Tulip Garden relaunched for en bloc sale

[SpinCity]

so how to compare jld white site wif tulip?

jld white sold at 1016psf ppr...min 40% set aside for office...

so we can use industrial site and hotel site to make comparison wif residential site? how to set the parameters correctly inorder to make a fair comparison?

Just think yourself as a developer, now, there are two sites in front of you to bid, what are the parameters you will use to value these two sites, assuming one is pure residential, one is mixed use. You may or may not come up with the same bidding price for both site
Is S$1016 psf forJLD cheaper than S$1250psf for tulip garden?
Well, from the angle of dollar psf, yes ,JLD is cheaper
from the the buyer's return perspective, it is up to the parameters of each one's choice, and to be proved when they are completed and sold

[SpinCity]

how much is the DC charge applicable to tulip?

if you go back to the first page of this thread you can find the following:

"Credo's press release yesterday said the development baseline plot ratio of Tulip Garden is 1.6425, higher than the allowable plot ratio of 1.6"

the allowable plot ratio is 1.6, 10% bonus for balcony, so totally can build 1.76

the base line is 1.6426, so the DC is the difference between 1.76 and 1.6426, times the land area, times the DC rate of S$6650 psm
As Tulip Garden has a land area of 316,708 sq ft, with the information available from this thread and URA's website, my estimated DC is about S$23 million

[DC33_2008]

From the developer perspective like Capitaland, it is very obvious to go for JLD which has greater potential to make more $. Anyway, the white site offers more opportunity.

Just think yourself as a developer, now, there are two sites in front of you to bid, what are the parameters you will use to value these two sites, assuming one is pure residential, one is mixed use. You may or may not come up with the same bidding price for both site
Is S$1016 psf forJLD cheaper than S$1250psf for tulip garden?
Well, from the angle of dollar psf, yes ,JLD is cheaper
from the the buyer's return perspective, it is up to the parameters of each one's choice, and to be proved when they are completed and sold

[devilplate]

Just think yourself as a developer, now, there are two sites in front of you to bid, what are the parameters you will use for these two sites, assuming one is pure residential, one is mixed use. You may or may not come up with the same bidding price for both site
Is S$1016 psf fro JLD cheaper than S$1250psf for tulip garden?
Well, from the angle of dollar psf, jst ,JLD is cheaper
from the the buyer's return perspective, it is up to the parameters of each one's choice, and to be proved when they are completed and sold

so u agree its very complicated?

so am i wrong to say both site cannot be compared to determine each fair value?

[SpinCity]

so u agree its very complicated?

so am i wrong to say both site cannot be compared to determine each fair value?

you are wrong because both site can be compared

[devilplate]

you are wrong because both site can be compared

at this point in time, we duno wats capland gona build on tat site for the remaining 60% GFA.....so how to compare?

if capland decides not to build any residential component....its still comparable?

i seriously dun tink we shd compare office/hotel vs residential site value....it just make no sense to compare...and its definitely non conclusive

[SpinCity]

at this point in time, we duno wats capland gona build on tat site for the remaining 60% GFA.....so how to compare?

if capland decides not to build any residential component....its still comparable?

i seriously dun tink we shd compare office/hotel vs residential site value....it just make no sense to compare...and its definitely non conclusive

You and I may not know but Capitaland surely know what it wants to build to make a reasonable return for the price it pays for the land.

Again, they are comparable, you just need to set your own parameters.
If you think it is too complicated to compare, I am fine with it

[devilplate]

You and I may not know but Capitaland surely know what it wants to build to make a reasonable return for the price it pays for the land.

Again, they are comparable, you just need to set your own parameters.
If you think it is too complicated to compare, I am fine with it

we do not haf the data and parameters to compare....

and definitely cannot make a direct comparison between the 2 sites to determine which is undervalue or overvalue

[amk]

Just think yourself as a developer...

for this one I have to support devil. JLD site was not bought as a "developer". it was bought by CAPL as a *business*. CapitaLand Residential, the one who is the "developer", has very little ( 0 ? ) stake.

When a site was bought for commercial/hotel/industrial usage, the perspective and business model is different. You can say whether residential or commercial, it's still looking at return over investment. Yes but how the return is projected, or even *accounted*, is entirely different.

therefore it's very right to say these 2 sites are not comparable. There is no basis to compare. Other than the funding requirement looks similar. That's the only common item.

[CCR]

Confirm tulip no DC....so is 1200 good price at current market for a D10 FH site?

[devilplate]

Confirm tulip no DC....so is 1200 good price at current market for a D10 FH site?

experts usually factor in 500psf construction cost for prime project?

if so, work out to be 1700psf breakeven....

so it will be a good px if u tink they can sell for 2kpsf

[SpinCity]

for this one I have to support devil. JLD site was not bought as a "developer". it was bought by CAPL as a *business*. CapitaLand Residential, the one who is the "developer", has very little ( 0 ? ) stake.

When a site was bought for commercial/hotel/industrial usage, the perspective and business model is different. You can say whether residential or commercial, it's still looking at return over investment. Yes but how the return is projected, or even *accounted*, is entirely different.

therefore it's very right to say these 2 sites are not comparable. There is no basis to compare. Other than the funding requirement looks similar. That's the only common item.

The models for a pure residential site and a mixed use site have to be different because the cashflow are different

What's the outcome of your models? Based your bidding price and projected income, you may have yield, NPV, IRR, or things you may wish.

When evaluating two pieces of land to bid for, assuming your cost of capital is 7%, your two models crank out the following figures:
Land 1: pure residential use, biding price S$1000 psf, IRR 5%, NPV S$1m
Land 2: mixed use, biding price S$900, IRR 5%, NPV S$1m

Another scenario:
Land 1: pure residential use, biding price S$1000 psf, IRR 5%, NPV S$1m
Land 2: mixed use, biding price S$900, IRR 4%, NPV S$0.5m

Are they comparable? I would think they are

A sweeping statement saying land of different use are not comparable is not correct, you just have to set your parameters, just like when comparing other things, such as CAPL stock and parkway REIT share

[DC33_2008]

Residential is different as compared to mixed as commercial/retail will need to have more circulation space which has not rental yield.

The models for a pure residential site and a mixed use site have to be different because the cashflow are different

What's the outcome of your models? Based your bidding price and projected income, you may have yield, NPV, IRR, or things you may wish.

When evaluating two pieces of land to bid for, assuming your cost of capital is 7%, your two models crank out the following figures:
Land 1: pure residential use, biding price S$1000 psf, IRR 5%, NPV S$1m
Land 2: mixed use, biding price S$900, IRR 5%, NPV S$1m

Another scenario:
Land 1: pure residential use, biding price S$1000 psf, IRR 5%, NPV S$1m
Land 2: mixed use, biding price S$900, IRR 4%, NPV S$0.5m

Are they comparable? I would think they are

A sweeping statement saying land of different use are not comparable is not correct, you just have to set your parameters, just like when comparing other things, such as CAPL stock and parkway REIT share

[SpinCity]

Residential is different as compared to mixed as commercial/retail will need to have more circulation space which has not rental yield.

There is no doubt that site for residential use is different from that for commercial use

My points are simple:
When compare a white site with an enbloc site of the same use, one needs to take into account 1) risk of pro-longed completion period, and 2) a 6-12 months difference of lead time before the construction can commence

When compare site of different uses, one need to value each site separately based on the parameters that fit to their respective nature. For example, for residential site your forecast normally ends after the final payment is received, while for commercial site your investment horizon may be longer with recurring income during holding period
Once you have "your" fair value of each site, of course you can compare, and you have to compare when money is on the table

a white site and an enbloc site can be compared
sites of different uses can also be compared
One just has to make his/her own assumptions, as comparing all the other things in life

Maybe the comparison of Tulip Garden vs. JLD site is not that apparent
If there is a freehold pure residential site at the corner of paterson road and orchard boulevard asking for S$1250psf,
and a LH99 mixed use site at JLD asking for $1000psf
Is it valid to say that the orchard site cheaper?

[amk]

Are they comparable? I would think they are

A sweeping statement saying land of different use are not comparable is not correct, you just have to set your parameters, just like when comparing other things, such as CAPL stock and parkway REIT share

No they are not comparable.

actually I think you are making sweeping *assumptions* mixing this property business and commercial business.

pure residential use has a simple funding, return , and accounting methods.

U r assuming commercial operations are the same. this is not true.

for example part of the bidder is CT, a reit. who practically already has the funding. the return goes to distribution. effectively you can say the said property has already been *pre-sold* to the said unit holders. And the return etc has no effect on the bottom line of CAPL itself as it's borne by the unit holder. (not 100% true though as CAPL also holds stake. it's complicated)

At the same time CT employs CMA to develop/manage the mall. and employs CCT to develop/manage the office. CT can charge high rates to them, thus artificially enhances the yield of the land. CMA and CCT are accounted separately. This makes the IRR of this transaction far from transparent (and simple).

And yes CAPL is totally not comparable to Parkway REIT! I dare say very very few ppl truly have the real picture of the financials of CAPL. I dun. The structure of its C* are too complex for me to analyze.

btw I just confirmed myself CapitaLand Residential has 0 stake in the "consortium". It's more and more clear to me this is for strategic commercial application for CAPL.

[amk]

in a simpler language.

pure residential play: you buy A, spend some money doing it up, then sell A. case closed. return (or profit) is simply the sale price minus buy price.

commercial play: you buy A, spend some money doing it up, you purely rent it out to others. your return is what ? you never sell anything. But you own the asset, which can be accounted into your balance sheet. Value of which is determined at "market rate".

so how do u compare these 2 ? there is no basis.

[SpinCity]

No they are not comparable.

actually I think you are making sweeping *assumptions* mixing this property business and commercial business.

pure residential use has a simple funding, return , and accounting methods.

U r assuming commercial operations are the same. this is not true. I never assume that, actually, I have already said that the models for residential and mixed use are different

for example part of the bidder is CT, a reit. who practically already has the funding. the return goes to distribution. effectively you can say the said property has already been *pre-sold* to the said unit holders. And the return etc has no effect on the bottom line of CAPL itself as it's borne by the unit holder. (not 100% true though as CAPL also holds stake. it's complicated)

At the same time CT employs CMA to develop/manage the mall. and employs CCT to develop/manage the office. CT can charge high rates to them, thus artificially enhances the yield of the land. CMA and CCT are accounted separately. This makes the IRR of this transaction far from transparent (and simple).
You are right, the consortium structure can be complicated, and IRR can be far from transparent and simple, but it is still necessary for the consortium to make the investment decision

And yes CAPL is totally not comparable to Parkway REIT! I dare say very very few ppl truly have the real picture of the financials of CAPL. I dun. The structure of its C* are too complex for me to analyze.
CAPL and Parkway REIT are different, their business are not comparable.

On the other hand, both of them are stocks, and an investor can still compare the two by his own matrices, be it P/E, dividend yield, etc
When capital is limited but investment targets are many, one is forced to compare


btw I just confirmed myself CapitaLand Residential has 0 stake in the "consortium". It's more and more clear to me this is for strategic commercial application for CAPL.

In real life, one has to compare things of different nature; the key is to have valid and sensible assumptions

[SpinCity]

in a simpler language.

pure residential play: you buy A, spend some money doing it up, then sell A. case closed. return (or profit) is simply the sale price minus buy price.

commercial play: you buy A, spend some money doing it up, you purely rent it out to others. your return is what ? you never sell anything. But you own the asset, which can be accounted into your balance sheet. Value of which is determined at "market rate".

so how do u compare these 2 ? there is no basis.

Wrong. For commercial, one has to decide his/her investment horizon, and determine the terminal value at the end of the investment horizon. There is nothing called "you never sell anything"

Generally, pure for residential the investment horizon can be 5-6year. for commercial, it can be 10 years or longer or shorter
It is all up to each individual's decision

[devilplate]

Wrong. For commercial, one has to decide his/her investment horizon, and determine the terminal value at the end of the investment horizon. There is nothing called "you never sell anything"

Generally, pure for residential the investment horizon can be 5-6year. for commercial, it can be 10 years or longer or shorter
It is all up to each individual's decision

As long there r assumptions n variables involved n different investment duration...there is no way u can make any conclusive comparison at this point in time for common folks like us to compare

Only the buyer can access his own variables n set his own parameter can do his comparison.

So, nobody other den the buyer can compare conclusively

[devilplate]

I m more interested to noe y tanjong pagar white site sold for only 1kpsf just about 7mths ago...or rather y capl bidded 1kpsf for jurong

[hyenergix]

Just stand at Jurong East MRT/ bus interchange and you will see that the human traffic is extremely high and growing. Tanjong Pagar cannot match the intensity of human traffic.

[amk]

Ok spincity let's just rest this case. It's like, can we compare 200k buying a BMW car against 10k buying a Kelly bag, which one is more value for money ? Everything under the sun is "comparable" in principle. To the extent such compare becomes rhetoric. The only meaningful compare would be apple to apple. In this case as devil suggested the tg pagar site compared to this one. We are taking about a *meaningful* comparism. Otherwise , why dun we compare any investment in the market with this ? I have 700mil should I buy this site or should I start a hedge fund ? In all cases i have my horizon and IRR in mind too

[amk]

Just stand at Jurong East MRT/ bus interchange and you will see that the human traffic is extremely high and growing. Tanjong Pagar cannot match the intensity of human traffic.

I learn from some past commercial experience that, human traffic alone is important, but not decisive. See 313 orchard. Human traffic is very high, but the shop turnover is very low. This business is not easy. I certainly do not know the tricks in this trade

[hyenergix]

You need human traffic to generate walk-in customers to support retail and F&B. I think the future air-con mall (is there?) at Jurong East will be bigger and better than Jurong Point. Clementi already has a make-over and it is very successful. Tanjong Pagar is too quiet in the evening and at night to support retail. There are insufficient and dwindling number of parking lots too - a big mistake by URA planners.

[SpinCity]

I m more interested to noe y tanjong pagar white site sold for only 1kpsf just about 7mths ago...or rather y capl bidded 1kpsf for jurong

I suspect that it is due to the mix of each component
These two sites have different mixture of residential/office/retail/hotel required by URA
The jurong site might have more area for retail, which generate higher rent than office and more stable income than hotel, with lower operating expenses.
Capitaland is also known for the green thumb for retail mall
lastly, T.P. site was won by a developer (is it allgreen?), while the consortium for JLD site has two REIT in it. REIT requires lower return and cost of capital is also lower, so they can afford to pay a higher price

[devilplate]

I suspect that it is due to the mix of each component
These two sites have different mixture of residential/office/retail/hotel required by URA
The jurong site might have more area for retail, which generate higher rent than office and more stable income than hotel, with lower operating expenses.
Capitaland is also known for the green thumb for retail mall
lastly, T.P. site was won by a developer (is it allgreen?), while the consortium for JLD site has two REIT in it. REIT requires lower return and cost of capital is also lower, so they can afford to pay a higher price

Tp won by guccoland

Hmmm...suburban retail rental also just slightly lower den orchard...

Ok sort of make sense. Hehe

However, tp site can make money from residential component....can easily sell for 2kpsf++

[AK47]

What price will TP site fetch if it was to be resold now? I say 30% more.

The other Jurong site won by LandLease was only $650 in June 2010.

So you can't compare land price of different time

[CCR]

Heard they are planning to re launch in June, July.... I think if no other bad news or new measures I thinkthisntime sure sell... Price is damn cheap today's market rate....

[kimwah]

CCR - Do u mean Landlease will launch the whiteside next month ?

Do u think they will sell the retail unit or simply keep them and collect rental ? are they planning to build apartment on top just like the Jurong Point development ?

What will be the impact to the HDB shophouse opposite MRT once the 2 white sites are up ? do u think their rental will go up or come down ?

Just wondering whether it is better to invest in the HDB shophouse or the new whitesite unit (retail/office/apartment).

[CCR]

I mean tulip garden planning a second tender next month... If no other bad news and CM5 I think will sell... I heard Gucocland launching Leedon Residence in Jul, at 2200 to 2500 psf.... So at 1200 psf ppr, Tulip is cheap man.... Too bad I no money to buy land lol..... And for d'leedon, it's not true that it's not selling well k... They released two blocks, almost all units from 1-24 floors all sold out k, dont play play..... Only those above 25 where they are pricing it at a premium of above 2100 psf moving slower..... Rmournthey releasing another tower soon.... Akan datang