Heartland condos at $1k psf or more?

Heartland condos at $1k psf or more?

Maybe for a few more months but it won’t be norm for mass market

By Joyce Teo, Property Correspondent
 
An artist’s impression of the 329-unit Centro Residences in Ang Mo Kio. Far East Organization launched it at more than $1,100 psf last year. — PHOTO: FAR EAST ORGANIZATION

A 99-year leasehold condominium The Vision, in the quiet suburbs of West Coast Crescent, was launched recently at an eye-popping price of around $1,000 to $1,200 per sq ft (psf).

Nevertheless, at least 160 buyers put down money for the mass market homes that come with branded goods and quality finishes, said the developer Cheung Kong (Holdings).

That set the benchmark price for the area. And this will not be the last of such pricey projects, industry players said.

PropNex chief executive Mohamed Ismail said the trend of a sizeable number of properties sold above $1,000 psf will likely continue over the next few months.

Still, this price level is not yet likely to become the norm for the entire mass market category, given that affordability will be a serious issue, said those in the industry.

This price level first came up in the mass market segment after Far East Organization launched its 329-unit Centro Residences in Ang Mo Kio at more than $1,100 psf last year.

At that time, property experts were caught by surprise, pointing out that the price would be a new suburban record.

Until then, the leasehold record was believed to be held by Bishan 8, which Far East launched at $1,100 psf in 1997.

Still, there were buyers at Centro, with five February deals registered at a median level of $1,220 psf.

At some of last year’s popular mass market launches, some units did cross this $1,000 psf price level, though the average launch price was below that mark.

These included Trevista in Toa Payoh, Meadows@Peirce in Upper Thomson and Elliot at the East Coast.

Looking ahead, the $1,000 psf price may not be surprising, based on some of the aggressive bids achieved at recent government land tenders, industry players said.

‘For the next half year, you will likely see new mass market launches hitting the price level,’ said Knight Frank managing director (residential services) Peter Ow.

‘The psf price is one thing, the quantum is another. As long as the total quantum is at $1 million or less, buyers can still afford to buy.’

Units will thus become smaller to keep the quantum affordable, he added.

‘If the developers bought land above $500 psf ppr, they would try to sell it for more than $900 psf ppr,’ said Ngee Ann Polytechnic real estate lecturer Nicholas Mak. (The term ppr refers to per plot ratio.)

However, the aggressive bidding situation will not last.

‘Demand is still strong. But as more supply comes onstream, developers’ landbanking needs will gradually be satisfied,’ said Mr Mak.

Their bids will come down gradually, he said.

Developers are also wary about overpricing their projects as they would then have difficulty selling them, he said.

Said DTZ’s South-east Asia research head, Ms Chua Chor Hoon: ‘Not all mass market projects can be sold at above $1,000 psf. They would need to have very attractive attributes in order to attract home owners or investors.’

This would include proximity to town and MRT stations, and proximity to employment hubs or sought-after educational institutions to provide a ready pool of good tenants, Ms Chua added.

‘Developers will try to maintain the ($1,000 psf and above) price level as the norm for very well-located mass market condos,’ said Mr Mak.

But it will not be the norm for mass market condos in general, he stressed.

‘We are not seeing a strong growth in household income, so how can we support those kind of prices?’

Source : Straits Times - 21 March 2010

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Google signals end to Chinese searches

Google signals end to Chinese searches

It may unveil plans on Monday, exit April 10

By Sim Chi Yin, China Correspondent

Google’s top brass had previously explained that any closure would be of Google.cn, its Chinese-language search service, not of all the company’s China-based business.

The Straits Times could not reach staff at Google’s Beijing headquarters for confirmation, but on March 12, the Financial Times quoted a source as saying the Internet giant had drawn up detailed plans to halt its Chinese service and ‘99.9 per cent’ sure it will follow through with them. — PHOTO: REUTERS

BEIJING: Google may announce on Monday whether it will shut down its Chinese search engine following a high-profile censorship row with Beijing, Chinese media reported yesterday.

Shanghai-based newspaper China Business News quoted an unnamed Google China employee as saying that the Internet giant was due on Monday to unveil its plans, which could include compensation packages for employees.

The newspaper also quoted a local authorised Google agent as saying he had received unconfirmed information that the company would ‘leave China’ on April 10.

‘I have received information saying that Google will leave China on April 10, but this information has not at present been confirmed by Google,’ the agent was quoted as saying.

These latest signs that Google was following through with its threat to shut Google.cn, its local search service in China, come two months after it vowed to stop playing by self-censorship rules that Beijing imposes.

The Straits Times was unable to reach staff members at Google China’s Beijing office for confirmation.

On March 12, the Financial Times quoted an unnamed source as saying Google had drawn up detailed plans to halt its Chinese service and was ‘99.9 per cent’ sure it would follow through as talks over censorship with the Chinese authorities had reached an apparent impasse.

Google’s top brass had previously explained that any closure would be of Google.cn, its Chinese-language search service, not of all the company’s China-based business.

The jury is still out on whether other Google.com services available internationally, including Gmail and Gchat, would be affected.

China has the world’s largest population of online users, at 384 million, but exercises strict control over cyber content, filtering out materials that are pornographic or politically sensitive.

Google has about a one-third share of the Chinese search market compared with chief rival Baidu’s 60 per cent.

The company said in January that it would stop filtering search results on Google.cn to protest against Beijing’s strict censorship rules, which other Internet companies in China abide by.

For an afternoon or two after that announcement, searches on Google.cn yielded images of the usually banned iconic picture of a lone man confronting a line of tanks during the Tiananmen protests of 1989. A search yesterday found no such images.

With Washington publicly taking Google’s side, the spat joined a list of bilateral trade and diplomatic issues causing friction between China and the United States, bringing relations to a low in recent months.

Google had said it would hold talks with Chinese officials on offering an uncensored search engine in the country. Neither side has since given details of talks.

Google’s fate in China may well be decided this month as the renewal season for Internet service licences ends on March 31.

While many Chinese Internet users might not feel a loss with Google’s departure as they rely on a host of Chinese search engines, the most demanding of users - like academics and researchers - would be greatly affected, said Chinese analyst Fang Xingdong, founder of the Chinalabs.com website.

‘No domestic search engine can match the technology that Google has. It will be a big loss if Google left. And whether other Google services can continue to be used in China will now be up to the Chinese government,’ he said.

Source : Straits Times - 20 March 2010

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Sim Lian Land awarded tender for residential site at Tampines

Sim Lian Land awarded tender for residential site at Tampines

By Wong Siew Ying

SINGAPORE: Developer Sim Lian Land has clinched the tender for the residential site at Tampines Avenue 1 and Avenue 10. It submitted the top bid of S$302 million for the 3.2-hectare plot.

The site with a 99-year lease had attracted a total of eight bids. The remaining bids range between S$168 million and S$289 million.

The Urban Redevelopment Authority (URA) said it is the fourth residential site to be sold through the Confirmed List of the Government’s Land Sales Programme in the first half of 2010. Others included land parcels at Choa Chu Kang Road, Buangkok Drive and Yishun Avenue 11.

The four sites can potentially yield 1,710 housing units.

URA added that another four residential sites, which could add an extra 1,215 units, will be released for sale in March and April. They are located at Boon Lay Way, Simei Street 3, Sembawang Road and Upper Serangoon Road.

URA has also assured the public that there is sufficient land supply to meet any surge in demand. It said a potential supply of 10,550 units will be made available from the Confirmed List and Reserve List system for the first half of the year.

This is the highest total supply quantum from any half-yearly government land sales programme.

Separately, URA has also awarded the tender for a transitional office site at Mohamed Sultan Road to LINK (THM) Holdings at S$17.2 million.

- CNA/sc

 
Source : Channel Newsasia - 20 March 2010

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S-REITs weighed down by modest economic recovery & property supply

S-REITs weighed down by modest economic recovery & property supply

SINGAPORE : Ratings agency Moody’s on Thursday said Singapore real estate investment trusts (S-REITs) could suffer from the supply of new commercial properties and modest economic growth.

In its latest report, Moody’s said that despite the resilience of most S-REITs in the last six months, it expects the fundamental prospects for the sector to remain challenging in the next 12 months.

This is because of the substantial supply of commercial properties due to come on stream over the next two years.

The report notes that Singapore’s economic recovery for the next 12 months will be about 5 per cent, which is below the average GDP growth of 8 per cent from 2004-2007.

And Moody’s said this will not be enough to absorb the increasing supply of commercial properties that was planned before 2008, when Singapore’s economic growth rate was much higher.

As such, the strong supply in the commercial property sector in the next 12-18 months will continue to impact rental and vacancy rates, in particular the office and the industrial sectors.

Moody’s also said that while suburban malls will remain resilient, downtown shopping malls will face near-term pressure on rental rates.

But on the positive side, Moody’s said that S-REITs should see relatively stable operating incomes, high-quality assets and low development risk.

It also notes that many investment-grade S-REITs have proactively dealt with refinancing risk issues by raising new loans or equity, totalling US$4 billion last year.

It said that those S-REITs with strong sponsors are in a better position to cope with refinancing as they have easier access to equity markets.

But the report also notes that the credit profiles for smaller-rated S-REITs without strong sponsors have been weakened by the challenges of obtaining new funds from banks. - CNA/ms

Source : Channel Newsasia - 19 March 2010

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Credo Real Estate launches collective sale of Culford Garden at Siglap

Credo Real Estate launches collective sale of Culford Garden at Siglap

By Ephraim Seiow

SINGAPORE: Property consultants Credo Real Estate has launched the tender of Culford Garden at Siglap with an asking price of between S$37 million and S$40 million.

At that price, each unit owner can expect to get between S$1.54 million to S$1.66 million from the en bloc deal.

The collective sale site has a land area of 44,000 sq ft and comprises 24-units which are mainly three-bedroom apartments.

The site is zoned for residential development up to a Gross Plot Ratio of 1.4 and an allowable height of five storeys.

The total Gross Floor Area or GFA allowed is about 68,000 square feet and it can be redeveloped into approximately 65 apartment units with an average size of 1,000 square feet.

Managing director of Credo Real Estate Karamjit Singh said the asking price for the en bloc sale translates to about S$545 to S$589 per square foot on potential GFA, including balconies.

He added that at this price range, a developer may expect to break-even at about S$950 to S$1,000 per square foot.

The tender for Culford Garden closes on April 8 at 2.30 pm. - CNA/vm

Source : Channel Newsasia - 18 March 2010

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2 property owners hope to fetch S$30m for adjacent bungalows

2 property owners hope to fetch S$30m for adjacent bungalows

By Mok Fei Fei

SINGAPORE: Two owners in the Mountbatten area are jointly putting up their adjacent bungalows for sale for some S$30 million.

Property consultant Cushman & Wakefield said the freehold units at 6 and 8 Margate Road have a combined land area of 24,000 square feet.

The property is zoned for high rise residential development of up to 24 storeys. It has a plot ratio of 2.1, allowing a maximum gross floor area of 50,404 square feet.

According to Cushman & Wakefield, the combined plot of land can allow the new developer to construct between 55 and 60 units with average sizes of 850 square feet.

It added that small concept apartments have been making headlines last year and sold well due to the affordability factor.

The property is expected to fetch in excess of S$30 million.

- CNA/sc

Source : Channel Newsasia - 18 March 2010

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Two East Coast en bloc sites on market

Two East Coast en bloc sites on market

(SINGAPORE) Two en bloc sale sites have come on the market - Culford Gardens at Siglap, with price expectations of $37-40 million, and two adjacent bungalows in Margate Road, which are expected to fetch more than $30 million.

Culford Gardens: The freehold 44,093 sq ft site has a price tag of $37-40 million or $545-589 per sq ft of potential gross floor area. Based on this price, a developer can expect to break even at about $950-1000 psf
Both sites are freehold.

In the Siglap/Upper East Coast vicinity, Credo Real Estate is handling the collective sale of Culford Gardens, which is on a 44,093 sq ft site. Under Master Plan 2008, the site is zoned for residential development with a 1.4 plot ratio - ratio of maximum potential gross floor area to land area - and a maximum five-storey height.

According to Credo, the total gross floor area allowed is 67, 903 sq ft including the additional 10 per cent balcony allowance. The owners’ $37-40 million price expectation reflects a unit land price of about $545-589 per sq ft of potential gross floor area. No development charge (DC) is payable. Based on this price, a developer can expect to break even at about $950-1000 psf.

Culford Gardens’s tender closes on April 8.

Over in the Katong area, two neighbours are teaming up to sell their bungalows at 6 and 8 Margate Road, which have a combined land area of 24,002 sq ft, through an expression of interest exercise being handled by Cushman & Wakefield.

The property is zoned for high-rise residential development of up to 24 storeys. It has a plot ratio of 2.1, which allows for a maximum gross floor area of 50,404 sq ft. Between 55 to 60 units of an average size of 850 sq ft can be built on the combined plot of land, says Cushman. The property is expected to fetch more than $30 million or $866 per sq ft per plot ratio, including an estimated $13.6 million DC.

This reflects a minimum breakeven cost of about $1,250 psf for a new project. The expression of interest exercise closes on April 20.

Source : Business Times - 18 March 2010

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JTC looks for external ideas to boost land use

JTC looks for external ideas to boost land use

Funding of up to $1m for any project with cutting-edge innovations

By UMA SHANKARI

(SINGAPORE) JTC Corporation is looking for ‘cutting-edge’ ideas from the private and public sectors and academic institutions on how to intensify land use and create new industrial space.

And it will provide funding of up to $1 million for each project proposal. The industrial landlord has decided to open up its innovation ‘dream fund’ - created to fund innovative projects internally - to external partners too.

‘Innovation is a high priority for JTC and we recognise that we can increase our capacity for innovation if we pro-actively reach out to external partners,’ said JTC chief executive Manohar Khiatani. ‘With this initiative, we hope to seek new inspiration to complement our own ideas and boost industry research in optimising, intensifying and creating new industrial space for the advancement of the economy.’

The maximum funding amount for each project proposal is capped at $1 million, and the duration at one year. Projects should not have started before the funding is approved.

Also, foreign organisations will have to partner a local organisation or have a local arm to participate. Applicants will know if their proposals have been successful by the third quarter of this year.

The overall theme for the inaugural proposal exercise is on the intensification of industrial land use - in line with what was recommended by the Economic Strategies Committee in early February.

The committee’s report said that Singapore has to support the intensification of industrial land use as there are now greater demands on the country’s limited land resources.

The focus for the proposal will be on three main areas: clustering relevant industries for increased synergy; reducing land use for infrastructure, transport networks, buffer zones and other facilities; and mitigating issues relating to high-rise industrial operations such as goods handling, vibration and urban heat.

JTC’s ‘dream fund’ was set up in 2004 to grow new capabilities to sustain Singapore’s competitive industrial edge.

Its innovative projects include Fusionopolis, Biopolis, Seletar Aerospace Park and the recently launched CleanTech Park. Besides these parks, JTC is pursuing other ideas such as new mega-hoist systems and a ’small-footprint high plot ratio’ for standard factories, which could cut costs and save space for businesses.

‘As an infrastructural solutions provider in Singapore, JTC places priority on developing innovative and sustainable infrastructure solutions to meet the evolving needs of businesses,’ JTC said in a statement.

Source : Straits Times - 18 March 2010

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Sales of private homes up 130%

Sales of private homes up 130%

Singaporeans are the main drivers of surge last year

By Melissa Sim & Melissa Kok

DOWNTURN? What downturn?

Private home transactions - for both new and resale homes - jumped by more than 130 per cent last year, despite the downturn. Singaporeans were the main drivers of the surge: There was an overall rise of 144 per cent in private property transactions by them last year - 23,516 compared with 9,649 in 2008.

In the non-landed segment, Singaporean purchases rose almost 159 per cent. The rise in landed property purchases was nearly 83 per cent.

But comparatively lower prices here as a result of the credit crunch, the influx of expatriates and the attractiveness of Singapore property also led to more purchases by foreigners.

The number of purchases by foreigners, including permanent residents (PRs), rose 114 per cent overall last year - 6,798 compared to 3,176 in 2008. The bulk of the increase was in the non-landed segment, which rose from 3,036 purchases in 2008 to 6,610 last year - a jump of 118 per cent.

Landed properties showed a year-on-year rise of 34 per cent.

In terms of overall private property transactions, Singaporeans accounted for 76 per cent of all purchases. Foreigners and PRs made up about 22 per cent, with the rest going to companies and others, according to figures from the Urban Redevelopment Authority and DTZ Research.

Checks by The Straits Times showed that among the foreigners, Malaysians, Indonesians, and Chinese and Indian nationals were the most active in the property market. In particular, the proportion of Chinese and Indian nationals has shown a steep hike.

In 1999, they made up 6.6 per cent of total transactions by foreigners and PRs. That proportion grew to 27.3 per cent last year.

Experts said the rising number of purchases by foreigners could also be due to home prices here being more attractive than in cities like Hong Kong and Tokyo.

Ms Christine Sun, senior manager of research and consultancy at Savills Singapore, said: ‘The opening of the integrated resort and the strength, resilience and stability of Singapore’s economy during the recent downturn could also be plus points.’

She added that the boom came despite a poor economy. ‘The market sentiment in the earlier part of 2009 was rather bullish. Many locals were buying due to pent-up demand, and PRs and foreigners could have ridden on the positive market sentiment and bought in as well.’

Mr Jeffrey Hong, executive director of HSR Property Group, said another reason for the rise in transactions was simply that there are more foreigners here.

Latest figures from the Department of Statistics showed there were 533,200 PRs and 1.25 million foreigners in Singapore as of last year, up from 449,200 PRs and one million foreigners in 2007.

Another reason foreigners are buying more homes is that to many, it makes more sense than renting.

Australian Justin Kwan, 26, a doctor who has lived here for more than a year, bought a Newton One condo unit last December. He did not want to go on paying $3,000 in rent, and said property prices were affordable.

Source : Straits Times - 18 March 2010

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Tampines site gets top bid of $302m

Tampines site gets top bid of $302m

Plot which attracted just one bid 18 months ago saw 8 bidders this time

By Joyce Teo

Sim Lian Group’s executive director Diana Kuik says the site is in a mature estate and offers a nice living environment.

A RESIDENTIAL site facing Bedok Reservoir that failed to be sold 18 months ago after attracting only one bid of $84.6 million is now sought after by eight developers, with one offering $302 million.

The Tampines site was a victim of the financial meltdown when it closed for tender in August 2008, but the property market rebound has brought it back into favour.

Sim Lian Land lodged the highest bid for the 99-year leasehold plot, which would be suitable for mass market housing - the property industry’s hottest sector these days.

Sim Lian’s offer - $302 million or $420.90 per sq ft per plot ratio - topped seven others for the land at the junction of Tampines Avenue 1 and Avenue 10.

The huge rebound in price follows a similar tender last month when a site at the junction of Choa Chu Kang and Woodlands roads above Ten Mile Junction attracted a top bid of $164 million, yet in 2008 it drew a top bid of $61 million and was therefore not sold.

The Sim Lian offer was above the $300 to $400 pricing tipped by some experts but within the $410 to $470 psf ppr range forecast by Ngee Ann Polytechnic lecturer Nicholas Mak.

The second-highest bid from a venture between Far East Organization and Frasers Centrepoint came in just 4.3 per cent lower at $402.80 psf ppr.

Other bidders included MCL Land, Allgreen Properties and GuocoLand, according to the Urban Redevelopment Authority yesterday.

A unit of CapitaLand Residential was in seventh place with a bid of $179.4 million or $250 psf ppr, while Boon Keng Development was last with a bid of $234.20 psf ppr.

The tender is ‘another demonstration of developers’ interest in the mass market segment’, said Mr Joseph Tan, CBRE’s executive director, residential. Of the eight bids submitted, the first six were very close to one another, he noted.

DTZ’s South-east Asia research head, Ms Chua Chor Hoon, concurred, saying the results showed that developers were still very eager to replenish their land banks and optimistic about the market outlook.

Sim Lian Group executive director Diana Kuik told The Straits Times: ‘Our bid is competitive but not very aggressive. Land prices in general have gone up.’

Also, the site is in a mature estate and it offers a nice living environment, she said.

‘We are looking to build 600 to 650 units with a range of sizes, from small two-bedroom units to four-bedroom units as well as penthouses,’ she added.

CBRE estimates a break-even level of around $700 psf, based on the top bid.

It pointed out that caveats lodged for sales in new projects in the Bedok Reservoir area, such as Waterfront Key and Waterfront Waves, have ranged from $700 psf to $850 psf in the past four to five months.

‘When the new project is ready for launch in six to eight months’ time, we would expect it to be launched within the same price range or higher, subject to market conditions,’ said Mr Tan.

Sim Lian as a contractor would be able to manage its development costs and so may be able to sell units for around $800 psf, based on its bid, said Ms Chua.

The Tampines site, which has a maximum gross floor area of 66,655 sq m, is the fourth residential site launched for sale on the confirmed list this year.

Confirmed list sites are tendered out on scheduled dates, without the need for developers to indicate interest.

The Tampines plot is next to The Tropica condominium and about five to 10 minutes’ drive from Tampines Central and Tampines MRT station.

Only one firm, Boon Keng Development, bothered to bid for the site when it was first offered for sale in August 2008.

Source : Straits Times - 17 March 2010

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