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.

URA statistics indicating private home market bottoming

The quarter-on-quarter drop of 0.3 % in URA’s overall private home price index, based on its Q2 flash estimate released on Monday, follows a 0.4 % decline in the index in Q1. The 0.3 % fall in the second quarter is the smallest of the 15 quarters since the peak in Q3 2013. The general sentiment among the property circles is that the private housing market is close to its trough given the statistics.

The Urban Redevelopment Authority’s overall private home price index is expected to start increasing next year, as projects on sites bought at high land prices come to the market.

 

The market is bottoming out with the cooling measures expected to stay put. While private home sales volumes are expected to remain healthy, the price index is expected to flatline, while the affordability in terms of absolute price quantum is expected to remain the key driver for sales volume – given the current muted market sentiment amid soft economic growth, and policy conditions.

The Monetary Authority of Singapore’s comments last week that the “calibrated adjustments” in March to the seller’s stamp duty and TDSR do not signal the start of an unwinding of the property cooling measures.

 

Based on its Q2 flash estimate, URA’s overall private home price index has slipped 11.8 % from the recent peak in Q3 2013.

URA’s data also showed that prices of non-landed private residential properties in the Core Central Region (CCR) or prime areas fell by 0.9 %  in Q2, after easing 0.4 % in Q1. In the city fringe or Rest of Central Region (RCR), prices rose 0.5 %, after registering an increase of 0.3 % in the previous quarter. Prices in the suburbs or Outside Central Region (OCR) retreated 0.4 %, after inching up 0.1 % in Q1.

 

https://www.ura.gov.sg/uol/media-room/news/2017/Apr/pr17-24

Many Sentosa Cove Homes suffering losses

Sentosa Cove properties may have the Singapore’s most prestigious address, but they may not be the guaranteed money spinners many of their rich owners thought when they bought them.

Many of the Sentosa Cove transactions over the past year recorded losses. Of the total of 30 units recorded , 16 suffered losses when they were sold, and 11 notched profits.

The largest loss was at Seascape. A seventh-floor unit, which had been purchased for $12.8 million in June 2010, chalked up a loss of $6.6 million. The 378 sq m apartment was put up for auction in January and sold through private treaty to a buyer with a HDB home address for $6.2 million in February.

The next largest loss was also at Seascape – $4.65 million in the red, after the eighth-floor unit went under the hammer for $6.35 million in a mortgagee sale (Oct 2016). The previous owner bought the unit for $11 million in December 2011.

For those who have made profits in this prestigious location, on example includes a house in Ocean Drive. One savvy investor made a $4.1 million profit for his landed property at 184 Ocean Drive. The owner purchased it for just $2.7 million in February 2005 and sold the 316 sq m terrace house for $6.8 million in May last year.

Sentosa Cove is the only place in Singapore where foreigners need not be permanent residents in order to buy landed property.

The second-largest profit recorded was at The Azure, where a 294 sq m unit was sold in May last year for a profit of $1.158 million – 10 years after it was purchased.

The 30 properties were sold for between $1.68 million and $6.8 million. The average profit of the 11 profitable transactions was about $820,900, while the average loss of the 16 loss-making transactions was about $1.67 million.

Prices at Sentosa Cove have been falling. In the core central region, which takes in Sentosa, private non-landed home prices continued on a downward trend, falling by 0.4 per cent for the first quarter of this year, compared with a 0.1 per cent increase in the previous quarter. Overall, prices fell by 1.2 per cent in the core central region last year.

Landed house market on upward trend amidst dropping prices

538 landed homes were sold in the second quarter – this is the highest quarterly volume since the fourth quarter of 2012. Overall, the number of landed homes sold has increased, driven by falling prices and limited supply of landed homes. URA flash estimates released recently indicated that prices of landed residential properties fell further by 0.4 % for Q2, down from a 1.8 % drop in the previous quarter.

The market for good class bungalows (GCBs) is lukewarm although the market for smaller bungalows in GCB areas is on a rise. Good class bungalows (GCBs) are the most prestigious segment of landed property in Singapore.

On the GCB front, a caveat was lodged on June 12 for the most expensive one sold this year. The latest GCB sold was a $46 million bungalow in Queen Astrid Park on a 29,709 sq ft site, reportedly purchased by the family who controls oil trading group Hin Leong.

20 sales have taken place in GCB areas so far this year, worth a total of $432.2 million. These include properties with a plot size of less than 1,400 sq m. This is markedly more than the 14 transactions in the same period last year, which totalled $298.36 million.

Another upmarket landed segment, Sentosa Cove, has contrasting statistics. Sales at the exclusive waterfront precinct shot to seven this year from just four for the same period last year.

Luxury property sector on the way up?

The luxury property market has pickup momentum after years of lull activity. Recent deals that transacted include a GCB sale of 31,211 sqft in Leedon Park. The buyer is understood to be the executive chairman of Raffles Medical Group Loo Choon Yong. The price is at $1310 psf based on land. There is also a Sentosa Cove bungalow selling for $16.6m based on a land area of 9725sqft. The sale will be a loss based on the price the seller bought in 2012 at $24m.

A penthouse in the prestigious area of Nassim area was sold for more than $25m. The condo unit at The Nassim has a strata area of 9300 sqft, including a pool deck and rooftop pool. The Mukhtar family from Allied Bank in Pakistan bought the place from the developer of the project, Nassim Hill Realty.

For condo and private apartment sold at $10m and above, the number is at a total of 19 units, valued more than $262m.

Woodleigh site to build 600 private homes plus mall

Singapore Press Holdings (SPH) and Kajima Development are planning to develop more than 600 residential units and a retail/commercial component with a gross floor area of about 310,000 square feet on a 99-year leasehold site in the new Bidadari Estate that they have won the tender. The two teamed up to form an equal partnership that placed the top bid for the site at a tender conducted by the Housing & Development Board.

The winning bid of S$1.132 billion translates to S$1,181 per square foot plot ratio based on the maximum gross floor area of 958,450 sq ft allowed for the commercial and residential site next to Woodleigh MRT Station.

The site’s proximity to popular primary schools and other educational institutions and the green environment in the Bidadari Estate including a park and a lake are the key attractions.

As part of the tender conditions, the successful bidder will also have to build a 6,000 square metre community club, a 2,190 sq m neighbourhood police centre, a commercial bridge towards Bidadari Park and an underpass to connect to the bus interchange as part of the development.

Prime Waterfront Homes and Living in Singapore

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