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Thread: General 'en-bloc' News; Bids & Tenders

  1. #6
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    May 2006
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    Default Duchess Court up for sale again

    Published March 16, 2006


    Duchess Court up for sale again

    By KALPANA RASHIWALA


    AFTER two earlier attempts at a collective sale in 1997 and 2000, the owners of Duchess Court in the Bukit Timah area are once again teaming up to sell their homes. This time, the price tag is lower, with marketing agent Credo Real Estate saying the expected figure is $100 million to $108 million.



    Third try: The current expected price tag is between $100-$108 million compared to $160 million in 1997 and $130 million in 2000
    This compares with price tags of $130 million in 2000 and and an even higher $160 million during the first attempt in 1997.

    Based on the current price expectations, the land price for the 999-year leasehold property works out to between $563 and $601 psf of potential gross floor area including an estimated $20 million in development charges. 'At this price, the developer should be able to break even at about $880 to $925 psf or so for a new condo development on the site,' said Credo executive director Karamjit Singh.

    The site is zoned for residential use with a 1.4 plot ratio and a five-storey maximum height. Mr Singh drew attention to two nearby low-rise units at Astrid Meadows on Coronation Road West which changed hands in December and January for $1,000 psf and $1,020 psf respectively - which he described as 'an impressive feat for a 16-year-old development'.

    Assuming Duchess Court fetches $108 million, owners of the 36 townhouses and maisonettes stand to receive between $2.58 million and $3.5 million each - or about 75 per cent more than the $1.45 million to $2 million that they will individually fetch.

    Given that Duchess Court has 36 owners currently, the 152,250 sq ft land area of the property works out to an average of 4,230 sq ft per owner. 'That's almost equivalent to the minimum size required to build one detached house and must make it among the highest land area per owner ratios among recent collective sales,' said Mr Singh.

    The tender closes on April 18.

  2. #7
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    May 2006
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    Default Who is afraid of the rate hikes?

    Who is afraid of the rate hikes?

    Experts give their views how rising development charges will affect land sales

    Weekend March 4, 2006

    shobha Tsering Bhalla
    shobha@newstoday.com.sg

    EVEN as market watchers warn of a slow down in en-bloc sales and the redevelopment of certain areas of Singapore such as the Central Business District (CBD) following the recent hike in development charge (DC) rates, some property developers say they would not be deterred if the properties were in the right location.

    They will "factor in the higher DC rates in their bid prices and also be very eager to lock in the prevailing DC rate once they have bought the site", said Mr Jeremy Lake, executive director, Investment Properties, CB Richard Ellis.

    Development charge refers to the tax imposed by the Government to enhance land use. DC rates, which are revised every six months, are closely tracked in the industry as they reflect property values and have a direct impact on the breakeven costs of developers seeking to redevelop sites.

    A senior executive from one of Singapore's top four property developers said if the property were in a prime area such as Bukit Timah, Districts 9 and 10 and the East Coast, they would continue to buy.

    "The big boys will not see the rate hikes as an obstacle but the smaller players might. We're still 40 per cent off the peak (in property prices) so big developers will look at the potential not at the cost."

    But, the buying would not continue at the same pace as they would be more selective," said the executive.

    In agreement, Knight Frank's head of research & consultancy Nicholas Mak said the higher rates would mean owners would get less "so they may be less eager to sell."

    Underscoring this view is the fact that the prime districts the epicentre of such sales have seen some of the biggest DC rate hikes. They range from an increase of 7 per cent in the Oxley and Leonie Hill area to 19 per cent in the Ardmore Park/Draycott area.

    The quantum of the rate hikes this time was a shock to industry watchers who say they are much higher than the rise in property prices over the last two quarters.

    "I was taken aback because the transacted prices have only gone up by 0.8 and 0.9 per cent for landed and non-landed properties. Whereas the DC rate hike for non-landed residential property was an average of 9.4 per cent and 4.6 per cent for landed," said Mr Colin Tan, head of research & consultancy at property consultancy Chesterton International.

    "The DC rate is supposed to take into account the transacted prices this rate hike is out of sync as it's more than twice that of property price increases. So what is the basis for calculating the DC rate?" he said.

    Some of the DC rate hikes announced this week are the biggest in six years. The highest increases have been for non-landed residential rates in the CBD by as much as 20 to 33.3 per cent, which experts say could deter owners of old office buildings from developing them for residential use.

    Explaining the rationale for the rates, a spokesman for the Chief Valuer who sets the rates said as these rates need to closely reflect the land value within each sector at the time of review, "they cannot be merely adjusted based on property price index (PPI)".

    "The adjustments are not even for all the sectors due to the different levels of market activities and interests across all sectors. If the rate hike for a particular sector is steeper than the actual market trend it could be because the previous rate adjustment for that sector was too conservative," said the spokesman.

    Still, the stiff rate hike has few fans. "It's a zero sum game if the DC quantum goes up and the absolute land value and residual land value that owners can look forward to receiving would go down correspondingly," said Mr Karamjit Singh, executive director of Credo Real Estate which specialises in collective sales.

    But while the rate hike will cause a slow down in en bloc sales, it could have the beneficial effect of slowing down the "frantic" pace at which land is being bought by developers. "They would need to slow down by mid-year or the third quarter as the pace at which land is being bought is unsustainably high," said Mr Singh.

    "Historically, the market has only been able to absorb that many units but the amount of land that has been bought over the last few months show that they would yield far more units than can be absorbed."

  3. #8
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    Default Amberville sale is unlikely to be repeated, say analysts

    Amberville sale is unlikely to be repeated, say analysts

    AS the first HUDC estate to be sold through the en-bloc route, the Amberville acquisition by Far East Organization earlier this week is a milestone in the collective sale market and no doubt a shot in the arm for owners of aging HUDC estates.

    But while the price set by Far East's $396 per sq ft bid for the estate is higher than expected, other HUDC owners should not expect a similar price or even similar interest for their estates say experts.

    Amberville, which cost Far East a total of $183 million, is the first privatised HUDC estate to be sold en bloc and is believed to have attracted bids from three other major developers City Developments, MCL Land and Wing Tai.

    The 218,435 sq ft site can be redeveloped into a condo with 530 units measuring 1,200 sq ft on average.

    Far East is estimated to have paid a development charge of $35.2 million and $23.8 million to top up the site's lease

    While it is definitely a "benchmark price", the amount that Far East paid for Amberville "can't be used as a referral point for the prices of other HUDC estates because Amberville was unique", said Mr Foo Suan Peng, executive director & head of investment sales at Knight Frank which brokered the sale.

    None of the other prospective HUDC estates are in as desirable a location as Amberville with its "breathtaking sea view and long frontage", he said.

    Agreeing, Knight Frank's head of research & consultancy Nicholas Mak said other HUDC estates were not very near MRT stations, were surrounded by HDB estates and without any sea views, "so definitely the price would be quite different".

  4. #9
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    Default Newton Meadows up for en bloc sale

    Property
    Published March 28, 2006


    Newton Meadows up for en bloc sale


    THE en bloc fever is infectious - this time, the owners of the freehold Newton Meadows have caught it. Sources say the price expected is about $75 million, or about $680 per square foot of potential gross floor area inclusive of an estimated $6.9 million development charge.


    Based on this, the breakeven cost for a new condo is about $900-$950 psf, say analysts. The 42,886 sq ft elevated site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area). The plot can be redeveloped into a 36-storey condo with about 95 units averaging 1,300 sq ft each.

    Assuming the 10-storey Newton Meadows does fetch $75 million, owners of the existing 28 units stand to receive about $1.4 million to $3.5 million in proceeds, depending on the size of their units, which range from about 1,200 to 3,600 sq ft. The sums the owners will receive are roughly 60 per cent higher than what the apartments would have fetched if sold individually.

    Jones Lang LaSalle is marketing Newton Meadows through an expressions of interest exercise that closes on April 27.

  5. #10
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    Default

    Property
    Published March 28, 2006


    Centrepoint highest bidder for SingTel site
    Award delayed as SingTel seeks to reduce premium payable to state


    By KALPANA RASHIWALA


    CENTREPOINT Properties has emerged as the highest bidder for SingTel's former warehouse site on West Coast Road, but its award has been delayed as SingTel is seeking to reduce the amount of differential premium (DP) payable to the state for the change of status of the site, BT understands.


    Sources say Centrepoint's top bid of about $220 per square foot per plot ratio (psf ppr) is inclusive of an estimated $40 million payment to the state.

    The payment to the state comprises an estimated $30 million DP for a change in the use of the site from industrial to residential and about $10 million as lease upgrading premium, to top up the site's lease from the remaining tenure of about 66 years to 99 years.

    Provisional approval has been granted for the site to be redeveloped into a 225-unit, five-storey condo, with a 1.4 plot ratio (ratio of potential gross floor area to land area).

    Originally, the successful bidder was supposed to make the payment due to the state. However, Centrepoint's bid is for a lump sum of about $220 psf ppr, which includes the land price payable to SingTel as well as the DP and lease upgrading premium payable to the state. So if SingTel is successful in negotiating a lower DP, Centrepoint will accordingly adjust upwards the land price component it will pay to SingTel.





    As a market watcher put it, 'Either way the total cost to Centrepoint is locked at $220 psf ppr. So if there is a reduction in DP, SingTel will get a higher price for its land. Hence, SingTel has an incentive to try and negotiate the DP downwards.'

    Credo Real Estate, which handled the tender for the West Coast site, declined to comment when contacted.

    BT understands a similar situation may arise for SingTel's site at the corner of Hillcrest and Dunearn roads, currently on the market.

    Here, the successful bidder will pay the state almost $40 million, comprising a $35 million DP to change the site's status from 'utility' to 'residential' and around $5 million for upgrading the property's lease to 99 years.

    In this case, industry watchers say that although the site is currently zoned 'utility', the price at which SingTel bought the property - which it has been using as a training centre - worked out to a price that reflected commercial land use at the time. Hence, the DP payable should be calculated on the basis of change of use from commercial to residential and not from utility to residential, goes the argument. The former scenario should result in a substantially lower DP.

    Provisional approval has been granted to redevelop the Hillcrest property into 160 strata terrace houses with a 1.4 plot ratio, although market watchers suggest the successful bidder could instead apply to develop a five-storey condo with a 1.4 plot ratio.

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