Residential

Aylesbury Pte Ltd bought freehold Kemaman View en bloc at $45.5m

The 17,388 sq ft site located off Balestier Road was sold for $45.5 million or $935 psf ppr based on its 2.8 gross plot ratio and 53,813 sq ft potential GFA. If approval for an additional 10% GFA for balconies is granted, the additional $2.8 million would mean a higher unit land price of $816 psf ppr. The site zoned for residential use has a maximum height allowance of 36 stories subject to approval. A new development on the site could potentially house 98 600-sq ft apartment units with a selling price between $1,400 and $1,600 psf.

URA and HDB launch two residential sites at Tanah Merah, Bright Hill

The two residential sites, one located at Tanah Merah Kechil Road and another at Bright Hill Drive have been launched.

The 99-year leasehold 150,678.5 sq ft site located at Tanah Merah Kechil Road has a maximum GFA of 421,901.8 sq ft which can potentially support 415 homes. It is expected to attract five to eight bidders, with a top bid ranging from $500 to $600 psf ppr and an expected average selling price of $1,100-$1,300 psf.

The second site, which is also a 99-year leasehold plot, is located at Bright Hill Drive. It has a 144,635.6 sq ft site area and a maximum GFA of 404,979.7 sq ft and can potentially yield 405 homes. The site is expected to attract three to eight bids, with the top bid at $550-$620 psf ppr and the average selling price at $1,100-$1,300 psf. While some believe that the irregular layout of the site may discourage bidders, others feel that the site may see pent-up demand since there had not been new launches in the area for years.

The tender for the two sites will close on noon on July 31 and August 7, respectively.

Farrer Drive reserve list site draws $1,048 psf ppr record high bid

The private residential site located at Farrer Drive attracted a record top bid of $1,048.52 psf ppr from a Singapore Land unit despite garnering only six bids. While the top bid was within top range of $1,100 psf ppr the site was expected to fetch, the number of bids fall short of the 10-20 bids that was predicted. This may be due to the site’s irregular, elongated layout, its proximity to an electrical substation and its maximum height condition of eight levels. There is also competition from the d’Leedon project nearby. Furthermore, being located in District 10 means that it does not cater to the mass market and instead the high-end residential market which has been seeing rather lacklustre results. SingLand plans to develop a 100-unit project comprising mainly of 1,000 sq ft two-bedroom units and some smaller units such as one-bedroom units with a study on the site. The expected breakeven cost and average selling price are $1,600 psf and $1,800 psf, respectively.

Commercial

Busy first five months in the strata office market

$1.1 billion of strata office properties were transacted in the first five months of this year, compared to $1.3 billion for the whole of 2012.This could be due to the liquidity, the increase in strata office supply, low interest rates and higher number of investors turning away from the residential market to the strata office market. Investors who have earlier made the switch from the residential market to the industrial market may have switched again to the strata office market as the government turns its attention to unauthorised use of industrial premises. The top three strata office sales came from Paya Lebar Square with $322.3 million of deals, 999-year The Adelphi near City Hall MRT Station with $94.3 million and Burlington Square at Bencoolen Street with $89.3 million. New projects such as such as Far East Organization’s PS100 at Peck Seah Street contributed $83.6 million of deals, Eon Shenton $67.3 million and Oxley Tower $42.8 million. The secondary market has also been busy, with many occupiers looking for office space and some buying individual units from investors who had bought them in bulk.

Maybank: Hotel room supply growing at a faster rate than demand

The hotel room supply is expected to grow at a compound annual growth rate (CAGR) of 6.3% between 2011 and 2015 with 11,441 new rooms from 2012 to 2015, compared to room demand which is expected to grow at 5.9%. Tourist arrivals are expected to rise by a CAGR of 5.2 per cent over 2011-2015 which meant that an oversupply of rooms could result in slower average room rate (ARR) growth and lower occupancy rates which is estimated to hit 90% in 2012F before falling to 84 per cent in 2014F. Revenue per available room (RevPAR) would parallel the occupancy rate with a $233 peak in 2012F but fall to $227-$229 in 2013F-2014F before peaking again at $237 in 2015F. ARR growth may fall to 3.2% but RevPAR could remain above $245 if occupancy rate remains above 80%.

DTZ: Q2 retail rents remain stable

Retail rents for both Orchard and suburban malls saw a marginal increase from the Q1 2012, with the average gross fixed rent of prime retail space along Orchard/Scotts Road having increased by 0.1% to $30.33 psf per month in Q2 and the average rents in suburban areas having increased by 0.2% to $28.35 psf per month. The stability in the prime retail rents could be attributed to the the lack of prime frontage retail space as well as the entry of new international brands such as Tory Burch and Tommy Bahama. The surburban retail rents, meanwhile, are benefitting from the strong retailer demand and consumer spending, especially with more expatriates living in the suburban areas. However, the average retail rents are not expected to rise by much because of the uncertain global economic outlook and the large upcoming supply.

Expression of interest exercise conducted for three conservation shophouses on Amoy Street

The three 999-year leasehold (with 814 years remaining) prime conservation shophouses (77, 78, and 79/80Amoy Street) have a combined site area of 8,182 sq ft, with an estimated floor area of 23,820 sq ft. Buyers can either purchase 78 and 79/80 Amoy Street together or all three units. 77 Amoy Street has a 2,773 sq ft site area, and has an estimated floor area of 7,610 sq ft. 78 Amoy Street has a 2,597 sq ft site area and an estimated floor area of 7,793 sq ft while 79/80 Amoy Street has a 2,812 sq ft site area, and an estimated floor area of 8,417 sq ft. The shophouses can potentially fetch $1,600 psf of GFA since the market for conservation shophouses in strong in the area. It is expected to be attractive to investors seeking a more affordable alternative to strata office units and office buildings. The exercise will close on July 25, by 5pm.

30-year leasehold Tai Seng Link industrial site attracts $23m top bid

The top bid of $23.3 million or $199.69 psf ppr for the 0.43 ha site came from OKH (Woodlands) Pte Ltd – a unit of OKH Holdings, exceeding the expectations of a top bid of around $100 to $170 psf ppr and the next highest bid by 28%. The number of bids, however, was a meagre four, despite predictions that it would draw much interest. The site’s proximity to the Tai Seng MRT station maybe the reason, since it also means that no strata subdivision of the site is allowed within the first 10 years of completing the project. Located within Paya Lebar iPark, the site has a permissible gross plot ratio of 2.5 and a 116,681 sq ft gross floor area. The expected selling price of the property is $450 to $500 psf ppr.

Investment sales of property on the rebound

Preliminary figures showed that investment sales have increased to $6.4 billion in Q2 as of June 19, up from $4.8 billion in Q1 2012, and may possibly hit $7 billion, bringing the H1 2012 total to $12 billion. This increase was driven by both the the residential and office markets and the figure may eventually result in a total of $21-25 billion for the whole of 2012, driven by GLS land sales in H2. Investment sales in the residential sector have increased by 46% to $3.6 billion from Q1 2012, driven by the $2.5 billion from GLS sites, an increase of 38% from Q1 and$1.9 billion, a 91% increase from Q1 in the commercial segment. Investment sales of industrial properties and the collective sales market, however, fell 32% to $766 million and from $456.6 million to $328.8 million in the same period, respectively.

High expectations for Bugis Cube strata units

91 out of the 119 units in Bugis Cube, a 999-year leasehold retail development located opposite Bugis Junction, have been launched. The development consists of over six floors of prime retail and food-and-beverage space with units ranging from 129 to 635 sq ft. Prices range from $2,900 psf to $7,500 psf. Since it is located in the popular Bugis shopping area, and near amenities and the Bugis MRT station, it will likely attract both retailers and investors interested in owning prime retail property in the city centre.

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