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16,920 sq ft plot at Bishopsgate sold for $9.8 million or $579 psf

A GOOD Class Bungalow (GCB) site in Bishopsgate has been sold at a price approaching the 1996 peak.

Data from the Singapore Institute of Surveyors and Valuers’ REALink system shows the 16,920 sq ft plot was transacted at $9.8 million, or $579 psf.

This is the highest price for GCB land since the 1990s property bubble burst. In 1996, the asking price for GCB land in Bishopsgate was $650 psf.

It is understood that the buyer this time around is a Singaporean.

Savills Prestige Homes brokered the sale. Director Steven Ming would not disclose the buyer’s identity but said Savills has done five deals in Bishopsgate.

The latest transaction involved part of a sprawling site bought by BS Capital from HSBC for $69.8 million in 2003. BS Capital carved out 16 freehold parcels from the 276,112 sq ft site.

Prices in the area have been edging up since. In 2003, Bishopsgate GCB land was going for about $370 psf. The following year, it was $425 psf. And last year, it was around $465 psf.

The latest price of $579 psf is the biggest annual jump so far - about 20 per cent.

Property players believe prices in top GCB areas could hit $600 psf this year.

Douglas Wong, associate director of Regal Homes (residential) Knight Frank, says his firm is marketing several GCB plots in Jervois Hill - next to Bishopsgate - and the asking price for the prime plot is $600 psf.

‘I think it is possible that we will get an offer at this price this year,’ he said.

The Jervois Hill land is owned by the Hong Leong Group.

Mr Wong said 11 plots are available but not all will fetch the same high price. Site conditions - view, street frontage, configuration - will affect prices significantly.

For instance, Regal Homes sold a site with a long driveway and reduced street frontage for $415 psf in December 2005.

According to Mr Wong, the cost of building a luxury home could be around $300 psf, adding up to $2.25 million for a house of 7,500 sq ft.

There are no official figures on the number of foreigners and permanent residents who have bought into GCBs, but Mr Wong reckoned they may have accounted 15 of the 100 or so GCBs sold last year.

At Sentosa Cove, where a 99-year leasehold bungalow plot sold recently for a record $500 psf, the number of foreigners and permanent residents buying is much higher, at 60 per cent of the 193 plots sold there.

Chew May Yenk, director (valuation and advisory services consultancy) at Cushman and Wakefield, felt that the high-end market could be ‘heating-up’ too quickly with the help of foreigners, and that this could spill over to mass-market prices - putting homes in that segment out of people’s reach.

‘Traditionally, the property market moves from bottom-up. Now we are seeing a top-down phenomenon. The hope is that there will be a trickle-down effect,’ she said.

$700 million of GCBs were transacted in 2005 - surpassing the previous peak of $600 million in 1999 and suggesting that prices are likely to keep climbing.

Source : Business Times - 28 Feb 2006

The returns may tempt you to jump on the bandwagon, but agents’ fees and possibly development charges could take a fat chunk out of your profits

AS FEVER over collective sales continues to spread, many home owners are rushing to put their estates up for collective sale to capitalise on this craze.

At least 15 residential sites have been launched for collective sale since the start of the year, with at least nine successful transactions already completed.

However, even as home owners turn more bullish about their asking prices, property consultants warn there are various costs involved in such sales that they should be aware of before putting their homes on the collective sale market.

For any collective sale, the highest costs lie in the development charges and differential premiums, which could amount to tens of millions of dollars.

These costs are usually borne by the buying developer and are not included in an estate’s collective sale price.

Nevertheless, resident sellers do have to deduct certain fees and charges from the sale price, which could amount to about 2 per cent of the gross proceeds, or about $20,000 for a unit that fetches $1 million in a collective sale.

The bulk of these costs comes from the fees charged by marketing agents, which could range from 0.2 per cent to 1.5 per cent of the sale price, said Mr Ong Beng Kheong, an executive director of property consultancy Savills Singapore.

‘The amount of fees that agents receive will depend on the complexity of the project as well as the type of development and the number of units involved,’ he said.

These fees usually comprise valuation fees, basic investigation costs such as title searches and legal requisitions, and marketing costs for the collective sale site including advertisements, said Colliers International’s director of research and consultancy, Ms Tay Huey Ying.

Each seller will also have to fork out money for legal fees, which could be quoted either as a lump sum per unit or as a percentage of the overall sales price, said Mr Ong.

‘This could be anywhere from 0.15 per cent to 0.2 per cent for larger projects, whereas for smaller projects, it could range from $1,000 to $2,500 per unit,’ he said.

The other major cost that sellers would have to bear is the cost of an application to the Strata Titles Board for the proposed collective sale.

This fee is about $1,000 and will also cover notices in newspapers as well as a valuation report, said Mr Jeremy Lake, the executive director of investment properties at CB Richard Ellis.

However, out-of-pocket costs are not the only matter to take into consideration when deciding to put a property up for collective sale, say consultants.

One of the most crucial issues in any collective sale is the employment of a good marketing agent. When choosing an agent, the seller should take several factors into account, such as the agent’s fee, marketing plan, track record, level of experience, and current workload.

Sellers should ‘consider the number of number of successful collective sales handled by an agent, the scale of the deals, as well as the experience of the marketing team’, said Ms Tay of Colliers.

‘Take into consideration the number of collective sales currently undertaken by the agent at any point in time.

‘This may be an important consideration as it will give an indication of the agent’s ability to undertake a new collective sale deal,’ she added.

Source : Sunday Times - 26 Feb 2006

Q My marriage of more than 20 years is breaking down but I am still hoping to salvage the marriage and to avoid a divorce.

I believe a separation for a period of time would do us good.

As my husband has incurred credit-card debts of about $40,000, I do not want to be liable for his debts in the event he defaults in his payments.

As his pay is insufficient to pay all the money he owes, I have been helping him pay part of the debts monthly to the banks for a long time.

I have also paid for everything else - household expenses, our daughter’s school fees - as I earn more than him.

If I file for a legal separation, will this save me from having to pay his debts should our problems end in divorce?

Do the banks have the right to seize assets in our HDB flat, some of which were bought by me?

I intend to leave Singapore for a period of time but should my plan fall through and I have to stay put, what happens if after signing the separation papers, we still live together under the same roof?

Neither of us has any other place to live.

And if we decide to patch up after a few years, can we annul the separation?

A You are not legally liable for your husband’s debts unless you are a joint account holder or signed as a guarantor for his debts.

Therefore, you will not be liable for his credit-card debts whether you are married, separated or divorced.

Your husband’s creditors will not be able to sue you to claim monies which he owes them.

If a bank or any creditor of your husband obtains a judgment to recover monies owed to them, they can apply to seize and sell his assets.

This will include assets in his home.

If the assets were bought by you or belong to you - such as your laptop - you can file a claim at the Subordinate Courts.

You should bring along proof of ownership, such as receipts of your payment.

After signing a Deed of Separation, which is a written agreement by your husband and you to lead separate lives, you can still live together under the same roof.

However, you have to ensure that you lead separate households - that is, you cannot, for example, cook, do the laundry or buy groceries for each other.

The court will have to be satisfied that you have not lived with your husband like a normal married couple.

There must be separate households under the same roof.

If your husband and you decide to reconcile, you can simply end your separation by leading a life together as husband and wife.

Separation is a question of intention and actions by the parties involved.

There is no court application to formalise a separation.

However, it is advisable that parties enter into a Deed of Separation to set out clearly their intention to live apart and the starting date of such a separation.

It will also be advantageous to set out the agreed terms, if any, for the divorce as well.

The cost of a Deed of Separation will depend on the details of your agreement. It starts from $1,500.

You may look for a lawyer through the Law Society’s website www.lawsoc.org.sg or by calling it at 6538-2500.

Nicole LohLegal AssociateHarry Elias Partnership

Q A PRIVATE 28-seater bus reversed into my car which was parked.

Damage to the bus was negligible but my sedan’s bonnet and headlights had to be replaced. The cost was about $4,000.

I paid the $450 ‘excess’ on my insurance policy to get immediate repairs paid for by my insurer.

My intention was to claim this excess and loss of use against the other driver’s policy after my vehicle was repaired.

The other party’s insurer refused to pay unless the bus driver reported the accident to it.

The onus of making the other party report the accident to his insurer fell on me.

I made many attempts to contact him but without success. A registered letter to him was returned to me undelivered.

Six months after the accident, a letter from the other party’s insurer was forwarded to me via my lawyers claiming that as their client did not report the accident, a breach of the policy contract has occurred.

The insurer cancelled his policy and repudiated all liabilities.

Henceforth, any claims against him would have to be pursued through legal action.

My lawyers advised me not to pursue the case due to the costs involved. I am appalled at the options available to insurers so they can absolve themselves.

Are legal proceedings against him the only option I have now?

What measures are in place to prevent the other party from buying a new policy?

If insurers are allowed to repudiate liability in this manner, what protection is offered to people such as me?

A The advice I am giving here applies to claims involving property damage only.

A different set of rules apply when personal injury is involved.

I can empathise with your frustration but I think you have misunderstood the role of the various parties in accident matters.

First, your claim is always against the driver of the vehicle who caused the accident, commonly known as the ‘tortfeasor’ and not the insurance company.

It is up to the tortfeasor to refer the claim to his insurance company if he does not want to incur further expenses.

After all, that is the reason that the tortfeasor paid insurance premiums in the first place.

At other times, if the claim amount is not large, the tortfeasor may simply want to pay out of his own pocket so as to preserve his No Claim Bonus.

A contract of insurance exists between the tortfeasor and his insurance company.

In essence, this contract states that if certain conditions are complied with, the insurance company will make payments to third parties on behalf of the tortfeasor.

It is common ground in most insurance policies that if the tortfeasor was, say, driving under the influence of alcohol at the time of the accident, the insurance company can repudiate liability.

It would then be up to the tortfeasor to pay the damages out of his own pocket.

As there is a need to balance the needs of competing interests, I do not see the loophole that you say exists.

Coming to your specific questions:

Yes, legal proceedings are your only option.

However, as your insurance company has paid you for the repairs, they would in all probability commence proceedings to recover this from the tortfeasor.

You may want to request your insurance company to claim the excess and loss of use on your behalf as well.

Whether an insurance company is prepared to extend a fresh policy to the tortfeasor depends on its own risk values.

Usually, an applicant would have to declare whether his previous insurance company has ever repudiated his policy, or any application has been declined.

If so, the new insurance company may see this as a bad risk and decline to accept his application or accept the application subject to a higher premium.

Although you may seem to think so, insurers do not repudiate liability at the slightest technicality.

Consider a case where the damage claim is very large and if the insurance company attempts to repudiate liability, the tortfeasor will bring an action against the insurance company to seek an indemnity.

The courts will then have to determine whether the policy is engaged or not in the particular circumstances. So, as you can see, it is not easy for the insurance companies either.

Vijai ParwaniPrincipal Partner Parwani Co

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 26 Feb 2006

SINGTEL has sold one prime residential land plot to an Australian property developer for $30 million and sources say it is close to selling a second site to a local buyer for an undisclosed amount.

It confirmed yesterday it had sold its former telephone exchange facility located at 859, Old Holland Road to Brisbane Development for $29.8 million.

However, the telco is still ironing out technical details of the sale of its 50, West Coast Road property, measuring 215,951 sq ft and occupied by a disused warehouse. The site is expected to fetch between $32 million and $34 million, according to market-watchers.

A local buyer is understood to have won the site tender. The deal should be finalised in the next few weeks.

SingTel had said earlier that the sale of the two properties is in line with its strategy to free up cash that can be used in its telecommunications business and for new investments.

Brisbane Development’s acquisition of the 87,086 sq ft site at Old Holland Road marks its first foray into the residential property market in Singapore.

It is ‘understood to be planning to redevelop the site into as many as 28 to 30 luxurious strata semi-detached houses with facilities such as basement carpark, swimming pool and security’, said Mr Karamjit Singh of Credo Real Estate, which handled the tender sale.

Source : Straits Times - 24 Feb 2006

Bullish prices for higher-end units hark back to 1996 property boom

IN A sign that the high-end property market may be fast edging back to the boom-time price levels of 1996, six units at Cairnhill Crest have been sold for more than $2,000 per square foot (psf).

These prices are reminiscent of the heyday of the property boom, when luxury freehold projects such as Ardmore Parkcommanded record prices of above $2,000 psf.

Market watchers said the Cairnhill Crest figures were unexpected because even though the luxury market is heating up, such bullish prices tend to be seen only at ultra-posh niche developments.

The project, developed by Hong Kong billionaire Li Ka Shing’s Cheung Kong Holdings, was launched last October and is regarded by some property experts as being as a notch below that in the luxury stakes.

SC Global’s The Ladyhill, for instance, sold two units for more than $2,000 psf in July and October last year. The 55-unit development in the exclusive Nassim Hill area has won a slew of architectural awards.

Another prestigious SC Global project, the 46-unit The Boulevard Residence at Cuscaden Walk, sold a 2,034 sq ft condominum in October at a record price of $2,200 psf, a level not seen since the late 1990s.

In contrast, Cairnhill Crest, with 248 units, is a ‘different category of product’, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

‘It is surprising that Cairnhill Crest can reach the same prices as Ardmore Park, which is the benchmark of luxury condos.

‘If that area can sell at above $2,000 psf, then other areas would go even higher than that, which means we could see a 20 to 25 per cent rise in luxury home prices this quarter.’

Cheung Kong said yesterday that it has so far sold 180 units at an average price of $1,705 psf or $2.6 million per unit.

Of the six units sold at over $2,000 psf, two were four-bedroom units averaging 2,013 sq ft, while the rest were three-bedroom units at 1,733 sq ft, Cheung Kong said. The most expensive unit sold was a 3,057 sq ft penthouse, which went for $5.5 million.

The developer plans to release the remaining units in three batches over the next six months, with prices rising up to $2,300 psf for the remaining unsold penthouse, said Cheung Kong’s deputy chief manager of sales, Mr Francis Wong.

‘We actually planned a second launch but now we don’t need that because our sales are already 40 per cent above our initial target,’ he added.

The first batch of 20 new units, due to come on the market in mid-March, will be priced between $1,850 and $1,870 psf.

But the average price of the final batch of units, which will be released in the third quarter, should hit $2,000 psf, Mr Wong said.

That batch will also include the last of the condominum’s 10 penthouses, which Cheung Kong said it deliberately held back from sale in anticipation of a further increase in luxury home prices. The other nine penthouses, averaging 2,500 sq ft each, have been sold at an average price of $1,968 psf and were all snapped up by foreigners.

In fact, 72 per cent of the units at Cairnhill Crest were sold to foreigners from places such as Indonesia, Hong Kong, China and Australia, he said.

He said one unnamed Indian buyer from Mumbai splurged on four units over three months, paying $14.5 million in total. He kept two units for his own use and is planning to lease out the other two.

And although more than 10 buyers bought at least two units, Mr Wong said there is no evidence of speculative activity.

Source : Straits Times - 24 Feb 2006