Singapore Property News This Week #74

Residential

Developer sales in September break 2010 records

2,621 private homes excluding ECs were sold in September, an 83.7% increase from August and the highest since July 2009’s 2,772 units, thus bringing the total units sold this year to 17,927 units, up 12.7% from 2011’s full-year record and 10% from 2010’s full-year record. This is mainly driven by the sales in the Outside Central Region, which saw a 146% increase from 837 units in August to 2.062 units in September. This may be due to the increase in new launches in September to 2,224 units from 1,118units in August as well as the high liquidity and low interest rates. September sales also brought the total developer sales in Q3 to a preliminary 5,999 units but sales are expected to slow in Q4, leading to a full-year record of 21,000-22,000 units. 150 EC units were also sold in September, up from 118 units in August, bringing the preliminary Q3 figure to 392 units and the year-to-date figure to 2,818 units, compared to 2,883 units last year. The sales are expected to increase further in Q4.

(Source: Business Times)

Khaw: Cooling measures successful

Minister for National Development Khaw Boon Wan said that the cooling measures in the property market to ensure that housing remains affordable has been successful as both the private property and the HDB resale markets are stabilising, with the moderation of the growth in private property prices from 6% last year to 0.9% in Q1 to Q3 2012. The yearly growth of the Resale Price Index has also fell from 10.7% in 2011 to 3.9% in the Q1 to Q3 2012, though Q3 reflected a 2.0% increase from Q2. Despite the increase in BTO supply, it will still take time for it to catch up with demand.

Meanwhile, five 99-year leasehold sites potentially yielding 2,880 homes have been released for sale to increase supply of residential homes, of which two are ECs. The first is a 153,999 sq ft EC site at the junction of Punggol Field Walk and Punggol East, next to Flo Residences. With its 461,997 sq ft GFA, can yield 435 units. It is likely to attract three to eight bidders, with a top bid of $270 – $329 psf ppr, since there is competition from significant housing supply in the area, and the site is located away from the Punggol MRT station and the town centre. The tender closes on Dec 6.  The second is a 120,855-sq-ft site with 592,189 sq ft GFA located next to Sky Habitat in Bishan St 14. The site which can generate 645 units is expected to attract ten to 15 bidders, with a top bid of $750 to $850 psf ppr. It has an expected launch price of $680 to $735 psf ppr. The tender closes on Nov 29. A third EC site at the Sembawang Crescent- Sembawang Drive junction will be launched for tender on Oct 30. The 233,760 sq ft site has a 654,527 sq ft GFA and can yield about 650 units. It could potentially attract four to seven bidders, with a top bid of $250-330 psf ppr.   Also available are two reserve-list sites in Tampines Ave 10, Parcels C and D. Parcel C is a 238,860 sq ft site with a 668,806 sq ft GFA that can support 680 units while Parcel D is a 168,567 sq ft site with a  471,988 sq ft GFA that can support 470 units.

(Source: Business Times)

99-year leasehold Tanah Merah site draws $434.6m top bid

The residential site next to Tanah Merah MRT along New Upper Changi Road attracted a total of 11 bids, with the top bid of $434.6 million or $791.42 psf ppr from Keppel Land unit Sherwood Development. The developer plans to develop about 700 one- to four-bedroom units (500-1,400 sq ft). The expected breakeven cost and average selling price are $1,150-1,250 psf and over $1,300 psf, respectively.

(Source: Business Times)

Chee Hoon GCBA bungalow plot up for sale

A two-storey detached house with an attic sits on the 14,000-square-foot bungalow plot in Chee Hoon Avenue Good Class Bungalow Area (GCBA) is up for sale by public tender. It is asking for $20.5-21.5 million or $1,454 to $1,525 psf of land area. It is near Coronation Shopping Centre, Serene Centre and Nanyang Primary School. The tender closes on Nov 14 at 3pm.

(Source: Business Times)

Commercial

Five Chin Bee terrace factories up for sale

The former factory premises of International Flavors & Fragrances located in JTC Corp’s Chin Bee Food Zone at the corner of Jalan Boon Lay and Enterprise Road is asking for $20 million. The property consists of five terrace factories (four two-storey and one three-storey) on five contiguous plots zoned ‘Business 2’ with a total of 75,018 sq ft land area with remaining leases of 23-30 years. The existing 57,112 sq ft GFA is much lesser than the maximum allowable GFA of 159,591 sq ft, allowing for substantial redevelopment. The tender closes on Nov 29.

(Source: Business Times)

Two freehold shophouses at Tanjong Katong up for sale

The pair of four-storey shophouses at Tanjong Katong Road within the gazetted Tanjong Katong Conservation area has been launched for sale by public tender with an indicative pricing of $10-12 million. The shophouses with a total of two retail shops on the first level and six apartment units on the upper levels sits on a 3,811 sq ft land zoned Residential with Commercial on the first storey with a 3.0 GPR and a 11,046 sq ft GFA. They could be used as as staff quarters or student hostel subject to the approval of the relevant authorities, refurbished before renting for better rental yield or strata-titled and sold individually. The fully tenanted shophouses currently yield an estimated total gross monthly rental revenue of $18,350. The tender for the subject properties closes on Nov 2, 2012 at 2.30pm.

(Source: Business Times)

URA believed to be setting informal guidelines on shop sizes

While the URA has yet to release any official guidelines, it was generally believed that URA is setting informal guidelines on shop sizes to discourage the increase of small shops in new developments and investment demand of strata shops. It is said to be encouraging a minimal 50% of the retail portion for 60 sq m units, a maximum 40% and 10% for 25-59 sq m units and 15-24 sq m units. It was also believed that URA is recommending 100 sq m as either a minimum or average unit size for strata office units.This may be because a development with mainly small units may result in carpark shortage and traffic congestion in the local area. Another reason could be the increased investment demand for strata units, which had resulted in high psf prices. A potential problem of having too many small shop units is that tenants may not be found, though some operators may combine these into a larger unit. Alternatively, these units may be used for storage, or retail purposes that require little space such as massage outlets and nail salons, which may not be the original intention of the planners.

(Source: Business Times)

No sign of speculations in prices of HDB shophouses

Since resale transactions of HDB-sold shops makes up only 3-7% of the total stock of HDB-sold shops (8,700), there are no signs of speculation in the prices of such shops. 216 such shops were transacted in 2012 so far, of which 6% were resold within one year. 95% of the sold shops are owned by Singaporeans and Singapore-owned companies, with the remaining owned by permanent residents (PRs), foreigners and foreign- owned companies. There would not be new restrictions on citizenship eligibility on transactions since these shops are sold without restrictions and in accordance with demand.

(Source: Business Times)

Improved sentiment for strata shops and offices

Almost $1.3 billion of strata retail units have been transacted so far this year and over $1.6 billion of strata office units have been transacted since January, compared to $685 million and $1.4 billion respectively in 2011. This is due to the increased demand from as a result of increased awareness of the gains to be made from purchasing strata commercial units, and the fundamentals such as increased interest in this sector as investors are diverted away from the residential market as a result of the cooling measures, low interest rates on savings and low mortage rates.

(Source: Business Times)

Moderation of industrial property prices expected

Average transacted prices for new strata industrial units fell slightly in Q3, while prices for resale strata industrial properties with 30-year leases increase by 3.8% in the same period to $249 psf, compared to a 28% increase in Q2 from Q1. Meanwhile, sixty-year and 99-year leasehold and freehold industrial properties registered 12%, 3% and 8% increases respectively. While the industrial property sector may benefit from the QE3, prices and price growth may moderate given the uncertain economic outlook, leading to a slower growth of average capital values of industrial space by up to 4% in Q4. The average capital values of ground and upper floor prime freehold factory space in Q3 increased by 5.1% and 6% to $699 psf and $636 psf respectively. Prices may remain stable in the medium term if financing remains easily available, especially for new 30-year leasehold units but may fall in the long term with the expected increase in 20 million sq ft supply of factory and industrial space in 2013. Rents are expected to remain fairly stable, with a slower growth of under 1.5%, as a result of the current high industrial property prices, lease renewals, and possibly relocation and expansion.

(Source: Business Times)

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