Developers not optimistic about the property market

With the latest round of cooling measures, developers are now less optimistic about the property market, as reflected in the Redas-NUS Real Estate Sentiment Index (RESI) Current Sentiment Index, which fell from 5.1 in Q3 2012 to 4.6 in Q4 2012. The Future Sentiment Index also fell from 4.7 in Q3 to 4.0 in Q4 while the Composite Sentiment Index fell from 4.9 to 4.3. Specifically, the prime residential sector fell to a current net balance of -27% and a future net balance of -49% from -8% and +2%, the suburban residential sector has a current net balance was +10% while future net balance fell from +6% in Q3 to -28% in Q4. Suburban retail and hotel/serviced apartments, on the other hand, had current and future net balances of +14% and +9% respectively. 48% of the survey respondents also expect to see moderately lower prices in the primary residential market, with another 25% expecting stable prices and another 28% expecting a moderate price increase.

10% of the respondents (compared to an earlier 23%) intended to launch substantially more units. 43% (compared to 48% earlier) expect moderately more launches, 28% (unchanged) expect the launches to be at the same level while  20% (4% earlier) expect lesser units at new launches. In addition, the level of interest in land sales also fell, with 10% expressing moderately greater interest in GLS (compared to an earlier 32%) and another 38% expressing moderately lesser interest (compared to 7% earlier). Similarly, level of interest in en-bloc sales also fell, with 35% (compared to 61% before) expressing the same level of interest and 45% (compared to 15% earlier) expressing less interest.

(Source: Business Times)


Six Samsung Hub units up for sale by tender

These six strata unitswhich strata areas range from 883 sq ft to 3,595 sq ft (a total of 13,132 sq ft) are located on the17th floor of Samsung Hub, a 999-year Grade A office development on Church Street near Raffles Place. The development consists of a 30-storey office block with 299,753 sq ft strata area and a six-storey podium with 178 carpark lots. Church Street Holdings, the owner, will only sell if the all or most of the units can be sold at $3,300-3,500 psf.The tender will close on March 15.

(Source: Business Times)

San Centre at Chin Swee Road up inthe collective sale market

The 12-storey San Centre, an office building at Chin Swee Road, is asking for $115-125 million or $872-948 per sq ft. It consists of 107 strata-titled office units and 80 carpark lots sitting on 28,719 sq ft of land. The plot ratio and total GFA are 4.59 and 131,895 sq ft respectively.Having a good location (near CBD, Chinatown and Robertson Quay and Chinatown and Outram Park MRT stations), it can be potentially redeveloped into a hotel, a serviced apartments for expatriates and medical tourists or an office building. The authorities would support the redevelopment into a 20-storey hotel development or a mixed residential and commercial development, with at least 60% for commercial use.The tender closes at 2.30pm on March 25.

(Source: Business Times)

JTC change rules on land rentals

Under Sale-and-Leaseback Scheme, JTC allows third-party facility providers to be its lessees by allowing an industrialist to sell its completed facility to a third-party facility provider such as a Reit, which would in turn leases it back to the industrialist. These would allow industrialists to offload assets and lighten their balance sheets. However, under the new rules, these third-party facility providers have to pay an upfront land premium (prevailing posted land price on JTC’s website,adjusted for the remaining tenure of the current lease term) for the remaining of the lease term; only buyers who are industrialists can pay a monthly land rental. Should there be a second term of lease, the upfront premium will be determined at the end of the first term. This new rulecould mean a higher cost and a lower yield for Reits, which may lead to less competition for SMEs interested in buying their own premises.

Another similar scheme is the Third Party Build-and-Lease Scheme, where a property fund or developer builds a customised facility for an end-user industrialist, to whom it leases the building. While the developer can choose between an upfront land premium or a monthly land rental, a new buyer (if a third-party facility provider) can only pay an upfront land premium for the balance of the current lease term.

(Source: Business Times)

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