NUS index shows 0.6% dip in condo prices

Based on recent flash estimates by the National University of Singapore (NUS) for its overall Singapore Residential Price Index (SRPI), the prices of completed private apartments and condominiums slipped 0.6% in April, after rising 0.8 % in March.

Completed units in central region dropped 0.5% in prices. Small units of floor area 506 sqft and below rose 0.7% instead. Overall the Residential Price Index dropped 0.3% in 2017 and down 2.4% lower than a year ago.

 

Enbloc @ Rio Casa and near Beauty World worth $676M

Two deals with a combined value of $676.5 million were announced in May in yet another sign of the continued resurgence in the collective sale market. One involved the sale of Rio Casa, a privatised HUDC estate in Hougang, while mixed-use development Goh & Goh Building, near Beauty World MRT station, was also snapped up. These follow the sale of One Tree Hill Gardens for $65 million to Lum Chang Group this month. The number of deals has now matched the three done in all of last year: Shunfu Ville, Raintree Gardens and Harbour View Gardens.

A.Rio Casa

Rio Casa in Hougang Avenue 7 was sold for $575 million to the joint venture firm Oxley-Lian Beng Venture comprising KSH Development, Oxley Holdings, Lian Beng Group and Apricot Capital. A further $208 million in estimated differential premiums is required for topping up the lease and to develop the site to a gross plot ratio of 2.8. The combined sale price and differential payment translates to a land price of about $706 per sq ft per plot ratio based on the maximum permissible gross floor area of about 1.1 million sq ft. Rio Casa comprises seven blocks of 286 apartment and maisonette units. Each owner stands to pocket about $2 million from the deal.

The gross development value for this project is estimated at $1.4 billion and can potentially be redeveloped to build about 1,400 residential units, assuming an average size of 70 sq m per unit.

B. Goh & Goh Building

Alika Properties of BBR Holdings bought the Goh & Goh Building for $101.5 million. Built in the late 1980s, the freehold property at 110 to 122 Upper Bukit Timah Road comprises seven apartments and seven shops. Each shop owner will reap about $9 million while apartment owners will get $5.4 million each. Subject to Alika’s payment of a development charge, the site can potentially yield about 100 residential units and a level of retail shops on the ground floor.

Chinese Developer pour in S$1B bid for Queenstown GLS site

A huge residential plot at Stirling Road launched by the government drew a record price of over S$1 billion in a joint bid from Logan Property Holdings (LPH)and Chinese conglomerate Nanshan Group. LPH is a new Hong Kong-listed entrant to Singapore market, originating from China’s Guangdong province

The bid of S$1,050.7 per square foot per plot ratio (psf ppr) on gross floor area is very bullish for for the 99-year-leasehold site thus setting a new record in the Queenstown area.

The site – despite its 2.11-ha size and heavy financial commitment required – saw a healthy demand of 13 bidders in total. The 227,000 sq ft plot near Queenstown MRT Station is expected to yield 1,110 units with prices projecting from S$1,700 psf upwards.

This bid signals a determination to enter the Singapore market. The top bid by the Chinese consortium is 8.3 % higher than the next highest bid tabled by MCL Land, and is 20.6 % higher than the S$871 psf ppr that MCC Land paid in June 2015 for the land parcel for Queens Peak. Competition was fairly stiff with close to half of the tenderers bidding in excess of S$900 psf ppr for the site, she added.

LPH has been studying the Singapore market for a while and believes “this is the right time to enter Singapore”.

One Tree Hill Gardens sold for S$65m

Lum Chang Holdings Limited is acquiring One Tree Hill Gardens for S$65 million, below the owners’ asking price of S$72.8 million. This is the first collective sale for this year. This collective sale translates to a land rate of S$1,664 per square foot (psf), based on the site area of 3,629.1 sq m (39,063 sq ft). The transaction is subject to approval from the Strata Titles Board.

The site is located at the junction of One Tree Hill and Jalan Arnap. It enjoys easy access to Orchard Road, and is within 300 m from the upcoming Orchard Boulevard MRT station along the Thomson-East Coast Line. The Lum Chang Group intends to redevelop it to residential landed homes for sale.

Toh Tuck Site attracted overwhelming number of bids

An overwhelming 24 bids were submitted for the tender of a residential plot in Toh Tuck Road — the second highest number of bids submitted in a residential government land sales (GLS) tender since 2009, when the tender for a parcel in Westwood Avenue attracted 32 bids.

Malaysian property developer SP Setia International put in the highest bid at S$265 million — S$939 per square foot per plot ratio (psf ppr). In second place was Singhaiyi Investments with a bid of S$260.2 million (or S$922 psf ppr); and in third place, Centrex Developments with a bid of S$250.9 million (or S$889 psf ppr).

In November 2012, World Class Developments, a unit of Aspial Corporation, won the tender with the highest price of 23 bids for an Upper Bukit Timah plot. The 60-year leasehold was developed into the “retirement resort”, The Hillford.

The 18,721.4 square metre (sq m) site can yield a maximum gross floor area of 26,210 sq m, or about 325 units — a manageable size for property developers. SP Setia plans to build a five-storey 320-unit development on the plot.

The top bid translates to a break-even price of about S$1,450 psf, and launch price of about S$1,600 psf.

Hunger for sites among developers and an expectation of a turnaround in the market are possibly the key factors that intensified the bidding, besides the attractiveness of the site and the affordable capital outlay. The recent easing of cooling measures and the positive reading of the Q1 2017 flash estimates are possible underlying contributory factors.

Government support for business costs

THE government will continue to keep a close eye on business costs, even as it took the stance of letting market forces set the price of rentals. But where there are possible market failures, such as when it is not commercially-viable to provide space for startups, the government will step in – and has indeed done so.

In the retail and the F&B (food and beverage) sectors, rental costs as a share of business costs is around 30 per cent. Rental costs make up between 0.7 and 4.8 per cent of total business costs in the manufacturing sector, and constitute about 5 per cent of business costs in most services sector.

Rentals across all sectors – industrial, commercial, retail and office spaces – have been declining for the past 3 years– thus the rental problem has not been so severe.

JTC has set up LaunchPad@one-north 2 years ago and future plans include building a network of LaunchPads around Singapore — the next one to be completed in the Jurong Innovation District in 2017.

The government has ways to support businesses, such as the Capability Development Grant (CDG), the SME Working Capital Loan and Automation Support Package (ASP). CPG defrays up to 70 per cent of qualifying project costs and thus encourages businesses to build business capabilities. SME Working Capital Loan has catalysed over S$700 million and 4,800 loans as of Dec 31, 2016, to the benefit of about 4,300 SMEs. Under the initiative, SMEs can access unsecured working capital of up to S$300,000 to help them address cash flow concerns and growth financing needs. The CDG and ASP schemes, which help companies achieve productivity improvements through automation, collectively supported 226 automation projects in 2016.

The government also introduced Bridging Loan for Marine & Offshore Engineering (M&OE) companies in November 2016 and enhanced the Internationalisation Finance Scheme for M&OE.

Both schemes aim to facilitate the access of these M&OE companies to working capital and financing to stabilise the sector as it copes with prolonged weaknesses in oil prices. Applications for loans amounting to over S$90 million have been approved as of February 2017. These support measures are expected to catalyse about S$1.6 billion in loans over one year.

The government continues to monitor the sector closely by tracking indicators such as order books and output levels, and evaluating feedback from industry players.

Samsung Hub Office sold at S$3280 psf

The 20th floor of the 999-year-leasehold Samsung Hub office tower is sold at S$43.07 million or S$3,280 psf based on the strata area of 13,132 sq ft. Standard Commodity Trade Centre Pte Ltd is selling the space on a vacant possession basis to Lei Shing Hong Properties (Singapore). The buyer plans to occupy the space for its own use.

The company is part of Hong Kong-based Lei Shing Hong group, which is involved in businesses ranging from retailing premium cars, trading and securities brokerage, to property development and investment. The S$3,280 psf fetched for the 20th floor is identical to that for the 21st level back in 2014.

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