Residential

Thomson View Condo and Kemaman View up for collective sale

99-year leasehold (with 62 years remaining)Thomson View Condominium along Upper Thomson Road is asking for $580 million or $685 psf ppr including $107 million to enhance the land use and another $90 million to top up the lease. If the development charge of $ 46 million for the additional 10% GFA for balcony area is included, the price would be $659 psf ppr. Thomson View Condominium consists of 200 flats, 54 townhouses and a shop unit sitting on a 540,314 sq ft land area zoned for residential use with a 2.1 gross plot ratio. The site is surrounded by private properties.

Freehold Kemaman View at Jalan Kemaman is asking for $46-48 million or $945-986 psf ppr. The site’s GFA is 53,813 sq ft and can be extended by 10% for balcony allowance, which will bring the price to $825-859 psf ppr including a $2.8 million development charge. 30 units (1,324 sq ft) sit on the 17,388 sq ft site zoned residential with a 2.8 gross plot ratio. It could potentially yield 98 600-sq ft apartment units with an expected break-even price and selling price of $1,266 psf and $1,400-1,600 psf respectively.

The tender for the former closes on May 22, while the latter closes on May 23.

Residential rents likely to remain high in Q2

Rental demand for homes (non-landed homes especially) have been on the rise and this trend is likely to continue in Q2, given the increase in home prices and the ABSD. Transactions in January and February each hit above 3,000, with 3,466 transactions in February. Median rents for landed and non-landed residential homes excluding ECs also continued rising, with rents for non -landed homes increasing by 1% from January to $3.53 psf per month in February 2012, an 8% increase from February 2011, and rents for landed homes increasing by 6% in the same period to $2.77 psf per month, a 14% increase from 2011. The total median rents from both landed and non-landed homes in February and January hit $35 million, increasing by 15% from 2011. This rise may be due to the influx of expatriates moving to Singapore. Meanwhile, rents for high-end, non-landed residential property fell by 2% from Q4 2011 to $5.17 in Q1 2012.

Recovery in private home resale market after ABSD setback

Resale transaction volumes for March 2012 show the recovery of the private home resale market back to pre-ABSD levels, which may a result of high psf prices at new launches leading to homebuyers considering resales.  There were 1,142 resale deals for private homes (excluding ECs and en bloc sales) in March so far, twice the 565 deals in February and more than triple the 314 deals in January. Total resale transactions in Q1 is 2,021, almost a 25% fall from Q4 2011 and a 42.3% fall from Q1 2011’s 3,503 since sales in January and February was slow.  While psf prices for new launches are higher, the absolute prices for resales are usually higher since the units are larger in size. Age of the project and its facilities may also result in a lower psf price for resales.

Watercolours EC to be launched

99–year leasehold 416-unit Watercolours EC located at the intersection of Pasir Ris Drive 3 and Pasir Ris Link and near Pasir Ris MRT and Pasir Ris Beach is to be launched soon. It consists of four towers with 48 two-bedroom units (743 sq ft), 280 compact, standard and dual-key three-bedroom units (starting from 915 sq ft), 62 standard and dual-key four-bedroom units  and 26 three- and four-room penthouses.

Novena Ville in the en bloc market

43-unit freehold mixed-use Novena Ville sitting on a 51,092 sq ft land is asking for $125-135 million or $1,748-1,887 psf ppr based on its 1.4 gross plot ratio. Including the additional 10% balcony allowance, the price would be $1,626-1,756 psf ppr since there is no development charge. Zoned “residential with commercial at 1st storey”, it can be redeveloped up to a maximum height of four storeys. It will likely attract medium and large developers since it is located near Novena MRT station and shopping malls such as Velocity @ Novena Square.

The tender closes on May 24.

Rental transactions in RCR increased in Q1

Q1 2012 saw 2,025 rental transactions in the rest of central region (RCR), a 25.5% increase from Q4 2011. Rental transaction volume in the core central region (CCR) was 2,165, a slight decrease from Q4 2011’s 2,181 while the transaction volume in outside central region (OCR) increased slightly from 2,604 to 2,656 in the same period. The overall rental transaction volume in Q1 increased by 7.0% in Q1 2012. The high transactions volumes in the RCR could be a result of tighter rental budgets, which meant that expatriates will seek more RCR units than CCR units. The overall rental transaction volume in Q1 suggests a strong rental market which is possibly a result of the relaxing of immigration policy.

The RCR rental rates did not do as well, as there is only a slight 1.9% increase from $3.69 psf in Q4 2011 to $3.76 psf in Q1 2012, possibly a result of increased supply from substantial new launches in the region. Average CCR rental rates fell from $4.68 psf in Q4 2011 to $4.66 in Q1 2012 while average OCR rents also fell from $2.99 to $2.98 in the same period.

Rental transaction volumes are expected to remain stable with a potential slight increase in later quarters while rental rates may also increase, driven by rental activity for shoe-box apartments.

Not an over-supply, but a shortage

Earlier reports suggested that the large amount of land supply from GLS is too much but some consultants now feel that instead of an over-supply, there may be a shortage. Latest URA figures suggest that there may be a shortage in the Outside Central Region (OCR).

Resale flat prices saw a slowdown in Q1 2012

The number of applications for resale flats fell by 0.5% to 5,892 in Q1 2012 from Q4 2011. Much of the fall was a result of decreased demand for larger type units, such as five-room and executive flats as buyers turn to BTO flats. Prices also increased by a mere 0.6% in Q1 2012 compared to a 1.7% increased in Q1 2011.

ECs to benefit from lack of DBSS activity

As there is no recent DBSS activity, ECs may benefit from demand in the DBSS market. As Singaporeans continue to gain more wealth, they may consider upgrading to ECs, a public-private housing hybrid.

Meanwhile, SingXpress Land has launched Pasir Ris One, a 447-unit DBSS development near Pasir Ris MRT Station and White Sands Shopping Centre. Units may go for an average of$639 psf, with prices for 3-room to 5-room units range from $390,000 to $770,000, which are considered fairly reasonable though buyers may prefer ECs, which would become private homes after 10 years. Many potential buyers might have purchased BTO flats, resale flats and ECs, affecting the demand for DBSS units.

Commercial

Competitive bids expected for Tai Seng industrial site

The 30-year leasehold 0.43-hectare industrial site at Tai Seng Link zoned Business 2 with 2.5 permissible gross plot ratio is expected the draw eight to 17 bidders with a top bid of $100-170 psf ppr. Being located in Paya Lebar iPark(developed as a lifestyle park) and near Tai Seng MRT station, its location is both a boon and a bane since its proximity to the MRT station would mean that no strata sub-division is allowed in the first 10 years of its completion though this factor is unlikely to affect the popularity of the site, judging from recent industrial land sales near MRT stations. The relative scarcity of sites in mature industrial Tai Seng area also adds to its attractiveness.

The tender will close on June 19.

Industrial price index saw 7.3% increase in Q1

URA’s industrial price index showed a 7.3% increase from Q4 2011, compared to the previous 4% increase from Q3 2011, while the rental index saw a 1.3% in the same period, compared to 0.6% in Q4 2011. The prices may be a result of speculation rather than actual demand, since the interest rates are low and residential investors have been turning to this market since the introduction of the ABSD. Some buyers may also be buying up these units in anticipation of limited supply as a result of new conditions on strata-subdividing units. The multiple-user factory price index and rental rates increased by 7.2% and 1.3% respectively while the multiple-user warehouse price index and rents increased by 8.8% and 1.9% respectively in Q1 2012. The number of strata factory transactions also rose 21.9% to 478 in Q1 2012 from 392 in Q4 2011, a result of attractive launches and the relative affordability of such units. Prices for strata industrial office (in multiple user factory) may fall by 5-10% in this year since both tenant and speculative demand are decreasing while overall industrial rents could decrease by 3% in 2012..

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