Collective sales hit $3.5b in just 5 months
Top Print Edition Stories
Published May 30, 2006
Collective sales hit $3.5b in just 5 months
Opinions differ on whether developers will keep buying at current prices
By KALPANA RASHIWALA
(SINGAPORE) Including yesterday's Lucky Tower deal, 26 collective sales have been transacted for a total of about $3.5 billion so far this year, surpassing the $2 billion for the whole of last year, although that was for 36 sites, the latest figures from CB Richard Ellis show.
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What is more interesting is the broad spectrum of buyers in the current wave of en bloc deals that kicked in last year.
From property giants like Far East Organization and City Developments to mid-size players like Ho Bee, relatively new entrants like Aspial and construction and property groups like Chip Eng Seng, Sim Lian and Hoi Hup, just about every player in town seems to have netted at least one prime district site - or more. Even Hotel Properties, which had not made a major purchase since the Asian financial crisis of 1997, was lured recently by Beverly Mai at Cuscaden Road.
Can property agents continue to whet the appetite of developers as they keep rolling out prime district collective-sale sites at current prices?
'After you've eaten something you're less hungry and tend to be more choosy about what you're going to eat next,' is how DTZ Debenham Tie Leung director Tang Wei Leng puts it.
Agreeing with this, a fellow property consultant notes that the number of bids for recent en bloc tenders has fallen compared with, say, six months ago.
However, taking a more positive view, CB Richard Ellis executive director Jeremy Lake says the broad spectrum of buyers for collective-sale sites - with buying not just confined to just a few players - suggests that if some drop out and decide to take a break for the time being, others can replace them.
But the jury is out on where luxury land prices are headed. Some industry players reckon they have plateaued, while others believe they can head further north because developers need to keep replenishing their landbanks with prime district sites on the back of strong purchases of luxury homes driven by foreigners.
Says a developer who has been buying prime en bloc sites: 'I think prices have levelled off. If prices were to come down, a lot of prime Orchard Road sites would not be available in the market as the prices would not be enough to entice owners to sell.
'But by the same token, over the past three months, everyone has bought at least one piece of choice land. When you're full and look at the dessert menu, it doesn't look so interesting. So that will provide a stalemate in land prices, I think.'
However, others beg to differ. 'St Regis Residences will be the litmus test for luxury residential prices. And that will provide the base for further increases in high-end residential land values,' suggests Knight Frank executive director Foo Suan Peng. Sources say Hong Leong Group has begun to sell the luxury housing project at Tomlinson/ Cuscaden roads at average prices of about $2,500-2,600 psf, although some choice units have achieved much higher prices.
Even taking into account the project's unique factors, the pricing reflects values above the current market, Mr Foo notes.
Luxury home prices in Singapore still lag those in major cities and are attractive to foreign buyers. 'Increasingly we are seeing regional and international property buyers who are looking for a place to park funds being drawn to Singapore because it's a wealth management hub and enjoys a safe haven status,' says Mr Foo.
'This will continue to provide the momentum for developers to replenish prime sites. If developers buy predominantly high-end sites, this will create upward pressure on prime land prices.'
A list compiled by CBRE of collective-sale transactions since June last year shows the big buyers include Hong Leong Group, which includes listed City Developments. The group has spent $726.5 million on four acquisitions including the $383 million purchase of Lucky Tower.
Another big buyer has been fellow property giant Far East Organization, which has bought four properties totalling $715 million, including the $385 million purchase of Waterfront View with Frasers Centrepoint.
Bukit Sembawang Estates broke an eight-year hiatus in land buying when it snapped up Woodleigh Grove in July last year, and followed up with four other collective-sale purchases.
Ardmore Point may topple current record
Singapore
Published July 5, 2006
Ardmore Point may topple current record
A new benchmark could be set if the $220m asking price for the prime location is met
By KALPANA RASHIWALA
A NEW benchmark could be set for the price of freehold residential land if owners of Ardmore Point are successful in the collective sale of their homes in the prime Ardmore Park location.
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Ardmore Point: Analysts reckon its reserve price could be 5 to 10% lower than the $1,432 psf ppr asking price, but even if the property is sold at these levels, it would still topple the current record set by Eng Lok Mansion
They are asking for $220 million, which translates to a unit land price of $1,432 psf of potential gross floor area, including an estimated $22.7 million development charge (DC).
Market watchers suggest the actual reserve price set by the owners could be 5 to 10 per cent lower, at $1,289 to $1,360 psf per plot ratio including DC.
But even at these levels, if they are achieved, Ardmore Point will still topple the current record of $1,218 psf ppr set by Eng Lok Mansion in March this year.
'We're confident that with competition from bidders, we'll be able to exceed Ardmore Point's reserve price,' says CB Richard Ellis executive director Jeremy Lake, whose firm is marketing the collective sale. Based on the asking price of $1,432 psf ppr, the breakeven cost for a new condo project on the Ardmore Point site could work out to around $1,950 psf. Using the likely reserve price, the breakeven would be a lower $1,830 psf. That still leaves a profit margin for its developer going by current pricing expectations for coming launches in the area.
Across the road, Wheelock Properties (Singapore) will launch in October its 118-unit condo, Ardmore II, on the amalgamated Ardmore View and Habitat II site at an average $2,250 psf, Wheelock CEO David Lawrence told BT yesterday.
The development will comprise of two 36-storey towers and all 118 units in the project will be four-bedroom apartments of 2,050 sq ft each.
Ardmore Point has a freehold land area of 60,533 sq ft and market watchers say that whoever bags it is also likely to be eyeing the next door Pin Tjoe Court, which is expected to be put up for tender soon.
The two sites will have a combined land area of over 120,000 sq ft - enough to accommodate a new condo with about 165 units averaging 2,000 sq ft. Both sites are zoned for residential use with a 2.8 plot ratio (ratio of potential maximum gross floor area to land area) and a maximum height of 36 storeys.
Ardmore Point's tender closes on August 8.
The existing 20-storey Ardmore Point has 47 units.
Based on the $220 million asking price, owners stand to receive sums ranging from $2.3 million to $7.9 million per unit.
These are about 120 per cent more than what the units would fetch if sold individually.
Chip Eng Seng, Lehman in JV for Cairnhill project
Singapore Companies
Published July 19, 2006
Chip Eng Seng, Lehman in JV for Cairnhill project
By ARTHUR SIM
MAINBOARD-listed construction company Chip Eng Seng Group will team up with Lehman Brothers Real Estate Partners II to build a high-end residential development in Cairnhill in a 50/50 joint venture.
The site, formerly Venus Mansion, was acquired by Chip Eng Seng earlier this year for $123 million. Raymond Chia, managing director of Chip Eng Seng's property arm, Chip Eng Leong Enterprise - now known as CEL Development - said the development will be worth 'over $200 million' when completed.
The joint venture with Lehman Brothers - through a newly formed company called PH Properties - comes after an earlier venture fell through when they failed to clinch a site near Tanah Merah MRT Station in a public tender in April.
There is no agreement with Lehman Brothers to partner CEL Development 'exclusively' in Singapore.
Even so, more joint ventures are possible. Lehman Brothers (Asia) managing director (private equity) Keith Greengrove said: 'Our experience with CEL so far has been extremely professional in the negotiations and due diligence process, and we look forward to continuing to make investments with them.'
Mr Greengrove pointed out that Lehman Brothers has been investing in Singapore property since 2004 when it bought the Hotel New Otani on River Valley Road - now Novotel Clarke Quay Hotel. It also has a stake in Paradiz Centre in Selegie Road. In March, Lehman Brothers partnered Shimizu Corp in a failed bid for a hotel site at Changi Airport. Mr Greengrove said: 'Lehman Brothers, particularly the real estate group, remains bullish on the Singaporean market.'
The Cairnhill project, which is expected to be launched for sale in Q2 2007, will be its third real estate investment here.
Revealing details on the project, Mr Chia said that they expect to build a 70-unit development with apartments about 2,000 sq ft in size. He added that the break even cost would be about $1,100 psf. He said that the final cost will depend on the type of fittings specified and highlighted that construction materials costs had risen by about 3 per cent over the last year.
Chip Eng Seng, which has large main-contractor jobs like the Housing and Development Board's The Pinnacle @ Duxton, only ventured into property development on its own in 2002 after earlier joint ventures with partners like NTUC Choice Homes. Mr Chia said that property development now makes up two-thirds of its revenue with the remaining one-third coming from construction contracts.
On the latest joint venture, CEL hopes some of its partner's financial finesse will rub off. 'Lehman Brothers can guide us on financing,' he said, by way of explaining how Chip Eng Seng expects to arrange its gearing ratio.
Chip Eng Seng, which requested a trading halt at 3 pm pending the joint venture announcement, was last traded at 18.5 cents.
Flamingo Valley up for en bloc sale
Property
Published July 25, 2006
Flamingo Valley up for en bloc sale
FLAMINGO Valley, a residential development in the Siglap area, has been put up for en-bloc sale. Separately, three smallish sites off Bukit Timah Road have also been put on the market.
The three sites, with a combined area of 116,861 square feet, are Century Ville, Le Marque and Villa Margaux. The asking price is pegged at $695 per square foot per plot ratio (psf ppr), or $156.6 million.
Marketing agent Newman and Goh said yesterday that the site, with a plot ratio of 2.1, has potential to be re-developed into a luxury project with 80 units of nearly 3,000 sq ft each. The tender closes on Aug 23.
Flamingo Valley, which comprises 185 apartments, sits on a 335,161 sq ft site. Colliers International is handling the sale. The asking price is pegged at between $195 million and $198 million, or $417-423 psf ppr, including an estimated development charge of $820,000.
The site can be re-developed into a five-storey condominium of about 300 apartments of 1,500 sq ft each. The tender closes on Aug 22.
Thomson Road property put up for enbloc sale
Property
Published July 27, 2006
Thomson Road property put up for enbloc sale
Market watchers expect Derbyshire Mansions to fetch about $50m
By KALPANA RASHIWALA
THE owners of Derbyshire Mansions in Thomson Road near United Square are teaming up for a collective sale for their 36,098 square foot freehold site.
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Derbyshire Mansions: The 36,098 sq ft freehold site could yield up to 74 units averaging 1,300 sq ft
Market observers expect the site to fetch about $50 million or $496 per square foot of potential gross floor area including an estimated $160,000 development charge.
The site is zoned for residential use with 2.8 plot ratio - the ratio of potential gross floor area to land area - and a 36-storey height limit.
This could yield up to 74 units averaging 1,300 sq ft, says Jones Lang LaSalle, which is marketing the property through a tender that will close on Aug 24.
Based on the $50 million price expectation, the proceeds for owners of the existing 33 units housed in a 12-storey block reflect a collective sale premium of about 60 per cent.
Another property put on the market earlier this week is a Good Class Bungalow at Bin Tong Park being offered by its owner, The Asia Life Assurance Society.
The vendor is part of the Asia General Holdings group, which recently sold Asia Insurance Building at Finlayson Green and Hotel Asia in Scotts Road to The Ascott Group, and White House Park Apartments in Stevens Road to Novelty Group.
The asking price for the Bin Tong Park bungalow is said to be $11.8 million to $12.3 million.
This works out to around $450 to $470 per square foot of land area.
A single-storey detached house stands on the 26,254 sq ft freehold site.
The tender for the property, which closes on Aug 21, is being handled by Credo Real Estate.
MCL Land gets nod for Dunearn site
Singapore
Published August 23, 2006
MCL Land gets nod for Dunearn site
MCL Land has received the green light from the Singapore Land Authority to upgrade the lease tenure and change the use of a redevelopment site formerly owned by SingTel.
The property developer won the 256,485 sq ft site in a public tender with a bid of $102.5 million in May. On top of this, MCL Land will pay $40 million to the government for bringing up the lease back to 99 years and changing the zoning from utility to residential.
Lui Seng Fatt, regional director and head of investments at marketing consultants Jones Lang LaSalle, said that MCL Land is now also looking to buy two adjoining plots of state land totalling 15,510 sq ft so as to increase the overall size of the site.
Mr Lui said MCL Land is not likely to seek planning approval for a condominium development either. Instead, the developer will maintain the building height restriction and build a combination of cluster housing and conventional terrace houses.
Together with the amalgamation of state land, there could be up to 170 units.
Noting that there are already several condominium offerings along Dunearn Road, Mr Lui said that brand new terrace houses in Districts 9, 10 and 11 are quite rare.
Freehold terrace houses by Far East Organization at Greenwood Avenue now sell for about $2.1 million. The price for MCL Land's 99-year leasehold houses could be between $1.75 million and $1.8 million.
Re: En Bloc: News, Offers
Singapore Companies
Published August 22, 2006
UOL close to buying Nassim Park: sources
Collective sale for freehold site may go for record $390 million
By KALPANA RASHIWALA
UOL Group is close to hammering out a deal to buy the prime Nassim Park through a collective sale, sources say.
The price for the freehold site is understood to be around the $390 million mark, which reflects a unit land price of about $1,150 psf of potential gross floor area inclusive of an estimated $8 million development charge (DC).
If a deal is eventually inked at the $390 million level, it will set a new record for a collective sale. The current record of $385 million was set by Waterfront View in Bedok earlier this year.
Nassim Park was completed just 14 years ago, in 1992. The 245,135 sq ft site is zoned for residential use with a 1.4 plot ratio (ratio of potential maximum gross floor area to land area) and a maximum height of four storeys under Master Plan 2003.
The site can be redeveloped into a new project with about 160 apartments ranging in size from about 1,900 sq ft to 2,200 sq ft.
Market watchers reckon the breakeven cost for a new luxury condo could be anywhere from $1,550 to $1,800 psf - depending on the quality of the finishes and the design.
The property was marketed through an expression of interest exercise which closed on June 21.
The reserve price is understood to have been around the $1,100 psf per plot ratio (inclusive of DC) level although Savills Singapore, Nassim Park's marketing agent, had said in May when the site was launched that the asking price was $410 million or $1,218 psf ppr including DC.
Savills declined to comment when contacted.
The existing Nassim Park has 104 strata-titled apartments and townhouses. Market watchers estimate that based on the price expected to be transacted, Nassim Park's owners stand to pocket sums that could be 50-80 per cent more than what the units would have fetched had they been sold on an individual basis.
Market watchers note that Nassim Park will be the poshest site UOL has bought to date.
It remains to be seen if it ties up with some of its usual partners - like Kheng Leong, Low Keng Huat and United Industrial Corp/Singapore Land - for its latest acquisition.
Horizon Towers fails to fetch minimum price
Top Print Edition Stories
Published August 22, 2006
Horizon Towers fails to fetch minimum price
All 4 bids understood to be below $500m reserve price
(SINGAPORE) It was pitched as the biggest collective sale deal ever, with a price tag of $500 million. But the tender for the leasehold Horizon Towers which closed last week failed to attract this minimum price set by the owners.
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Overpriced? The developer who buys Horizon Towers will have to pay about $31 million to top up the lease to the original 99 years.
BT understands that notices made available to Horizon Towers' owners recently revealed that the tender attracted four bids, all below the reserve price. Sources say the bidders declined requests to raise their bids subsequently to meet the reserve.
Horizon Tower's marketing agent, First Tree Properties, is now expected to team up with other consultants to look for a buyer through private treaty.
The estate has a land area of 204,742 sq ft and is on a site with a remaining lease of 72 years. The developer who buys Horizon Towers will have to pay about $31 million to top up the lease to the original 99 years. Apparently, no development charge is payable. The $500 million reserve reflects $835 psf of potential gross floor area inclusive of the lease-upgrading premium and based on a 3.1 plot ratio (ratio of maximum potential gross floor area to land area), according to an earlier report.
A seasoned consultant said he was not surprised by the outcome for Horizon Towers as he considered it overpriced for its location, at Leonie Hill, given the leasehold tenure and the huge risk involved because of its big size.
Re: En Bloc: News, Offers
Singapore
Published August 18, 2006
Owners of 2 apt buildings join forces to sell en bloc
OWNERS of two residential developments on Cavenagh Road are joining forces to sell their apartment buildings as one large collective en bloc sale site.
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Clemenceau Court: Together with Cavenagh Mansion, the combined site could yield 164 units of 1,000 sq ft each and the breakeven price for a new development would be $850-900 psf
The owners of the 60-unit Clemenceau Court have decided to launch their site next for sale by tender in conjunction with an invitation to make an offer for the neighbouring 18-unit Cavenagh Mansion.
Marketed by Charles Chua of Propnex, the Clemenceau Court site measuring 38,131 sq ft is going for about $75 million while owners of Cavenagh Mansion (19,813 sq ft) are asking for $27 million.
Mr Chua has worked out that the possible amalgamation to the sites makes them more attractive.
With a plot ratio of 2.1, Clemenceau Court works out to be $940 per sq ft per plot ratio (psf ppr) including development charge. Even with the cost of an available 9,688 sq ft of state land for $4.9 million, it will still cost $798 psf ppr.
With the same 2.1 plot ratio, Cavenagh Mansion will cost $652 psf ppr. With the cost of an available 5,059 sq ft of state land, it will cost $569 psf ppr.
Together, the combined site lowers the price to $642 psf ppr. In such a scenario, the site could yield 164 units of 1,000 sq ft each and the breakeven price for a new development would be $850-900 psf.
EXPECTED RISE IN DEVELOPMENT CHARGES
Top Print Edition Stories
Published August 24, 2006
EXPECTED RISE IN DEVELOPMENT CHARGES
DC hikes could dent en bloc market
But prime sites may be spared given the luxury housing boom
By KALPANA RASHIWALA
(SINGAPORE) The en bloc market could take a hit when development charge (DC) rates go up on Sept 1, property consultants say. But much will still boil down to supply and demand.
They reckon that DC rates - payable to the state for enhancing a site's use or developing a bigger project on it - could rise as much as 15-20 per cent for non-landed residential use in prime locations like Ardmore Park, Tomlinson Road and Grange Road, where collective sales have set new benchmark prices in the past six months.
'If owners stick to the same minimum land price quantum, the total land price to developers will increase by the quantum of the DC hike,' says Knight Frank executive director Foo Suan Peng. 'This means the unit land cost in terms of per square foot per plot ratio will be increased, without any benefit to owners. It has a dampening effect on the collective sale market.'
But not all en bloc sales will be affected. Collective sale sites with little or no DC component like Derbyshire Mansion and Grange Tower will be spared any blow from DC rate hikes.
There are also sites in locations like Cairnhill and Newton with a high development baseline or where the existing development's gross floor area is high relative to what is allowed under the current Master Plan. Such sites are liable for either no or little DC payment if they were to be redeveloped, says Mr Foo.
But sites with a significant DC component as a percentage of total land value could suffer from a substantial increase in DC rates. An example is Minton Rise, where the reported DC estimate of $84 million works out to about 27 per cent of the total land cost.
'For some of these cases, it may make it harder for owners to achieve, or for developers to pay, reserve prices - because of the higher DC rate,' says CB Richard Ellis executive director Jeremy Lake.
Agreeing, Credo Real Estate managing director Karamjit Singh says: 'There are cases where the DC forms about 20-30 per cent of total land cost. In such a case, if the DC rate goes up by, say, 10 per cent, it could, overnight, wipe out around 2.5-4.3 per cent of owners' land value. This can be quite significant - especially if the collective sale premium is not that fantastic - and reduce owners' incentive to go for an en bloc sale.'
But Jones Lang LaSalle's regional director and head of investments Lui Seng Fatt reckons the market is unlikely to be shocked by any DC rate rise because the last increases six months ago were so steep.
DC rates - which are specified according to land use (such as non-landed residential, landed residential and commercial) and location - are published by the Ministry of National Development in consultation with the Chief Valuer, who takes into account current market value.
The increases that kicked-in on March 1 this year were among the biggest in six years. For non-landed residential use - the group that often applies to collective sale sites - rates in the prime Ardmore/Claymore/ Draycott location went up 19 per cent. Other popular en bloc haunts like River Valley, Leonie Hill/St Thomas, One Tree Hill/Angullia Park and Cairnhill saw smaller increases of 6 to 15 per cent.
Market observers expect another round of substantial hikes for non-landed residential DC rates in prime locations, pointing out that since March 1, en bloc deals in such areas have continued to set benchmark prices that reflect land values significantly higher than those implied by the March 1 DC rates.
Examples include Beverly Mai in Tomlinson Road and Lucky Tower in Grange Road. Their respective transacted prices of $1,184 and $1,134 per square foot per plot ratio inclusive of DC were 68 per cent and 110 per cent above DC-rate implied land values for the area.
Similarly, Habitat One was sold last month at $1,228 psf ppr - 50 per cent higher than the $818 psf ppr DC rate-implied land value for the area.
CBRE predicts that non-landed residential DC rates in Ardmore Park, Grange Road and Tomlinson Rd could go up 5-10 per cent come Sept 1.
Colliers International predicts that rates in places like Ardmore and Angullia Park will rise by 10-15 per cent.
JLL expects a bigger increase of 18-22 per cent in the central areas of the prime districts 9, 10 and 11. But JLL's Mr Lui reckons that availability of sites is a more important factor than any DC rate rise - alluding to the large supply of en bloc sites now weighing down the market.
He believes that developers will still be willing to buy in prime locations like Draycott, Orange Grove, and to some extent Newton, regardless of a DC rate rise. But they may not be so willing to shoulder the burden of a higher DC in less choice areas - particularly for huge sites like former HUDC estates.
In such cases, owners may have to bite the bullet and cut their reserve prices. 'It boils down to the scarcity value of the site and how much demand there is for it,' Mr Lui says.
Silver Tower penthouse sold for $6.12m
Property
Published August 31, 2006
Silver Tower penthouse sold for $6.12m
$1,020 psf price reflects premium for condo's en bloc potential: analysts
By KALPANA RASHIWALA
THE collective sale of Silver Tower has yet to be concluded, but a penthouse in the freehold development in Cairnhill Road was sold yesterday for $6.12 million at an auction by Colliers International.
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Silver Tower: Without factoring in en bloc potential, the penthouse is said to be worth $4.5m or $750 psf
The price works out to $1,020 per square foot based on the 5,995 sq ft strata area of the three-level penthouse - a price market watchers said reflects a premium for the property's en bloc potential.
A source suggested that based on its individual sale value, without factoring in potential for an en bloc deal, the penthouse could have fetched about $4.5 million or $750 psf. Silver Tower is about 20 years old.
BT understands the penthouse had been on the auction circuit for at least three years. It was sold by its mortgagee, understood to be Hong Leong Finance. Three years ago, the mortgagee was said to be asking for $3.8 million for the unit.
The buyer is said to be a Chinese individual from the region. The unit, #08-04, has a private pool and is tenanted until May 2007 at $4,000 a month.
BT understands that despite paying a hefty premium for the penthouse, the new owner stands to reap a further $1 million or so if an en bloc sale of Silver Tower proceeds at the target price of $168 million. Based on this price, the owner would be able to collect about $7 million-plus for his unit.
Savills Singapore, which is marketing the en bloc sale of Silver Tower, declined to comment yesterday except to say the collective deal is still under negotiation.
Colliers also sold three other properties at yesterday's auction. One was a single-storey, freehold detached house with a land area of 6,183 sq ft in Sommerville Road off Upper Serangoon Road. It fetched $1.7 million. Another was a third-storey walk-up apartment in Lorong 15 Geylang. The 999,999-year leasehold property with 1,517 sq ft strata area fetched $310,000.
Colliers also sold a three-storey JTC detached factory at 6 Woodlands Loop for $4.88 million. The property is on a site with 30 years' lease starting September 1994 with an option to renew for 30 years. All four properties sold yesterday were mortgagee sales.
Re: General 'en-bloc' News; Tenders
Top Print Edition Stories
Published September 1, 2006
Waiting game seen for collective sales
DC hike impact varies from $0-$50 psf per plot ratio
By KALPANA RASHIWALA
(SINGAPORE) Property owners and developers are pondering their next move in the collective sale game as they weigh the impact of the hike in development charge rates on en bloc sales.
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Will owners have to trim their price expectations? Or will developers bite the bullet and pay owners what they ask if the outlook for the high-end residential sector remains optimistic?
'For deals under discussion, it'll be a matter of who blinks first over the next month or so,' said Knight Frank executive director Foo Suan Peng.
He and other property consultants whom BT spoke to last night said that they have some en bloc cases with little or no DC component - in which case the rate hikes have either zero or little impact. An example is Grange Tower, which has no DC.
As for collective sales with a more sizeable DC component as a percentage of total land price, the DC rate hike will jack up the total land cost to the developer, assuming that the owners stick to their reserve price. But the extent varies.
In the case of Ardmore Point in the Ardmore Park location where the DC rate has increased by 36 per cent, the total DC quantum will increase by $48 psf per plot ratio or $8.2 million to $30.9 million. That would be under 4 per cent of the total land value of the prime freehold site.
Knight Frank's Mr Foo reckons yesterday's DC hikes could raise total land cost by zero to 3 per cent for the cases that his firm is handling.
Giving the impact in terms of unit land price, Jones Lang LaSalle's regional director and head of investments Lui Seng Fatt estimates yesterday's rate hikes will translate to zero to $30 psf ppr in additional cost for the collective sale sites that his firm is marketing.
CB Richard Ellis executive director Jeremy Lake sums up the work ahead for property consultants: 'We have to look at the impact of the changes and advise owners. Where the reserve price has been set, we've to see how developers react to the higher cost, whether it has any impact on their bids.'
'Ultimately, the impact will depend on the appeal of the site, how significant the DC component is, and how realistic the owners' price is,' he added.
Mr Lui said that going forward, owners' expectations would have to take into account the rate hikes, 'especially in areas with ample supply of sites'.
Giving a developer's perspective, City Developments' group general manager Chia Ngiang Hong said: 'The increase in DC rates will certainly have an impact on the assessment on all our future property acquisitions.'
As for its current land bank, the impact will be nominal as most of CDL's projects in the pipeline have already secured planning approvals and have thus locked in the DC rate.
Putting things in perspective, yesterday's DC rate hikes might not be such a bad thing after all.
'They reflect the increased value of property, backed by a strong, thriving economy,' as Mr Chia says.
Kovan MRT site now open for bids
Singapore
Published September 1, 2006
PROPERTY
Kovan MRT site now open for bids
By UMA SHANKARI
A 1.76 ha land parcel zoned for residential use at Simon Road - next to Kovan MRT station - is now open for application, said the Urban Redevelopment Authority (URA) yesterday.
'This site is one of the most attractive residential sites on the Government Land Sales Programme for the second half of 2006,' said Nicholas Mak, director of research and consultancy at Knight Frank. 'The potential development for this site will be a mass-market suburban condominium, where a majority of the apartments would be the 3-bedroom types.'
URA estimates that 535 units could be built on the 99-year leasehold site, which has a 3.5 plot ratio - giving it a maximum gross floor area of 61,700 sq m. Mr Mak expects it to fetch between $200-$235 million, which works out to between $300-$350 per sq ft per plot ratio (psfppr).
'Even though the price increase of the mass-market suburban condominiums has been much lower than that of the high-end residential segment, such development sites with close proximity to the MRT has always proven to be very popular with developers,' he said. Savills Singapore agreed with the assessment, pointing out that the adjacent Kovan Melody land parcel was awarded in 2003 at $255 million or $268 psfppr.
'The total land value (for the new site) may be around $180-$200 million,' said Wallace Chu, senior manager for research and consultancy at Savills.
'We would expect the current developer of Kovan Melody to be one of many interested parties along with local developers who are experienced in the mass market projects,' he added. Kovan Melody was developed by Wing Tai and NTUC Choice Homes.
The sale site is on the government's reserve list, which means that it will only be put up for tender if a developer's indicated minimum bid price is acceptable to the government.
