En Bloc fever catches on (updated: Normanton Park sold at $830.1M on 5 Nov)

The collective sale fever in Singapore is gathering steam as the news of record enbloc deals and potential sites looms. Among the latest that are joining the fever are:

1. Pine Grove ($1.65B)
Owners of the 660-unit former HUDC estate are aiming to achieve the largest collective sale deal in Singapore. The price tag of $1.65B is much higher than the last record of $1.34B deal made in Farrer Court in 2007.

An extraordinary general meeting will be held on Oct 29 to get at least 80 per cent of owners to back the en-bloc sale. Based on the minimum reserve price, each owner is looking at receiving $2.08 million to $2.64 million per unit.

It will be the estate’s 3rd attempt for a collective sale after a no-bid attempt in 2011 following the owners raising the reserve price from $1.33 billion to $1.7 billion. Its first try was in 2008. The 99-year leasehold project has 66 years left on its tenure

2. Braddell View ($2B)
Braddell View, the largest of Singapore’s 18 HUDC estates and the last to be privatised in March this year, is planning to jump on the en bloc bandwagon.

The 918-unit estate is holding an extraordinary general meeting on Oct 10 to form a collective sales committee to kick-start the process.

The reserve price for the 1.124 million sq ft development is S$2 billion. If successful, this would easily eclipse Pine Grove’s S$1.65 billion en bloc attempt. The 99-year lease Braddell View development has 63years left on its lease.

3. Spring Grove ($1B)
Owners in the 325-unit estate are targeting at least $1 billion sales price. They had asked for $1.39 billion in 2014. A $1 billion price works out to about $1,807 per sq ft (psf), based on a maximum gross floor area of 553,377 sq ft. This is above the $1,285 psf to $1,438 psf that units in the estate have fetched so far this year.

There are quite a lot of sales en bloc going on now, but not that many are in the prime district, so that’s something going for this development.

4. Normanton Park ($0.8B) — updated: sold at $830.1M
It will be second-time lucky in its collective-sale bid at an $800 million reserve price for the hopeful owners at Normanton Park.

The Normanton Park owners are among those capitalising on the collective-sale fever. It failed in its previous bid in 2015. The tender will close today on Oct 5 at 3pm.

Based on the reserve price, each Normanton Park unit owner could get between $1.6 million and $1.8 million. This translates to a land rate of about $898 per sq ft per plot ratio (psf ppr), which includes a differential premium for intensification of the site of about $225.3 million, and a top-up premium of $220.6 million for a fresh 99-year lease.

Update: Normanton Park has been sold to Kingsford Huray Development for S$830.1 million — translating to a land price of approximately S$969 per square foot per plot ratio (psf ppr), is the highest land rate for a 99-year leasehold collective sale site this year.

Each home owner will stand to receive about S$1.68 million to S$1.86 million. Kingsford will have to fork out a premium of about S$231.1 million top up the lease to another 99 years, and top up about S$283.4 million to redevelop the site to a gross plot ratio of 2.1.

5. ICB Shopping Centre ($65m)
This is the first en bloc attempt by ICB Shopping Centre, a mixed-use development in Yio Chu Kang Roadwhich is more than 30 years old. It comprises six apartment units (of between 1,324 sq ft and 1,550 sq ft) and 13 retail units. The site about 1 km from Nex shopping mall and Serangoon MRT station, and is also near eateries and other small retail shopping areas.

The development’s residential and commercial owners are looking for a price of S$65 million to S$70 million. Based on its maximum potential gross floor area (GFA), the asking price range translates to a unit price of about S$1,390 per sq ft (psf) to S$1,500 psf.

The development sits on a freehold plot with a land area of 15,548 sq ft. It has a current GFA of 25,123 sq ft, but with a plot ratio of 3.0, it can be built to a maximum permissible GFA of 46,643 sq ft.
Concerns about current enbloc fever
Though the enbloc fever looks to getting even hotter, the concerns among the industry players are about the sustainability of the momentum over the long run. The market can only absorb one or two big sites. Some of the record-aiming enbloc sites have such huge sizes that the interested developers will need to factor in expected costs if they cannot finish selling the completed units.

Selling all the units within five years of buying the land to avoid additional buyer’s stamp duty (ABSD) will pose a challenge. This could affect the price developers are prepared to pay for the site.

Projects such as The Interlace and d’Leedon, which were built on large sites sold during the 2007 en-bloc boom, are still left with unsold units, together with the existing launches which have unsold inventory. New launches will face some fierce competition among the existing unsold units as well as among themselves.

To top it off, the property rental market has yet shown signs of shaking off its lull as well amidst the economic/employment uncertainty. Unless the authorities loose up the policy of workforce, and new jobs emerge from the current lacklustre market, it remains to be seen if new launches can provide good returns to prospective buyers.

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Raffles Place commercial building seeking new owner

Chevron House, a commercial building located near the entrances to the Raffles Place MRT station, is reportedly available for sale. The building owner, Deka Immobilien GmbH — a unit of DekaBank Group of Germany — bought the premises in 2010 for around S$420M. The previous owner was a Goldman SachGroup-managed property fund.

The market price was understood to be S$700M based on anonymous sources. Recent prominent completed commercial deals includes:
– S$2.6B bid led by Malaysian IOI on a Marina Bay white site
– Sale of Sime Darby Centre in Bt Timah area by Blackstone to Tuan Sing
– Purchase of Wilkie Edge from Capitaland by Lian Beng Group

Chevron House is a skyscraper building in CBD housing Chevron Corp. The 262,650 sqft building consists of a 4-storey retail podium with a basement as well as a 29-storey office block.

Top Japanese Shipping lines taking up Marina One space bigly

OCEAN Network Express is said to be taking up some 50,000 sq ft of office space at Marina One. The joint-venture company of Japan’s “Big Three” shipping lines, is a consolidation of the container shipping businesses of Kawasaki Kisen Kaisha (K Line), Mitsui OSK Lines (MOL) and Nippon Yusen Kabushiki Kaisha (NYK Line). It includes their worldwide terminal operation businesses, except those in Japan. Ocean Network Express is planning to use the new office spanning 1½ floors as its regional and global headquarters.

Macquarie Bank, which is now at Marina Bay Financial Centre Tower 2, is also said to be in advanced negotiations for some 50,000 sq ft of office space at Marina One.

The two new office towers at Marina One, an integrated development in downtown Marina Bay, are due to be completed soon. Developed by M+S, Marina One’s 1.88 million sq ft Grade-A office space is said to be about 70 per cent pre-leased ahead of its completion.

The first-half of 2017 saw a good volume of pre-committed space in the upcoming premium developments such as Marina One and UIC Building in the CBD.

At Guoco Tower of Tanjong Pagar Centre, which is already 90 % committed, Thai rubber group Sri Trang Agro-Industry Public Company is moving into close to 6,000 sq ft of office space on the 25th floor in early December, letting go of its existing 5,100 sq ft office at One Raffles Place where it has been operating for more than 10 years.

Grade-A CBD rents rose by 1.7 % in Q2 2017 to about S$8.51 psf pm, the first increase in nine quarters, led by a 5.8 % rise in premium office rents in Marina Bay.

The Urban Redevelopment Authority is slated to release the second-quarter real estate statistics on July 28.

Super Penthouse in Singapore for S$100M

Who will be buying the most expensive apartment or “bungalow in the sky” in Singapore? The asking price for a new three-storey Singapore penthouse, complete with a private pool on the 64th floor, has reached more than $100 million. This amount of money can well easily buy one a few good-class bungalows (GCBs) in District 9/10.

The Wallich Residence’s penthouse is in the tallest building in Singapore, the island of well-heeled stability that attracts the super-rich from its less-developed South-east Asian neighbours, as well as multi-millionaires from mainland China.

It will test the endurance of demand for luxury property in the city-state – the part of the market that has taken the biggest hit from measures aimed at cooling down prices in recent years.

Prices for luxury homes in Singapore have fallen 15-20 % from a 2013 peak. However the recent events has cause optimism among market insiders to foresee a turnaround – at least at the top end of the market – and is forecasting a 3-5 % increase in luxury prices this year, citing demand from both locals and foreigners who feel the market is bottoming out.

The volume of transactions in the first four months of the year in Singapore’s core central region was 35% higher than in the same period last year. The Core Central Region includes the popular areas among wealthy foreigners — the Orchard Road shopping area and Sentosa island.

Buying by foreigners has picked up since the start of the year at the developer’s high-end Leedon Residence project, near the 150-year-old Singapore Botanic Gardens. GuocoLand is part of Malaysian conglomerate Hong Leong Group, headed by billionaire Quek Leng Chan.

The recent tightening of property market controls in places like Hong Kong and Australia played a part in attracting foreign demand to Singapore’s luxury property this year. While prices in Hong Kong tripled and Sydney’s doubled over the past decade, Singapore prices rose just 29 %.

City Developments (CDL), one of the largest Singapore developers, also said the average sales price at its high-end Gramercy Park project has risen to more than $2,800 per sq ft in recent months, up 8 % from a year ago, and foreign buyers accounted for three-quarters of the project so far.

One may note though that the Singapore’s residential market has fallen for 15 straight quarters to log its longest losing streak since official records began in 1975. Analysts expect a bottoming of prices in the year 2017.

Singapore introduced property price cooling measures to curb speculation for the past 7 years. Some measures were relaxed slightly this year but the authorities announced that there would be no more rolling back of the remaining measures for now.

More information of the Penthouse can be found at the following link.

Click to access Wallich_PentHse.pdf

Golden Shoe Carpark’s billion-dollar redevelopment plan finally unveiled

A highly anticipated redevelopment project in Raffles Place, touted for years, was finally unveiled over the week by the press. A 51-storey mixed-use development – slated for completion in the first half of 2021 – will be built on the site. It will comprise office space, serviced residences, a multi-storey carpark, a food centre and shops.

The redevelopment will be led by CapitaLand in a joint venture (JV) for an estimated cost of $1.82 billion. The JV partners are: CapitaLand, CapitaLand Commercial Trust (CCT) and Mitsubishi Estate Co (MEC).

Of the $1.82 billion development cost, about 52.6 %, or $957.8 million, was attributed to charges for the intensification of land use and other land-related costs.

At 280m high, it will be among the tallest buildings in the heart of the Central Business District. The other highlights of the plan include:

– 635,000 sq ft of net lettable area
– 29 floors of Grade A office space
– 299 serviced residences over eight storeys managed by CapitaLand’s The Ascott – five floors of carpark space
– 12,000 sq ft of retail space at ground level
– a shared four-storey-high “Green Oasis”, where tenants can hold meetings or other activities amid lush greenery
– a new food centre owned by the government, which will house former stallholders of Market Street Food Centre in Golden Shoe Car Park on the second and third levels of the new building’s podium. In the meantime, starting from 1 Aug, the stallholders will be at an interim centre next to Telok Ayer MRT station
– flexible offices and co-working spaces.

Rents bottomed for CBD offices?

Based on recent estimates from JLL, the average rental values for its overall CBD Grade A and Marina Bay offices rose for the first time in Q2 2017 since 2 years ago. The area of concern, which includes Raffles Place, Marina Bay, Tanjong Pagar/Shenton Way and Marina Centre, rose 0.6% quarter-on-quarter in Q2 2017, at $8.49 psf. The major signings include FAcebook’s takeup of more than 250,000 sqft in Marina One, and Uber’s 55,000 sqft in Guoco Tower. The space at Asia Square vacated by Google last year has also been filled. Microsoft signed up 125,000 sqft in Frasers Tower which is due for completion in 2018.

Wilkie Edge sold to Lian Beng and Apricot Capital

Located at the junction of Wilkie Road and Selegie Road, Wilkie Edge is a leasehold 12-storey development comprising office and retail units as well as a serviced residence, Citadines Mount Sophia Singapore. It has 88 years left on the lease. The mixed-use commercial and residential building located near Little India, is being sold for S$280 million — works out to a price of S$1,812 per square foot (psf) based on the building’s net lettable area, and a price of S$1,299 psf based on gross floor area.

Lian Beng Group and Apricot Capital, the private investment firm of Super Group’s Teo family, have agreed to acquire Wilkie Edge from CapitaLand Commercial Trust (CCT).

The sale is expected to be completed in September. The sale consideration is 39.3 % above Wilkie Edge’s valuation of S$201 million or S$1,301 psf as at Dec 31, and 53.3 % higher than its original purchase price of S$182.7 million in 2008.

UOL to increased share in UIC via Haw Par

UOL Group, a Singaporean Real Estate Developer, will be buying over Haw Par Corporation’s stake in United Industrial Corporation (UIC), another property developer and landlord, via a share swap.

This came after days of speculation following the trading halts of three companies linked to  There was talk that the veteran banker Wee Cho Yaw, who is linked to UOL, might be restructuring his empire of companies, and a privatisation of UIC could be in the works. .

The transaction allows UOL to gain an additional significant stake in UIC which would not otherwise be easily available due to the lack of liquidity in UIC.

An increased stake in UIC gives UOL access to UIC’s commercial property portfolio, eg Singapore Land Tower and Marina Square in Singapore. Both UOL and UIC have property interests across the residential, office, retail and hospitality segments in Singapore, China and the United Kingdom. The transaction also allows both groups to collaborate on joint acquisitions of land banks and office and retail investments.

The domestic housing market is bottoming out, consolidating its holdings in UIC will help to boost UOL’s local residential exposure through UIC’s condominium projects.

Following the transaction, UOL will account for UIC as a subsidiary. UOL already has sufficient representation on the board of UIC. Thus there is a lesser incentive to cough out more cash, while allowing UOL can take UIC into its fold in a way that allows it to consolidate its numbers and its position, so that its perceived position as a developer will increase further.

The deal is subject to shareholder and regulatory approvals by Oct 2017.

Downtown Line 3 to open 21 Oct this year

The Downtown Line 3 (DTL3) will open on 21 October 2017, making it the longest underground and driverless MRT line in Singapore, surpassing the 35.7km Circle Line (CCL).   The DTL3 Extension from Expo to Sungei Bedok, an additional 2.2km, will open in 2024.

Downtown Line

Downtown Line Alignment

DTL3

The 21-kilometre long DTL3 comprises 16 stations and is the longest stretch of the Downtown Line to be opened. DTL3 includes three interchange stations at MacPherson (link to CCL) , Tampines (EWL), and Expo (EWL).

1.      Fort Canning Station

Fort Canning station is located at the intersection of River Valley Road and Clemenceau Avenue. The station has two entrances and will serve developments in the area including Fort Canning Park, Liang Court, U.E Square, Park Hotel Clarke Quay and Robertson Quay Hotel, which were previously not connected to the rail network.

2.      Bencoolen Station

Bencoolen station is located at Bencoolen Street, near the junction with Bras Basah Road. It has three entrances and comprises six levels – concourse, upper mezzanine, lower mezzanine, platform and two service levels. To provide greater connectivity to the existing rail network, the station has an underground unpaid linkway connected to CCL Bras Basah station through the existing SMU basement. The NAFA Campus extension is integrated above one of the station’s entrances.

The station will serve students, office workers, businesses and tourists, with its close proximity to the Nanyang Academy of Fine Arts (NAFA), Singapore Management University (SMU), Manulife Centre, Sunshine Plaza, National Museum and hotels along Bencoolen Street. There are also several places of worship around the station such as the Kwan Im Temple, Sri Krishnan Temple, Maghain Aboth Synagogue and Masjid Bencoolen.

3.      Jalan Besar Station

Jalan Besar station is located at the junction of Jalan Besar and Weld Road. It has two entrances and comprises two levels – concourse and platform. The station will serve Sim Lim Tower, Stamford Primary School, residences and shophouses in the vicinity. The station is within five minutes’ walk of Rochor station (on the DTL) and Bugis station (on the EWL, DTL) allowing commuters to easily transfer between rail lines.

4.      Bendemeer Station

Bendemeer station is located at Kallang Bahru, near the junction with Kallang Avenue. The station has two entrances, one on each side of the road. The station will serve the commercial buildings, residences and shophouses in the vicinity. The station is within ten minutes’ walk of Lavender station (on the EWL) and Boon Keng station (on the NEL) allowing commuters to easily transfer between rail lines.

5.      Geylang Bahru Station

Geylang Bahru station is located along Kallang Bahru, at the junction with Geylang Bahru. The station has two entrances and comprises two levels – concourse and platform. The station will serve Kallang Basin ActiveSG Swimming Complex, Kallang Basin Industrial Estate and HDB estates in Geylang Bahru, providing greater connectivity for workers and residents.

6.      Mattar Station

Mattar station is located near the junction of Merpati Road and Mattar Road. The station has two entrances. One of the entrances leads to Merpati Road and will primarily serve Canossa Convent School, Macpherson Primary School, Masjid Sallim Mattar Mosque and those working in Kallang Pudding area. The other entrance leads to Mattar Road near the Circuit Road hawker centre (Blk 79 and 79A Circuit Road) and the Macpherson Community Club.

7.      MacPherson Station

MacPherson station is located along Circuit Link, near the junction with Circuit Road. It has two entrances and comprises three levels – concourse, mezzanine and platform. It will serve Geylang Neighbourhood Police Centre, industrial buildings and residences in the vicinity.

The new station will allow commuters to conveniently transfer to the CCL as the DTL platforms are connected directly to the CCL platform though a short escalator ride. This could be done as the bottom-most level of the DTL station was constructed along with the CCL station, allowing the two lines to be built in close proximity.

8.      Ubi Station

Ubi station is located near the junction of Ubi Avenue 1 and Ubi Avenue 2. The station has two entrances, one of which is located close to the residential estate.  The station aims to serve the nearby high-rise light industrial buildings and also supports a dense HDB estate with schools in its vicinity such as Maha Bodhi School and Manjusri Secondary School. The station exterior is bronze in colour to depict the colour of Ubi (Malay for “tapioca”).

9.      Kaki Bukit Station

Kaki Bukit station is located along Kaki Bukit Avenue 1, near the junction with Jalan Damai. The station has two entrances and comprises three levels – intermediate, concourse and platform. Utilities found within the station footprint posed challenges during the construction of the station, and they had to be relocated during different phases of excavation. The station will serve Bedok North Secondary School, Kaki Bukit Tech Park, Kaki Bukit Tech View, as well as residences along Bedok Reservoir Road, Jalan Damai and Jalan Tenaga.

10.  Bedok North Station

Bedok North station is located at Bedok North Road, near the Pan-Island Expressway flyover. The station has three entrances and comprises three levels – concourse, mezzanine and platform.

The station will serve Damai Primary School, Bedok Town Park, HDB estates and industrial buildings nearby.

11.  Bedok Reservoir Station

Bedok Reservoir station is located at Bedok Town Park, beside Bedok North Avenue 3. The station has two entrances leading to the residential blocks in the vicinity and the Bedok Town Park.

The station will serve many schools, residences and parks such as Bedok Town Park, Bedok Reservoir Park, Damai Secondary School, Bedok Green Secondary School, Red Swastika School, Yu Neng Primary School and residences along Bedok Reservoir Road.

12.  Tampines West Station

Tampines West station is located at Tampines Avenue 4, near the junction with Tampines Avenue 1. It has two entrances leading to HDB blocks nearby. Both entrances are connected directly to taxi stands, drop-off points and bicycle parks. The last tunnel boring machine (TBM) on DTL3 broke through into the Tampines West station in June 2015, marking the completion of tunnelling works along the DTL3. The station will serve Temasek Polytechnic, Junyuan Primary School, East View Primary School, Tampines Polyview and Tampines Palmspring HDB estates.

13.  Tampines Station

Tampines station is located along Tampines Central 1. The station has three entrances and comprises three levels – subway (retail level), concourse and platform.  The station is connected to the Tampines Bus Interchange and the EWL and will service commuters travelling to offices and shopping areas around the Tampines town centre. The station will also serve commercial buildings such as OCBC Tampines Centre One, AIA, Telepark, Our Tampines Hub and residences in Tampines.

14.  Tampines East Station

Tampines East station is located along Tampines Avenue 7, near the junction with Tampines Avenue 2. It has four entrances leading to the current site of Tampines Junior College and HDB blocks in the vicinity. The station will serve Tampines Junior College, Ngee Ann Secondary School, Tampines North Park and residences nearby.

15.  Upper Changi Station

Upper Changi station is located at Upper Changi Road East. At 205m, the station is the longest on the DTL3. It has four entrances and comprises three levels – concourse, intermediate, and platform. Two of the entrances are connected directly to bus stops, taxi stands, drop – off points and the bicycle park. The station will serve the Singapore University of Technology and Design and residential estates in the vicinity. For the convenience of movement between the station and SUTD, there will be an underground linkway between them.

16.  Expo Station

Expo station is located along Changi South Avenue 1, 25 metres below ground level. It has four entrances and comprises three levels. The station will primarily serve Singapore Expo and a major business hub, the Changi Business Park. As Expo connects to Changi Airport on the EWL, commuters will have an additional travel option when going to the airport.

https://www.lta.gov.sg/apps/news/page.aspx?c=2&id=5c4e424c-1a46-44cb-92d0-212e37a2b6df

JLL: investment sales set for bull run in 2017

According to consultancy JLL in a new report, property investment sales are set for a bull run after a spectacular start to the year. The positive outlook is being driven by the office, and possibly the retail and residential sectors.

The overall value of real estate investment deals soared 67 % in the first quarter to $4.99 B – of which $4.47 B was from the private sector.

Private investment sales of office property accounted for $2.12 B – the sector’s strongest first-quarter showing for the past 9 years. The $2.12 B figure was a 60.6 % rise from the fourth quarter, and more than treble that of a year ago. Last year’s private-sector investment sales stood at $19.06 B.

The top two office deals in the first quarter were entity sales. One was the sale of the entire interest in the holding company of PwC Building in Cross Street to an indirect unit of Manulife Financial Corporation for $760.6 M. The other was the divestment of the entire interest in Plaza Ventures – the owner and developer of GSH Plaza in Cecil Street – to Hong Kong-listed Fullshare Holdings for $725.21 M.

JLL noted the potential for the full-year sales of private office assets to surpass the $6.49 B recorded last year, considering the recent deal for One George Street and sizeable assets available in the market, including Asia Square Tower 2 in Marina Bay.

The residential segment, registered $1.69 B in private investment sales for properties valued at $5 M and above in the first quarter.
For retail and industrial sectors, private investment sales more than doubled that from the previous year in the first quarter: $280 M for retail and $390 M for industrial.

JLL predicts a bright investment sale outlook for the year, driven by the recent sale of the $2.2 B Jurong Point mall and upbeat sentiment in the private residential market. A growing appetite for collective sale sites by developers facing depleting land banks and limited supply of sites from the Government could also lend support to investment sales.