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HONG Kong-based developer Cheung Kong Holdings is resuming sales of its Cairnhill Crest project, with a launch planned next month.

Property consultants say a three-bedroom unit that went for $2,045 per square foot in January was a recent high. A Chinese national who purchased it paid around $3.5 million.

Last October, a record was set at $2,200 psf for a three-bedroom unit at The Boulevard Residence at Cuscaden Walk in the Orchard Road area.

Sixty-eight units, or 27.4 per cent, of Cairnhill Crest’s total of 248 remain unsold. They are one to four-bedroom units, ranging from 818 sq ft to 2,016 sq ft. A penthouse of over 2,500 sq ft is available; the other penthouses are off the market.

Cheung Kong is releasing the remaining units in batches of 20 or so over three phases from mid-March, with the aim of selling everything by the third quarter of this year.

While Cheung Kong’s management is still finalising pricing, deputy chief sales manager Francis Wong said that prices are likely to be increased by 5 per cent with each release. In the past few months, apartments were sold at between $1,248 psf and $2,045 psf.

For the batch in March, Mr Wong is expecting the average price to hit $1,800 psf. On average, the project’s prices have reached $1,705 psf, according to Mr Wong. He added that over 70 per cent of the units are sold at about $1,400 psf.

Over 70 per cent of the buyers are foreigners, led by the Indonesians. One customer - an Indian national - bought four units of the development, while another 10, from various countries, bought two units each, Mr Wong told BT.

Cairnhill Crest has an ‘investment plan’, where it pays the monthly mortgage for three years if the buyer agrees to delegate full authority on all leasing issues within that period. The scheme was taken up by 52 per cent of its buyers.

Property consultancy Jones Lang LaSalle, which is handling the leasing, said that the lease price is between $4.80 psf and $7 psf, depending on whether the units are furnished or not. JLL national director (residential) Jacqueline Wong said that a typical three-bedroom unit would cost about $7,000 to $9,000 monthly. The yield for owners is an average of 4.2 per cent annually.

Mr Wong said that Cheung Kong is constantly looking out for new land to purchase for residential development. ‘Our group is very optimistic about the future of Singapore,’ he said. ‘The recovery of the property market can last for three to five years.’

Source : Business Times - 24 Feb 2006

AFTER announcing the sale of its Old Holland Rd property yesterday for $29.8 million, Singapore Telecom is expected to put its Dunearn Road training centre on the market soon for about $95 million.

The centre, next to Raffles Girls’ Primary School and on the corner of Dunearn and Hillcrest roads, is now occupied by SingTel Academy.

It includes two 11-storey tower blocks, a few shorter buildings and a swimming pool.

The 256,486 sq ft site comprises two land parcels - one with about 85 years of its lease remaining and the other with 75 years.

The successful bidder will have to pay the state almost $40 million - one premium to top up the lease to 99 years, and another to change the site’s use from ‘utility’ to ‘residential’.

The expected $95 million price of the site plus the near-$40 million upgrading payment to the state works out to a unit land price of almost $380 psf of potential gross floor area.

Provisional approval has been granted for two storey, strata-title landed terrace houses with attics and basement carparks, with a 1.4 plot ratio - the ratio of potential gross floor area to land area. This is expected to yield about 160 such houses.

Market watchers say the successful bidder could instead apply to the authorities to develop a five-storey condo with a 1.4 plot ratio, as this would still be in keeping with the surrounding low-rise residential character.

Jones Lang LaSalle is said to have been appointed marketing agent.

The property should generate strong interest given its proximity to good schools - Raffles Girls’ Primary and Nanyang Girls’ High are both within a kilometre. This should create a sizeable pool of ‘captive buyers’ for the project - and hence the site.

As for the freehold site at 859 Old Holland Rd site, the $29.8 million sale price works out to $513 psf for a net land area of 81,400 sq ft after road widening and inclusive of a $12 million development charge.

The buyer, who was the highest bidder during the tender, is Brisbane Development Pte Ltd, a company fully owned by Bestwise Pte Ltd, whose ultimate shareholders include Indonesia’s Tjugito family, linked to the Eagle Indo Group.

Brisbane plans a cluster housing project designed by SCDA Architects, comprising up to 30 semi-detached homes with facilities such as a swimming pool and basement parking.

The breakeven cost is estimated at $2.1 million per house, and Brisbane could expect to sell the homes for about $2.5-2.9 million in a year’s time. Credo Real Estate brokered the sale of the site.

Eagle Indo group deve loped the Enterprise Industrial Building along Sims Avenue in 1995 and owns the 50,000 sq ft at Delta House on Alexandra Rd, bought more than 20 years ago.

Some time over a year ago, Bestwise bought four floors in John Hancock Tower - now known as 6 Raffles Quay - for about $750 psf of net lettable area.

The Tjugito family also has property interests in Australia, including a stake in the recently completed 53-storey Riparian Plaza in Brisbane’s CBD, comprising offices and residential penthouses overlooking the Brisbane River.

Market watchers are also waiting for SingTel to award another site - at 50 West Coast Rd. As with 859 Old Holland Road, the tender for this site closed in November last year.

BT understands the highest bid received for the West Coast plot could be close to $30 million - about $220 psf per plot ratio inclusive of a premium to top up the lease to 99 years and a change-of-use premium.

Source : Business Times - 24 Feb 2006

3 developments have combined freehold land area of 137,500 sq ft

CAPITALISING on the momentum for collective sales, three separate residential developments off Thomson Road are joining forces to put the properties up for en bloc sale.

The properties are Lock Cho Apartment, Comfort Mansion and a walk-up apartment block at Jalan Datoh and Jalan Raja Udang.

In terms of permissible gross floor area for redevelopment, the properties together could be the largest collective sale launched so far this year.

The three properties together have a freehold land area of around 137,500 square feet.

A piece of state land of 40,500 sq ft could be incorporated into the project, boosting the total to about 178,000 sq ft.

In terms of potential GFA, it comes up to 500,000 sq ft, given the site’s plot ratio of 2.8 and a height control of 36 floors.

In their first collective sale attempt, the owners are hoping to get $160 million for the combined site, or around $350 per sq ft per plot ratio, factoring in the development charge and state land costs of $14 million.

If successfully sold at $160 million, the owners are expected to get between $300,000 and $500,000 each, a 60 to 80 per cent premium over individual sale.

‘The launch of the Lock Cho Apartment and its adjoining developments marks the first large-scale residential collective sale site in the Thomson Road vicinity in recent years,’ says Tan Hong Boon, executive director of Credo Real Estate, who is handling the sale.

He added: ‘The launch of this centrally located site is timely as the locality experiences an almost absence of such a coveted large site, which many developers are seeking to acquire.

‘We feel it would be more appealing to developers if we can offer them a critical mass in size with regular plot shape for them to enjoy greater efficiency and economies of scale in construction and marketing.’

Mr Tan believes that such a large site will attract listed companies that are at least mid-sized.

He reckons developers can break even on the site at between $580 and $600 per sq ft of potential saleable floor area, with 400 apartment units of about 1,200 sq ft each.

At present, Lock Cho Apartment is a 140-unit development, Comfort Mansion has 17, while the walk-up apartment has eight units.

The apartments are around 30 to 40 years old, Credo says.

The tender for the properties will close on March 27.

Source : Business Times - 23 Feb 2006

CDL may sell premium project at prices topping those of the last property boom

CITY Developments’ (CDL’s) super luxury St Regis Residences being built in the exclusive Cuscaden/Tomlinson area could be offered for sale at record-busting prices of $2,600 per sq ft (psf) - well above the top prices at the height of the property boom in 1996-1997.

That is according to Credit Suisse analysts, quoting sources in the know.

‘According to our sources, pricing could be as high as $2,600 psf, as the list of interested buyers continues to grow,’ said a Credit Suisse report yesterday. ‘We remain conservative and have only imputed an average price of $2,100 psf in our forecasts.’

St Regis Residences have been described by CDL as a premium product, with many large units of 400 sq m (4,310 sq ft) in size. It will have three- to four-bedroom units and penthouses.

Assuming the 400 sq m units are priced at $2,100 psf, each one will cost at least $9 million.

St Regis Residences will have all the perks of the St Regis Hotel, including access to St Regis’ much-touted 24-hour butler service, hotel-style room service and cleaning, but residents must pay ongoing fees for these.

Property watchers expect the property to set a new price benchmark in the market. If it is sold at $2,600 psf, it would be a new record for Singapore. Ardmore Park, long seen as having Singapore’s most expensive homes, achieved a high of $2,400 psf in the 1996-1997 peak.

‘St Regis is in a class of its own. If you have a very different product, you will set a new benchmark,’ said DTZ Debenham Tie Leung’s executive director, Mrs Ong Choon Fah.

An industry source said more foreign buyers were expected to buy for prestige reasons.

Prices in the luxury homes market climbed by about 20 per cent last year and could rise by 10 to 15 per cent this year, though the recovery has yet to filter down to the mass market, said property consultancy Savills.

St Regis Residences, which is on a 999-year leasehold site and next to the new six-star St Regis Hotel, could be launched next month. Both developments are jointly owned by CDL, Hong Leong Holdings and TID.

It will be the first of at least five projects that CDL has lined up for launch this year, as it looks to replicate its residential sales success last year, said the Credit Suisse report. Last year, CDL, together with Hong Leong Group, sold 2,300 residential units, taking the top spot with a 30 per cent market share.

The other projects lined up include its 264-unit Sentosa Cove condominium, which could be priced at $1,200 psf on average and launched in the middle of the year, said Credit Suisse.

A 214-unit condominium at the freehold King’s Centre site could be launched in the first half at $930 psf on average, followed by a 360-unit block at the 99-year leasehold 1, Shenton Way site in the third quarter and possibly priced at $1,100 psf on average.

By year-end, CDL may launch its 999-year leasehold Pasir Ris site, which could have 600 units priced at $580 psf on average.

Credit Suisse is forecasting that CDL, which will report its full-year results next Tuesday, will achieve a net profit of $207 million.

Source : Straits Times - 23 Feb 2006

Banks to bump up rates by between 0.25 and 0.8 percentage point

HOME owners are about to be slugged with another round of mortgage rate increases with hikes ranging from 0.25 to as much as 0.8 percentage point.

Banks yesterday blamed the increases, which will hit existing borrowers and new clients when the hikes kick in, on the higher costs they face in obtaining funds for lending.

DBS Bank is bumping up the rates on its fixed and floating home loan packages by 50 basis points, or 0.5 percentage point.

The increase, which applies to owners of private property and HDB flats, takes effect at the end of next month.

This will mean that a customer who borrowed up to 80 per cent of his property’s value on a floating rate package will be charged an annual interest rate of 3.75 per cent in his first year - up from 3.25 per cent.

Home owners on fixed rate packages are affected only if their loans have crossed the agreed period, which can be between one and 10 years in the case of DBS loans.

United Overseas Bank is raising rates across the board for existing customers by an average of 0.5 percentage point, starting from an increase of 0.25 percentage point.

HSBC Bank’s increase is sharper - 0.8 percentage point - and kicks in on March 13.

Standard Chartered Bank (Stanchart) said it will raise rates next month for some clients but did not provide details.

The new rates would be ‘competitive and in line with industry rates’, it said.

Citibank raised rates this month but only on its floating home loans.

It said that at least 20 per cent of customers were unaffected, but the bulk of those hit saw rates rise 0.5 percentage point.

Maybank and OCBC Bank both said they were reviewing the situation, but industry observers, noting that banks tend to move in unison on rates, expect them to follow suit soon.

The latest round of increases comes after a series of revisions last year which saw home loan rates go up between 75 and 150 basis points.

Banks said they had to raise rates given the rising costs of getting funds to support their lending activities.

A Stanchart spokesman said: ‘While we sought initially to absorb the increase in cost of funds to lessen the impact on our customers, this is not sustainable in the long run.’

The key three-month Singapore Interbank Offered Rate (Sibor) - a measure of how much it costs banks to borrow from each other - has been climbing since the end of August last year where it was about 2 per cent.

It now stands at almost 3.4 per cent and is expected to rise further given that the United States Federal Reserve’s key benchmark interest rate, to which the Sibor is strongly correlated, is expected to continue going up.

Daiwa Institute of Research analyst David Lum said: ‘Once there was a view that there might be some relief but given what the Fed has been saying, there’s no reason to expect interest rates to come down in the near term.’

Singapore’s economy is also on a roll, he noted.

‘Unemployment is extremely low and the property market looks to be stable.

‘All these factors support why it is about time to raise rates,’ he said.

Banks would not say how many more mortgage rate hikes are in store this year.

However, Citibank Singapore’s business director for the secured assets group, Mr Tan Chia Seng, said: ‘We will not rule out the possibility given the uncertainty of the interest rate environment.’

He added that the bank’s five-year fixed rate package was popular with customers concerned about rising rates.

Source : Straits Times - 23 Feb 2006