12,700 bids for 2,132 flats so far

12,700 bids for 2,132 flats so far

APPLICATIONS are pouring in for the HDB’s sales exercise for 2,132 flats in 24 estates across the island.

The homes, launched under its new Sales of Balance Flats scheme last Thursday, have attracted 12,728 bids as of the latest update at 5pm yesterday - about six times oversubscribed.

Analysts say applications could hit 20,000 when the process closes next Wednesday, making 10 bids for every available flat.

The main reason for their popularity is that the flats are completed or nearly completed, so buyers will not have to wait three years before moving in.

Flats on offer are accumulated from earlier build-to-order exercises, the Selective En-bloc Redevelopment Scheme and repurchased flats.

The HDB’s new process has replaced the previous balloting, quarterly sales and half-yearly sales exercises.

Source : Business Times - 07 October 2009

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Two BTO projects to start despite slower flat sales

Two BTO projects to start despite slower flat sales

HDB confident of sustained demand for public housing

By Jessica Cheam

MODERATE sales at two Housing Board projects launched last year suggest that first-time home buyers still have plenty of choice despite the high demand for flats in some areas.

The take-up rate at Punggol Breeze was 69 per cent while only 55 per cent of applicants selected flats at Fernvale Residence in Sengkang, according to new HDB data released to The Straits Times this week.

Some home seekers turned down a chance to buy as the waiting time for the build-to-order (BTO) projects - three to four years - was just too long.

‘Some eventually decided to opt for other housing that can be ready sooner than BTO flats,’ said the HDB. Other reasons buyers gave were that preferred flats had already been sold, or that they had decided to consider other housing options.

Waiting time is likely a key factor, given the overwhelming response to last week’s launch of 2,132 completed or nearly completed HDB flats.

Applications for homes in 24 estates across the island are pouring in, including those for units in the locations of the two BTO projects.

There have been seven bids for every four-room flat in Punggol, and 25 for every four-roomer in Sengkang as of 5pm yesterday.

Those who bought at the two BTO projects have been assured by the HDB that work on their homes will soon be under way.

Under the BTO scheme, flats are built when a certain demand, typically 70 per cent, is reached, but this serves only as a guide, said the HDB, which told The Straits Times that it will start building the Punggol and Sengkang projects.

In the case of Fernvale, it will be the first BTO project to be started with a take-up rate below 60 per cent - a move that signals HDB’s confidence in sustained demand for public housing.

It will ‘help build up critical mass of residential units required for the area’s further development’, said the HDB.

Below-par take-up rates have not deterred construction in the past. A Punggol project was started in 2003, and Fernvale Court in Sengkang two years later, despite both having a take-up rate of 67 per cent. Both projects are 97 to 99 per cent sold today.

The HDB data also showed an overall take-up rate of 89 per cent for the 7,793 new flats offered in 12 BTO projects last year.

These numbers were available only recently as the selection process can take months after the project is launched.

PropNex chief executive Mohamed Ismail said the numbers were strong, considering that the flats were in non-mature estates.

The data also showed higher sales of projects in towns where there had been no recent launches, and those in more central locations. Projects offering two-roomers were less popular.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said it was not surprising that some projects did not fare as well due to their distance from MRT stations.

Both analysts said the HDB’s move to go ahead with projects even with low take-up rates was a step ‘in the right direction’, as it would replenish its stock of flats, which has dwindled in recent years due to high demand.

ERA associate director Eugene Lim said that as plans to make Punggol the first waterfront public housing estate materialise, sales could improve.

12,700 bids for 2,132 flats so far
APPLICATIONS are pouring in for the HDB’s sales exercise for 2,132 flats in 24 estates across the island.

The homes, launched under its new Sales of Balance Flats scheme last Thursday, have attracted 12,728 bids as of the latest update at 5pm yesterday - about six times oversubscribed.

Analysts say applications could hit 20,000 when the process closes next Wednesday, making 10 bids for every available flat.

The main reason for their popularity is that the flats are completed or nearly completed, so buyers will not have to wait three years before moving in.

Flats on offer are accumulated from earlier build-to-order exercises, the Selective En-bloc Redevelopment Scheme and repurchased flats.

The HDB’s new process has replaced the previous balloting, quarterly sales and half-yearly sales exercises.

Source : Straits Times - 07 October 2009

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Ho Bee prices Trilight at $1,650 psf

Ho Bee prices Trilight at $1,650 psf

Far East sells 12 units at Alba in Cairnhill at average $2,300 psf

By KALPANA RASHIWALA

HO Bee Investment will preview its Trilight condo at Newton Road this week at an average price of about $1,650 per sq ft, the group’s chairman and CEO Chua Thian Poh told BT yesterday.

Trilight: The $1,650 psf average price is for an initial batch of 60 units in the 205-unit condo
Ho Bee will not offer an interest absorption scheme (IAS) for the 30-storey freehold condominium project, located on the highest point in the Newton area.

The $1,650 psf average price will be for an initial batch of 60 units. The condo will have a total 205 units, up from 152 planned initially. The increase results from Ho Bee’s decision to introduce two-bedroom units and reduce the number of four-bedders. Previously Trilight had only three- and four-bedroom apartments.

The latest scheme comprises 104 two-bedroom units ranging from 1,109 to 1,227 sq ft; 74 three-bedders in two sizes (2,099 and 2,110 sq ft) and 24 four-bedroom apartments of 2,336 sq ft. Trilight will have three penthouses - two units of 5,200 sq ft and one of 5,800 sq ft.

The typical two-bedder will cost under $2 million.

CB Richard Ellis and DTZ will market the project.

Market watchers say the $1,650 psf average price is within the range of recent transactions in the area. In nearby Bukit Timah Road, units at Ferrell Residences sold for between $1,556 psf and $1,931 psf in July-August.

And Madison Residences nearby sold at $1,567-1,745 psf in August, according to Urban Redevelopment Authority information on developer sales.

The high-end housing market is stirring again after Hungry Ghost Month. Far East Organization has sold a dozen units over the past couple of weeks at its Alba project in Cairnhill Rise. The unit sizes are 1,862, 2,066 and 2,250 sq ft.

They are among a clutch of 18 units Far East released on the second to seventh levels of the 18-storey freehold condo, which has a total of 50 units. The average price achieved for the 12 units sold is $2,300 psf, with the highest price being $2,500 psf.

Under the freehold project’s ‘white plan’, Far East can customise apartment layouts to suit buyers’ preferences.

Source : Business Times - 07 October 2009

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Record high sales for small homes: CBRE

Record high sales for small homes: CBRE

Developers provide for more units of 500 sq ft or less

By EMILYN YAP

(SINGAPORE) A study by property consultancy CB Richard Ellis (CBRE) has confirmed what everyone suspected - small apartments have become more common. And their sales hit a record-high this year. But whether owners or tenants can get used to tighter living space is another matter, says CBRE.

The firm looked at caveats lodged between January and September and found that 412 new non-landed residential units measuring 500 sq ft or less had been sold - 38 per cent more than the 299 sold in the whole of last year.

The number of small units taken up has risen steadily for several years. In 2006 and 2007, 171 and 275 such apartments were sold respectively.

‘Developers are providing more of these small-format units and home-buyers are snapping them up, especially in 2009,’ said CBRE Research executive director Li Hiaw Ho. ‘The rise of small-format units has served to bolster overall transaction volume in the residential market.’

Activity in the residential market slowed sharply with the onset of the financial crisis last year. But sales picked up from February this year with the launch of Alexis - a project with many small units starting from a tiny 366 sq ft. It was fully sold.

Since then, developers have been re-doing designs to fit in more small apartments. And buyers have waded in, taking up more than 11,000 new private homes from January to August - far exceeding the number for 2008.

Just last week, Oxley Land previewed the 72-unit Suites@Guillemard, which has 45 one-bedders ranging from 258-527 sq ft in size. According to CBRE, 80 per cent of the project had been sold at around $1,300 psf as of Monday.

A brochure for another project, the 24-unit Cubik in Telok Kurau, shows there are eight one-bedroom units measuring 484 sq ft.

Penthouses have also shrunk, CBRE noted. While they were typically larger than 1,500 sq ft, some measuring just 800-1,200 sq ft have appeared.

The emergence of small units has raised concern among some market watchers. ‘People who buy for owner-occupation will have to consider whether they can adjust to smaller living space,’ said CBRE’s Mr Li. ‘And people buying for investment should think about who is going to rent such units.’

Ngee Ann Polytechnic real estate lecturer Nicholas Mak agrees, saying some foreigners are used to much more space and may prefer to rent bigger apartments.

Facing competition from larger units, owners of small apartments may have to lower the rent or wait longer to find tenants, he said.

But until the homes are completed and the anticipated leasing challenges materialise, Mr Mak expects small units to remain popular with buyers.

Source : Business Times - 07 October 2009

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CapitaLand basks in positive spin (-off)

CapitaLand basks in positive spin (-off)

Its shares rise as investors eye special dividend; outlook rosy for CMA too

By UMA SHANKARI

(SINGAPORE) CapitaLand shares rose as much as 4.9 per cent yesterday on news that the property group will spin off its $20.3 billion retail portfolio into a separate listed entity.

‘Post-IPO, we are likely to see a switch in interest from CapitaLand to CMA.’

- Wendy Koh,
Citigroup analyst

Shares rose following analyst reports which said that the move was positive for both CapitaLand and the new CapitaMalls Asia (CMA). Many research houses also issued ‘buy’ calls on the stock and raised their target prices.

However, the news did not go down as well with shareholders of CapitaLand’s two retail property trusts - CapitaMall Trust (CMT) and CapitaRetail China Trust (CRCT).

One reason for the warm reception for CapitaLand’s shares was a potential special dividend, which CapitaLand said it could pay out post-IPO. The stock gained 8 cents, or 2.2 per cent, to close at $3.75 yesterday.

‘The proposed IPO (initial public offering) is positive for the group in the short term given the potential net asset value accretion and special dividend per share,’ said Citigroup analyst Wendy Koh.

Depending on the valuations ascribed to the spin-off, CapitaLand could record an exceptional gain on divestment, as well as potentially attract a revaluation of a significant part of the group’s asset base, noted JP Morgan analysts Christopher Gee and Joy Wang.

CapitaLand’s shares are also trading at around 1.2 times book value at the moment, and there could be some potential for a re-rating if the spin-off allows the underlying business value to become more apparent to the stock market, the analysts added.

The company will also benefit from the capital recycling exercise.

CMA’s effective interest in the $20.3 billion retail portfolio (including minority interests in some cases) is $7 billion. The book cost of the properties is $5.3 billion.

Using the net asset value of $5.3 billion, and assuming that CapitaLand chooses to float 20-40 per cent of CMA, about $1.1 billion to $2.1 billion would be raised. This will increase CapitaLand’s cash position, lower its gearing and allow it to invest and grow its other core business.

‘Assuming a divestment of a 30 per cent stake in CMA at book value, CapitaLand could expand its cash hoard to around $5.3 billion,’ said DBS analysts Lock Mun Yee and Derek Tan. ‘With a gearing of 0.3 times, it would have an additional $6 billion debt capacity, based on the higher end of the target gearing of 0.5-0.75 times.’

But there are concerns that CMA, which will take over all of the group’s retail business - which was widely thought to be the main growth engine for CapitaLand previously - will now be the more attractive option. Said Citigroup’s Ms Koh: ‘Post IPO, we are likely to see a switch in interest from CapitaLand to CMA.’

The shift in interest could also affect CMT and CRCT. Both stocks were down following CapitaLand’s announcement. CMT lost 8 cents, or 4.4 per cent, to close at $1.74, while CRCT shed 2 cents, or 1.7 per cent, to end at $1.17.

‘We expect the prices of CMT and CRCT to face some short-term weakness,’ said Kim Eng analyst Wilson Liew. ‘Shareholders of CMT and CRCT might take a while to digest the impact of the news.’

The main issue, analysts said, is that CMA is a pure retail play, just like CMT and CRCT. Institutional investors in particular might want to re-allocate their funds. ‘Some of them might choose to transfer their shareholdings into CMA,’ observed an analyst at a brokerage here.

Source : Business Times - 07 October 2009

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Seven Palms smashes price records at Sentosa Cove

Seven Palms smashes price records at Sentosa Cove

SC Global sells units at $3,100-$3,400 psf at the exclusive 4-storey project

By KALPANA RASHIWALA

(SINGAPORE) Upmarket developer SC Global Developments is said to have sold six units at its Seven Palms at Sentosa Cove condo at between $3,100 per square foot (psf) and $3,400 psf - record prices for the upscale waterfront housing district.

On a lump-sum basis, the three and four-bedroom units were sold at about $9 million to $15 million each.

All units in the four-storey development will face either Tanjong Beach next door, or the sea or the Tanjong Golf Course at the Sentosa Golf Club.

Singaporeans are understood to have picked up two of the six units sold recently, with Singapore permanent residents buying the other four.

Market watchers reckon SC Global is probably looking at a project-average price of about $3,500 psf for Seven Palms at Sentosa Cove. The condo will comprise just 41 units.

‘We’re seeing big-ticket transactions coming back to the market. For example, there are more of the $4.5 million to $12 million per apartment deals again…’

- Joseph Tan,
CB Richard Ellis

Standard apartment sizes range from about 2,750 sq ft to 6,500 sq ft.

BT understands that the biggest unit in the 99-year-leasehold project, an 8,000-sq-ft penthouse, has a price tag of about $25 million to $30 million.

Prior to this, the highest median price achieved by a developer of a Sentosa Cove condo was $2,734 psf seen at Lippo Group’s Marina Collection, which was released in late 2007.

The highest price fetched for a unit in that development was $2,917 psf, for a fourth-floor unit that sold for just over $9.8 million in December 2007.

Property consultants were generally not surprised at the record price achieved for Seven Palms, given the project’s unique positioning.

‘This will be the only condo on Sentosa Cove with direct access to a beach. And SC Global has established a track record of being able to command a premium to the market for its project,’ said CB Richard Ellis executive director (residential) Joseph Tan.

‘We’re seeing big-ticket transactions coming back to the market. For example, there are more of the $4.5 million to $12 million per apartment deals again as the bottom-up property recovery spreads to the luxury residential sector,’ he added.

Seven Palms is designed by Kerry Hill Architects, which has designed many of the Aman resorts.

SC Global clinched the 113,797-sq-ft plot, which was marketed as the Beachfront Collection, at a tender conducted by Sentosa Cove Pte Ltd (SCPL) and which closed in July 2007.

Its top bid of $268.3 million worked out to nearly $1,800 psf per plot ratio. Assuming a breakeven cost of about $2,400 psf, SC Global’s pre-tax profit from the development would be more than $170 million.

The plot has a 1.31 plot ratio (ratio of maximum potential gross floor area to land area) and a four-storey height limit. The maximum number of apartments allowed by SCPL - the district’s master planner - is 88 units.

However, SC Global has opted to build less than half that number, but with bigger units.

All penthouses and ground-floor apartments come with their own swimming pool and each unit in the project has a private lift. Housing in the immediate neighbourhood is bungalows.

Source : Business Times - 07 October 2009

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Sales of small-format properties hit all-time high, says CB Richard Ellis

Sales of small-format properties hit all-time high, says CB Richard Ellis

By Yasmine Yahya, Channel NewsAsia

SINGAPORE: Sales of small non-landed private properties in Singapore have hit an all-time high, even before the year has ended.

According to property consultant CB Richard Ellis, 412 units with a size of 500-square-feet or smaller have been sold this year so far.

This is a stark contrast to 1995, when just one unit of that size was sold.

CBRE said it has seen a rising trend in the popularity of such small homes - about 170 were sold in 2006, 275 in 2007 and close to 300 last year.

Sales of homes sized between 500 and 800 square feet have also hit a record high, with 908 units sold so far this year.

CBRE said these small units are forming a large proportion of the burgeoning sales volume seen in recent months.

- CNA/yb

Source : Channel NewsAsia - 07 October 2009

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