ST PATRICK’S Gardens estate off East Coast Road has been sold for $172 million – the second-biggest collective sale in year 2011 but still below what the owners had initially counted on.
The price UOL Group paid for the freehold condominium on site works out to $812 per sq ft (psf) per plot ratio (ppr), inclusive of a 10 per cent balcony allocation.
When it was launched for sale in June, the block had an indicative price of $188 million, or $888 psf ppr, including the additional balcony space.
It failed to get a buyer and owners relaunched the 98-unit development in October without an indicative price.
The Straits Times understands that the $172 million sale price was slightly below the reserve price and that marketing agent Colliers International had to collect the 80 per cent support for the sale again.
The owners of the flats, whose sizes range from 89 sq m to 146 sq m, are expected to receive between $1.53 million and $2.06 million in gross proceeds.
The 137,561 sq ft site has an allowable gross plot ratio of 1.4 and can be redeveloped to five storeys accommodating 176 units of 1,200 sq ft each, Colliers had earlier said.
Ms Tang Wei Leng, Colliers’ executive director for investment services, also said the project does not fall under recently announced rules by the Finance Ministry that require developers to complete and sell all the units in a residential development within five years or pay an additional stamp duty of 10 per cent.
Land bought on or before Dec 7 with the option exercised on or before Dec 28 are not subject to these rules. The option to purchase St Patrick’s Gardens was issued before Dec 7 and already exercised, Ms Tang noted.
UOL said the deal will be financed by internal resources and bank borrowings.
The sale comes after a cluster of shops and homes at Henry Park Apartments went for $176 million earlier this month.
The amount is also slightly more than that for the collective sale of Hong Leong Garden Shopping Centre, which sold for $171 million in September.
It is understood that UOL group will soon to launch new condominium at this site naming it 70 St Patrick’s.
An ageing Orchard Road landmark has failed in its second collective sale attempt, as not enough owners want the property to go on the market.
Owners of the strata-titled Tanglin Shopping Centre did not manage to garner the required consent of 80 per cent of owners before the collective sale agreement expired at midnight on Wednesday.
The owners who signed the collective sale agreement represented a 69.36 per cent stake in the property. The property has 173 owners in total.
For the building to be put on the market, owners of 80 per cent of the property – by both share value and strata area – must sign the agreement before it expires.
The sales committee garnered the 80 per cent level by strata area, but the percentage by share value fell short.
The 44-year-old building comprises a six-storey podium block of shops, eateries and medical suites, and a 12-storey tower block of offices.
The first attempt at a collective sale in 2011 fell through when the reserve price of $1.25 billion was not met.
This would have worked out to about $4,200 per sq ft (psf) of potential gross floor area, assuming the 68,512 sq ft freehold site had been redeveloped.
The reserve price for the second attempt was $1 billion, or about $3,200 psf per plot ratio.
The hotel arm of Singapore-listed property group City Developments, Millennium & Copthorne Hotels, holds the largest stake in the building at 34 per cent. It announced last November that it had signed the collective sale agreement.
Sales committee chairman Len Hoo, the managing director of family firm C.T. Hoo, which owns an office unit and a jewellery shop in the building, suggested that the Government look into bringing down the requisite collective sale consent level for older properties, to facilitate redevelopment.
Mr Hoo pointed to a number of other ageing strata-titled malls in the Orchard Road area, including Ming Arcade, Far East Shopping Centre and Orchard Towers, some of which have also tried and failed to launch collective sales.
It can be tough for owners to hit the 80 per cent consent level, especially as premiums on collective sale prices “are not as high as they used to be”, he added.
An owner who did not sign the collective sale agreement – and who holds two office units in the property – said revisions in the reserve price had not been made in favour of office unit owners.
Speaking to The Straits Times on condition of anonymity, the owner said office unit owners were underrepresented in the sales committee, which mainly comprised owners of retail units.
For his part, Mr Hoo is considering joining the ranks of owners who have sold their units and cashed out.
“To stay here would cost a lot of money because of the rising building maintenance costs… Maybe I’ll have to think about moving on,” he said.
<Business Times – 27 August 2014>
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The latest state land tender for a pair of adjacent private housing sites in Fernvale Road in Sengkang showed a thinning in tender participation rates as well as land prices – compared with two sites in the area sold last year before the total debt servicing ratio kicked in.
This reflects less confidence among developers given current weaker market conditions, said industry players.
At yesterday’s tender for the 99-year plots, Parcel A along Fernvale Road drew just four bids, and the next-door Parcel B, three bids – down sharply from the eight and nine bids respectively for the two sites tendered in April and June last year respectively.
While the earlier sites, which are now being developed into Riverbank@Fernvale and Rivertrees Residences condos, are slightly superior as they boast water-frontage, the latest pair of sites along Fernvale Road are closer to the Jalan Kayu amenities such as food and beverage outlets.
The top bids for Parcels A and B in Fernvale Road – S$438.17 per square foot per plot ratio (psf ppr) and S$448.35 psf ppr respectively – are also significantly lower than last year’s winning bids of S$489 psf ppr and S$533 psf ppr for the Riverbank@Fernvale and Rivertrees Residences sites respectively. Against the land price of Rivertrees Residences – the highest bids for Parcels A and B on Fernvale Road are lower by 17.8 per cent and 15.9 per cent respectively.
A tie-up involving Chip Eng Seng, Kim Seng Heng Realty and Heeton Homes placed the highest bids for both parcels in the latest tender. Analysts attribute the slightly higher bid for Parcel B to it being closer to Thanggam LRT Station. The introduction of the TDSR (total debt servicing ratio) framework in late-June 2013 has reduced property transactions.
Analysts polled by BT when the sites were launched by the Urban Redevelopment Authority (URA) in June this year had forecast top bids of $420-480 psf ppr for the two sites, with around five bids for each plot.
When contacted last night, Raymond Chia, group CEO of Chip Eng Seng, which is leading the consortium that placed top bids for both Fernvale Road plots, said: “Clinching both sites is more of a strategic move to better manage construction costs and overall planning for the development. We’re exploring whether to do separate projects for the two sites or a single development, but we should have nearly 1,400 units in all, encompassing a range of unit sizes.”
Chip Eng Seng is taking the majority 60 per cent stake in the consortium, while a joint venture between Kim Seng Heng Realty and Heeton Homes will hold the balance. “With both Chip Eng Seng and Kim Seng Heng involved in the construction business, we should be able to contain our costs better,” said Mr Chia.
The breakeven costs for the two sites are estimated at around $850-890 psf. And the consortium is hoping to launch the initial phase in first-half next year at around $1,000 psf on average.
Also bidding for Parcel A yesterday were a City Developments-TID partnership (bidding around S$400 psf ppr), Sim Lian Land (S$361 psf ppr) and Koh Brothers (S$321 psf ppr). Vieing for Parcel B were Flair Development, controlled by Wee Ee Chao (S$418 psf ppr) and Sim Lian Land (S$392 psf ppr).
<Business Times – 8 August 2014>
Sherman Kwek, chief investment officer of City Developments, has picked up a Good Class Bungalow for S$18.8 million. This works out to about S$1,247 per square foot on freehold land area of about 15,073 square feet.
Sitting on an elevated, triangular-shaped site near the confluence of Jervois Road and Tanglin Road, the two-storey bungalow is said to have six en suite bedrooms and a small swimming pool. The total built-up area is around 7,600 sq ft.
Mr Kwek, who is in his late 30s, is said to be buying the property from a couple. He exercised the option for the purchase last month.
Based on caveats information, this would be the fourth time the property is changing hands in the past 11 years. It was previously transacted in 2003, 2006 and 2007.
Mr Kwek is the elder son of City Developments and Singapore Hong Leong Group executive chairman Kwek Leng Beng. He is also a council member of the Singapore Chinese Chamber of Commerce and Industry.
In another GCB deal, motoring tycoon Peter Kwee is believed to have exercised an option last month for the purchase of a house in Gallop Park for S$25.2 million, translating into S$1,574 psf on land area of about 16,010 sq ft.
Mr Kwee is understood to be buying the property as trustee for another party. Under a complex deal, the seller – who is understood to be formerly from China, have completed his university education here and to be now a Singaporean – is said to have granted an option in the fourth quarter of last year.
The two-storey Gallop Park bungalow has about 7,000 sq ft built-up area; it has six bedrooms and a swimming pool. The property is believed to have been renovated a few years ago. The latest deal would mark the fifth time the property is changing hands in the past eight years; the earlier transactions were at about S$7.5 million in March 2006, S$12.3 million in July 2007, S$13.1 million in September 2008 and S$21 million in December 2010.
Other recent GCB transactions are said to include an option granted recently for an Oriole Crescent property for around S$15.7 million. It has land area of about 10,220 sq ft and built-up area of some 7,000 sq ft.
A property at Dalvey Road is also said to be selling at S$30-plus million. It is said to have five bedrooms in addition to a granny room and a guest room. The bungalow is on nearly 18,490 sq ft of land.
GCBs are the most prestigious type of landed housing in Singapore because of the planning constraints imposed by the Urban Redevelopment Authority, which has designated 39 locations on mainland Singapore as Good Class Bungalow Areas (GCBAs).
Typically, GCBs have a minimum land area of 1,400 square metres (15,069 sq ft). However, when GCBAs were gazetted in 1980, they included some slightly smaller existing sites. Nonetheless, these are still considered GCBs as they would be bound by the other GCB planning rules if they were to be redeveloped.
For instance, such plots cannot be further sub-divided and they cannot be built more than two storeys high (plus an attic and a basement).
15 deals in GCBAs have been done in the first half of this year totalling slightly over S$344 million, an improvement from just eight deals of S$233 million in the second half of last year.
With the recent resale prices of private condos falling at a faster clip than rents, gross rental yields picked up in the first half of this year in all regions across Singapore, after having slid since 2009.
Going by Urban Redevelopment Authority (URA) data compiled by STProperty, the recovery was led by suburban areas, especially the north-east.
Market watchers say that this rebound is likely to be a blip, as the leasing market is softening and vacancy rates are on the rise.
They reckon that, with buyers of private homes being more driven by the prospects of capital appreciation than by gross yields, the slight improvement in yields is unlikely to influence their buying decisions.
The report by STProperty yesterday derived median gross rental yield in each planning area based on the annualised median gross rent per sq ft and the median resale price per sq ft for that area, which implicitly assumes that units being rented out can fetch those resale prices based on recent transactions.
It showed gross rental yields in the north-east region recovering to 4.03 per cent in the first half of this year, up from 3.73 per cent last year. Yields for the entire north region inched up to 4.14 per cent from 3.90 per cent last year.
The central area recorded the smallest improvement in yields to 3.39 per cent, from 3.37 per cent last year.
Topping the list of planning areas are Ang Mo Kio, Yishun and Sembawang in the north, followed by north-eastern areas Sengkang and Hougang. Six planning areas attracted rental yields of 4 per cent or more, including Geylang, which came in sixth.
The lowest-yielding areas are the prime locations, including Orchard, Newton, Tanglin, River Valley, the Southern Islands (Sentosa Cove) and Bukit Timah. Homes in the Orchard area attracted the lowest gross rental yield of 2.7 per cent.
Commenting on the report, property consultants said this dynamic could shift, with the huge supply of completed condos coming onstream, mainly in the suburbs.
But rising vacancy rates and the difficulty of securing tenants are weighing on the minds of investors, on the back of URA data showing vacancy rate islandwide spiking to 8.3 per cent in the second quarter; this was higher than the 7.3 per cent in the third quarter of the 2009 recession year.
News dated: 7 August 2014
FOR Singaporean motorist Mohd Noh Omar, his frequent visits to Johor Baru may soon come to an end following the recent news of the implementation of the Vehicle Entry Permit (VEP) on all Singapore-registered vehicles entering Malaysia.
The 39-year-old may have to settle with entering Johor Baru less than his regular twice a week visits to the southern city.
“Johor Baru is where I normally unwind after my shift ends in Changi Airport. This has been my practice for the past five years,” said Noh, who works as a forwarding executive.
On July 17, Prime Minister Datuk Seri Najib Razak announced that the government agreed to the implementation of the VEP following a request from the Johor government.
This announcement came shortly after the Singaporean authorities announced a hike in the republic’s VEP for foreign cars from S$20 (RM51.40) to S$35 per day beginning Aug 1. The Singapore Land Transport Authority also said the Goods Vehicle Permit for lorries would be increased from S$10 to S$40 per month.
However, the Johor government had pointed out that the request was submitted to Putrajaya more than five months ago. This news was welcomed by the state government, as well as many Johoreans.
The Johor government has been awaiting the Federal Government’s go-ahead to implement the VEP for Singapore-registered vehicles entering both the Causeway in the city and the Second Link in Gelang Patah.
The VEP was proposed back in 2006 and 2010 as a means to curb losses incurred as a result of foreign vehicle owners buying subsidised petrol and diesel.
At that time, the state government had proposed a RM20 levy on Singapore-registered cars, with RM5 to be channelled back to the state for road maintenance. But nothing came of it until recently.
Noh said with the implementation of the VEP by Malaysian authorities, entering the state capital would be an additional burden for him.
“The VEP levy will be an additional charge. This is despite the fact that Singaporeans like us spend money in Johor.”
However, Noh said he did not mind if the VEP was pegged below RM10 for cars and RM5 motorcycles.
And many other Singaporean motorists shared the same view as Noh, with thousands frequenting Johor Baru, popularly known as JB, daily for food and entertainment.
At the same time, this will also affect several thousand Singaporean citizens who are permanently residing in Johor Baru. Many Johoreans are of the opinion that introducing the VEP is a good measure, depending on the charges.
For the past three decades, Singaporeans have taken advantage of their high exchange rates to shop in Johor. Many businesses in Johor Baru have flourished over the years by catering to Singaporean customers.
Johoreans agree that this was the main reason why Johor Baru’s cost of living was constantly on the higher end compared with other cities within Peninsular Malaysia.
The increasing prices of basic amenities, houses, urban sprawl and transportation are some of the problems the average Johorean wants addressed.
With the implementation of the VEP, it is hoped that that this can assist in bringing about a healthy balance between businesses and the cost of living in Johor Baru, as well as play a part in Iskandar Malaysia’s economic growth region, which encompasses the entire south Johor.
Singapore’s proximity to the Johor Baru city centre have provided the latter with a significant volume of trade and tourism.
These advantages, however, have had some negative impacts on Johor Baru. The development has brought with it rapid population growth and higher cost of living for residents.
It is hoped that the VEP introduced by the Malaysian authorities can contribute to minimising these transborder challenges that are becoming more complex, difficult and costly to effectively solve.
News dated: 24 July 2014
JOHOR BAHARU: The Johor Strategic Development Plan will be launched in November to spur economic development in the state, says Menteri Besar Datuk Seri Mohamed Khaled Nordin.
He said the comprehensive plan would have five focus areas including the development of the food sector.
“With the development plan, the state government will ensure Johore will remain competitive not only within the country but also in the region,” he told reporters after launching the Frontier Industrial Park (Second Phase) in Taman Desa Cemerlang here.
Mohamed Khaled said rapid economic development would ensure the state remained attractive for investors.
On the setting up of the industrial park by WB Land Sdn Bhd, he said it would lure investors as it has added attractive features such as gated community, close circuit television security, gymnasium and jogging tracks amid environmental friendly surroundings which was not only attractive to investors but employees too.
“This development is different from the rest.
“In the world of competitive investments, investors are very selective, choosy and want the best,” Mohamed Khaled said.
He added that the industrial park was strategically located near the Johor Port and can be the trend setter for others who want to build similar industrial parks in the state.
The second phase of the industrial park is sprawled over 25 hectares of land and has a gross development value of RM354 million and is expected to be completed by year-end.
News dated: 21 Jul 2014
KUALA LUMPUR: The Government may set up a separate entity to oversee the development of specific areas located along the proposed high-speed rail (HSR) project between Kuala Lumpur and Singapore.
Land Public Transport Commission (Spad) chief executive Mohamad Nur Ismal Kamal (pic) said that the entity could be a special authority which will look at the socio-economic aspect of the towns.
“The development of these towns located along potential stops or stations of the HSR would be leveraging on the existing economic environment there but we will push it up the value chain slanting more towards high-end industries,” he said.
He said Spad was working on the draft by itself for now, but there could be a standalone authority to focus on this development as “it’s very important to have everything in concert and coordinated, once the ball starts rolling.”
“This is because the HSR project is expected to be a game-changer for the creation of two mega cities and high value socio-economic clusters in between,” Mohamad Nur told StarBiz recently.
At this point in time, Spad shared that Greater KL would be the focus of business and financial services, Seremban would be home to small and medium size enterprises of technology-based industries, Malacca would be a centre for tourism and health tourism, Muar is dedicated for consumer goods and industrial design, Batu Pahat would be developed into a textile design and manufacturing centre while Nusajaya would continue to grow its education industries.
While most of these stops in Malaysia do not have high population density, Mohamad Nur believed the project would boost the profile of the connecting areas, which, in turn, would attract new investments
The HSR is estimated to save up to 1½ hours of travelling time compared to boarding a flight with a capacity for 500 passengers in one sitting. The total estimated time for the 350-km journey from Kuala Lumpur to Singapore is 1½ hours.
It will provide two types of services – the first being an express service between Kuala Lumpur and Singapore, while the other is a transit service that will stop at all five proposed stations.
The HSR project would cost around RM40bil, according to previous news report.
The HSR project, according to Mohamad Nur, would be a catalyst of transport high-value workers and customers, but it would need an active planning and clear policies coordinated with the development of the HSR.
At both ends of the HSR, he said, Kuala Lumpur and Singapore would be further developed into two mega cities with population exceeding 10 million people and high income per capita such as in Hong Kong, New York and Shanghai.
News dated: 28 July 2014
Amid the current supply-demand imbalance, the gradual decline in private home prices is set to continue for the rest of the year after three quarters of decreases, say property consultants.
Including the 1.1 per cent quarter-on-quarter drop in the second quarter based on Urban Redevelopment Authority’s (URA) latest flash estimate, the official private home price index has shed 3.2 per cent in three straight quarters of declines after peaking in Q3 last year.
In the first half, the index has eased 2.3 per cent (comparing the latest Q2 number with that for Q4 2013) and consultants expect a 4-8 per cent full-year decline. Property consultants are forecasting a moderate price erosion – barring a recession or external shocks.
ERA‘s key executive officer Eugene Lim reckons the softening rental market – which has been under pressure on the back of rising private housing completions and a slowdown in new demand due to reduced expat inflow – is also contributing to sliding home prices.
The 1.1 per cent drop in Q2 is smaller than Q1′s 1.3 per cent fall. That was probably due to prices of non-landed homes in the city fringe, or Rest of Central Region (RCR), easing at a slower clip of 0.6 per cent in the April-June quarter compared with the 3.3 per cent slide in the first three months.
Market watchers believe the RCR subindex in Q2 was probably supported by the launch of Kallang Riverside and Commonwealth Towers, with respective median prices of $2,111 per square foot and $1,626 psf achieved in their first month of launch.
In all other categories – non-landed private homes in Core Central Region (CCR) and Outside Central Region (OCR), as well as landed properties – the latest flash estimate Q2 price declines were bigger than in Q1 .
The 1.1 per cent contraction in suburban locations or OCR in Q2 (compared with a 0.1 per cent dip in Q1) is thought to be due to lower-priced units transacted at a number of projects – most notably The Panorama in Ang Mo Kio but also to a lesser extent, Vue 8 Residence in Pasir Ris, Riverbank @ Fernvale, The Tembusu in Kovan and The Skywoods in the Dairy Farm area.
The pace of price decline also gathered momentum for non-landed homes in CCR – which includes the traditional prime districts 9, 10 and 11, Downtown Core Planning Area and Sentosa. The subindex shrank 1.5 per cent in Q2 after falling 1.1 per cent in Q1.
This segment has posted the sharpest drop of 5 per cent after five consecutive quarters of decline since its recent peak (in Q1 2013), amid a slowdown in purchases by foreign buyers and investors due to the additional buyer’s stamp duty (ABSD).
Landed homes – long regarded as a bastion of strength in the Singapore property landscape due to their more limited supply – have also been seeing their prices crumble. URA’s subindex for this category eased 1.5 per cent in Q2, double the 0.7 per cent fall in Q1.
News date: 2 July 2014