CapitaLand joint venture’s bid is 21% more than second highest bid

THE tender of a residential-commercial site at Bedok Town Centre closed yesterday with nine bidders in the fray, most of which put up offers far exceeding expectations.

The strong demand for the 99-year leasehold plot surprised the market somewhat, given that the government had just introduced measures to cool the residential property sector. According to consultants, developers’ enthusiasm could have stemmed from the site’s retail potential and its proximity to Bedok MRT station.

A 50:50 joint venture between CapitaLand Residential Singapore and CapitaMalls Asia (CMA) submitted the top bid of $788.9 million or $841 per sq ft per plot ratio (psf ppr).

This is 21 per cent more than the second highest bid of $650.9 million or $694 psf ppr, placed jointly by a unit of Singapore Press Holdings’ Times Properties and a unit of United Engineers.

Frasers Centrepoint followed close behind with a bid of $650 million or $693 psf ppr. Other participants in the tender include Keppel Land, Choice Homes Investments and Sim Lian.

Market watchers had predicted bids of $500-$580 psf ppr when the site was released for sale in July.

According to a CapitaLand spokesperson, CapitaLand Residential Singapore and CMA will leverage on CapitaLand’s ‘proven expertise and synergies in the retail and residential sectors to develop the site into an integrated project’.

The project, with around 500 apartments above a shopping mall, will have direct access to Bedok MRT station and an upcoming bus interchange.

Colliers International director Tay Huey Ying had expected the recent cooling measures to dampen developers’ interest a little. But the stiff competition in this tender shows that they are ‘still hungry for well-located sites, sites with strong attributes.’

CBRE Research executive director Li Hiaw Ho added that Bedok has the biggest resident population of 294,500 individuals compared with other towns, according to the latest advance census release. This underscores huge potential for private condominiums and a mall in Bedok.

He estimated that a mall on the site can fetch an average retail rent of $16-$18 psf per month, while apartments may go for more than $1,000 psf.

As for the high top bid, Cushman & Wakefield managing director Donald Han felt that CapitaLand can afford to be aggressive. Not only does the group have experience developing residences and managing malls, it also has a vehicle to sell the mall to in future, he said. Besides, the developer has ‘a lot of gunpowder’.

Mr Han added that the latest tender results cannot fully reflect the impact of the government’s cooling measures – the market should wait to see what results the tender of a pure residential site are like before drawing conclusions.

Meanwhile, the collective sales market continues to gather steam. Colliers said yesterday that it brokered the sale of Melrose Court en bloc for $44 million. Including a development charge of $277,235, the land price works out to $665 psf ppr.

Another agency Urban Front Real Estate is putting the freehold Maison Royale up for tender for at least $48 million. Owners of the project at Surrey Road had tried to sell their estate for at least $50 million in 2008.

Source: Business Times, 4 Sep 2010

Most likely outcome now is for 15-15.9% full-year growth, ahead of government’s 13-15%
(SINGAPORE) The Singapore economy could expand by a record pace this year that exceeds the government’s 13-15 per cent forecast, a survey of private sector economists shows.

But the higher base from which next year’s growth will be measured, as well as external uncertainties, have led them to lower projections for 2011.

A Monetary Authority of Singapore survey of 20 professional forecasters last month found that forecasts now point to a most likely outcome of 15-15.9 per cent growth.

This significant jump, from a probable outcome of under 11 per cent growth in June’s edition of the survey, was thanks to the 18.8 per cent surge in Q2 GDP that outstripped expectations for 9.4 per cent growth.

The latest median forecast of 14.9 per cent growth for the year, gleaned from a range of 11-16.5 per cent, was also a sharp hike from June’s 9.4 per cent.

Manufacturing is still expected to be the economy’s key driver this year with a median growth forecast of 28.7 per cent, up from 16.7 per cent three months ago.

And analysts are also expecting non-oil domestic exports to grow 19.5 per cent, above the official forecast of between 17 and 19 per cent.

Compared to the last survey’s findings, financial services, wholesale & retail trade, hotels & restaurants, and private consumption are now forecast to grow more strongly this year. Only for construction did the analysts’ median growth forecast fall slightly.

The economists polled now expect consumer price inflation of 2.9 per cent this year, up from 2.8 per cent three months back. Unemployment forecasts for the year also showed an uptick from 2 per cent in the last survey, to 2.2 per cent.

In the immediate months ahead, economists are expecting 11.6 per cent growth in Q3, up from 6 per cent in the last survey. The focus is on manufacturing, whose 44.5 per cent surge fuelled Q2 GDP growth but is now expected to slow to 15.9 per cent growth in Q3.

Already, Singapore’s industrial production grew at its slowest pace in eight months in July. The regional production picture is not too optimistic either, with declines in the recent purchasing manager indexes (PMI) coming out of Taiwan and South Korea.

Also of growing concern are sharper and earlier than expected signs of a slowdown in the US, where sluggish economic growth and high unemployment continue to weigh on consumer spending.

Standard Chartered economist Alvin Liew said that his forecasts, the most bearish of the lot, reflect lingering concern over external risks which Singapore’s trade-dependent economy would be especially sensitive to.

He expects Q3 GDP year-on-year growth of 5.8 per cent (an annualised q-o-q contraction of 29.9 per cent), some way below the median forecast of 11.6 per cent.

But so far, the slowdown in manufacturing has been within expectations, said OCBC economist Selena Ling. And others such as RBS economist Lim Su Sian think that Q3 could even surprise on the upside if the expected pharma pullback is not as sharp and the services sector contributes stronger growth.

Noting that yesterday’s rebound in China’s PMI ‘offers reassurance that China’s growth, critical for Asia and the world, continues’, Action Economics director David Cohen also expressed optimism that Singapore would continue on a positive trajectory and might do better than the 15.5 per cent he projects for 2010.

But looking a little further into the future, next year’s first half being measured off this year’s high base and residual risks of a global double-dip have led forecasters to nudge their 2011 forecasts downwards.

The survey showed that economists now expect 2011 growth to be between 4 and 4.9 per cent, down from 5 and 5.9 per cent last year.

Citi economist Kit Wei Zheng stressed, however, that external dampeners must be set against domestic factors supporting the growth story.

‘Sizeable investments locked-in and approved before the recession are set to come onstream in the next one or two years, financial sector activities are being relocated to Singapore and the IRs are not running at full capacity yet,’ he said.

Provided that there is no ‘full-blown global recession’, these new engines ought to sustain growth in the coming year, he added

Source: Business Times, 4 Sep 2010

WING Tai Holdings will relaunch the remaining apartments in its Oxley Walk luxury Belle Vue Residences at prices between $2,300 and $2,800 per square foot (psf), the developer said yesterday.

Deputy chairman Edmund Cheng also said he believed that measures announced by the government on Monday to cool the property market are ‘very timely’.

‘Prices have really gone up so much, it is not sustainable,’ Mr Cheng said. ‘I think that it is good that we have these measures to cool off a little bit.’

He also added that the impact of the measures on Wing Tai will not be great as the company’s exposure to the Singapore residential sector is mostly in the high-end and luxury segments.

By contrast, he expects the mass-market segment to take the biggest hit from the policy changes. Among other things, the government will not allow concurrent ownership of HDB flats and private residential properties within the minimum occupation period (MOP), which is the time that buyers are required to stay in their flats before they can sell.

Currently, about 62 per cent of the 176-unit Belle Vue Residences have been sold, with slightly more than half of the apartments snapped up by foreigners. Units were sold for $2,000-$2,700 psf, Wing Tai said. The new bunch of apartments that are being released are ‘choice units’, so they are priced higher on a psf basis, the company added.

The size of a three-bedroom apartment starts from 1,600 sq ft and a four-bedroom apartment begins at 2,000 sq ft.

Source: Business Times, 4 Sep 2010

Those found lying about properties abroad face imprisonment, cancellation

THE Housing & Development Board (HDB) will be relying on buyers of non-subsidised flats to declare if they own private properties here or overseas.

Those found making false declarations will face penalties, which include a fine of up to $5,000, or imprisonment for up to six months, or both.

HDB shared these details yesterday, in response to questions on how it will enforce new rules introduced this week to cool the residential property market. Key among these are rules preventing people from owning both public and private properties.

From Aug 30, a person who buys a non-subsidised flat can buy a private property here or overseas only after fulfilling a minimum occupation period (MOP) of five years.

Also, a private property owner who buys a non-subsidised HDB flat will have to sell his private property within six months of the flat purchase – regardless of whether the property is here or abroad.

HDB said yesterday that buyers of non-subsidised flats will have to declare their interest in any other property in Singapore or overseas in the application form.

If the private property is abroad, buyers have to produce documentary evidence showing that they sold the property within the stipulated period.

Those found guilty of making false declarations will be fined up to $5,000, or imprisoned for up to six months, or both. If HDB discovers the lie before the flat purchase is completed, it can cancel the application. The seller can seek legal redress from the buyer for breach of contract arising from the failed transaction.

HDB can compulsorily acquire the flat if it discovers the false declaration after the buyer has taken possession of the flat.

Rules aside, HDB added that it is ‘prepared to exercise flexibility on a case-by-case basis depending on the merits of each case’.

According to HDB, the new rules introduce parity to the treatment of all HDB flat buyers, by subjecting buyers of non-subsidised flats to the same rules for buyers of subsidised flats. The latter are not allowed to concurrently own a flat and a private property either here or overseas within the MOP.

Most market watchers felt that owners of private property in Singapore would declare their interest when buying non-subsidised flats.

There are many systems for tracing the ownership of homes locally, said C&H Realty managing director Albert Lu.

The challenge lies in verifying foreign property ownership. It is either impossible or impractical to do so, said PropNex chief executive Mohamed Ismail.

Permanent residents who own properties overseas for their parents to live in or who inherit farming land are in a bind, he added.

ERA Asia Pacific associate director Eugene Lim believes that there will be people who choose to take the risk and make false declarations.

Source: Business Times, 4 Sep 2010