far through the confirmed list. These are in various choice locations outside the city – near Khatib MRT Station fronting Lower Seletar Reservoir, at Lorong 2/3 in Toa Payoh near Braddell MRT Station, at West Coast Crescent overlooking the sea, in Choa Chu Kang, close to Lot 1 Shoppers’ Mall and the MRT station, and Phase 2 of Sembawang Greenvale near the sea.

Developers have yet to make a single successful application for reserve list private housing sites in the H1 2008 slate – with the sentiment being weak and the reserve plots generally not boasting choice locations.

While the government launches plots under the confirmed list for tender according to a prestated schedule regardless of market demand, it releases reserve list sites only if there is a successful application by a developer who undertakes to bid at a minimum price acceptable to the state.

So will the MND release the sort of sites the developers want? As a seasoned market player puts it: ‘They’re very practical people. When the market sentiment is weak, why give away their good sites at subdued prices?’

Instead, the MND may offer more run-of-the mill sites. Such plots may draw poor interest, and this could affect sentiment. However, developers may still like the end result: not much new land actually being sold by the state.

Put simply, the outcome developers desire – of having less state land being sold – may be effected if the government offers a slate of mostly not-so-desirable plots.

The current weak demand makes it clear there’s no housing shortage in Singapore.

A moderation of land supply sold by the government would lend some support to the market. Another benefit if the government ends up selling less land is that it will provide some relief to the overheated construction sector.

On the other hand, the government may not be able to accede to developers’ calls not to sell land in H2 2008 through the confirmed list – as official data have so far not shown any decline in private home prices, despite thin sales volumes.

The government also has to balance the need to provide stability to home prices with the aspirations of Singaporeans who have yet to buy private homes.

The MND will likely be prudent and moderate the GLS programme for H2 2008. A shorter list of sites in both confirmed and reserve lists, with stronger emphasis on less choice locations, could do the trick.

Source : Business Times – 6 Jun 2008

Four en bloc sites back on market with lower tags

Filed under: Collective Sale,General,Land Sale — Propertymarketupdates @ 4:40 am

Cavenagh Gardens, Novena Hill, Seletar Garden, Hong Thye offered in Q4 2007

FOUR collective sale sites are back on the market, with price expectations much lower than when they were offered in Q4 last year. Cavenagh Gardens, Novena Hill, Seletar Garden and Hong Thye are for sale after attracting weak bids the last time round.

The freehold Cavenagh Gardens near the Istana could fetch $450-$455 million or $1,671 to $1,689 per sq ft per plot ratio (psf ppr). This is 27 per cent lower than the expected price of $619 million or $2,308 psf ppr last October.

The buyer may be able to alienate adjoining parcels of state land for a further $10 million. If approved, the combined site would have a potential gross floor area (GFA) of 310,649 sq ft, bringing the price down to $1,481 to $1,497 psf ppr.

The site could yield 155 units with an expected breakeven cost of $1,915 psf and an expected selling price of $2,200 psf.

If the authorities allow redevelopment with a plot ratio equivalent to the development baseline of 3.24, the site’s potential GFA could increase to 479,287 sq ft.

Riding on the back of redevelopment plans for Paya Lebar Central under Draft Master Plan 2008, Hong Thye at Lorong 39 Geylang is also up for sale again. The freehold site could fetch $12-$13 million, which translates to $359 to $385 psf ppr including an estimated $1.9 million development charge (DC).

With a potential GFA of 38,702 sq ft, the site could house 40 units with an expected breakeven cost of $709 to $735 psf, and an expected selling price of $780 to $809 psf.

Last October, the site was up for sale at $15-$17 million or $438 to $489 psf ppr including DC.

The expected price for a freehold residential site at Novena Hill is $42-$45 million or $1,170 to $1,254 psf ppr. The site, with a potential GFA of 35,885 sq ft, could yield 40 boutique apartments. The site was up for sale last October at $56-$60 million.

The last site, Seletar Garden in Yio Chu Kang Road, is an estate in perpetuity. Located near the Seletar Aerospace Park, the mixed-development site could fetch $50-$55 million or $488 to $537 psf ppr. The expected price was $70-$75 million last September.

There is also the possibility of alienating three parcels of adjoining state land at an estimated additional cost of $7.9 million. The combined site would have a potential GFA of 132,219 sq ft, lowering the price to $438 to $476 psf ppr.

Propnex is marketing the four sites. According to its head of investment sales Charles Chua, although the property market is relatively quiet, ‘we do believe that there are pockets of pent-up demand’.

Source : Business Times – 5 Jun 2008

June 24, 2008

Govt rolls out two industrial sites

Filed under: Commercial,General,Land Sale — Propertymarketupdates @ 3:13 am

THE government continues to roll out new sites for sale against the backdrop of a quieter market.

The latest to be offered are two industrial sites – a confirmed list plot in Woodlands with Business 2 zoning being launched for tender, and a smallish plot at Kallang Pudding Road for Business 1 use that is now open for application under the reserve list.

Both sites are being offered on 60-year leasehold tenures and have 2.5 plot ratio (ratio of maximum potential gross floor area to land area).

Colliers International director (industrial) Tan Boon Leong predicts the 61,757 sq ft Kallang Pudding site, located in the established MacPherson/Al- junied industrial belt, will attract more attention with bids likely to be around $90-100 per square foot of potential gross floor area.

In contrast, the 180,835 sq ft plot at Woodlands Industrial Park E5 may fetch bids of only about $20 to $25 psf per plot ratio (psf ppr), Mr Tan reckons.

He notes that a 30-year leasehold site next door was sold last year for about $28 psf ppr but that was with a lower plot ratio of 1.0.

‘The latest plot has the highest plot ratio for an industrial site offered by the government in the Woodlands area since 2000. Industrialists generally don’t like operating in high-rise industrial facilities – because of the inconvenience and time consumed in moving goods and people up and down – especially in outlying areas like Woodlands and Tuas.

‘So the developer of this site may not be inclined to build up to the maximum plot ratio of 2.5, especially given rising construction costs. Any potential bidder will ask himself: ‘Should I bid high for the land and take a risk to build something industrialists may not like?’

With a Business 2 zoning, the site can be developed for a wide range of uses such as clean/light industry, general industry and warehouse.

‘The site is near established industries specialising in auto parts, hardware, furniture, scrap metal and waste management,’ Urban Redevelopment Authority said.

The tender for the Woodlands plot closes on July 22.

The Kallang Pudding Road plot, despite its triangular shape, is expected to be hotly contested.

‘It is suitable for development into an upscale flatted factory and sold on a strata-titled unit basis. The plot is very close to the main trunk road in the area – Aljunied Road,’ Mr Tan said.

The Business 1 zoned plot can be put to clean and light industrial, and warehouse use.

Source : Business Times – 28 May 2008

June 21, 2008

Key player in Jade saga set to sell luxury home

Filed under: General,Land Sale,Regulators — Propertymarketupdates @ 8:07 pm

$13.8m price tag in Anthony Soh’s ad suggests he wants a quick sale

THE businessman caught out when his takeover of Jade Technologies descended into farce and recrimination has put his multimillion-dollar home on the market.

Dr Anthony Soh placed an advertisement for the plush house in The Straits Times classifieds section over the weekend with an asking price of $13.88 million.


ST PHOTO: ALBERT SIM

The home near the Singapore Island Country Club in leafy Windsor Park Road sits on 21,000 sq ft of sloping land and boasts a pool, badminton court and parking for up to 10 cars. The area is surrounded by the greenery of MacRitchie Reservoir.

The pricing probably indicates that Dr Soh is looking to seal a deal soon as similar-sized bungalow plots are being advertised for as much as $15 million.

But Dr Soh told The Straits Times that he is not selling because he is in financial difficulties. ‘I am selling because I want to clear all my outstanding housing loans with OCBC, and to downgrade to get out of the public eye,’ he said.

OCBC Bank was also caught up in the buyout drama. It was Dr Soh’s adviser, but resigned and has since found itself criticised by investors for its role in the mess.

The bank also made a report to the Commercial Affairs Department (CAD) about the buyout events.

Dr Soh, who bought the house in December 2006, said he was raising funds to also cover his expected hefty legal fees in relation to the Jade fiasco.

The doctor-turned-venture capitalist became Jade’s largest shareholder in June last year. His arrival boosted the shares, with investors hopeful that he would transform the firm and its loss-making precision engineering business.

The counter got a further boost when he launched a buyout offer for the firm in February.

But the positive sentiment turned sour when he abruptly withdrew his $117 million bid in April.

He told the Singapore Exchange that he had pledged millions of his Jade shares to Australian broker Opes Prime as collateral to get a loan.

But Opes collapsed, partly a victim of a falling Australian share market that exposed many of its clients to severe margin calls. Its creditors, Merrill Lynch and ANZ Bank, seized the shares held by the brokerage, including those pledged by Dr Soh.

The seizure meant he had insufficient funds to complete the buyout.

Many investors have been burnt. They were confident that the deal would succeed as Dr Soh had said he owned nearly 46 per cent of Jade. All he needed was 50 per cent plus one share for the deal to go through.

But as more details emerged, some have questioned if Dr Soh’s loss was just a hard-luck story. Doubts were also raised as to whether he really owned as much as 46 per cent of Jade when he made his offer.

Dr Soh’s move to sell his bungalow may be related to OCBC’s actions.

As the financial adviser in the deal, OCBC stated that he had enough financial resources to complete the buyout.

After the deal fell through, investors questioned how OCBC could make such a statement when his shares had been pledged elsewhere.

OCBC’s report to the CAD claimed that ‘in the course of our advisory assignment, a series of events had occurred which caused us to question the integrity of the representations which we have received’.

So where will Dr Soh and his family live?

He said: ‘I have two other properties but have not decided which one to move in to. The objective is to pay OCBC all my loans as all my three properties are mortgaged to it.

‘I am going to fight for my integrity and what I have lost. I will never be a quitter.’

Source : Straits Times – 27 May 2008

Five bids for Choa Chu Kang tender

Filed under: Auction,Developer News,General,Land Sale — Propertymarketupdates @ 7:36 pm

A UNIT of property giant Far East Organization has put in the top bid for a condominium site at Choa Chu Kang Drive, about five minutes’ walk from Choa Chu Kang MRT Station.

Tian Hock Properties offered $116 million for the 204,514 sq ft plot, which works out to about $203 per sq ft per plot ratio (psf ppr).

The site drew a respectable five bids when its tender closed yesterday, possibly due to the perceived strength of the mass-market condo segment, experts said. Far East’s offer topped those of Sim Lian Land, Hong Leong Holdings, GuocoLand and Hiap Hoe.

But property consultants said the bid amounts remained low, reflecting a continuing caution and lacklustre demand in the overall property market.

Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, estimated the site’s breakeven cost at about $600 psf, based on the top bid. The units could be sold for $650 psf in about a year, he added.

Homes at nearby condos such as Yew Tee Residences, Northvale and The Warren have fetched $450 to $650 psf recently, Mr Li said.

Far East’s bid yesterday came in higher than the top bid submitted last month for a similar site at the junction of Choa Chu Kang Road and Woodlands Road.

That site, home to the Ten Mile Junction mall, drew a top bid of $61 million, or $162 psf ppr.

Source : Straits Times – 27 May 2008

Trustee should distribute sale proceeds according to terms

Filed under: General,Land Sale,Property Q & A — Propertymarketupdates @ 3:15 pm

Q I read your advice on how to claim a share of an estate, and I have some queries.

If there is a piece of land in the name of a trustee:

Is it possible for the trustee to sell it without the knowledge of the descendants of the person who entrusted it to him?

And if so, does the trustee get to keep all the proceeds?

How can we check if a transaction has been made and if the proceeds have been paid out?

A A trust is set up when a settlor gives an asset to a trustee on behalf of a beneficiary. The trust can be set up immediately, during the settlor’s lifetime or, if it is stated in the settlor’s will, it will take effect only upon the settlor’s death.

The trustee holds the legal title to the asset, while the beneficiary will inherit the asset.

It is possible for the trustee to sell the asset (in this case, the land) without the knowledge of the beneficiary.

However, under the law, whatever the trustee does, he has to ensure that everything is done for the benefit of the beneficiary and according to the terms of the trust.

The trustee will, therefore, have to distribute the proceeds of the sale according to the terms of the trust and should not keep all the proceeds – unless he is one of the beneficiaries under the trust, in which case he is entitled to keep his share according to the terms of the trust.

You can check with the Singapore Land Authority to find out whether the piece of land has been sold and, if so, to whom and for how much.

Alternatively, you may wish to engage a lawyer to do the necessary searches for you.

Note also that the beneficiary has the right to ask the trustee for an account of the income and expenses of the trust to date.

Ang Kim Lan
Goodwins Law Corporation

Source : Sunday Times – 25 May 2008

June 19, 2008

Seletar Aerospace Park Phase 1 fully taken up

Filed under: Developer News,General,Land Sale — Propertymarketupdates @ 4:19 am

PHASE 1 of Seletar Aerospace Park (SAP) has been fully taken up, says developer JTC Corporation.

The land around the former West Camp, comprising 12 per cent of the proposed 140 hectare industrial park surrounding Seletar Airport, has been allocated to four companies.

These are existing tenants ST Aerospace and Jet Aviation, and newcomers Rolls-Royce and Pratt & Whitney.

Earlier this year, Rolls-Royce broke ground on a $320 million Trent aero-engine facility at SAP, while engine-maker Pratt & Whitney is building a US$30 million, 105,000 sq ft facility there.

ST Aero is spending $17.3 million to build a two-bay hangar, while Jet Aviation is extending its existing facility.

JTC is now marketing Phase 2 and is ‘in talks’ with interested parties. ‘As the final touches are put to infrastructure works for Phase 1, JTC has started laying the infrastructure for Phase 2,’ a spokeswoman said.

‘This includes the development of a new multi-storey building to house aerospace-related businesses that are non-runway-dependent, such as aviation insurance, flight chartering, aircraft financing and leasing.’

By the third quarter of this year, JTC will launch a concept and fixed-price tender for the multi-storey commercial building, inviting private developers to build and manage it.

‘It is part of JTC’s efforts to promote private-sector participation in industrial development and create a dynamic landscape,’ the spokeswoman said.

‘It is also to optimise land use and locate as many aerospace companies as possible at SAP, which will cater to companies big and small.’

JTC is making sure the infrastructure at Seletar keeps pace with strong demand from the aerospace industry. It is upgrading and expanding roads in the area.

And at East Camp it is building a substation that will supply power to the entire aerospace park and airport. SAP is a strategic national project to anchor major aerospace activities in Singapore.

The park will host an integrated aerospace industry cluster incorporating maintenance, repair and overhaul, design and manufacturing of aircraft systems and components, business and general aviation, and an aviation campus to train pilots, other industry professionals and technical personnel.

When completed in 2018, SAP is expected to elevate Singapore’s status as an aviation hub, contribute $3.3 billion a year or one per cent of GDP and create employment for 10,000 people.

Source : Business Times – 23 May 2008

June 16, 2008

4 firms snap up land at Seletar aerospace hub

Filed under: Commercial,General,Land Sale — Propertymarketupdates @ 4:31 am

PLANS for an aerospace hub at the former Seletar airbase are shaping up well, with land that was available under the first phase of development fully taken up by four companies.

The front runners are Singapore Technologies Aerospace and Jet Aviation, both existing tenants with plans to expand their current facilities at Seletar.The other two companies are new tenants – engine makers Rolls-Royce and Pratt & Whitney.

The new and extended facilities should be up and running by the end of next year.

With Phase One out of the way, JTC Corporation, which is overseeing the development of the 140ha park surrounding the existing Seletar Airport, has started talking to potential Phase Two customers, its spokesman told The Straits Times.

Part of the plans for the next phase includes a multi-storey commercial building to house aviation companies, such as those in the business of chartering and leasing aircraft as well as aviation insurance.

To promote private-sector participation in industrial development, JTC Corp will invite bids from private developers to build and manage the new building, said the spokesman.

Apart from aerospace companies, there are also plans to set up aviation training schools at the new park.

Neglected for years, Seletar will also have new roads and better infrastructure to support the operations of the companies based there.When fully completed by 2018, Seletar Aerospace Park will create 10,000 jobs and boost output in the aerospace sector, which hit a record $6.9 billion last year. This figure was a 10.4 per cent increase from a year earlier.

Source : Straits Times – 23 May 2008

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