The Shore Residences (D15, 103 years leasehold, Far East Organization)

[Property_Owner]

yup. at least LH from govt 99 years later they wanna take land back they have a social contract to ensure those staying in that land have a backdoor out - affected citizens can do a lot of nonsense things like referendums, votes, sit-ins, call in UN lah and press etc - make it political.

if after 103yrs FEO wants to take back land and ask you to fly kite? Nothing you can do. Maybe out of the kindness of their hearts they will give you additional 5% discount in the new development.

pple please dun be stupid - buying LH from govt means you are putting your family/descendants under temporary shelter subject to the auspices of the govt, which at the end of the day represent the people/society.

buying LH from FEO means you are putting your family/descendants under temporary shelter subject to the auspices of the descendants of Ng Teng Fong and Company, which represent no one other than themselves, have a reputation of you know what, and are totally motivated only by profit.

but if you've already put in a cheque and bought a unit after all this talk in this thread to advise otherwise, then yes - you are truly a fuhkwit

I strongly agree with you.

[bargain hunter]

put in cheque still can back out. lose some money and let the option expire. some buyers of Centro did just that.

yup. at least LH from govt 99 years later they wanna take land back they have a social contract to ensure those staying in that land have a backdoor out - affected citizens can do a lot of nonsense things like referendums, votes, sit-ins, call in UN lah and press etc - make it political.

if after 103yrs FEO wants to take back land and ask you to fly kite? Nothing you can do. Maybe out of the kindness of their hearts they will give you additional 5% discount in the new development.

pple please dun be stupid - buying LH from govt means you are putting your family/descendants under temporary shelter subject to the auspices of the govt, which at the end of the day represent the people/society.

buying LH from FEO means you are putting your family/descendants under temporary shelter subject to the auspices of the descendants of Ng Teng Fong and Company, which represent no one other than themselves, have a reputation of you know what, and are totally motivated only by profit.

but if you've already put in a cheque and bought a unit after all this talk in this thread to advise otherwise, then yes - you are truly a fuhkwit

[teddybear]

It is very obvious that MSCP is cheaper to build than underground car park because underground have to dig down first with additional costs and have to ensure no flooding mah!

For a LH development that is selling $1.1k-$1.4Kpsf unit, you still have to walk a distance to your block after parking your car.... . Is MSCP easier and cheaper to build than underground CP? Maybe they have a budget to meet.

[xebay11]

put in cheque still can back out. lose some money and let the option expire. some buyers of Centro did just that.

Wow at least $10k loss, not heart pain? better go through with it and try to recover money when TOP, there will be other f*ckwits.

[xebay11]

Some people talk about en bloc, but what if no developer is keen to enbloc the project as the land size etc is not favourable?

Strongly agree, very easy to tell if future developer would be interested in en bloc, as long as there is no change in the plot ratio and the development is built to the maximum current plot ratio, the chances of enbloc are much slimmer.

[Reporter]

For leasehold commercial properties, the govt can and usually top up the lease for owners but the premium that one pays to top up the lease may not be as worthwhile as buying a freehold commercial property, but again depending on the business location. As for residential property, I hardly hear the government topping up leases unless the developer is taking over the land to develop a new project. Imagine you are 30 now and get a leasehold property for 2 generations to live, what would be the value of your property when you are 60 (30 years on) and want to pass on the property to your children? Some people talk about en bloc, but what if no developer is keen to enbloc the project as the land size etc is not favourable?

I am not judging your argument here. I just want to ask some questions.

Maybe that "extra" money you spent on the FH commercial property will allow you to have "bigger return" from a larger LH commercial property? Maybe with the "bigger return" accumulated for years, you will still make a "gain" after substracting the "top-up premium"?

I believe the same question is applicable to LH residential property.

The LH property will regain its value after the "top-up". So what's the drawback? The drawback is the non-linearity in LH's value. When a LH approaches its "0 lease", its value drops a lot. When it is topped up, its value shoots up again. You must play long term. So long that you can't see or smell it. So long that you may say "FH is easier."

[gfoo]

LH fr govt enblocs are straightforward and topups are foreseeable and hasslefree.

LH fr a pte developer will run into complications IF the developer decides to retain the land for his own purposes, and the likelihood of a competing developer entering to enbloc the place is significantly lower. so what if residents vote to enbloc when FEO can ultimately veto topups?

in such a scenario, LH value is truly depreciating and subservient

[Regulators]

i hear about lease top-ups regularly for commercial properties and in fact, those old shophouses along the same stretch of road may often have varying leases remaining. I think condo lease top-ups is a different matter altogether. I have so far not come across a condo with the lease being topped up for another 99years after the age has hit for example 30 years. More often than not, the owners and developer would find it more lucrative to sell off the project entirely (en bloc) to another developer for redevelopment. If no developer wants to takeover for redevelopment, I think developers and Management committee would just wait and see or wait for a better offer to enbloc the project.

I am not judging your argument here. I just want to ask some questions.

Maybe that "extra" money you spent on the FH commercial property will allow you to have "bigger return" from a larger LH commercial property? Maybe with the "bigger return" accumulated for years, you will still make a "gain" after substracting the "top-up premium"?

I believe the same question is applicable to LH residential property.

The LH property will regain its value after the "top-up". So what's the drawback? The drawback is the non-linearity in LH's value. When a LH approaches its "0 lease", its value drops a lot. When it is topped up, its value shoots up again. You must play long term. So long that you can't see or smell it. So long that you may say "FH is easier."

[DKSG]

Any agents out there who can provide sales data for this ?

I heard internal staff bought a sizeable chunk of this.

Concept and furnishings are high end.

But of course we do need confirmation, I just hear say only. Not in the showflat.

[Miow]

Is this the first case in Singapore that a developer is retaining the freehold status and "leasing" the land to a project?

Isn't the developer usurping the "government role"?

Has anyone asked why the URA has allowed this? Surely FEO would not have gotten so far if the authorities had not allowed it? Is this a new development in Singapore land issues?

Will other developers follow FEO? Or has FEO exploited a loop hole that should be closed by the authorities?

All very puzzling and interesting....

[proud owner]

Is this the first case in Singapore that a developer is retaining the freehold status and "leasing" the land to a project?

Isn't the developer usurping the "government role"?

Has anyone asked why the URA has allowed this? Surely FEO would not have gotten so far if the authorities had not allowed it? Is this a new development in Singapore land issues?

Will other developers follow FEO? Or has FEO exploited a loop hole that should be closed by the authorities?

All very puzzling and interesting....

i am not sure but i heard Dunman View ? also LH on a FH land

if true then this is not the first case

[Miow]

i am not sure but i heard Dunman View ? also LH on a FH land

if true then this is not the first case

Then, why don't the other developers do the same?

Something not right....

[proud owner]

Then, why don't the other developers do the same?

Something not right....

how many private / family owned developers are there that are rich enuff ...to take the risk ?

what if they launch and fail ?

only FEO rich enuff to HOLD until price reach their target ..

[pearly]

Then, why don't the other developers do the same?

Something not right....

one may rather sell it at a go with a higher mark up, the concept of selling LH on FH land, technically speaking will eat into the short term profit for a long term ownership. In the perspective of the people, this is more irrelevant, but on a company stand point, its a very long term goal and target.

[Reporter]

one may rather sell it at a go with a higher mark up, the concept of selling LH on FH land, technically speaking will eat into the short term profit for a long term ownership. In the perspective of the people, this is more irrelevant, but on a company stand point, its a very long term goal and target.

So long that you have to ensure that the company is still around after 99 years. The present owners or management will not benefit from it.

[xebay11]

how many private / family owned developers are there that are rich enuff ...to take the risk ?

what if they launch and fail ?

only FEO rich enuff to HOLD until price reach their target ..

How can you fail? Aren't many 99 LH developments sold out if location is good?

[xebay11]

So long that you have to ensure that the company is still around after 99 years. The present owners or management will not benefit from it.

The present owners benefit from current sale and future gen, if any, benefit from future sale. Jia buay leow.

[Reporter]

The present owners benefit from current sale and future gen, if any, benefit from future sale. Jia buay leow.

But they are also bearing the risk during that 99 years.

If an act-of-god event (e.g. 2012, war, etc.) destroy the place during that 99 years, they will lost the land. If they have sold the complete lease away, that risk is passed to the buyers. That "extra" money is already in their pocket.

With that "extra" money in their pocket, they have the flexibility to stay in real estate business or move to another industry to survive.

I strongly feel that they are exposed during these 99 years.

[greenhorn]

This is a case-in-point on the LH vs FH land debate. The value and desire for freehold / 999 land is an increasing asset going forward vis-a-vis land sales all being 99 LH. Even developers are hanging on to their precious FH land...using creative (desperate) means, albeit disgusting strategy of selling LH on FH land.

[nochoice]

But they are also bearing the risk during that 99 years.

If an act-of-god event (e.g. 2012, war, etc.) destroy the place during that 99 years, they will lost the land. If they have sold the complete lease away, that risk is passed to the buyers. That "extra" money is already in their pocket.

With that "extra" money in their pocket, they have the flexibility to stay in real estate business or move to another industry to survive.

I strongly feel that they are exposed during these 99 years.

I think FEO do not want to jeopardize his own sale in Sliversea which is also 99LH. And if they are to sell it as FH, imgaine they will price it at $1.4k - $1.5k psf... the sale will be slower in this market.

[Laguna]

FEO is going to make The Shore with sandy beach. Creative but without thinking of the practical problem in pool maintenance, how is the pool pump to be maintained and how to vacuum the pool...

I was told the small units are all sold

[Reporter]

This is a case-in-point on the LH vs FH land debate. The value and desire for freehold / 999 land is an increasing asset going forward vis-a-vis land sales all being 99 LH. Even developers are hanging on to their precious FH land...using creative (desperate) means, albeit disgusting strategy of selling LH on FH land.

Perhaps you may be willing to take a bigger loan to buy that FH lease. However, not everyone is willing to pay more interest upfront.

Can we not discuss what we have discussed before?
Hope you are not trying to make us go in the same loop again.

I feel compelled to share my views on the LH/FH issue.

There are a lot of people who seems interested in events 40 years down the road when maybe a big part of us are gone.

The price difference between a FH and LH is about 15-16% theoritically and realistically.

When property prices move UP, this gap is narrowed. When property prices move DOWN, this gap is widened.

Imagine if I promise to pay you $100 in 50 years time and ask u for $20 now ? Would u entertain me ? The value attached to cash flows that is past 50 years from now is literally worth very little. And if you extend the same calculation, cashflows 100 years later is worth near nothing at the present value.

So buyers, dont be misled by some of the posts. If you see a FH selling for $1.2 million and a LH selling for $1,000,000 ... both same size same location. Go for the LH, its underpriced.

Dont overpay for FH.

PS : I do own LH and FH properties and I dont treat them too differently when it comes to buying or selling. If you use the concepts put forth by some people here, then u cannot sell FH properties lo ... because when u buy them now at $1 million, they are worth about $1 billion because they give you cashflows FOREVER and EVER.

Just my 2 cents worth of comments.

DKSG

You are being rational and analytical.

However, when freehold is concerned, many tie their emotion to it. It is the feeling. Owning FH property forever is more important than return on investment/capital.

I love FH properties too. However, one should not rule out that some LH properties can have a higher ROI. It really depends on the individual property pricing.

Analysing LH properties for ROI is simply an investment POV. I am sometimes willing to forgo the short term ROI and look at the long road. I would only consider LH if it has potential for very short term gain ie. flipping.

I am preparing to leave 2 FH properties for my 2 kids too.

However, I know very well that by doing so, I may or may not have the best ROI. (It really depends on the FH's premium over LH.) Perhaps there is a better way of passing wealth to them? (I am not sure.)

Maybe that 2 FH properties will never reach them due to enbloc?
Maybe they could have more wealth with a LH resale/enbloc?

That's why I don't argue on FH vs LH.
For investment, it's all about ROI.
For personal preference/emotion, what's there to argue?

for best return .. maybe a LH in a prime location

for best value and future value .. FH LANDED

thats my take

For leasehold commercial properties, the govt can and usually top up the lease for owners but the premium that one pays to top up the lease may not be as worthwhile as buying a freehold commercial property, but again depending on the business location. As for residential property, I hardly hear the government topping up leases unless the developer is taking over the land to develop a new project. Imagine you are 30 now and get a leasehold property for 2 generations to live, what would be the value of your property when you are 60 (30 years on) and want to pass on the property to your children? Some people talk about en bloc, but what if no developer is keen to enbloc the project as the land size etc is not favourable?

I am not judging your argument here. I just want to ask some questions.

Maybe that "extra" money you spent on the FH commercial property will allow you to have "bigger return" from a larger LH commercial property? Maybe with the "bigger return" accumulated for years, you will still make a "gain" after substracting the "top-up premium"?

I believe the same question is applicable to LH residential property.

The LH property will regain its value after the "top-up". So what's the drawback? The drawback is the non-linearity in LH's value. When a LH approaches its "0 lease", its value drops a lot. When it is topped up, its value shoots up again. You must play long term. So long that you can't see or smell it. So long that you may say "FH is easier."

..........
..........

[Jazzer]

So long that you have to ensure that the company is still around after 99 years. The present owners or management will not benefit from it.

Resulting from this question, what if the company goes bust and go under receivership, won't the piece of land be affected as the company owns the land?

[Miow]

Why has the URA approved it? I believe this is a precedent case?

[sleek]

Why has the URA approved it? I believe this is a precedent case?

http://forums.condosingapore.com/showthread.php?t=8722

You sure can, I wrote to URA and this is the response:

We refer to your query on the subject matter which was directed to us by URA on 26 Nov 2009.
It is possible for owners of freehold land to, in a private arrangement, carve out a leasehold interest (e.g. 99 year tenure) for development purposes. The State only preside over the tenure of State lands sold via public tender for development purposes. For such State lands sales, the tenure granted is capped at a maximum of 99 years.

[Reporter]

Resulting from this question, what if the company goes bust and go under receivership, won't the piece of land be affected as the company owns the land?

I don't think the land will be affected. The remaining lease will be passed to the creditor(s).

If the company is listed and if I am the sharesholder, I will question the management for not realising the full profit now. Why should the shareholder "pay" for the remaining lease now? How can the management predict the future which is 99 years away? How can shareholders benefit from something that is 99 years later?

If they are doing this to save Silversea, I think they are being very short-sighted. They could have just hold back the launch of The Shore.

But they are also bearing the risk during that 99 years.

If an act-of-god event (e.g. 2012, war, etc.) destroy the place during that 99 years, they will lost the land. If they have sold the complete lease away, that risk is passed to the buyers. That "extra" money is already in their pocket.

With that "extra" money in their pocket, they have the flexibility to stay in real estate business or move to another industry to survive.

I strongly feel that they are exposed during these 99 years.

[Miow]

I don't think the land will be affected. The remaining lease will be passed to the creditor(s).

If the company is listed and if I am the sharesholder, I will question the management for not realising the full profit now. Why should the shareholder "pay" for the remaining lease now? How can the management predict the future which is 99 years away? How can shareholders benefit from something that is 99 years later?

If they are doing this to save Silversea, I think they are being very short-sighted. They could have just hold back the launch of The Shore.

I disagree with you. The company is creating value. The project is sold at the same price as that of a freehold property because of bullish sentiments, AND freehold ownership is retained in the company (effectively a bonus) to generate future earnings e.g. say the project gets en-bloc 30 years down the road and the company receives additional cash for the lease top-up. Do this for the company's various projects, you can imagine theoretically, the company's value could be greatly enhanced by the recurrent earings.

All the properties in Hong Kong are leasehold. Why should it be different for Singapore? Maybe that's the way to go for a city state in keeping cost down.

[Reporter]

I disagree with you. The company is creating value. The project is sold at the same price as that of a freehold property because of bullish sentiments, AND freehold ownership is retained in the company (effectively a bonus) to generate future earnings e.g. say the project gets en-bloc 30 years down the road and the company receives additional cash for the lease top-up. Do this for the company's various projects, you can imagine theoretically, the company's value could be greatly enhanced by the recurrent earings.

All the properties in Hong Kong are leasehold. Why should it be different for Singapore? Maybe that's the way to go for a city state in keeping cost down.

Even in a bullish market, LH will never be sold at the same price as a FH. Otherwise, your statement of "keeping cost down with a LH" will not hold. There is a project in Thomson with both FH and LH units sold together some time back in a bullish environment. You may refer to their pricings.

[DKSG]

Freehold The Sea View (old) currently doing about 1,400-1,500 psf.

LH The Shore, currently doing about 1,150-,1250 psf.

All launch units are more than 90% sold I heard.

Developer is inching the prices up now ... I also heard.

Anyone can verify ?

We do need some real information, rather than the 99-years latter argument.
This is nearly the same as saying that my grandson will certainly be smarter OR richer or ... blah blah than your grandson ... useless discussion.

Esp the bit on act of god ... Alamak ! U mean all the Metropolitan, The Sail, MBR, if there is an act of God, gahment take over all the land ??

Think my friends, THINK!

DKSG

[proud owner]

Even in a bullish market, LH will never be sold at the same price as a FH. Otherwise, your statement of "keeping cost down with a LH" will not hold. There is a project in Thomson with both FH and LH units sold together some time back in a bullish environment. You may refer to their pricings.

another example ...
Varsity park (LH) and Stellar (FH) .. the resale price ..are almost the same .. in fact Varsity park is selling more expensive now .. maybe they have more units .. while Stellar has fewer and most are owner occupied ..

they are next to each other .. while many say Stellar being closer to the main road is less attractive