Residential

Freehold Cavenagh Gardens on the collective sale market

The site located along Cavenagh Road is asking for $460 – 480 million or $1,708 – $1,782 psf ppr based on a 2.1 gross plot ratio (excluding balcony allowance) or $1,553 to $1,620 psf ppr (including balcony allowance). The 128,256-sq ft site is zoned residential and has a 269,338 sq ft potential GFA, which can be further expanded to 308,920 sq ft if it can be amalgamated with adjoining state land which would bring the total land area to around 150,000 sq ft, and the development is granted the Green Mark GFA incentive or bonus balcony gross floor area. This would also bring the price to $1,598 psf ppr (excluding balcony allowance) or $1,394 to $1,453 psf ppr (with balcony allowance) or lower with the Green Mark GFA incentive. The expected breakeven cost and sale price of units of a new development is $1,784 – 1,848 psf and $2,308 – 2,400 psf respectively with amalgamation and $1,962 – 2,040 psf and $2,308 – 2,400 psf respectively without.

The site is expected to be popular since it can potentially be developed into high-end residences, serviced-apartments or SOHO apartments. This is especially since the site located next to the Istana and near Orchard road and has a redevelopment potential of 350 1000-sq ft units. The tender will close on May 3.

Far East sells 109 Hillsta units

109 units at 99-year leasehold 416-unit Hillsta project located at Choa Chu Kang Road/Phoenix Road has been sold, with 90% of the buyers mainly Singaporeans mostly already living in the vicinity. The project comprises condominium apartments, Soho-style apartments with a 3.6 metres higher-than-usual floor-to-ceiling height and 20 strata townhouses. A one-bedroom condo unit costs an average of $1,042 psf, a two-bedroom unit  $984 psf and a three-bedroom unit $918 psf while Soho-style one-bedroom, two-bedroom and three-bedroom units costs an average of $1,198 psf, $1,106 psf and $1,093 psf respectively. Townhouses have an average cost of $907 psf.

Top bid for Pasir Ris condo site 19.3% higher than next highest bid

At $472 psf ppr, the top bid paid by Elitist Development for the 251,036 sq ft site located at Elias Road/Pasir Ris Drive 3 is a good 19.3% higher than the next bid. This might be due to the site’s location, neighbouring a landed housing estate and near amenities like Elias Mall and Pasir Ris Park, as well as the positive outlook in the Outside Central Region market. The nine bids the site attracted is an indication of developers’ interest in the residential market. Given the bid price, the expected sale price is between $900 to $950 psf. Nevertheless, the site is expected to face much competition from upcoming projects yet to be launched as well as upcoming projects from government land sale (GLS) sites.

Two adjacent sites at Serangoon Rd up for collective sale

The first site, Serangoon Mansion is asking for $23 million or $1,039 psf ppr if there is no development charge. Nine walk-up apartments with unit sizes of 1,141 sq ft to 1,195 sq ft sit on the 6,327 sq ft plot. The second site, which is adjacent to the first, is a two-storey shophouse at 23 Race Course Lane. It sits on 1,314 sq ft plot and is asking for $4.78 million or $1,039 psf ppr if there is no development charge.  Both sites are zoned “residential with commercial at first storey” and have a 3.5 gross plot ratio. The sites could be redeveloped into a mixed development with shops on the first level and 30 700-sq ft residential units on higher levels. The expected break-even price is around $1,500 psf.  Buyers can either tender for one or both sites by May 10.

Two freehold GCBs sold for a total of $91.6m

The first Good Class Bungalow (GCB), a two-storey bungalow at Ridout Road over 20 years old with five bedrooms, a tennis court and swimming pool is sold for $60.6 million or $1,490 psf based on its 40,679 sq ft land area. The plot could potentially be subdivided for redevelopment into two GCBs.

The second, a bungalow sitting on a 20,001 sq ft land at Binjai Park was sold for $31 million, or $1,550 psf. The two-storey-plus basement bungalow which won the Greenmark Platinum Award has six bedrooms, a gym, home theatre, steam room, lift, and dehumidifiers in all rooms. The GFA is about 14,300 sq ft.

Commercial

Making industrial space affordable

Some measures in place to ensure the affordability of industrial space include JTC’s innovative infrastructure projects which help SMEs to reduce business costs and the up-front provision of capital-intensive facilities. The upcoming supply of industrial land was also increased to 24 ha in H1 2012, some with lower lease periods. The project completion period for the sites sold under the industrial GLS is also reduced from eight years to between five to seven years. These will help to increase the supply of industrial space and keep rents low. The government may also sell the remaining JTC factory spaces which are mostly smaller flatted factories to owners and occupiers instead of Real Estate Investment Trusts (REITs).

Hong Kong’s Chiu family sells 51 Parkway Centre office units for $53.37m

The 51 strata-titled units located on the second to ninth floors, and the thirteenth floor of Parkway Centre, which has 68 years of lease remaining, are sold to a company led by Mr Kishore Buxani. The price of $53.375 million is equivalent to $1,043 psf on the total area of 51,191 sq ft. The 51 units sold are all leased out at $4 to $4.80 psf with a net yield of 4.2%. These units make up 44% of the 116,950 sq ft total strata area in the 13-storey building and 43% of the building’s total share value. While the company may initiate an en bloc sale of the entire building if other owners are keen to do so, they intend to first concentrate on increasing the value of the entire building either directly or through the Management Corporation Strata Title. The building has a total of three retail units on the first storey and 107 units on the remaining storeys, with some on the higher levels boasting seaviews, and has a large multi-storey car park and the Parkway Parade mall as its neighbour.

Oxley purchases McDonald’s Place for $150 million

Freehold McDonald’s Place at King Albert Park located at Bukit Timah Road/ Clementi Road near the future King Albert Park MRT station has all its seven strata commercial units sold for $150 million to Oxley Holdings. The two-storey building on the 5,534.8 sq m site zoned for commercial and residential use has a plot ratio of 3. The price of $150 million is equivalent to $2,918 psf of net lettable area based on the current lettable area of 4,776 sq m, or $1,207 psf ppr based on its 16,604 sq m potential GFA and a $65.8 million development charge.

60-year leasehold Aljunied industrial site attracts 14 bids with $43.4 m top bid

The top bid of $43.4 million or $255.44 psf ppr for the 0.63 ha industrial site located at Sims Drive/ Aljunied Road came from Fragrance Biz Space, beating out 13 other bidders. This is despite the new conditions on strata sub-division for industrial developments. However, this is not unexpected given the plot’s location in a mature estate and its relatively small size. The site zoned Business 1 has a maximum permissible gross plot ratio of 2.5. Its expected breakeven price is around $400 psf to $430 psf with an expected rental rate of $2.80 – 3.50 psf.

Things to look out for at Changi City

As Singapore’s largest integrated business park development sitting on a 4.7 ha land, Changi City includes three-storey retail mall Changi City Point, a 313-room hotel and a business space tower, ONE@Changi City. Changi City Point has a total net lettable area of 207,000 sq ft with a 450-seater rooftop arena for performances and other activities, out of which 96% has been leased out. ONE@Changi City has a total net lettable floor area of 650,000 sq ft on nine levels, 315,000 sq ft of which has been leased by Credit Suisse. The average rent is around $4-5 psf.

UOL group to develop One KM

The upcoming three-storey-plus-basement One KM currently being developed by UOL group positioning itself as an edutainment mall with enrichment schools and other education-related trades since there are 20 local and international schools with a total student population of 37,000 located in the vicinity. There will be 170 to 200 shop units of sizes 400 sq ft to 600 sq ft in the mall with a 210,000 sq ft net lettable area, out of which 20,000 sq ft has been leased to Cold Storage. UOL will likely hold the retail units for investment purposes and rent them out at rates up to over $30 psf. The mall located next to the upcoming Paya Lebar Central Commercial Hub and near Paya Lebar MRT station will have 530 car park lots. 244-unit freehold Katong Regency, located above the mall, is expected to offer 126 one-bedroom or one-bedroom-plus-study units, 58 two-bedroom or two-bedroom-plus-study units, 36 three-bedroom or three-bedroom-plus-study units, 18 sky suites and 6 penthouses at $1,500 – 1,600 psf at its launch.

Office rentals to fall by no higher than 15% in 2012 (according to analysts)

The fall in office rents is expected to fall by a maximum of 15% in 2012, much lower than the 20-50% fall in 2009 financial crisis. The average gross monthly rental value for Grade A office space in the Raffles Place/New Downtown area fell by 5.3% to $9.76 psf in Q1 2012 from Q4 2011. The biggest fall is from Grade B offices in the Beach Road micro-market, which fell by 8.8% to $5.21 psf in Q1 2012. The biggest fall in average occupancy rates for Grade A offices is in the Orchard Road area, from 91.8% in Q4 2011 to 84.4% in Q1 2012. The average occupancy rate in Raffles Place/New Downtown fell from 88% in Q4 2011 to 87.2% in Q1 2012. Nevertheless, the overall islandwide occupancy rates is considered fairly stable with major lease renewals and the decent take-up in newly or soon-to-completed projects.

Demand for office spaces has been on the decline as a result of the Eurozone debt crisis and slower growth in the Chinese and Japanese economies, which has led to corporate restructuring and a hold on expansion. The impact has not been severe so far, but rents are expected to fall given the cautionary stance many will take in light of the uncertain economy and the upcoming supply.

Industrial properties the best performing property sector in the Q1 2012

The average capital values for prime freehold factories on the ground floor and upper floor space increased by 4.8% to $633 psf and 5.3% to $560 psf from Q4 2011 to Q1 2012. Prime factory prices also increased slightly higher than the 1.2% and 2.1% growth for their respective ground and upper floor space in the same period. One reason for this could be the new conditions on subdividing GLS sites. Growths in rents, however, have been slowing; with a mere 0.5-0.8% increase from Q4 2011 to Q1 2012 compared to the 2% increase in Q4 2011. The average monthly gross rents for prime factory space are $2.39 psf for ground floor space and $2.08 psf for upper floor space, while the average monthly gross rents for warehouses were $2.47 psf and $2.04 psf for ground and upper floor spaces respectively. The rents for business parks fell by 1.5% to $3.90 psf in Q1 2012; rents for high-specs space also fell, both a result of a fall in demand and an upcoming increase in supply. Nevertheless, demand for industrial space is likely not to fall a lot, which should result in industrial rent declines not exceeding 3% for the year. Capital values are also expected to remain fairly stable.

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