Published January 17, 2006
Pasir Panjang Hill site up for en bloc sale
A 32-UNIT four-storey apartment building at Pasir Panjang Hill is up for collective sale with an asking price of $28 million for the freehold 63,707 sq ft site.
Based on a plot ratio of 1.4 and an additional development charge of about $5.8 million, the site should cost $370 per square foot per plot ratio, and the breakeven cost will be around $660 psf per plot ratio, according to Jones Lang LaSalle's regional director and head of investments, Lui Seng Fatt. The firm is also the sole marketing agent for the property.
Last month, MCL Land bought Balmeg Court, also in Pasir Panjang, for $79.2 million. This works out to $340 psf per plot ratio for the 182,555 sq ft site. In the same month, Hoi Hup launched the Foliage, an 88-unit freehold condominium off Pasir Panjang Road, at an average $608 psf.
A new residential development of up to 89,190 sq ft of gross floor area with a maximum building height of five storeys can be built on the Pasir Panjang Hill site, although Mr Lui points out that approval from the relevant authorities and a development charge will apply.
On the renewed interest in en bloc residential sites - there were over 30 in 2005 - Mr Lui believes there is still opportunity to 'unlock the value of old and outdated property'.
He added: 'The market value of the apartments at its current stage of obsolescence can only fetch a low market value reflected in the state of the property. Through the collective sales process, investors will be prepared to pay a higher value for the new apartments. In short, the difference between the two will be exactly the premium which the existing owners will be enjoying through the collective sale.'
Published January 12, 2006
Braddell Park, Telok Kurau sites go en bloc
11 Kampong Glam shophouses also among properties put on market
By KALPANA RASHIWALA
RIDING on the current improvement in property sentiment, several investment-sales properties came on the market yesterday.
They include two collective sales at Braddell Park and Lorong K Telok Kurau. Both are offered for sale in separate tender exercises.
As well, a six-storey serviced apartment in the Tiong Bahru/Outram area is going on the block. And in the Kampong Glam area, the Urban Redevelopment Authority (URA) is auctioning 11 unrestored conservation shophouse lots on March 8. The shophouses will have to be restored and are being sold on a 99-year leasehold tenure.
In May last year, URA auctioned 10 parcels of unrestored conservation shophouses. The sale prices ranged from $360,000 to $600,000 per parcel, or $295 per square foot to $440 psf of site area.
CB Richard Ellis, which is marketing Braddell Park, says the property is expected to achieve $42 million. This works out to about $330 psf of potential gross floor area (GFA).
No development charge will be payable to tap the full development potential of the 91,361 sq ft freehold site as the location has a high base density equivalent to a 2.072 plot ratio (ratio of potential GFA to land area).
This is much higher than the 1.4 plot ratio stated for the site in Master Plan 2003, which also zones the site for residential use. The site may be developed up to five storeys high.
Another collective sale site launched yesterday comprises two apartment buildings - K Garden and Wen Yuan Court - and a bungalow at 16 Lorong K Telok Kurau, being marketed by Jones Lang LaSalle. Developers may bid for the three properties, adding up to 46,473 sq ft in freehold land area, individually or combined.
Sources say the price expectation for the combined three is around $25 million, which works out to about $386 psf per plot ratio, including a development charge. The site is zoned for residential use with 1.4 plot ratio and a maximum height of five storeys.
Over in the Tiong Bahru area, Colliers International is marketing a six-storey serviced apartment at 3 Seng Poh Road which sources say has an indicative price of about $12.5 million. The freehold property is said to be put up for sale by mortgagee United Overseas Bank. The mortgagor was Kim Koon Garment Industries, BT understands.
The property has a land area of 9,143 sq ft and a GFA of 27,451 sq ft. The building has an eating house on the first storey, a car park on the second and third storeys, and 61 serviced apartments occupying the upper levels.
Colliers' executive director Grace Ng, who will be auctioning the property on Feb 8, says buyers may continue operating the building as a serviced apartment or apply to convert it into a boarding house/budget hotel.
St Thomas Walk site up for en bloc sale
19 Jan 06
THE Somerset area looks set to become hot property. Prices for en bloc redevelopment sites there will be closely watched, especially now that the latest land sales exercise by the Urban Redevelopment Authority (URA) at Orchard Road/Killiney Road has received a record bid of $1,085 per square foot per plot ratio.
Chez Bright Apartments at 18 St Thomas Walk is the latest property to go on sale in that area. It is marketed by Jones Lang LaSalle, whose regional director and head of investments Lui Seng Fatt believes that any new residential development on the freehold site would be able to sell at $1,500 psf.
The Somerset site is for a mixed development that may include a residential component.
Said Mr Lui: 'Based on the highest price tendered for the Somerset site, residential units there would have to sell for between $1,700 and $1,800 psf. And these are 99-year leasehold units.'
After factoring in the freehold status of Chez Bright Apartments, and the 'near prime' location, Mr Lui said a 15 per cent discount, or $1,500 psf, for the new development on the St Thomas Walk site would not be unreasonable.
The asking price for the 34,402 sq ft Chez Bright site has been set at $61.3 million (including a development charge of $6.3 million) or $640 psf per plot ratio.
The break-even price is around $960-$980 psf.
Five months ago, a larger site also on St Thomas Walk went to Centrepoint Properties for $210 million, or $601 psf per plot ratio.
The present 12-storey apartment block can be developed up to 36 storeys. With a plot ratio of 2.8, the maximum gross floor area is 96,325 sq ft.
There are several new developments in the area already on sale, including Wheelock Properties' The Cosmopolitan and Guocoland's Leonie Studios. Still, Mr Lui feels there will be ample demand from foreigners.
'Foreign investors, especially those from Hong Kong, are looking for this kind of investment grade properties,' he said.
By ARTHUR SIM
Seven sites already launched, as market rides on positive economic outlook
By Joyce Teo
IT IS no surprise that optimism is flowing in the property market: The year has barely begun, but already seven collective sale sites have been launched.
And that is coming off a record year in 2005 when 37 collective sales of residential sites worth $2.09 billion were completed - more than double the deals and value achieved in 2004.
Ms Soon Su Lin, executive director of property consultancy CB Richard Ellis, said such sales will continue at the same pace as last year thanks to a good economic outlook.
Supply and demand tells the story: Sites sold en bloc last year generated a potential supply of 3,860 new homes, while overall, 8,955 new homes were sold last year.
'So potential supply from the sites being sold en bloc is expected to meet good demand when they are ready for launch,' said Ms Soon.
Home owners in collective sales typically get at least 30 to 50 per cent more than what they would have reaped from an individual sale. But the risk, said consultants, is that owners may have unrealistically high price expectations.
Typically, potential collective sale developments are more than 10 years old with rising maintenance costs.
Selling these sites require the consent of at least 80 per cent of the owners; those less than 10 years old need 90 per cent acceptance.
Because people looking to rent tend to migrate to new projects, owners of older projects find it harder to find tenants. And with maintenance costs rising, they may be keener on a collective sale, said DTZ Debenham Tie Leung director Tang Wei Leng.
But that does not mean everyone can cash in.
Prime sites in districts 9, 10 and 11 clearly have the best chances. The Cairnhill area appears to have the most potential sites, though projects in posh Ardmore, Draycott, Nassim, Leonie Hill and St Thomas Walk are also very popular, said Credo Real Estate executive director Tan Hong Boon.
'Sites in Cairnhill are very sought-after and the success rate will be good if they are not over-priced,' he said.
In general, most owners ask for about $800-$850 per square foot per plot ratio, though some want as much as $1,000 psf ppr, he said.
Still, the highest residential collective sale land price last year was only at $876 psf ppr - made by Wheelock Properties in September for The Habitat II in Ardmore Park.
Areas in Tanjong Katong Road, Meyer Road, Amber Road, East Cost Road and the Telok Kurau area also have good chances, said the head of investments at Jones Lang LaSalle, Mr Lui Seng Fatt.
The best candidates are developments of six storeys or less, with a small number of units or a large plot of land, said DTZ's Ms Tang.
'Those with facilities would have good rental value so the owners won't be very motivated to sell,' she said.
Credo Real Estate's executive director, Mr Karamjit Singh, said: 'The poorer the physical conditions, the better the chances.'
Surroundings also play a part. For instance, a low-rise development in an area with mostly high-rise projects could be a strong target, he said.
It could be tricky for mixed developments as shop owners may not want to sell. 'The revenue they derive from the shops may be much better than the property's value,' said Ms Tang. 'If they move out, they will lose the goodwill they have established over the years.'
Consultants said many former HUDC estates like Pine Grove, Gillman Heights and Farrer Court have expressed interest in selling collectively.
So have some owners of ageing private properties such as Grand Tower in Moulmein Rise, Eng Tai Mansions at St Thomas Walk, Peck Hay Mansion in Cairnhill and The Ardmore at Ardmore Park.
But getting enough owners to agree to a collective sale could take years. 'It's a waiting game,' said Ms Tang.
A home owner Gerald sold his Parry Gardens home near Yio Chu Kang in 1993, even though a neighbour said there may be plans to sell en bloc.
'I missed out on making money but the deal was only concluded in 2005! I would have had to wait for more than a decade,' he said.
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Published April 7, 2006
NUS feels Gillman Heights en bloc heat
Its approval needed as it controls over 50% of share values
By KALPANA RASHIWALA
(SINGAPORE) The National University of Singapore is getting some en bloc heat from some of the other apartment owners at Gillman Heights Condo.
Gillman Heights: Some owners fear they could miss the en bloc boat if developers slow down on landbanking. If NUS gives the nod, owners would secure the minimum 80% consent level to put the 836,425 sq ft site on the market
The university - which holds the key to a collective sale as it controls slightly more than half of share values in the project - is being pressured to finalise an agreement soon to launch a sale of the privatised HUDC estate.
BT understands that the university had earlier indicated it would not hold up a collective sale but is still studying the terms for a sale. However, some of the other owners fear it may take too long and they could miss the en bloc boat if developers decide to slow down on landbanking.
If NUS gives the nod, the owners of the privatised HUDC estate would secure the minimum 80 per cent consent level to put the 836,425 sq ft leasehold site on the market.
BT understands NUS owns 305 apartments in the condo, which comprises four high rise blocks of 24 storeys each with a total of 455 units and six low-rise blocks with 152 maisonettes. There is also a shop unit, bringing the total number of units in the development to 608.
Sources say the asking price of about $528 million works out to a unit land price of $323 per square foot of potential gross floor area, including an estimated $36 million payable to the state for upgrading the site's lease to 99 years from a remaining tenure of about 78 years and a further payment of $3.5 million for a slight enhancement in plot ratio.
The site is zoned for residential use with a 2.1 plot ratio (ratio of potential gross floor area to land area).
NUS told BT it has yet to make a decision. 'It is to our understanding that the proposed en bloc sale of Gillman Heights was initiated by some residents living there. The university is evaluating the information and would be taking this up with our management and Board of Trustees before making any decisions on whether to agree to the collective sale of the residential property.'
On average, owners stand to receive $870,000 per unit which is about 50 to 60 per cent more than the average value of what their units would fetch if sold individually.
The NUS spokesman said the university's apartments at Gillman Heights provide off-campus accommodation for some of its staff and graduate students. 'If necessary, and when appropriate, the university will then proceed to help them source for alternative accommodation,' he added.
Even if NUS gives the nod, and the collective sale is launched, it remains to be seen what sort of response the exercise will garner.
While developers have been snapping up land over the past six months or so, they've focused on the prime districts in response to a strong recovery in home buying in the luxury residential segment. As well, the Gillman Heights site is huge - a new project on the site can house around 1,400 apartments averaging 1,300 sq ft.
Not many developers have the financial muscle for such a big project. And even if they do, they may not wish to put all their eggs in one basket.
Also, the asking price set by the owners, which works out to a unit land price of $323 psf per plot ratio, would translate to a relatively high breakeven cost of at least $500 psf for the developer, say market watchers.