TWO Singapore-listed property groups, Yanlord Land and Ho Bee Investment, have acquired a 13.69ha residential development site in a fast-growing area of Shanghai for 3.82 billion yuan (S$789 million).

This is the first joint venture bet-ween Yanlord, based in China, and local firm Ho Bee, after they inked an agreement last October to explore investment options in Tangshan, China.

Yanlord will have a 60 per cent stake in the Shanghai project, while Ho Bee is taking the remaining 40 per cent.

The site is in Shanghai’s Qingpu site, 5.5km from the Hongqiao commercial district, which has been earmarked by the authorities for major development as a financial and transport centre.

‘This latest acquisition will tap on the emergence of the Hongqiao commercial district as a key economic, financial, commercial and logistic hub servicing the greater Yangtze River Delta region,’ said Ho Bee chairman Chua Thian Poh in a media statement.

He added that the development site was ‘ideally situated within the Qingpu Tujing Township, which has in recent years emerged as a high-end international residential community in western Shanghai’.

Yanlord chairman Zhong Sheng Jian was equally upbeat about the project.

‘The latest acquisition of the Qingpu land parcel reflects our continued confidence in the potential of Shanghai’s real estate sector and presents a unique opportunity for investment in large-scale, high-end residential developments amid the growing scarcity of sizeable prime residential development sites within Shanghai’s city centre,’ he said.

He said the company would draw on its past experiences in Qingpu district in key projects there such as Shanghai Yanlord Riverside Gardens and Yunjie Riverside Gardens.

‘We are confident that our ability to amalgamate quality, aesthetics and functionality will lead to the creation of another landmark international residential development,’ Mr Zhong said.

The two firms teamed up last October to explore a project to build residential properties at Nanhu Eco-City on the outskirts of Tangshan, in north-eastern China.

However, the project has been put on hold while the two firms wait for the authorities to release the land for tender.

On the stock market yesterday, Yanlord gained three cents to close at $1.79 while Ho Bee rose six cents to $1.80.

Source: Straits Times, 18 Feb 2010

MALAYSIANS are snapping up more private homes in Singapore than any other nationality, according to a new report.

DTZ Debenham Tie Leung found that last year, they accounted for 27 per cent of total transactions by non-Singaporeans, who include foreigners and Singapore permanent residents (PRs).

This is the second year in a row that Malaysians have emerged as the most active non-Singaporean purchasers in this type of study, which is based on Urban Redevelopment Authority data and uses caveats lodged as a proxy for sales transactions.

Indonesians were behind 19 per cent of transactions last year, the lowest proportion since 1995, when caveat data became available.

In all four quarters of last year, Malaysian buyers came out tops – a turnaround from the period between 2004 and 2007 when this position was held by Indonesians. And in the final three months of last year, Malaysians were responsible for 25 per cent of transactions by non-Singaporeans, significantly higher than the 17 per cent that went to Indonesians. The two groups of buyers were on an equal footing during the same quarter in 2008.

Mr Joseph Tan, executive director for residential at CB Richard Ellis, said geographical proximity and cultural similarities were key reasons for the interest shown in Singapore by its nearest neighbours.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the legal system and language make it more comfortable for Malaysians to deal with Singaporeans.

Malaysians look at a wider spectrum of property compared to Indonesians, who are more likely to focus on upper-middle tier to high-end homes, noted Mr Tan.

Indonesians made up one-third of total transactions worth more than $1.5 million during the second quarter of last year, according to a previous DTZ study on private residential demand during the period.

In contrast, Malaysians were well represented among the transactions below the $1.5 million mark – particularly in the under $500,000 and the $500,000 to $1 million segments.

Up to 75 per cent of the transactions by Malaysians were made by Singapore PRs, the same report noted.

These PRs – especially those living in Singapore for more than 10 years – have adopted buying patterns similar to Singaporeans’, Mr Mak said. He credited the strong continuing demand from the mainly PR Malaysian buyers to their tendency to buy properties to live in, mainly in the mass-market segment, rather than as investments.

Source: Straits Times, 18 Feb 2010

SINGAPORE’S private property market is off to a strong start this year, with new-home sales in January coming in at a record-setting pace.

The Urban Redevelopment Authority (URA) said yesterday that 1,476 new homes were sold last month, sharply higher than the 481 units sold in December and 601 sold in November.

It is also the first time monthly sales figures have risen since July last year.

In fact, January’s sales were so exuberant that buyers bought more units than the number launched by developers that month.

They also set a faster pace than the average 1,230 units sold per month in 2007 – a year which saw a record 14,811 new homes snapped up.

Property analysts said yesterday that this has set the tone for this year. Demand for new homes is expected to be strong, especially in the higher-end segments of the market.

URA figures seemed to confirm this trend. Almost half of the new homes sold – 699 units – were in prime areas such as Cairnhill and Holland Road, otherwise known as the core central region.

The region saw the largest jump in number of units launched and sold. Developers launched almost five times the number of units – 690 in January, up from 126 in December – while the number sold tripled in January from 218 in December.

By comparison, mass market or suburban condominiums, which drove the property boom last year, accounted for just 29per cent of the units sold last month.

PropNex chief executive Mohamed Ismail said: ‘The middle- to high-end markets are certainly moving. Some 76per cent of homes were sold at above $1,000 per sq ft (psf), a proportion not seen for over 30 months.’

CBRE Research executive director Li Hiaw Ho said that a positive economic growth forecast for this year and pent-up demand following sluggish sales in the last three months of last year could have contributed to the sterling start.

Prime property sales were led by RVEdge in River Valley, where 91 units were sold at a median price of $1,696 psf, and Urban Suites in Cairnhill, where 88 units were sold at a median of $2,506 psf.

URA’s figures showed that another 350 homes sold were in the city-fringe areas, led by City Developments’ Cube8 in Thomson Road – January’s top-seller. Out of 177 Cube8 homes launched, 167 units sold at a median price of $1,286psf.

Far East Organization’s The Shore Residences, in the East Coast, also did well, with 144 units sold out of 202 launched, at a median psf price of $1,200.

CBRE’s Mr Li noted that, in general, the smaller one- or two-bedroom units continued to be popular because they cost less in absolute terms.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak added that based on caveats that have come in for January so far, the resale market is also showing similar strong volume.

But for now, prime properties are nowhere near the record-breaking levels of the last property peak in 2007. Last month’s sales did not see any homes priced above $4,000 psf, he noted.

In a separate report released yesterday, property consultancy DTZ Research said that the move towards higher-priced homes was already evident in the last quarter of last year, when home purchases of $3million and above made up 8per cent of all transactions, inching up from 7per cent in the previous quarter.

DTZ agreed that the high-end segment will see greater price appreciation this year. But it said that a runaway increase in prices is not likely as concerns like credit tightening in China and weak consumer demand in the US and Europe remain.

Following the Chinese New Year holiday, developers are expected to launch more projects, such as The Estuary in Yishun and Sentosa Quayside.

Source: Straits Times, 18 Feb 2010

They account for 76% of home deals last year, highest since 2005: DTZ

Singaporeans had a better shot at owning a private home in 2009 as property prices fell in the early part of the year and mass-market launches were the order of the day.

Analysing caveats lodged, real estate consultancy DTZ found that Singaporeans’ share of private residential transactions reached 76 per cent last year. This exceeded the 73 per cent in 2008 and was the highest level since 2005.

Permanent residents accounted for 13 per cent of the deals – unchanged from the previous year.

In contrast, foreigners’ share shrank to 9 per cent from 11 per cent in 2008. But some market watchers believe this group of buyers could become more active this year, with more high-end projects in the market.

HDB upgraders spurred the revival in the property market last year when they snapped up suburban homes, taking advantage of lower prices at the height of the financial crisis. Encouraged by sentiment in this sector, developers focused on rolling out more mass-market projects.

DTZ pointed out that last year, those with HDB addresses made up 41 per cent of all private home buyers – almost double the 22 per cent in 2007.

Real Estate Developers Association of Singapore CEO Steven Choo said: ‘Typically, upgraders and mass-market buyers are locals, many of whom buy for owner-occupation’. This would be a key reason why Singaporeans accounted for a greater proportion of private home transactions last year.

Mr Choo said the same trend had played out in 1999 after the Asian Financial Crisis.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that on the other hand, foreigners who buy property as an investment still prefer prime districts. But high-end or luxury launches were few and far between until the later part of last year.

In 2007, when prime projects were making headlines in an exuberant property market, Singaporeans accounted for just 67 per cent of private residential deals, whereas foreigners accounted for 13 per cent. PRs and companies together accounted for the other 20 per cent.

Industry watchers expect to see foreigners’ share of transactions edge up this year compared with 2009. ‘That’s nothing out of the ordinary, quite consistent with the (historical) pattern,’ said Mr Choo, explaining that this could happen as property prices rise and the pace of purchases by HDB upgraders slows.

He said it is too early to say whether foreigners’ share of deals will return to the level in 2007 – there is still uncertainty in the markets, and there is a need to see how the global economy pans out in the second half of the year.

DTZ’s data does show HDB upgraders being increasingly sidelined as property prices rise. In Q4 2009, those with HDB addresses made up 34 per cent of all private home buyers, down from 56 per cent in Q1.

Prices of mass-market homes increased to $610 per sq ft in Q4 – 6.6 per cent up from Q2 and ‘back to almost the peak price level in Q4 2007′.

Going by sales reports from developers, foreign buyers are returning. There is also talk in the market that some buyers from China made their way here to view showflats over the Chinese New Year holiday.

According to DTZ, Malaysians were most active among non-Singaporeans in the property market last year, accounting for 27 per cent of transactions by foreigners and PRs. Indonesians followed with a 19 per cent share – the lowest since 1995 when caveats were available for analysis.

The Chinese were in third place, accounting for 15 per cent of the deals. Indians ranked fourth with a 12 per cent share.

DTZ noted that in the second half of 2009 there were more foreign buyers from other countries, particularly the UK, Korea and Australia.

Source: Business Times, 18 Feb 2010

Big turnaround after blip of last year’s Q4; choice locations feel the buzz too

The private housing market has entered the year on a firm footing, with developers’ home sales in January rising to 1,476 units – three times as high as the previous month. They also hit their highest level since August last year.

Of the units launched in January as well as units sold in the same month, about half were in the Core Central Region, reflecting a revival in activity in the choicest housing locations in Singapore. Another interesting statistic gleaned from the latest monthly data released by the Urban Redevelopment Authority (URA) yesterday is that 76 per cent of the total units sold in January were priced at at least $1,000 per square foot (psf). Such a high proportion has not been seen since URA began releasing such data in June 2007, observes property agency PropNex CEO Mohamed Ismail.

Industry players expect this trend to continue for the rest of 2010, pointing to high land prices achieved at state tenders late last year, which would translate into higher target selling prices by developers.

As a developer put it: ‘Increasingly, people will accept that $1,000 psf is not a shocking price for mass-market private homes anymore.’ He acknowledged, however, that further price increases in this segment will be checked by what HDB upgraders can afford.

Also, many expect sales volumes and price gains this year to shift to the mid and higher price segments, hence supporting a bigger proportion of higher-priced transactions.

It was not price reduction but more launch activity that helped raise developers’ January sales volume, notes real estate lecturer Nicholas Mak. ‘Average prices in many recently launched projects either increased marginally or remained unchanged,’ he added.

A brighter economic outlook and pent-up demand after low sales in Q4 last year also gave January numbers a push, felt CB Richard Ellis (CBRE) executive director Li Hiaw Ho. ‘The 1,476 units sold in Jan 2010 alone is about 80 per cent of the 1,860 new homes sold in the entire fourth quarter of 2009,’ he said.

House-hunters also moved after noting that the government’s property-cooling measures last September did not translate into price reductions, noted Knight Frank chairman Tan Tiong Cheng.

CBRE’s Mr Li said the stronger sales volume in January was also partly driven by anticipation of a possible price hike in the mid and high-end segments this year.

The 1,476 private homes (excluding executive condos) developers sold last month was triple the 481 units sold in December last year. The latest January number is nearly 14 times the 108 units sold in January last year.

Developers launched 1,424 private homes last month, almost double the December figure of 734 units, according to URA.

Industry observers also say private home-buying activity is being driven mostly by investment demand rather than owner occupation. ‘We’re getting a lot of interest from mainland Chinese buyers because luxury home prices in Singapore have not recovered to the extent seen in gateway Chinese cities and Hong Kong,’ says DTZ executive director Ong Choon Fah.

CBRE predicts URA’s overall private home price index could appreciate 8 to 10 per cent in 2010 after last year’s 1.8 per cent rise.

Developers are expected to rev up launches in the coming weeks. ‘Some developers who were supposed to have released projects before Chinese New Year held back their launches, for greater clarity on the price of land when the first few state land tenders this year close,’ said a senior executive with a major developer. Assuming land costs remain firm, that will give developers greater confidence in pricing their end units, he added.

Low interest rates and improving sentiment will support buying interest from Singapore residents as well as foreigners this year, he argues.

January’s top-selling projects in the primary market were Cube 8 at Thomson Road (167 units), The Shore Residences in the Katong area (144 units), RV Edge along River Valley Road (91 units), Urban Suites in the Cairnhill area (88 units) and Parvis at Holland Hill (73 units).

The lowest psf price for a developer sale last month was for a unit sold at $544 psf at Oasis @ Elias; the highest price, $3,243 psf, was for an Orchard View unit.

Source: Business Times, 18 Feb 2010