BUYERS have snapped up 96 of the 120 units launched at the 368 Thomson condominium since previews began on Thursday.

The District 11 development was priced at an average of $1,350 per sq ft (psf).

Sale prices ranged from $918,000 for a 689 sq ft one-plus-study flat to $4.4 million for the 3,391 sq ft five-bedroom penthouses.

The 36-storey tower, which will be built on the former Concorde Residences site in Thomson Road, will have 157 units. They comprise 31 one-plus-study flats, 62 two-bedroom units, 31 three-bedders, 31 four-bedroom units and two penthouses.

City Developments (CDL) said it will release more units to cater to demand.

The private preview – for former owners of Concorde Residences, Balestier Court and Bright Building, as well as CDL directors and staff – started on Thursday. The public were admitted yesterday.

Most of the buyers were Singaporeans, with permanent residents and foreigners – mainly from Malaysia, Indonesia, China and Hong Kong – making up 25 per cent, CDL said.

Its general manager, Mr Chia Ngiang Hong, said the strong demand for the project is testament to the popularity of the prime District 11 vicinity.

Buyers will also benefit from the growth cluster in the area, he said.

The developer launched Cube 8, a 36-storey condo comprising 177 units, in January in Thomson Road, on the site of the former The Albany and Thomson Mansion.

The Cube 8 project is next to CDL’s The Arte in Thomson, which it began selling in March last year at an average price of $880 psf.

The 368 Thomson estate is expected to be completed in 2015.

Terrene at Bukit Timah has also sold well. More than 50 out of the 85 units launched at the preview sale for developers UOL and La Salle’s business associates and staff were taken.

The average selling price for the 999-year leasehold condominium was $1,250 psf.

The project offers over 140 one- to four-bedroom apartments, and 30 three- to five-bedroom penthouses, all with rooftop jacuzzis.

Sizes vary from 506 sq ft for a one-bedder to 3,025 sq ft for a five-bedroom penthouse. The development is expected to be ready by April 2014.

Source: Straits Times, 10 Jul 2010

Financial and social stability at risk, economist warns

BEIJING: China’s property market remains dangerously overheated and failing to tame the speculative bubble could threaten financial and social stability, a prominent economist said in an official newspaper yesterday.

Dr Yi Xianrong, an economist at the Chinese Academy of Social Sciences, a government think-tank in Beijing, noted that estimates from electricity meter readings show 64.5 million empty apartments and houses in urban China, many of them bought by people wagering on a constantly rising property market.

In the overseas edition of the People’s Daily, Dr Yi said the ‘shocking’ level of empty housing shows the dangers brought about by the country’s property boom, which the central government has been trying to cool.

‘If this outsized property bubble does not burst, it will hurt residents’ well-being, and also affect national financial security and coordinated national economic development,’ wrote Dr Yi.

The People’s Daily is the main newspaper of China’s ruling Communist Party, and the overseas edition is a small- circulation offshoot that tends to be more forthright than the main, domestic edition. While the paper is not an unerring mirror of official policy, Dr Yi’s commentary suggests that the real estate market remains a worry for policymakers.

On Tuesday, Dr Kenneth Rogoff, a Harvard University economics professor and former chief economist at the International Monetary Fund, said China’s property market was beginning a ‘collapse’ that would hit the nation’s banking system.

Beijing has announced a slew of measures over the past months to cool the property market, including raising downpayments and mortgage rates, and the move has already caused deal volumes to drop and property inflation to slow in many cities.

Nationwide, property prices rose 0.2 per cent in May from a month earlier, and were 12.4 per cent higher than a year earlier. The increases were smaller than in April.

Property prices will fall within a few months as government steps to cool the real estate market bite deeper, Mr Xu Shaoshi, the Minister of Land and Resources, said on Sunday.

But Dr Yi suggested that more robust steps are needed to beat back property price rises fuelled by speculation.

‘The problem now is that investment in the domestic property market has completely overturned China’s traditional concepts of wealth management and investment and its price formation system,’ he wrote.

REUTERS

Source: Straits Times, 10 Jul 2010

Older estates struggle to reach price peak amid flood of new projects

SOME developments have missed the price gravy train in the private homes sector and are languishing at levels below their benchmark launch values set more than a decade ago.

Their plight is at odds with the prevailing market, where values are now 1.5 per cent above 1996′s record prices.

Part of the problem is that they can look like poor cousins compared with the flashy new estates being built now, but many were also launched amid a property boom when speculators sent prices soaring to unsustainable levels.

One of the laggards is Far East Organization’s 99-year leasehold Bishan 8, which stunned market watchers when it was sold at an average of $1,100 per sq ft (psf) in June 1997.

That was a record selling price then for a leasehold condo outside of the traditional prime areas.

A 980 sq ft unit cost $1.07 million, while one at 1,163 sq ft cost $1.36 million.

However, caveats lodged with the Urban Redevelopment Authority found that despite the development’s selling points – its proximity to Junction 8 mall, Bishan MRT station and Raffles Institution, for instance – prices have struggled to reach their peak.

The 15 units sold since July last year averaged $802 psf. The most recent transaction was a 1,163 sq ft apartment that sold for $912 psf last month.

Owners at City Developments’ freehold, 40-unit Chelsea Gardens are in a similar position.

It launched in May 1997 with average prices at $1,900 psf, but a recent sale of a 1,787 sq ft flat in March went for only $1,620 psf.

Prices were even lower in August last year, with the second most recent transaction of a 2,508 sq ft unit going for just $1,396 psf.

Seasons View, a 99-year leasehold project by Far East’s mainboard-listed Orchard Parade Holdings on Pemimpin Drive, was launched at $888 psf in June 1997. Prices for the 18 caveats lodged since July last year showed an average sale price of just $715 psf.

Property experts said apart from some of these developments being about 10 years into their 99-year lease, which inevitably resulted in a depreciation in value, they were also launched at peak prices during a period where speculative activity was high.

‘A few projects were sold at the peak of the cycle in the light of strong speculative activity, with a lot of sub-sales in the market,’ said Mr Steven Tan, executive director of residential at the OrangeTee agency.

‘Some of these projects were launched at future prices,’ he added.

PropNex chief executive Mohamed Ismail said consumers were now spoilt for choice and lifestyle options with the slew of new property launches that have inundated the market in recent months.

‘The price index includes new properties which buyers are willing to pay more for… It might take a longer time for a second-hand product to climb up to the level of the current price index,’ he said.

Older projects are often sold at about 10 per cent to 20 per cent less than a new project nearby, Mr Ismail said. However, if they are in a good location, they are likely to fetch break-even prices eventually, even if they are 20 years old.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak added that properly maintaining an older project is vital to its selling price. However, buyers may still prefer new launches if they feel that the design of an older condo and its facilities have become dated.

Some experts also point out that certain popular areas in the past have lost some attention as new residential enclaves such as Dakota and West Coast compete for the attention of buyers.

ERA Asia-Pacific associate director Eugene Lim said the circle and downtown lines are making more areas accessible, giving buyers more options.

‘Buyers are more open these days and might decide to invest in an area they see growth potential in, such as the Jurong Lake district, rather than buying an older condo,’ he added.

Official estimates show prices rose a higher-than-expected 5.2 per cent in the second quarter after a 5.6 per cent jump in the first. That means private home prices have risen 11.1 per cent so far this year.

Prices are expected to continue to edge up this year, given the positive economic outlook, property experts forecast.

Source: Straits Times, 10 Jul 2010

PEOPLE’S Mansion, a freehold residential development at Geylang Lorong 31, has been sold en bloc for $42.68 million.

Private firm Tomlinson Investment – which also developed the Tan Swie Hian Museum nearby – won the tender for the 37,497 sq ft plot. The site has a plot ratio of 2.8 and a maximum gross floor area of 104,991 sq ft.

The price does not include a development charge. If it does, it will work out to $421 psf per plot ratio. The collective sale is subject to approval from the Strata Titles Board. People’s Mansion has 32 apartments ranging in size from 1,313-1,496 sq ft. Urban Front Real Estate Pte Ltd, which handled the collective sale, said it can be redeveloped into a project with 115 units of an average size of 900 sq ft.

Based on a caveat lodged, a unit at People’s Mansion was sold for $521 psf in February. Next door, apartments at Torieview Mansions changed hands for $537-575 psf in May. Tomlinson Investment beat three other bidders to win People’s Mansion. Its director Tan Tien Chi told BT that the company is discussing plans for the new project with an architect.

According to Mr Tan, Tomlinson developed a few projects in Singapore some years back. One of these is Tan Swie Hian Museum, which showcases paintings, sculptures and other works of Cultural Medallion recipient Tan Swie Hian.

Collective sales have been gradually making a return to the market. Last week, BT reported BS Capital’s purchase of the Colourscan building at Kim Keat Road for just over $36 million.

Urban Front Real Estate told BT that it has been appointed to handle another potential collective sale, involving a residential site measuring around 20,000 sq ft in District 10.

Source: Business Times, 10 Jul 2010

CITY Developments Ltd (CDL) and UOL Group seem to have struck a chord with home buyers with their latest condo previews.

CDL has sold 96 of the 120 units released in the first phase of its 368 Thomson condo, as at 5pm yesterday. The average price is $1,350 per square foot for the 36-storey freehold condo in District 11. The project comprises 157 units. CDL said it is releasing more units progressively to cater to demand.

Over in the Toh Tuck/Jalan Jurong Kechil area, UOL released 85 units at The Terrene on the former Rainbow Gardens site and as at 10pm yesterday, had sold about 50 units. The average selling price for the five-storey, 999-year leasehold condo is about $1,250 psf. The project comprises 172 units. UOL is developing the condo jointly with LaSalle Investment Management.

Developers of both projects began sales to their respective staff/directors and former owners of the sites on Thursday, followed by previews to other buyers yesterday.

CDL said prices of 368 Thomson range, in absolute dollar quantum, from $918,000 for the 689 sq ft one-plus-study units to $4.4 million for the 3,391 sq ft, five-bedroom penthouses.

The 96 units sold include all 62 two-bedders in the development and about 12-15 one-bedders as well as one of the condo’s two penthouses.

DMG & Partners analyst Brandon Lee described CDL’s pricing as ‘reasonable and in line with current prices in the area’, given that newish projects in the area are fetching between $1,250 and $1,450 psf.

Agreeing, a seasoned property consultant noted that prices of new condos in the Newton area, which is closer to Orchard, are hovering around the $1,700-2,000 psf range.

A back-of-the-envelope calculation shows CDL stands to book pre-tax profit of about $70 million from 368 Thomson. This is the third condo the group is developing in the location. Its first, The Arte at Thomson, was previewed in March last year at an average price of $880 psf, followed by Cube 8 in January this year at $1,250 psf on average.

CDL said that about 75 per cent of buyers at 368 Thomson were Singaporeans, with the rest comprising permanent residents and other foreigners – mainly from Malaysia, Indonesia, China and Hong Kong.

‘With its prime District 11 location, freehold status and attractive pricing, 368 Thomson represents an excellent investment opportunity and also good rental potential,’ said CDL’s group general manager Chia Ngiang Hong.

UOL and La Salle Investment Management on the other hand are targeting primarily owner-occupiers for The Terrene.

‘The majority of units sold are two-bedroom apartments, followed by three bedders. Seven penthouses have also been sold,’ said Knight Frank managing director (residential services) Peter Ow. Buyers mostly have addresses in the surrounding area – districts 21 (such as Upper Bukit Timah) and 23 (which includes Bukit Batok and Toh Tuck) and comprise a mix of HDB flat dwellers and private home dwellers.

‘Most of the buyers are locals,’ he added. The 85 units released are priced between $920 psf and $1,480 psf. Knight Frank is marketing Terrene jointly with Jones Lang LaSalle.

The project’s 172 units range from one bedders (starting from 506 sq ft) to five-bedroom penthouses (up to 3,025 sq ft).

Source: Business Times, 10 Jul 2010

Most sought-after places for strata shop deals in H1 this year include Peninsula Plaza and Sim Lim Square, says Knight Frank study

THE number and value of strata shops and shophouses transacted in the first half of this year are down slightly from the preceding half-year, shows a study by Knight Frank.

However it predicts the full-year 2010 tally will surpass that for 2009. Assuming businesses continue to be optimistic, this will support demand among entrepreneurs for this property class, says Knight Frank executive director Mary Sai.

As for the relatively subdued interest in strata shops in H1 2010, she attributes this partly to excessively high asking prices by sellers. ‘Furthermore, the availability of substitute properties like HDB shops also affects investors’ interest in strata shops,’ she added.

The property consultancy group’s study did not include HDB shops and shophouses.

It showed that 167 private-sector strata shop units were transacted in the first half of this year for a total of $200.1 million, down from the 209 deals worth $214.6 million in H2 2009.

For the whole of last year, the figure was 306 deals worth $278 million.

At the peak of the market in 2007, there were 603 strata shop units that sold for $506 million.

The most popular haunts for strata shop deals in H1 this year include Peninsula Plaza at North Bridge Road and Sim Lim Square, with 12 caveats each.

Sales activity was also rife in the Upper Bukit Timah area, with a total 16 caveats lodged for shop units in three neighbouring malls – Beauty World Centre, Bukit Timah Plaza and Bukit Timah Shopping Centre – perhaps fuelled by the nearby Beauty World MRT Station, which is being built, Ms Sai suggests.

Knight Frank observed that about half of the strata shops that changed hands in H2 2009 and H1 2010 were 99-year leasehold strata shops. ‘The bulk of the strata shop space in Singapore has 99-year leasehold title. Such properties are also more affordable and because of their lower capital value, rental yields tend to be higher,’ Ms Sai said.

People’s Park Complex, High Street Centre, Fortune Centre, Fu Lu Shou Complex, Golden Mile Complex, Sim Lim Square, Beauty World Centre and Bukit Timah Plaza were among the developments on 99-year leasehold sites that were a hive of activity for strata shops in H1 this year.

In the freehold/999-year leasehold category, shop units at Peninsula Plaza, Holland Road Shopping Centre and Katong Shopping Centre were highly sought after.

The most expensive transaction (in terms of per square foot of strata space) in January to June this year was $8,977 psf for a ground-floor unit at Sim Lim Square facing the escalator and main shopping concourse. The 355 sq ft unit was transacted at $3.19 million in May.

The majority of strata shops transacted in H1 2010 were in the lower price range, in line with the historical trend. Units priced below $1 million made up 64 per cent of transactions.

Ms Sai sees a modest increase of about 5-10 per cent in the number and value of strata shop transactions for the whole of this year compared with 2009. ‘Some owners may want to unlock their values, especially for properties with shorter balance leasehold tenure and those where values have rebounded substantially from the trough.’

While many of these 99-year shop units are in ageing shopping centres, they have a vibrant, bazaar feel, marked by haggling with shopkeepers and an eclectic tenant mix, which wows some shoppers, says DTZ executive director (consulting) Ong Choon Fah. One factor that has helped to hold up values of this property class is limited stock since over the past two decades, developers by and large have stopped selling shop units in their mall.

Property values tend to hold better in malls which are held under single ownership as that allows better control on management and tenant mix. As well, strata-titling individual shop units and selling them will entail setting up a sinking fund and collective decision of subsidiary proprietors for major matters like substantial works, or a collective sale, Mrs Ong points out.

As for the shophouse market, Ms Sai is predicting that for full-year 2010, there could be about 330 transactions at over $700 million – higher than full-year 2009 figures of 261 caveats for a total of $630 million.

‘Buying interest in shophouses will remain strong due to limited supply and the flexibility of usage – for retail, office, boutique hotel or residential,’ Ms Sai said.

Knight Frank’s analysis of caveats on the URA Realis system shows that in H1 this year alone, the tally stood at 165 caveats lodged at a total $408.7 million, down from 167 transactions at $446.7 million in H2 2009. The decline was amid a fall in transactions of $5 million or more, from 17 deals in H2 2009 to 11 in H1 2010. The bulk or 45 per cent of shophouse deals in January-June this year were in the mid-price band of $1 million-$2 million.

Ms Sai says that most of this year’s shophouse transactions were in Chinatown, Little India, Kampong Glam, Geylang and Joo Chiat.

Industry players highlight that those thinking of buying strata shop units or shophouses will have to use cash resources and/or bank loans; the use of CPF savings for the purchase of non-residential properties has been phased out since July 1, 2006.

DTZ’s Mrs Ong also advises those eyeing shophouses to do their homework or engage a seasoned property consultant. ‘Some shophouses are very old and may not have been renovated; you’ll have to check if they are structurally sound.

‘You should also check with Urban Redevelopment Authority whether you are allowed to build a taller rear extension.’

Potential buyers should also study the profile of surrounding uses and occupiers to see if they are compatible with their intended use. One drawback about shophouses is a lack of dedicated carpark lots, so occupiers and their guests usually rely on street carparking or public carparks.

Only about a quarter of H1 2010 shophouse deals involved 99-year leasehold properties, ‘reflecting buyers’ strong desire to have a lasting interest in a freehold shophouse’, according to Ms Sai.

Shophouses will remain favourable for buyers, underpinned by their limited supply and unique design and architecture, she reckons. ‘When you buy a shophouse, especially if it’s in a conservation area, you also own a piece of history,’ she said.

Source: Business Times, 10 Jul 2010

Cold Storage’s Market Place, Golden Village and BreadTalk will lease about 32% of NLA

A NEW Peranakan-themed mall will soon take the place of the former Katong Mall and mark the debut mall for Pua Seck Guan’s Perennial Real Estate in Singapore.

Mr Pua is CEO of Perennial Real Estate and formerly CEO of Capitaland Retail.

The mall, located at the junction of East Coast Road and Joo Chiat Road, will have a net lettable area (NLA) of 207,000 sq ft, 20 per cent larger than before.

It has already secured three key tenants. Cold Storage’s Market Place will take up about 13,000 sq ft of space. Meanwhile, Golden Village multiplex will take up 30,000 sq ft, boasting eight halls, two of which will be Gold Class Halls. This will be a first in the eastern part of Singapore. The third key tenant is George Quek’s BreadTalk group, which will open a 15,000 sq ft Food Republic Food Atrium and 7,500 sq ft of restaurants such as BreadTalk, Din Tai Fung and Toastbox.

The space leased by these three tenants will amount to about 32 per cent of the NLA.

The mall will feature six levels of retail – basement 1 and from level 1 to 5, with an atrium on level 2. Basements 2 and 3 will have 310 carpark lots.

The mall is owned by Perennial Katong Retail trust, a private trust constituted for the purpose of buying Katong Mall. Investors in the trust include Alpha Investment Partners Limited’s Asia Macro Trends Fund, which holds a majority stake of 77 per cent. It is a unit of Keppel Corp. Other investors include BreadTalk Group Limited and Mr Pua, among others. The mall will be managed by Perennial (Singapore) Retail Management Pte Ltd.

Katong Mall is currently undergoing redevelopment and is expected to be ready by the third quarter of 2011. The contract is worth $60 million and has been awarded to SEF Construction Pte Ltd.

‘The expected rent is about $12 psf per month on average,’ said Mr Pua.

The mall, designed by DP Architects, will reflect the Peranakan culture that surrounds the mall and seamlessly integrate itself with the many F&B outlets around the area. For example, the first two floors will be dedicated to F&B and bars that will operate till extended closing hours that will complement the surroundings and the cinema upstairs.

Mr Pua believes that the new mall will do better than the former strata-titled Katong Mall because it will come under single ownership, where Perennial Retail Management will be able to control the tenant mix and positioning.

About 30 per cent of the mall space is expected to be designated F&B with another 30 per cent dedicated to fashion and accessories.

Source: Business Times, 10 Jul 2010