Property Market Updates (10 Nov 2010)

Top bids for Hougang site just 2.6% apart
The more sober bidding mood continued at a state tender for a 99-year leasehold private condominium site at Upper Serangoon View in the Hougang area, as developers remained mindful of the sustained land supply being delivered by the state. The top bid of $320.15 psf of potential gross floor area - from a tie-up of Frasers Centrepoint, Far East Organization and Japan's Sekisui House - was within market expectations and just 2.6% above the second highest offer by a unit of Centurion Properties. It bid about $312 psf ppr. Yesterday's tender drew just four bids. A unit of CapitaLand offered $302 psf ppr, while a unit of City Developments bid at $278 psf ppr. This is believed to be Osaka-based Sekisui House's first major Singapore real estate venture. The group is the largest home builder in Japan and prides itself on building environmentally-friendly houses. In a joint statement, Frasers Centrepoint, Far East and Sekisui said: 'This is an attractive site as the development will enjoy water views (from the adjacent Sungei Serangoon) and the greenery from nearby Punggol Park. We are planning to build about 470 units (eight blocks of 17 storeys) on the site. Tender result is consistent with the pattern for the previous four state tenders for 99-year leasehold private condo land where top bids have also come in below the $350 psf ppr mark. This pattern reflects caution on the part of developers who are mindful of the continuity of sites coming on. There will be a Government Land Sales (GLS) tender closing every week till mid-December, and the first-half 2011 GLS Programme can be expected to throw up a wide selection of sites when it's announced. In May this year, MCL Land paid $456 psf ppr for a site at the corner of Hougang Avenue 2 and Yio Chu Kang Road that can be developed into a five-storey condo. That plot is next to a landed housing estate. In the resale market, units at Evergreen Park and Rio Vista (both nearby 99-year condos) were sold at $600-720 psf in July to September 2010.

- The Business Times, P10

- Also quoted in The Straits Time, B29, “Serangoon residential site draws just 4 bids”.

Bought: $20m in June 2009 ; Sold: $37m in Oct 2009
Good-class bungalow owners are cashing in on rocketing property prices. A CBRE analysis of URA Realis caveats shows that good-class bungalows are netting bumper profits for owners who have seen average psf prices rise almost 30% over the past year. Several have taken to buying and selling their good-class bungalows within a period of less than two years. At least seven good-class bungalows bought since May last year have been sold within 18 months of purchase, with four sold within a year, with a profit of as much as 85 per cent over the purchase price. This massive gain was seen by a 40,677 sq ft good-class bungalow property on Ridout Road near the Holland area, translating to a $17 million gain within a four-month span. At least one home, on Nassim Road, has even been sold five times within the past six years - soaring from $9.8 million in 2005 to $43.5 million this year. It sold at $1,800 psf in April this year - almost 4.5 times the $405 psf it was sold for in February 2005. The 24,186 sq ft property had changed hands at $620 psf in August 2006, $760 psf in December the same year, followed by $1,000 psf in June 2007. Experts said that good-class bungalows have turned out to be one of this year's star investment propositions. URA data shows that non-landed home prices inched up 1.6 per cent in the third quarter, while prices of detached homes rose 8.4 per cent over the same period. This increase is one of the steepest over the last 15 years, said Cushman and Wakefield's senior manager of Asia-Pacific research, Mr Ong Kah Seng. He noted that the keen buying interest in good-class bungalows was being driven by limited supply, making it the safest buy for a home buyer not limited by affordability. The owners are usually ultra-high net worth Singaporeans, who are mostly professionals, businessmen or entrepreneurs. Typically, only Singapore citizens can own a good-class bungalow, but permanent residents may obtain permission to buy small bungalows with land areas of about 15,000 sq ft.

- The Straits Times, P14

S'pore Pools buys its new home
A unit of Malaysia's IOI Properties Bhd is understood to have sold IOI Plaza, a landmark 12-storey granite office block at the corner of Middle Road and Prinsep Street, for $139 million. The price works out to about $1,381 per square foot (psf) based on a net lettable area (NLA) of about 100,640 sq ft. The building is on a site with about 85 years' remaining lease. The buyer is said to be Singapore Pools, whose headquarters are currently located a stone's throw away at PoMo at 1 Selegie Road. According to a media report in 1996, IOI unit Future Link Properties developed the building at a total cost of about $100 million, inclusive of about $52.2 million or $444.18 per square foot per plot ratio paid for the 99-year leasehold plot which it won at a state tender that closed in January 1996. The 27,992.60 sq ft plot was one of the first 'white' sites to be sold by Urban Redevelopment Authority. Owners of such sites can make changes of use during the plot's 99-year leasehold tenure without paying a differential premium. The plot was sold with a 4.2 plot ratio (ratio of maximum potential gross floor area to land area). The plot's zoning and plot ratio remain unchanged in the current Master Plan 2008.

- The Business Times, P3

Hot money flood 'could trigger more property curbs here'
The flood of hot money unleashed by the United States' latest round of monetary easing runs the risk of inflating a Singapore property bubble and increases the chances of further property dampening measures. Regional markets - already awash with liquidity from advanced economies seeking better returns in Asia - are expected to be on the receiving end of a large slice of the US$600 billion (S$770 billion) injected by the US Federal Reserve last week. Analysts are highlighting property as the asset area most likely to be impacted by these large flows, with the market boosted in two ways.

The more direct route is via foreign funds buying into property directly, pushing prices up. The other is by flows pushing down interest rates and allowing people to borrow more to buy property.

- The Straits Times, B29

8,000 apply for 1,322 BTO flats
Demand for the latest batch of new Housing Board flats is high, with the offering oversubscribed by six times. Nearly 8,000 people applied for the 1,322 build-to-order (BTO) units in Sengkang and Bukit Panjang. By contrast, oversubscription rates for the two previous projects in Yishun in September and Woodlands last month were more modest, at 2.4 and 2.2 respectively. The oversubscription rate for the latest project, while high, was not as high as some of the earlier BTO projects such as the ones in Punggol and Boon Lay in May, which was more than six times the number of units available. Bigger flats proved the most popular this time around. Five-room premium flats at Anchorvale Horizon in Sengkang were oversubscribed by 12 times, with 1,838 applications for 148 units. The demand for the Sengkang flats, which are within walking distance from the town centre and the MRT, is a sign buyers are becoming more discerning. Some people are also prepared to wait for the flats they want because now they have more options, he added. HDB announced 16,000 new BTO flats this year, with 22,000 expected next year.

- The Straits Times, B5

Interpol to build global base in Singapore

Interpol is to build a base in Singapore, which will beef up the international policing organisation's crime-fighting efforts in the Asia-Pacific region. The Interpol Global Complex is expected to house about 300 staff, including enforcement officers seconded from Interpol's 188 member countries and those hired by the organisation. It could be sited in the Tanglin area, where several embassies are located. The proposal for the complex was approved by members at the Interpol General Assembly meeting in Qatar. The agreement was signed yesterday by Home Affairs and Law Minister K. Shanmugam and Interpol secretary-general Ronald Noble. The decision to build the complex is a recognition that technology and globalisation have allowed crimes to be carried out simultaneously across continents. The complex will complement Interpol's headquarters in France, the MHA said. It is expected to be operational by 2014.

- The Straits Times, B5

More SMEs understand concept of true branding

Local enterprises are becoming more aware about branding, going by the quality of submissions at this year's Singapore Prestige Brand Awards (SPBA). According to one of the judges, most of the applicants have gone beyond the basic concept of improving their product quality and services, and are looking at branding as a positioning and differentiating element. Even B2B businesses are beginning to focus on brand building. Among this year's SPBA winners, there were more than 20 that came from non-retail, non-F&B sectors. They included industrial property developer Kingsland Development and liquefied petroleum gas supplier Union Energy Corp.

- The Business Times, P11

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