S’pore Q2 GDP grows at fastest pace in 2 years

S’pore Q2 GDP grows at fastest pace in 2 years
SINGAPORE - Singapore’s trade-driven economy beat even the most optimistic forecasts, growing at an annualised rate of 12.8 percent in the second quarter, its fastest pace in two years, thanks to a manufacturing rebound and soaring construction.

Economists said the surprisingly strong data would most likely prompt the republic’s government to eventually raise its full-year 2007 growth forecast, which stands at 5-7 per cent.
‘By all indications we should be able to do a little better than the 5-7 per cent. Over 7 per cent should be possible and I should think they’ll raise the forecast at some stage. Maybe 6-8 per cent would be more descriptive of the outlook,’ said David Cohen at Action Economics.
The seasonally adjusted rise from the previous quarter compared with 7.6 per cent growth forecast by economists in a Reuters poll and followed a revised 8.5 per cent expansion in the first quarter of 2007. Quarter-on-quarter growth was the strongest since the 14.5 per cent seen in the second quarter of 2005.
Compared to a year earlier, gross domestic product grew 8.2 per cent in the second quarter, the Ministry of Trade and Industry said in its advance estimate for the quarter released on Tuesday.
Economists had expected second quarter GDP to grow 6.6 per cent from a year earlier.
‘Even if GDP was flat in the second half of the year - which is obviously extremely unlikely - then it would average 6.7 per cent growth - close to the top of the government’s current 5-7 per cent range,’ said Robert Prior-Wandesforde of HSBC.
The advance estimate, based largely on data from April and May, gives an early indication of the economy’s performance in the April to June period.
Faster-than-expected growth in the first three months of the year prompted Singapore’s government in May to lift its 2007 growth forecast by half a percentage point to 5.0-7.0 per cent.
In 2006, the economy grew 7.9 per cent. — REUTERS
Source : The Business Times, 10 July 2007

Singapore economy grows 12.8%, strongest in 2 years

Singapore economy grows 12.8%, strongest in 2 years

Singapore’s trade-driven economy grew at an annualised rate of 12.8 per cent in the second quarter, led mainly by growth in the construction industry. — ST PHOTO: CHEW SENG KIM SINGAPORE’s gross domestic production grew much faster than expected in the second quarter, and the robust, broad-based expansion may lead the government to upgrade its 2007 growth forecast. The economy expanded 12.8 per cent compared to the first quarter on a seasonally adjusted, annualized basis, the Ministry of Trade & Industry said on Tuesday in a statement. A Dow Jones Newswires poll of economists had forecast a 7.8 per cent expansion for the second quarter, closer to the 7.6 per cent expansion posted in the first quarter. The stronger-than-expected growth may prompt the government to raise its growth forecast for 2007, economists said. The government may raise its forecast for economic growth in 2007 to a range of 6-8 per cent, up from a previous forecast of growth of 5-7 per cent for the year, Citigroup economist Chua Hak Bin told Dow Jones Newswires. “It looks like growth is holding up despite weakness in the tech sector, but manufacturing will be pretty difficult to predict in the second half,” Mr Chua said. Manufacturing, the mainstay of Singapore’s export-dependent economy, accelerated in the second quarter with output up 10.2 per cent from a year earlier. It grew 4.4 per cent in the first quarter. Construction was also robust, with the sector, which had stagnated for several years, growing 17.9 per cent during the second quarter from a year earlier. Construction activity was boosted by office and residential property projects, and the development of two casino-resorts. Construction grew 11.6 per cent from a year earlier in the first quarter. Electronics manufacturing was weak but was offset by a surge in production of pharmaceuticals and continued strong activity in the offshore marine sector. Overall, the economy grew 8.2 per cent in the second quarter from a year ago. It grew 6.4 percent in the first quarter. The Dow Jones poll forecast growth of 6.7 per cent from the previous year for the quarter. — AP

Source : The Straits Times, 10 July 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com

Don’t overstretch to get flat in hot spot: Experts

Don’t overstretch to get flat in hot spot: Experts 
Go for sensible loan, location instead, flat buyers urged
By Malini Nathan & Jennani Durai 
YOU can buy a five-room flat on a high floor, with a view, near an MRT station, shops and other facilities, and pay $610,000.
That is if you want to live in Clementi.

For about $200,000 less, you can have a high-floor flat with a good view in Bedok.

And for as little as $235,000 you can have a great view across to Johor Baru, if you live in Woodlands.

HDB flat buyers keen on a home with a view can pay widely varying sums for their new home. Intense interest in what your money will buy in terms of a high-floor HDB flat grew recently when a five-room flat in Kim Tian Road near Tiong Bahru MRT station sold for a record $720,000.

But financial experts say finding the right home all depends on where you want to live and what you can sensibly afford to fork out in loan repayments.

RELATED LINKS
 All 5-room flats, but different prices
They warn that home buyers should be careful not to borrow too much just to buy a home in the latest fashionable hot spot, which could change over time in any case.

Investment firm Providend director Eleanor Ng said: ‘The worst that could happen is for one to lose one’s regular income source and therefore not be able to service this monthly debt commitment.’

Mr Leong Sze Hian, president of the Society of Financial Service Professionals, also warned of the dangers of borrowing too much. ‘Buy what you can afford. Although some areas may follow a vicious circle and continue to lag behind more desirable areas, one may want to focus on the flat as a home forever rather than as an investment.’

The $610,000 Clementi flat has an asking price well above recent average sale prices.

Typical five-room flats in Clementi have been fetching about $445,000, according to data from PropNex and ERA, but these sellers think their flat has almost everything that Kim Tian has to offer.

They cite the location and view of Bukit Timah Hill afforded by their 29-year-old flat.

Owner Angeline Sim, 32, also believes the flat has ‘a third factor most HDB flats don’t have’ - condominium-like interior decor. She explained that they were asking a higher-than-average price because they had bought the flat at a high price at the end of 2001.

‘We also spent around $60,000 on the renovation,’ added Mrs Sim, a housewife.

A couple in Bedok are asking $400,000 for their high-floor flat with a good view. It is within walking distance of a market, schools, a swimming pool, a stadium and Bedok interchange shops.

In Woodlands, the asking price for a five-room flat is even lower. The Straits Times found a couple asking just $235,000 for a flat with an unobstructed view of the Causeway and Johor Baru.

‘I am a little sad to sell because I love the view. It’s so beautiful,’ said owner Evelyn Chua, 33, who is looking for a bigger flat for her family.

Mr Leong warned that, while many are scrambling to take advantage of the property market’s current buoyancy, basic precautions should not be forgotten.

‘The recent AXA Global Retirement Study showed that Singaporeans are one of the greatest savers yet end up with the lowest income for retirement. It’s because they put so much of their nest egg into their flat,’ he said.

He advises home hunters to consider carefully their income relative to the anticipated monthly payments before deciding on a five-room flat.

He said: ‘If we take the general guidelines that home mortgage payments should not exceed one-third of our income, then households earning less than $4,328 a month may want to consider very carefully before buying a flat priced at, say, $400,000.

‘That would mean, for instance, a $360,000 loan at 2.6 per cent HDB concessionary loan rate for 30 years would translate to a monthly repayment of $1,441.’

Asked about the rising trend of sellers asking for cash above the valuation amount and buyers dipping into their savings to pay the excess, Mr Leong said: ‘Unless you have spare cash to pay above the valuation amount, think carefully about borrowing through other means, like unsecured credit.’

Source : The Straits Times, 10 July 2007

Investment firm wants to sell Orchard bungalow site for $115m

Investment firm wants to sell Orchard bungalow site for $115m 
By Joyce Teo, Property Correspondent 
HEFTY PRICE TAG: The nearly 18,000 sq ft property, which now houses the Pat’s Schoolhouse childcare centre, sits along Claymore Road. It is close to Hong Leong’s Tate Residences condominium, which is currently being built. — PHOTO: CREDO REAL ESTATE
 
A BUNGALOW site owned by a family-owned investment firm near Orchard Road has gone on sale for an astonishing $115 million.
At that price for the property of nearly 18,000 sq ft, the buyer’s break-even cost would be about $3,700 per sq ft (psf) with the selling price possibly at around $4,500 psf.

Those levels are currently only attained by a handful of luxury projects in Singapore.

The bungalow site behind Orchard Towers now houses the Pat’s Schoolhouse childcare centre, and sits along Claymore Road between two similar bungalow sites.

These sites are the last remaining ones with the potential for redevelopment along that stretch.

The bungalow site up for sale is close to Hong Leong Holdings’ Tate Residences condominium, which is currently being built.

The plot is small, compared with more conventional condominium sites.

Still, it can accommodate 20 luxury flats of about 2,400 sq ft each, according to sales agent Credo Real Estate.

In its favour, however, are the psf prices that have been achieved for nearby sites.

The bungalow site is near The Ardmore, which developer SC Global bought en bloc for a record price of $2,338 psf of potential gross floor area in mid-June.

The Ardmore sits on 42,565 sq ft of land, allowing SC Global to develop another luxury project.

A record price was also set last month when a unit at The Marq on Paterson Hill sold for $5,100 psf.

Such prices have led Credo to expect offers of around $115 million for the Claymore Road site.

This reflects a land rate of about $2,815 psf of potential gross floor area and includes an estimated $26.7 million in development charge, Credo managing director Karamjit Singh said.

He added that wealthy individuals may team up to buy the land for their own use. ‘They may even choose to build only 10 sky-villas of close to 5,000 sq ft each.

‘A redevelopment offering at Claymore Road is very rare,’ he said.

The tender closes on Aug 2.

In a separate real estate move, Colliers International is selling the 18-storey Keck Seng Tower for $250 million.

This works out to $2,144 psf, based on an existing net lettable area of 116,586 sq ft.

The Cecil Street building - built in 1984 - has a 99-year lease on a site that allows a 30-storey block.

A buyer could redevelop it to the maximum gross floor area allowed of 198,000 sq ft.

Its existing gross floor area is 173,535 sq ft, and it has a 98 per cent occupancy rate.

Collier International managing director Dennis Yeo said the last transacted rent in Keck Seng Tower was around $6 psf, with the asking rent now at $6.50 psf.

The tender closes on Aug 8
 
Source : The Straits Times, 10 July 2007

US suburban office space demand grows with supply

US suburban office space demand grows with supply
Many analysts don’t expect the steep price rises to continue
(NEW YORK) US suburban office space has become a favourite among developers and is attracting tenants squeezed out of downtowns by surging rents, according to a report by real estate services company CB Richard Ellis Group Inc.
The amount of newly completed US office space climbed to about 11.5 million square feet in the second quarter, and roughly 10 million of that was in the suburbs, according to the firm’s US National Office Vacancy Index, released yesterday.

Tenants quickly claimed the new space, and more, absorbing 17 million square feet, with 14 million in suburban buildings.

‘The markets are receiving new space and still want more,’ said Ward Caswell, CB Richard Ellis’ US director of research.

‘We saw most of the construction in the suburbs,’ he said. ‘But we also saw most of the demand in the suburbs. The suburbs have definitely and will always be a bargain compared to downtown.’

For the past three to four years, the US office market has been boosted by strong US job creation. Vacancy rates in the second quarter continued to fall.

‘At this part of the cycle, you’re always trying to see if there’s going to be too much construction,’ MrCaswell said.
‘This stuff takes a while to come online, and we have seen a nice steady growth in the construction level. But what we’re seeing is that construction is still outpaced by absorption.’

Demand from growing economies such as China has driven up the cost of building materials and construction equipment.

That has curbed the overbuilding in the United States seen in the 1980s and that led to an early-1990s real estate depression.

‘What we’re seeing in the US is a stable platform, so for investors this is very good news seeing these numbers today,’ Mr Caswell said.

In the past three years, investors have snapped up office buildings in key US cities and quickly sold them at a profit.

But many experts don’t expect the steep price rises to continue, meaning investors will seek returns through rent.

‘For tenants, this is an indicator that rents are going to rise,’ Mr Caswell said.

‘While there is new space coming online, which gives them more options to choose from, there is even more competition for that space.’

The trend should help both the office landlords in key US cities - companies such as Vornado Realty Trust, Boston Properties Inc and SL Green Realty Corp - and those who focus on suburban offices, such as Brandywine Realty Trust, Highwoods Properties Inc and Colonial Properties Trust.

Nationally, the vacancy rate was 12.6 per cent, down 0.2 percentage points from the first quarter and 1.1 percentage points from the year-earlier quarter.

Downtown office vacancy last quarter was 10.6 per cent, down 0.2 percentage points from the first quarter.

Suburban office vacancy also fell 0.2 percentage points to 13.7 per cent. — Reuters

Source : The Business Times, 10 July 2007

Morgan Stanley to buy US$1b Seoul building

Morgan Stanley to buy US$1b Seoul building
(SEOUL) Morgan Stanley will buy a Seoul office building from South Korea’s Daewoo Engineering and Construction Co for US$1 billion in the Wall Street bank’s latest big deal in the booming Asian property market.

Morgan Stanley has joined a slew of foreign investors buying Asian property assets, which are yielding stable returns on the back of tight supply in a region which has been chalking up blistering economic growth.
The US bank said in June it has raised the biggest property fund ever, an US$8 billion warchest, and earmarked 60 per cent of the money for Asian deals, including Japan, China and India.
In South Korea’s biggest deal for a single office building, Morgan Stanley’s real estate investment fund, AHI Holding BV, has signed a 960 billion won (S$1.58 billion) contract with Daewoo, the South Korean builder said yesterday.
According to property service firm Jones Lang LaSalle, South Korean office building prices rose 20-25 per cent in the past year.
The former head office of the now-defunct Daewoo Group has been up for sale by the new owner of Daewoo Engineering, Kumho Asiana Group, to pay down debt and improve financial conditions of the builder.

The property fund beat other bidders including Australia’s Macquarie Bank Ltd and South Korea’s Kookmin Bank in the race for the Daewoo building, located in the heart of downtown Seoul.
Morgan Stanley’s recent big deals include the US$3.9 billion acquisition of Australia’s Investa Properties Ltd in May and the US$2.4 billion purchase of hotels and two property management units from Japanese airline All Nippon Airways in April.
An analyst of a foreign property advisory firm said conditions in South Korea’s commercial buildings market will continue to favour owners over the next two to three years, because of limited supply and lower vacancy ratios.
‘Limited supply will continue until 2010 before supply turns up, now that construction companies started building office buildings,’ he said, asking not to be named.
The Government of Singapore Investment Corp (GIC) broke ground for Korean property investment as an institutional investor, when it bought Seoul Finance Center for 355 billion won in 2000.
Now the building, located in the capital’s financial hub, houses a number of global banks and brokerages in central Seoul, including Merrill Lynch and asset manager Fidelity.
GIC also bought Star Tower building from US private equity house Lone Star for a reported 900 billion won in 2004. Morgan Stanley could not immediately be reached for comment.
Land prices in Seoul and its outskirts on average have risen 15-20 per cent a year over the past three years, according to construction ministry data. — Reuters

Source : The Business Times, 10 July 2007

Li spends HK$290m to raise stake in Cheung Kong

Li spends HK$290m to raise stake in Cheung Kong
The firm’s shares have gained 16%, beating the gain in the Hang Seng Index
(HONG KONG) Li Ka-shing, Asia’s richest man, spent HK$289.7 million (S$56.3 million) raising his stake in Cheung Kong (Holdings) Ltd, fuelling the 8.6 per cent gain in the property developer’s stock over the past week.

Mr Li, Cheung Kong’s chairman and founder, bought 2.83 million shares on July3 and July4 at an average price of HK$102.24 per share, according to filings to Hong Kong’s stock exchange. Mr Li raised his stake to 39.88 per cent from 39.76 per cent.
Investors here and across Asia look to Mr Li, referred to locally as ‘Superman’, for a sense of where the Chinese city’s economy is headed because his companies invest in businesses ranging from supermarkets to shopping malls and ports.
Shares of Cheung Kong have gained 16 per cent this year, beating the 14.3 per cent gain in the benchmark Hang Seng Index.
‘There should be more upside to Cheung Kong, as well as other local property developers, which have been undervalued,’ said Manfred Ho, an analyst at BNP Paribas SA.
‘Demand for housing should remain robust because of the strength of Hong Kong’s economy, giving good support to housing prices.’ Mr Ho has a ‘buy’ rating and target price of HK$125 for Cheung Kong shares.
The stock rose 0.9 per cent to HK$111.20 at the close of trading here yesterday, compared with a 1.3 per cent gain in the benchmark.

Mr Li, with a fortune of US$23 billion, according to Forbes magazine, has added to his Cheung Kong stake at least 21 times since March22, when the property company announced a 29 per cent jump in annual profit. Cheung Kong is Hong Kong’s biggest developer by market value.
Cheung Kong’s income from property sales ‘would remain high’, Credit Suisse analysts including Clifford Lam wrote in a report last week, ‘even without any significant increase in prices’. The Swiss bank raised its target price for the stock to HK$122 from HK$116.
Profit for Mr Li’s flagship rose to HK$18.08 billion in 2006, compared with HK$14 billion a year earlier, the company said on March22, on higher property sales and rising contributions from unit Hutchison Whampoa Ltd. Mr Li’s stake in Cheung Kong stood at 39 per cent on March22.
Cheung Kong shares surged 7.1 per cent on July6, the most in more than six years, after Credit Suisse raised its target price. — Bloomberg

Source : The Business Times, 10 July 2007

Two more office towers on the market

Two more office towers on the market
78 Shenton Way, Keck Seng Tower expected to fetch $700m and $233m

By KALPANA RASHIWALA

OFFICE towers continue to be put on the market for sale, as owners continue to ride on the increase in office capital values and rents. Two of the latest offerings are 78 Shenton Way and Keck Seng Tower.

The Shenton Way block has been put up for sale by expression of interest, and the leasehold property could fetch over $700 million or $1,920 per square foot, based on a total net lettable area (NLA) of 365,000 sq ft.
This area includes some 65,000 sq ft that the owner, a joint venture between Credit Suisse and CLSA funds, has undertaken to build in the form of a 12-storey office block that will stand above 78 Shenton Way’s retail podium.
Jones Lang LaSalle is marketing 78 Shenton Way through a closed invitation via an expression of interest exercise, after the owner received approaches from several potential buyers. The site has a remaining lease of about 75 years.
The Credit Suisse-CLSA tie-up purchased 78 Shenton Way in January for $348.5 million - or about $1,160 psf based on the property’s existing NLA of about 300,0000 sq ft - from Ferrell Realty, which is fully owned by a property fund in which Lippo is a major investor.
Ferrell bought the property for $151 million or $505 psf of NLA from MCL Land in August 2004.

Keck Seng Tower at Cecil Street is being offered for sale via tender by its owner, Keck Seng Group, with an expected price of at least $233 million, or $2,000 psf based on its NLA of 116,586 sq ft, sources say.
The office property is on a 17,322 sq ft site with a remaining lease of around 72 years.
‘The successful buyer can choose to either refurbish or redevelop the development, maximising its allowable gross floor area (GFA) to about 198,000 sq ft,’ said Colliers International managing director Dennis Yeo, whose firm is marketing Keck Seng Tower.
The 198,000 sq ft maximum GFA allowed for the property is around 24,500 sq ft higher than Keck Seng Tower’s existing GFA.
If Keck Seng Tower is redeveloped, a differential premium (for building this additional GFA) of around $5.3 million is payable to the state. If the new owner seeks to reset the site’s lease to 99 years, a further $24 million lease upgrading premium (assuming the building is sold for $233 million) is payable.
Inclusive of these two payments to the state, the all-in unit land price for Keck Seng Tower - based on $233 million - would be around $1,324 psf of potential gross floor area. The break-even cost for a new office project on the site could be about $2,100 psf.
There is potential to build the additional GFA above the car park podium. And on top of this, Keck Seng Tower’s current net lettable area of 116,586 sq ft can be boosted by about 10 per cent by making more efficient use of space, such as by converting a floor now used for mechanical and engineering equipment to lettable space.
‘With the current robust demand for office space, amidst soaring rents and tight office supply, particularly within the CBD area, investors can expect to reap from this investment in the short- to mid-term period,’ Mr Yeo said.
Keck Seng Tower’s tender closes on Aug8.

Source : The Business Times, 10 July 2007

Local buyers baulk at prices that’s over $3,000 psf

Local buyers baulk at prices that’s over $3,000 psf
But well heeled foreign investors may continue to set new benchmarks
By KALPANA RASHIWALA
SOME high-net-worth individuals from places as varied as Indonesia, Thailand and Russia who need to park money in Singapore may not bat an eyelid about paying record prices for condos, but resistance seems to be setting in from local investors for properties priced at more than $3,000 per square foot, according to some market watchers.
Will this clip developers’ ability to constantly keep jacking up prices of new projects? Or will the Singapore luxury market evolve to a new plane, as Singapore becomes increasingly attractive as a global city, where buyers at luxury residential property launches will be predominantly foreigners?

Some foreign buyers may be more amenable to paying top prices if they find Singapore still offers them an attractive proposition.

Of late, 60 per cent of the buyers for most new high-end projects have been foreigners, but sometimes the figure is even higher. At City Developments’ Cliveden at Grange Road, 90 per cent of the 38 units sold so far have gone to foreign buyers, with an average price of $3,600 per square foot.

Some industry players say there is resistance from local buyers to anything costing above $3,000 psf, although one major developer has put the resistance band higher, at $3,300 to $3,600 psf.

Despite prices of $4,635 psf for a unit at St Regis Residences and $5,100 psf for another at The Marq On Paterson Hill, ‘buying at prices above $3,000 psf is still pretty selective at this point in time’, reckons DTZ Debenham Tie Leung executive director Ong Choon Fah.

Just how many units developers have been selling, and for how much, will emerge soon when the Urban Redevelopment Authority (URA) publishes more pricing details of units sold by developers.

The URA is expected to aggregate the number of units sold by developers each month, for each project, within certain dollar-per-square-foot price ranges, as well as the average dollar psf price posted each month for each project.

This source of information, where developers report sales prices achieved directly to the URA, will provide the market with more timely information instead of having to rely on caveats, which take time to be lodged.

And then there are also buyers who have not been lodging caveats, perhaps because they intend to flip the units for a quick profit.

Lamenting the current dearth of detailed price information on prices actually achieved for launches, Colliers International director (research and consultancy) Tay Huey Ying says: ‘For most projects launched since the beginning of the year, generally only an estimated 40 to 70 per cent of the total number of units reportedly sold in each project have lodged caveats thus far. Hence, sales information that is available via caveats lodged is incomplete at this point in time.

‘Improving provision or publication of more timely and complete information on sale progress and their transactional prices will go a long way in improving market efficiency. Would-be home-buyers will be able to make more informed purchase decisions.’

Going by caveats lodged for primary market sales between Jan1 and June19 this year, units sold by developers in high-profile projects like Orchard Residences, St Regis Residences and Beaufort @ Nassim at prices above $3,000 psf formed the minority of transactions for the respective projects.

Sixteen of the 48 caveats lodged during the period for Orchard Residences were for prices above $3,000 psf.

For St Regis Residences, the figure was five of the 39 caveats lodged, while for Beaufort @ Nassim, the share of caveats for developer sales at prices of above $3,000 psf was four out of 13.

Of course, a different picture may well emerge when the URA’s data is released.

But whether the resistance is $3,000 psf, or at the $3,300 to $3,600 psf level, the resistance being shown by local investors is very real, say industry players.

‘As prices go higher, potential buyers have more and more alternatives, and may want to diversify risk, to even beyond Singapore,’ Mrs Ong of DTZ reckons.

‘For such investors, chances are it will not be their first or even second property. If they pay $3,000 psf for, say, a 2,000 sq ft condo, the price comes up to $6 million. For this sort of sum, they will ask: ‘Where else can I put my money? A small bungalow in Singapore, a top-end condo in Malaysia, Bangkok or even Sydney?’

CB Richard Ellis executive director (residential) Joseph Tan says that from his experience, for the price of condo units costing ‘anything more than $8-10 million, which could work out to say $3,500 to $4,000 psf, local buyers have the option to look at freehold landed properties in prime locations’.

However, Mrs Ong says these would not be the sort of considerations going through the minds of wealthy foreign investors who may just want to park some money in Singapore real estate to diversify their portfolio.

Mr Tan says: ‘They peg local property prices to those in major financial cities. For instance, average prices of luxury homes in London are about two-and-a-half times those in Singapore. So Singapore prices still look attractive to these global investors.’

Whereas foreign buyers have accounted for no more than 60 per cent of buyers in new high-end condo launches in the past, Mr Tan believes this figure can increase further.

But some market watchers reckon developers counting on just foreigners to set benchmark prices for their projects may not necessarily find the sailing smooth.

‘Some foreigners prefer to buy projects that are well supported by local investors for added assurance, since local investors would generally be considered to know their market best,’ Mrs Ong reasons.

But whether developers rely predominantly on foreign investors, or a mix of Singaporean and overseas buyers, developers may still be able to achieve higher prices for luxury housing projects here, if they can offer compelling propositions on design, lifestyle and the like, market watchers reckon.

While $3,300-3,600 psf appears to be a resistance of sorts among local investors currently, the level may move higher, depending on economic growth and supply-demand dynamics, Mrs Ong adds. ‘Just last year, there was resistance at the $2,000 psf level,’ she recalls.

Mr Tan says: ‘If Singapore continues to be attractive to foreigners and our prices look appealing to them, it is likely developers will continue to bid aggressively for prime sites.’
Source : The Business Times, 10 July 2007

Claymore Road site expected to sell for $2,815 psf ppr

Claymore Road site expected to sell for $2,815 psf ppr
A NEW record price for residential land is being sought, of $2,815 psf of potential gross floor area. This is the price wanted for 11 Claymore Road, a 17,974 sq ft freehold site with an old bungalow on it but which can be redeveloped into a luxury boutique apartment project with about 20 units averaging 2,400 sq ft.

The site has a 2.8 plot ratio (ratio of maximum potential gross floor area to land area).
‘We expect to receive offers in the region of $115 million, reflecting a land rate in the region of $2,815 psf per plot ratio (psf ppr), inclusive of an estimated development charge of about $26.67 million,’ reckons Credo Real Estate managing director Karamjit Singh, whose firm is marketing the property.
The $2,815 psf ppr unit land price expected for 11 Claymore Road is 20 per cent higher than the $2,338 psf ppr fetched a few weeks ago for The Ardmore, which is just behind the site.
‘We wouldn’t be surprised if a tycoon or a group of high net worth individuals came along to purchase the land to build something totally unique and exclusive for their own occupation. On this basis, they may even choose to build only 10 ’sky-villas’ of close to 5,000 sq ft each,’ Mr Singh reckons. The site is owned by a local investment company controlled by a family named Kok.
Based on the $2,815 psf ppr unit land price expected, the break-even cost for a new apartment development on the site would be around $3,700 psf. The first batch of units at The Marq On Paterson Hill was recently sold for an average price of $4,100 psf.
Source : The Business Times, 10 July 2007