Singapore Property News This Week #10

RESIDENTIAL

HDB resale prices will take three to five years to stabilize: Minister Khaw

Minister Khaw mentioned that HDB resale prices will take around three to five years—the time needed for flats to be completed—to stabilize. He believes that by introducing and building more BTO flats, the disparity between supply and demand for flats will be improved. He advised young couples, who already have a place to stay, to apply for BTO flats instead of buying flats from the resale markets; as for current HDB residents who want to ‘upgrade’ their flats, he advised them to steer clear of the resale market in order to prevent overcrowding.

Detached house with land size of 11,357 sq ft up for sale with asking price of $10.5 million to $12 million; 999-year-leasehold en bloc site put up for tender with asking price of $20 million to $22 million

Credo Real Estate has put up a detached house at No. 10 Andrew Road up for sale. The two-storey house, which is smaller than the standard size of 15,070 sq ft required for GCBs, has a land size of 11,357 sq ft and comes with a swimming pool. The asking price falls between $10.5 million to $12 million (approximately $1,000 psf). Over at Hillside Drive, a 21,533 sq ft en bloc site has been put up for tender. The asking price for the site, which has a plot ratio of 1.4, falls around $20 million to $22 million (approximately $800 psf).

Ascott Residence Trust allowed to redevelop Somerset Grand Cairnhill Singapore site

URA has granted provisional permission to Ascott Residence Trust to redevelop Somerset Grand Cairnhill Singapore into an integrated hotel-cum-residential project. Apart from allowing the site to be rezoned from residential to commercial-cum-residential use under the terms and conditions of the OPP, URA also allowed a maximum GFA of around 43,400 sq ft for the development. Also, at least 40% of the site must be put to hotel and hotel-related purposes, and the redevelopment must preserve the Al-Falah Mosque.

Singapore luxury home prices remain stable due to government’s measures

The average capital value for luxury homes across Asia increased 1.6% quarter-on-quarter in Q2, down from the 1.8% hike in Q1. Singapore luxury home prices remained stable in Q2 as compared to Q1 or previous year. Buyers might have become more cautious with government’s tightening measures. JLL mentioned that prices for luxury homes in Singapore are likely to remain stable in H2 2011.

Market expects moderate response for site at Upper Serangoon

A 99-year lease site, which includes a 60-month construction period, will be put up for sale by the government via a tender. Market watchers mentioned that the 2.46 hectares plot at Upper Serangoon, which has a maximum allowable GFA of approximately 927,500 sq ft, is likely to receive average response. Credo Real Estate believes that the plot, which can potentially yield about 860 residential units, will only attract around three to five bidders, and obtain a top bid between $300 to $350 psf ppr. Similarly, Cushman & Wakefield also believes that the site will attract around five bids and obtain a top bid between $380 to $450 psf ppr.

New housing loans in Q2 decreased 4.2% as compared to Q1

The government’s cooling measures for property prices seem to have taken effect because the volume of new home loans approved in Q2 decreased by 4.2% as compared to Q1. $12.86 billion of housing loans was granted in Q2, a fall from the $13.42 billion in Q1. New housing loans granted for owner-occupied property decreased 5.3% to $9.29 billion in Q2, down from the $9.81 billion in Q1, while housing loans for investment property decreased 1.3% to $3.57 billion in Q2, down from $3.61 billion in Q1.

GCB deals continue to slow with only one caveat lodged for July so far

Following the slowdown witnessed in H1 2011, GCB deals continued to slow in July. Only one caveat for a bungalow in a GCB area – a property at Andrew Road that was sold for $8.88 million ($780 sq ft on land area)- has been lodged for the month of July so far. However, market watchers mentioned that a few more caveats for deals clinched in July will be recorded in the next few weeks; this includes a bungalow at Coronation Road West which was sold at $12.6 million ($1,140 psf). The $770.3 million GCB deals clinched in H1 2011 is a 40% decrease from the $1.3 billion GCB deals clinched in H1 2010. However, CBRE noticed that the average price for GCBs sold in H1 2011 increased 19.6% to $1,216 psf, up from the $1,017 psf in H1 2010.

Weakened outlook by real estate players in Q2

According to Redas and NUS, real estate players’ confidence about the property market dampened in Q2, and this is especially evident in the suburban residential sector. The Current Sentiment Index decreased from 4.9 in Q1 to 4.6 in Q2, while the Future Sentiment Index decreased from 5.1 in Q1 to 4.4 in Q2. Similarly, the Composite Sentiment Index decreased from 5 in Q1 to 4.5 in Q2. The difference between the number of people who thought the office sector would improve in the next six months, and the number of people who thought the office sector would do worse was +42%. For the residential sector, the net balance for the prime residential segment in Q2 was +11%, while the net balance for the suburban sector was -37%.

COMMERCIAL

FCT will be buying Bedok Point at a price of $127 million

FCT will be buying Bedok Point, a four-storey mall at Bedok town centre, from Frasers Centrepoint Limited. The mall, which started operations in December 2010, has a NLA of 80,985 sq ft and was 97.4% leased by June 30. A successful acquisition will make the mall the fifth mall in FCT’s Singapore portfolio and will increase the Reit asset size from $1.53 billion to $1.66 billion. The price of $127 million is derived from the average of two valuations by two independent valuers.

Seven strata shops at The Adelphi sold for $1,900-$4,040 psf; Ho Bee sold three office floors at Samsung Hub

In the past few weeks, Guthrie GTS and Sun Venture Property jointly sold seven strata shop units at The Adelphi at prices between $1,900 psf to $4,040 psf. The sizes of the shop in the 999-year-leasehold building fall between 398 sq ft and 915 sq ft, marketing agent CBRE mentioned. Over at Church Street, Ho Bee has sold three office floors at the 999-year-leasehold Samsung Hub. The 13th and 14th floors is said to be sold at a total price of about $66.9 million, or around 26,220 sq ft at $2,550 psf. Also, the 12th floor is said to be sold to four different buyers at $2,600 psf (slight above $34 million).

URA decided to put Woodlands industrial site up for sale via public tender

After an application from a developer, URA decided to put up the industrial site at Woodlands Avenue 12 (Parcel 3) for sale through public tender. The site, which has a site area of 202,361 sq ft, has a maximum gross plot ratio of 2.5 (maximum GFA of 505,904 sq ft). With a 60-year lease period, the site is zoned for Business 1 development and has a maximum building height of 61 metres above mean sea level. The developer is said to be offering a bid of at least $56,150,000 ($111 psf ppr) for the site in the tender.

77% of OUE Bayfront leased

OUE Bayfront, which received its temporary occupation permit just earlier this year, has already secured committed leases for more than 77% of its office NLA. New tenants for the building include Hogan Lovells International and Union Bancaire Privee (Singapore). OUE Bayfront has a current total office NLA of 387,358 sq ft and consists of prime Grade A office space.

Divided views for commercial site at Paya Lebar

Property market watchers have divided views for the second commercial site at Paya Lebar launched by URA. Some believe top bid for the site will exceed the $872 psf ppr achieved by the first Paya Lebar site in April, while some believe that upcoming office supply in the central area will make the Paya Lebar site less attractive. Cushman & Wakefield predicts that top bid for the site will be around $960 psf ppr ($897.6 million), and Credo Real Estate predicts top bid will be between $800 to $950 psf ppr ($748.50 million to $888.80 million).

16-storey 137 Market Street is around 35% leased

With monthly rent at approximately $8 psf on averge, 137 Market Street is around 35% occupied or up for rent to interested tenants. The building has a total NLA of around 43,000 sq ft and a standard office floor-plate of approximately 2,800 sq ft. Having received its Temporary Occupation Permit earlier this month, the building currently houses firms like VoskampLawyers, Classic Fine Foods, and Dimbullah Office. Appointed sole leasing agent Jones Lang LaSalle mentioned that the building’s proximity to Raffles Place MRT station and its green credentials are the attractive features of the building.