Singapore’s first farm resort up for sale

Singapore’s first agri-tainment centre is up for sale. D’Kranji – a 5ha resort featuring 36 villas, a spa, agriculture kiosks and other amenities – has been valued at about $14 million.

Its owner, HLH Group, is selling the complex in Kranji so that it can focus on its core business of property development, group general manager Ryan Ong told The Straits Times on Thursday.

“As a listed company, we want to make money for our shareholders,” he said.

“We’re expanding our business in Cambodia and internationally, and property development, on top of agriculture and farming, is our forte.”

Mr Ong, a director of D’Kranji Farm Resort since January last year, said the facility is an attractive proposition for investors and operators.

The resort was opened in September 2008.

Mr Ong noted that its room occupancy rate was 40 per cent to 50 per cent before, but improved to 60 per cent since he took over operations. It hit 70 per cent in March and April this year.

Monthly revenue is about $140,000 to $150,000. Overall revenue has risen by at least threefold, compared with levels two years ago, he added.

Including room sales, the resort rakes in a “healthy profit” every month, he said.

Turnover comes partly from the space it leases to operators. These spaces are for some of the site’s attractions, which include ponds for prawning, food and beverage outlets, and a museum that showcases swiftlets, the species that produces the bird’s-nest delicacy.

In addition, Mr Ong has held events such as farm fairs and weekend markets at the resort, in collaboration with external vendors and neighbouring farms.

Agriculture kiosk operators with unusual concepts were brought in as well, including a cherry tomato farm with technology from Japan and high-tech farming projects for harvesting leafy vegetables. A honey farm with sting-less bees is set to open soon.

The sale includes the land, name, facilities and contracts with various tenants.

“The purpose of my coming in was to turn the business around and enhance the asset value, so as to maximise and achieve sustainable value for our shareholders,” said Mr Ong.

“(D’Kranji Farm Resort) now has a fixed rental income monthly, reputable villas, exciting and attractive activities, and trained employees.”

Even though the resort is generating decent cash for the company, it could fare much better with a professional party running the show, he noted.

Interest has been positive, with around 16 inquiries from companies, including hospitality firms, he said. The site was launched for tender sale on May 20.

About 12 parties have already viewed the site.

The tender closes at 3pm on June 19. The marketing agency is ERA Realty Network.

Sungei Pandan waterfront site may yield 600 homes

A residential site at West Coast Vale was put on the market yesterday with price expectations of up to about $370 million.

The 18,908 sq m plot, which is on the confirmed list of the Government Land Sales (GLS) programme, is located on the Sungei Pandan waterfront.

Its maximum gross floor area of 52,945 sq m could yield about 595 residential units.

Analysts said there would be keen interest in the 99-year leasehold site.

“While there has been a fall in the supply of land available for residential development, the same number of developers are still there.”

Market expert noted that developers would be interested because of the amenities in the area, which will include the upcoming high-speed rail terminal in Jurong East.

“The area also has the new Science Centre, and the Westgate and Jem shopping malls,” he said.

Recent developments there have fared quite well.

“Nine months ago, Waterfront @ Faber was launched. It has 210 units, with 135 already sold. That’s more than 60 per cent, which is quite good.”

Market analyst said: “Surrounding projects include The Infiniti and Hundred Trees, many of which have seen strong end-user demand, and have been fully sold.

“Many of the projects were launched in 2006 and 2007.”

Market analyst expects about 10 bidders for the West Coast Vale site, with offers exceeding $600 per sq ft (psf).

Market expert predicts five to eight bidders, offering $400 to $500 psf, made up mostly of “cash-rich listed developers who need to have land in the pipeline for future developments”.

Market analyst expects the bid price at $600 to $650 psf, noting that there could be higher building costs as the site is near water.

“The negative is possibly the industrial estates to the west of the area. However, that is rather minor as they are fast-changing.”

The tender closes at noon on Aug 4, said the Urban Redevelopment Authority yesterday.

Toa Payoh residential site draws 14 bids

A residential site in Toa Payoh drew 14 bids at the close of the auction on Thursday (Jun 18), indicating strong demand from developers for sites in mature housing estates.

The Housing and Development Board (HDB) said the 12,154.6 square metre, 99-year leasehold site at the junction of Lorong 6 and Lorong 4 Toa Payoh attracted a top bid of S$345.86 million from a group that includes Evia Real Estate, Greatearth and Malaysia’s Gamuda Bhd.

This works out to around S$8,130 per square metre of gross floor area, or about S$755 per square foot.

The site can yield around 535 private residential units. Alternatively, developers may, with prior written approval, build a mix of flats and strata landed houses.

Mr Desmond Sim, head of CBRE Research for Singapore and Southeast Asia, said the strong demand was “unsurprising” given the site’s location within a well-established mature estate with very few private residential projects. The site is also within walking distance of the Braddell MRT station.

JLL’s head of research in Southeast Asia Chua Yang Liang said the gap between the winning bid and the next highest is only 1.1 per cent. That is the closest gap since the second half of 2014, when a site at Choa Chu Kang Drive was awarded to Sim Lian Land at a margin of 2.2 per cent over the next bidder, said Dr Chua.

HDB, as the Government’s land sales agent, had launched the site for public tender on Apr 29.

A decision on the award of the tender will be made at a later date after the bids have been evaluated, HDB added.

Transactions of strata commercial properties hit new lows

BUYING sentiment for strata-titled commercial properties continues to cool amid tapering demand from both end-users and investors, sending transaction volumes to new lows since the global financial crisis.

Easing business activities have crimped demand from end-users, and individual investors are having their borrowing capacities capped by lending curbs.

Based on Knight Frank’s analysis, the number of caveats lodged for strata office units between January and May plunged 72.7 per cent from a year-ago period to 81 – the lowest level since the first half of 2009, when 63 caveats were lodged.

In the retail space, the number of caveats lodged for strata units fell 58.4 per cent year on year to 84 in the January-to-May period – the lowest level since the second half of 2008 when 80 caveats were lodged.

Knight Frank head of research and consultancy Alice Tan, citing slower business activity and the total debt servicing ratio (TDSR) among the dampeners, said: “Overall transaction volume is anticipated to remain low at around 400 to 600 units for the full year, as buying sentiment for strata-titled commercial properties continues to be hampered by a few main factors.”

Average prices of strata commercial space tends to be volatile across periods due to the lumpy nature of these transactions. Based on Knight Frank’s estimates, which mitigated such volatility by factoring in total transaction value and size of the units, average prices of strata offices are still holding up for now.

Buoyed by new development Crown @ Robinson in Tanjong Pagar, new freehold office units averaged S$3,467 per square foot in the first five months of this year, up 17.8 per cent from S$2,944 psf in H2 2014.

But the average price for resale freehold offices dipped 2 per cent to S$2,551 psf.

Among leasehold offices, both new sale and resale units staged a 17 per cent rebound in average prices – to S$2,646 psf for new units and S$2,341 psf for resale ones.

Ms Tan said: “Owing to limited available stock of smaller-sized units for sale, office spaces in the CBD will remain sought after, especially from investors looking at bulk purchases of strata-titled units.”

But she added that, with office rents easing amid economic uncertainties, further price increases of strata offices will be capped in the later half of this year.

Cushman & Wakefield research director Christine Li noted that, with most office buildings here in the hands of major landlords and Reits, the only way for individual investors to ride the upcycle is through strata office units, which remain limited in supply.

From the second half of this year to end-2017, there will be an additional 1.62 million square feet of strata office islandwide, of which only 500,000 sq ft is Grade-A office space in the CBD, she estimated.

With limited new launches in the pipeline, strata office volumes will remain subdued for this year.

As for strata retail units, consultants note that challenges confronting retailers are still weighing on rents and putting a cap on buying demand.

Average prices for new freehold retail units climbed 22 per cent to S$3,919 psf in the first five months of this year from S$3,525 psf in H2 2014; this was mainly buoyed by two transactions at Novena Regency that commanded a price tag of S$6,473 psf; the average price of resale units, however, slipped 6.8 per cent to S$3,483 psf, data from Knight Frank shows.

Retail units with leasehold status also presented a mixed picture: among new sales, the average price slipped on lower selling prices of retail units at Kingsford Waterbay; among resale units, the average price inched up due to two caveats lodged at The Arcade, which recorded S$7,876 psf and S$12,077 psf.

CBRE head of research for Southeast Asia Desmond Sim said: “Location and amenities play a very important role in rental and pricing and will be reflected in the success and transacted prices of these strata projects.”

He noted that the average prices of strata commercial units tend to be skewed by the supply of new units in the market and the type of units being transacted.

URA data compiled by Knight Frank also indicated that Singaporean buyers accounted for only 18.3 per cent of office caveats (including those for non-strata properties) lodged in the first five months of this year, down from 31.6 per cent in 2012.

Companies made up 70.7 per cent of office caveats, up from 54.7 per cent in 2012.

Singaporean buyers’ share of retail caveats also fell to 39.8 per cent in the first five months this year, from 56.4 per cent in 2012; meanwhile, companies’ share of retail caveats rose to 49.4 per cent, from 35.7 per cent in 2012.

Since the implementation of the additional buyer’s stamp duty on residential purchases in December 2011, there has been a notable shift in liquidity into the commercial market, Mr Sim said.

“But at the same time, we noticed that for stabilised assets – completed projects and bigger floor plates – they tend to be companies or long-term investors; smaller investors tend to gravitate towards uncompleted projects because the capital outlay is smaller and the required loan is disbursed only on project completion. That is also slowing down because TDSR is playing a role in credit control.”

Coffeeshop at Bt Batok sold for $31m

A COFFEE shop in Bukit Batok has reportedly changed hands for $31 million, setting a record for a Housing Board coffee shop.

The sale of Yong Xing Coffee Shop at Block 155, Bukit Batok Street 11 was finalised last month, according to Chinese evening daily Lianhe Wanbao.

Tenants told The Straits Times they felt the effects of the big money deal when their rental agreements with the new landlord went up by at least 10 per cent, but they hoped not to raise prices for their customers.

According to Wanbao, the seller had bought the place for $3.38 million nearly 20 years ago. He is believed to own another large coffee shop in Jurong West Street 91.

The buyer is a new company, EH 155, believed to be set up by the brother of Mr Ricky Kok Kuan Hwa, the founder of coffee shop operator Chang Cheng Group, which owns the Chang Cheng Mee Wah chain of coffee shops.

Business registration records show a director of EH 155 is Mr Kok Kuan Pow, a former director of Chang Cheng Mee Wah. He could not be reached for comment. The selling price of the 4,521 sq ft coffee shop works out to about $6,856 per sq ft (psf).

It beats the previous record set in 2013, for a coffee shop in Hougang Avenue 4, sold for $23.8 million. That worked out to about $5,935 psf.

Location was clearly a factor in the Bukit Batok transaction, as Yong Xing is surrounded by housing blocks and retail shops, with the nearest shopping mall, West Mall, a 15-minute walk away.

While this is true of other coffee shops in the vicinity, Yong Xing trumps the competition with its 19 stalls, said customers. It is the largest and offers the greatest variety of food options.

Bukit Batok resident Prescealla Ong, 40, frequents it as a number of stalls are quite famous, such as Fatty Weng, which sells fish soup.

“I haven’t noticed any price increase yet, but I think the stalls will raise prices sooner or later,” said the real estate agent.

Owner of Ar-Rina Nasi Padang, Mr Zainal Arrfin, 49, who just renewed his two-year lease, said he has no plans to raise prices for now.

“Most of my customers are regulars, so I don’t want to increase prices. I’ll see what happens after these two years,” he said.

Background story


$6,856 psf

Price of the coffee shop in Bukit Batok

$5,935 psf

Previous record set by a coffee shop in Hougang Avenue 4 in 2013

Sales of new private homes fall

THE lack of much launch activity hit sales of new private homes last month.

Developers sold 638 units, 45 per cent down on April’s level, but only 499 were launched, 64 per cent lower than the number in the previous month.

Compared with May last year, sales of new private homes were down 57 per cent while launches were 73 per cent lower.

But the take-up rate for launched units seems to have improved, from 82 per cent in May last year to 84 per cent in April and 128 per cent last month, meaning more were sold that month than were launched.

Lower prices are luring some buyers back into the market, noted Dr Chua Yang Liang, JLL head of research and consultancy. “(This is) especially given Singapore’s strategic position and role within South-east Asia and Asia-Pacific.”

There have been more inquiries by private funds this year looking at “strategic buys” – largely bulk purchases in the central region, he said.

One such deal was the sale of 16 unsold units in 111 Emerald Hill to a group of Singapore investors in the first quarter. These transacted for a total of about $75 million, or roughly $1,700 per sq ft (psf).

Other units sold earlier at the project were transacted at $2,214 psf and $3,030 psf.

Buyers picked up 69 private homes in the central region last month, up from 40 units in April and the highest monthly sales total for the region this year.

But the suburbs continued to lead sales last month, with 469 units sold or 74 per cent of total transactions.

Sales activity remained robust at Botanique at Bartley and North Park Residences in Yishun, which were both launched in April.

Botanique at Bartley sold 94 units at a median price of $1,292 psf, while 59 units were sold at North Park Residences at a median price of $1,397 psf.

The city fringe accounted for about 16 per cent of sales, or 100 units. The top-selling project in the region was The Panorama in Ang Mo Kio, where 44 units were sold at a median price of $1,232 psf.

Sales were down about 21 per cent for the first five months of the year compared with the same period in 2014, while launches were down 30 per cent over the same period.

This was partly due to fewer sales of development sites last year compared with 2012 and 2013, said Mr Nicholas Mak, SLP International executive director.

The Government Land Sales programme has steadily reduced the number of sites on the confirmed list, so the potential new homes to be launched this year and in 2016 should fall as well, he said.

“In the current property market climate, the probability of a developer triggering a reserve list site for tender is rather slim.”

Sales of new private homes will likely weaken further this month to about 500 as no major launches are expected, given the school holidays.

But transactions could pick up slightly in subsequent months with at least two new launches expected – City Developments’ 174-unit Gramercy Park in Grange Road, and the roughly 1,390-unit High Park Residences in Fernvale by CEL Development, Heeton Holdings and KSH Holdings.

If executive condominiums (ECs) are included, 845 units were sold last month.

Westwood Residences, an EC in Jurong West, was the sole new launch for the month and moved 118 units at a median price of $803 psf.

Pasir Panjang Wholesale Centre upgrading

The 32-year-old Pasir Panjang Wholesale Centre is undergoing improvement works, and sellers there are hopeful that a refurbished centre will draw the crowds back.

Some areas in the centre were hoarded up when The Straits Times visited earlier this month.

According to the signs put up, a wider carpark driveway will be completed by the end of this month, and a linkway between Blocks 13 and 14 will be built by end-September. The centre remains open during this period.

HDB called for an expression of interest last month for a consultant to carry out further improvement works by mid-2017, such as building more covered walkways and roof extensions, upgrading common toilets and repainting the facade of the centre.

The cost of the renovations is not available as the proposals are not finalised.

Mr Tay Khiam Back, chairman of the centre’s association, said stallholders will also benefit from new coldrooms currently under construction.

“The previous system was designed more than 30 years ago and is getting old,” he said.

Sellers and shoppers said the renovations works are a long time coming.

The centre, made up of 26 blocks, opened in 1983 to centralise the distribution of vegetables, fruits and dried goods.

Sellers said that the number of walk-in customers has dwindled over the years as people preferred to shop for groceries in the comfort of supermarkets instead of the non-air-conditioned centre.

Madam Sim Cho Hwang, the 62-year-old boss of Shen Trading and Wholesale, a dried goods store in the centre, said: “It is about time they did something about the carpark. It has been the same size since 1983, and there are cracks in the carpark grounds.”

With perspiration running down her face, she added: “I hope they make the roof higher, so there is better ventilation. It is very hot in here.”

Madam Noor Sinah Abdul Gani, who shops at the centre once a week, said she is looking forward to the covered walkways and wider carpark driveway.

The 58-year-old, who sells spices at a Jurong East market, said: “The centre is quite dirty and disorganised now, and the carpark is small and congested.”

Prime Waterfront Homes and Living in Singapore


Get every new post delivered to your Inbox.

Join 2,530 other followers