World Cup, school holidays, lack of supply among reasons cited for drop

Private home sales continued to slow last month, falling to below the 1,000-unit mark for the first time this year.

Data from the Urban Redevelopment Authority (URA) showed that only 847 new units were sold last month – the lowest number of private home sales so far this year.

The figure is 22-per-cent lower than the 1,083 homes sold in May.

Yet, analysts seemed unperturbed by the softening trend, with some citing the World Cup fever and the month-long school holidays as among the reasons that contributed to the lower sales last month.

“Demand is starting to stabilise, reaching a more sustainable level,” said Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic.

Still, some analysts believe that the latest figures may not suggest that demand for private homes have cooled down. Instead, they attributed the decline in sales to the lack of supply as reflected by the drop in the number of new units launched.

Last month saw a total of 1,010 units launched compared to 1,134 units launched in May and a hefty 2,084 units launched in April.

This may have resulted in buyers holding back their purchases as they wait for more options to become available through future launches, analysts said.

“I think the developers couldn’t launch enough of the mass-market segment as they have exhausted most of their earlier sites and cannot get new sites secured quickly enough for it to be launched for sale,” said Mr Colin Tan, head of research and consultancy at Chesterton Suntec International.

ERA Asia Pacific associate director Eugene Lim reckoned that the decline in the number of property launches was because developers had held back due to jitters arising from the euro zone crisis.

Meanwhile, about 51 per cent of the total units sold in June were located in the suburban areas with 429 units sold there, among which are The Minton and Waterfront Gold.

Homes located in the city and prime districts also did well, totalling 143 transactions for the month. However, home sales in the city fringes declined with only 275 units sold out of the 445 units launched there.

Ms Tay Huey Ying, director for Research and Advisory at Colliers International, said this may be because price points in the area had risen by about 18.3 per cent in the first half, based on URA flash estimates.

That is higher compared to the core central region which gained 9.7 per cent and outside central region which increased by 10.3 per cent.

While there was a drop in the sales of luxury homes, the price points for last month were higher than in May, said executive director of CBRE Research Li Hiaw Ho.

The number of units sold in the first half of the year totals 8,158, said CBRE.

Analysts said monthly sales in the coming months could average between 900 and 1,000 units and total home sales for the year could be in the range of 12,500 to 14,000 units.

There could still be a bright spot this month as market watchers expect better home sales as developers gear up for more launches ahead of the Hungry Ghost festival in August.

The Government’s upward revision of its gross domestic product growth forecast to between 13 and 15 per cent for the year may also help improve sentiment among home buyers, they said.

Source: Today, 16 Jul 2010

Freehold residential property Cavenagh Mansions has been sold to SDB Asia for S$42.4 million.

Property consultancy Knight Frank said this translates to a land price of S$1,025 per square foot per plot ratio on the potential saleable area of 41,608 square feet.

SDB Asia is a wholly-owned subsidiary of Selangor Dredging Berhad (SDB).

SDB is a property development and management group listed on the main board of Bursa Malaysia.

Cavenagh Mansions sits on a land area of 19,813 square feet.

The district 9 site currently comprises 21 apartment units with sizes ranging from 90 to 153 square feet.

The development charge is estimated at S$267,000.

Cavenagh Mansions is fully owned by Teck Jin (Private) Limited, and the sale therefore does not need approval by the Strata Titles Board or High Court.

Source: Channel News Asia, 16 Jul 2010

CapitaCommercial Trust (CCT) is selling the StarHub Centre to Frasers Centrepoint for S$380 million in cash.

StarHub Centre is a 10-storey non-Grade A office building with retail space next to FCL’s Centrepoint mall.

It currently has a committed occupancy of 68.2 per cent and some 280,000 square feet of lettable space.

The current lease for the site expires in January 2095.

CCT disclosed that it has received in-principle approval from the Singapore Land Authority to top up the lease to 99 years, subject to the payment of a differential premium.

Earlier this year, the Urban Redevelopment Authority gave its approval for the building to be converted into a residential block.

But 20 per cent to 40 per cent of the gross floor area must be retained for commercial use.

CCT expects to make approximately S$375.8 million from the deal after transaction costs.

StarHub Centre was last valued at S$266.7 million by CB Richard Ellis in June this year.

Frasers Centrepoint CEO Lim Ee Seng said that with its strategic location in the heart of Orchard Road, the StarHub Centre has great redevelopment potential for a high-end mixed residential and retail development.

Source: Channel News Asia, 16 Jul 2010

Singapore’s Orchard Road will be adding another new face to its shopping belt.

A retail, hotel and office development will soon come up at the sites of the former Specialists’ Centre and Hotel Phoenix, as well as Orchard Emerald mall.

The project, costing some S$700 million, is expected to be completed in the second half of 2013.

A groundbreaking ceremony on Friday marked the start of the redevelopment of three neighbouring sites on Orchard Road.

Where the former Specialists’ Centre and Hotel Phoenix used to be, a new 4-star hotel with about 500 rooms will come up, along with nearly 21,000 square metres of retail space.

United Engineers (UEL) is the developer of the site, which is wholly owned by OCBC.

Across the road, the former Orchard Emerald site will contain around 3,500 square metres of office space and 2,700 square metres of retail space. The site is wholly-owned and developed by Great Eastern Holdings.

The two sites will be connected by a glass overhead bridge across Orchard Road, which developer UEL said is the first in Singapore.

UEL is not concerned that its new development is a relatively latecomer in the saturated Orchard Road shopping strip.

Jackson Yap, CEO, United Engineers Limited, said: “We are the last of the jigsaw that would make this into a significant shopping area. The key to this is connectivity.

“You can go seamlessly in bad weather and so on, into the three shopping malls. You can cross the street, and also shop on the other side of the road.”

The new development will also be connected by passageways to its neighbours 313@Somerset and Orchard Central. Its Basement 1 will also be connected to the Somerset MRT station.

UEL said it is confident it can generate decent foot traffic.

Mr Yap said: “Phoenix Hotel has always been well-occupied, partly because of its location and also its proximity to many shopping malls. So we expect the hotel to be full and the hotel is full because we have good shopping tenants!”

A key tenant will be a new Singapore Visitors Centre, but the developers are keeping mum on the retail mix for now.

Observers say the new development may also feature some high-end brands, given Orchard Road’s reputation as a premier shopping belt.

Source: Channel News Asia, 16 Jul 2010