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ANOTHER day, another sale en bloc.

But this one has caught the property sector’s eye for its size, prime location - and potential payoff for the lucky owners.

The sale of freehold 114-unit Casa Rosita in Bukit Timah could reap the owners $1.7 million each if the property meets their asking price of $300 million. That is 70 per cent above the last sale in the block - a 118 sq m unit that sold last July for $1 million.

The property has huge potential, given its choice location and size - at 267,425 sq ft, it is the largest residential collective site to go on sale in a prime district.

CB Richard Ellis (CBRE) will be marketing it in Hong Kong, China and Indonesia from Monday but the firm has already received interest from a major, privately held Hong Kong-based developer that has residential projects here. Tenders close on March 22.

The previous largest site was the 243,796 sq ft Belle Vue in Oxley Walk, sold by CBRE to Wing Tai last October for $227.3 million. CBRE said it also marketed Belle Vue overseas.

Sentiment in the luxury property market has clearly picked up and recent collective sale deals done at better-than-expected prices have encouraged many owners to revise their asking prices, said consultants.

About 84 per cent of the owners of Casa Rosita agreed to the collective sale, initially demanding $255 million for the property last year. But they revised their asking price to $300 million in line with the recent upswing in luxury home prices.

This prices the block at about $752 per plot ratio inclusive of an estimated development charge of $21.7 million.

Casa Rosita, which was developed by City Developments and completed in 1986, has units ranging in size from 118 sq m to 299 sq m. Its sale is just the latest in what is already turning out to be a busy year.

At least seven collective sale sites were launched in January while this month, sites such as Haig Gardens in Katong and Kai Sheng Court together with an adjoining pair of semi- detached houses at Mar Thoma Road were launched for sale.

And these come after what was a record year for collective sales of residential sites in 2005.

The increased demand has already had an effect on price. Far East Organization last week bagged the freehold Angullia Mansion off Orchard Boulevard for $120 million or about $1,060 per sq ft (psf) per plot.

This compares with the price of $1,020 psf per plot for the prime Orchard Turn site.

DTZ Debenham Tie Leung investment director Tang Wei Leng said of the sale: ‘We have probably achieved the first significant benchmark transaction of the year which is set to boost market confidence.’

Meanwhile, a handful of contractors and developers have placed bids for a collective site at Braddell Park. Its tender closed yesterday.

Source : Straits Times - 16 Mar 2006

CASA Rosita, one of the largest freehold residential sites in the prime Newton area, was put up for collective sale yesterday at an asking price of $300 million.

The development at Bukit Timah Road has a site area of 267,425 sq ft and comprises 114 apartment units in five sizes, ranging from 118 sq m to 299 sq m. The asking price of $300 million works out to about $752 per plot ratio, inclusive of an estimated development charge of $21.7 million.

Marketing agent CB Richard Ellis yesterday said that based on the $300 million price tag, owners stand to receive a collective sale premium ranging from 50 to 70 per cent over the individual values of the apartments.

About 84 per cent of the owners have agreed to the collective sale so far. A developer who buys the site could build about 300 units at an average size of 1,500 sq ft each, said CB Richard Ellis.

Some of the site’s key attractions include its proximity to the Newton MRT station and schools such as Anglo Chinese School (Barker Road), Singapore Chinese Girls’ School and Raffles Girls’ School.

The large site area also offers potential buyers a large degree of flexibility in developing the site. The plot ratio is 1.6 times, implying a 12-storey height restriction on any future development.

The tender for Casa Rosita closes at 3pm on March 22. Last night, CB Richard Ellis said it has already received interest from a major Hong Kong-based developer.

Casa Rosita was completed in 1986 and developed by City Developments Ltd. It was last put up for collective sale in August 2001. It is the largest prime district residential site to be put on sale in recent months, trumping the en bloc sale of the 243,796 sq ft Belle Vue site at Oxley Walk to Wing Tai for $227.3 million last October.

Source : Business Times - 16 Feb 2006

Rents set to rise quickly in next few months, with some office blocks poised to change hands

THIS year looks to be an exciting one for the office property market in Singapore, with rapidly rising rents and a number of office buildings potentially changing hands.

Premium office rents rose 22 per cent last year to $5.40 per sq ft (psf) a month in the last quarter, the highest yearly rise since 2000.

This is according to a report released on Tuesday by property consultancy Savills Singapore, which predicted that rents would continue to increase this year by about 12 to 15 per cent.

‘For premium buildings, rents may fetch close to $8 psf per month by the end of the year, compared with about $4 in 2003 and an all-time high of about $12 in 1996,’ the report said.

Rents have been boosted by a crunch in prime office space, which remains in high demand. Even One Raffles Quay, which will bring new office supply of over one million sq ft onto the market when it is completed this year, has already leased out more than half its space.

With a total net lettable area of 1.3 million sq ft and large floor plates of up to 30,000 sq ft, One Raffles Quay ‘is expected to pioneer a new era in terms of services, building specifications and requirements’, said the report.

This will help further raise Singapore’s office rents to the level of other key cities in Asia such as Hong Kong and Shanghai. Hong Kong’s Two IFC building currently fetches rents almost three times that of One Raffles Quay, according to Savills.

Another factor boosting office rents is the rise in occupancy rates, which increased in the fourth quarter of last year for the fifth quarter in a row.

Rates rose to above 90 per cent in all areas except River Valley and Tanjong Pagar, which had occupancy rates of 83 per cent and 87 per cent respectively, said Savills.

The largest rise in occupancy rates was in Shenton Way, which saw rates rise from about 87 per cent in January last year to about 94 per cent at the end of December.

Vacancy rates will remain low this year as expanding businesses, the Government’s pro-business initiatives and a strong global economy help to sustain the growth of demand for office space, the report said.

It added that offices would also be in the spotlight this year as foreign investors and real estate investment trusts (Reits) look to prime office space for potential investments.

The Monetary Authority of Singapore’s 2006 deadline for local banks to divest themselves of non-core assets, many of which are commercial buildings, may attract foreign investors looking for a steady income stream, the report said.

A revitalised Reit market may also help to ensure a vibrant office sales market, as existing Reits as well as new office Reits such as Keppel Land’s planned K-Reit Asia seek continued asset injections.

This may raise capital values for offices by up to 5 per cent, Savills said.

Source : Straits Times - 16 Feb 2006

Estimates of 15-20% based on recent transactions done at benchmark prices

THE prime Orchard Road area, which has seen several land deals at benchmark prices of late, will head the next round of increases in development charge (DC) rates come March 1, say property consultants.

They predict hikes of up to 15-20 per cent for commercial and non-landed residential use in this traditional prime district. The area has been the centre of recent transactions such as Angullia Mansion and the Orchard Turn and the former Glutton’s Square sites.

All three properties changed hands at prices that were substantially higher than the land values implied by existing DC rates for the locations, say property consultants.

Development charges are payable by developers to the state for enhancing a site’s use. The rates are revised every six months, on March 1 and Sept 1.

The revisions are made by the Ministry of National Development in consultation with the Chief Valuer, who takes into account current market value.

The rate changes are tracked in property circles because they reflect values and can affect the breakeven costs of developers seeking to redevelop sites. DC rates can also impact collective sales.

Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt says that hikes of 15-20 per cent in the DC rate for non-landed residential use in prime districts could mean that sellers have to shave anything up to 10 per cent from their asking prices. This will depend on how big the DC component is as a proportion of total redevelopment cost of the site.

This, of course, assumes that developers refuse to accept an increase in breakeven cost for their projects due to the DC rate hike.

But much would also depend on market sentiment, he adds.

There’s a possibility that some of these home owners could still fetch the prices they’re seeking, despite any DC rate hike, if developers’ bullish market outlook continues and they’re willing to factor in higher breakeven costs and project higher selling prices for the end units in their projects, adds Mr Lui.

He also has another suggestion for the Chief Valuer. To encourage private-sector rejuvenation of ageing commercial buildings in the Shenton Way stretch, there’s a need to resist raising DC rates for both non-landed residential and commercial use in the location.

DC rates are expressed in terms of per square metre of gross floor area. The rates are specified by land use - such as landed and non-landed residential, or commercial and industrial - and are applied across 118 locations or ‘geographical sectors’ in Singapore.

CB Richard Ellis predicts that on average, DC rates for commercial use will rise by 1-1.5 per cent, although in the Orchard Road location, it could go up by about 20 per cent.

Colliers International predicts a 3-5 per cent rise in the average commercial rate, with the biggest increases of 10-15 per cent expected for the Orchard location.

JLL’s analysis shows that the prices at which two prime commercial sites sold by the state along Orchard Road in the past few months - Orchard Turn and Glutton’s Square - were at least 70 per cent more than the implied land values based on current DC rates for commercial use in the area.

And although there were no commercial sites sold in the Marina Bay area in the past six months, JLL notes that the price fetched for the July 2005 tender of the Business & Financial Centre site is still 22 per cent higher than the implied land value even after a 20 per cent hike in the commercial DC rate for the area during the last revision on Sept 1, 2005. Hence, JLL believes that there’s scope for the commercial-use DC rate in the Marina Bay area to be raised further by at least 5 per cent.

For non-landed residential use, Colliers predicts a 3-5 per cent hike on average, and CBRE, a 4-5 per cent gain.

Consultants expect Sentosa Cove to lead the increases, with JLL predicting a 20 per cent rise. It bases its expectation on the fact that the award of the Baywater Collection site in the upscale waterfront housing district in January was at a price that is a whopping 79 per cent higher than the land value implied by the September 2005 DC rate.

Colliers and JLL both predict a 10-15 per cent hike in non-landed residential DC rates in the prime Orchard, Ardmore and Paterson locations, thanks to recent collective sales such as Habitat II, Belle Vue and Angullia Mansion.

The latter was sold earlier this month at $1,058 psf per plot ratio. This is 70 per cent higher than the land value implied by DC rates for the area.

Non-landed residential DC rates are also expected to head north by at least 5 per cent in the Katong area, say consultants. They cite prices fetched for recent en bloc sales like Amberville and Gracious Mansions in the area.

Colliers reckons that landed DC rates will appreciate by 1-2 per cent on average. But CBRE predicts an even more modest 0.1 per cent average rise, although it expects a 10-15 per cent hike for Sentosa Cove, where bungalow sites recently hit the $500 psf mark.

Property consultants expect industrial DC rates to either stay put or even continue to edge downwards in some locations like Pioneer Road, Penjuru Road and Alexandra Road, on the basis of land deals at prices below land values implied by DC rates.

JLL predicts a moderate increase in hotel use DC rates given the positive tourism newsflow following the government’s decision to go ahead with two integrated resorts.

CBRE, though, believes rates will remain unchanged. Despite the improving industry outlook, a lack of hotel transactions makes it difficult to justify a DC rate hike, says CBRE managing director Pauline Goh.

Source : Business Times - 16 Feb 2006

Prime plot can house posh shops, a hotel and 2 condos; a bungalow site is also on offer

WATER views - lake or ocean - are up for grabs with the imminent release of new sites in the exclusive residential enclave Sentosa Cove.

The Lakefront Collection comprises coveted residential bungalow sites beside Serapong Lake, while a prime site that can house posh shops, restaurants, a hotel and two condominiums is also on offer.

The Quayside Collection, as the prime 48,611 sq m site is known, is unique in the Cove as it will be the only commercial site for sale and foreign developers are believed to be keen. Developers can bid for the combined hotel and commercial site and omit the condominium plots, but will not be allowed to bid for only the condominium sites.

But investors are unlikely to forgo these plots, given Sentosa Cove’s latest seafront condominium plot sold at $638.62 per sq ft (psf) per plot ratio (ppr) - 82 per cent higher than the first plot two years ago.

‘The condo plots are the carrots. Developers would be able to sell the condo units to finance part of the hotel and commercial portion,’ said Knight Frank director of research and consultancy Nicholas Mak.

He expects the condominium sites, which face the water, to fetch $400-$450 psf ppr. There is space for up to 236 units in the two six- storey projects. ‘The hotel and shops would have a longer payback period, particularly as the hotel would face competition from the other hotels on Sentosa,’ he added.

The seven-storey, five-star 320-room hotel will be the only hotel in the Cove. It will add to the existing 800 hotel rooms on Sentosa as well as new hotels under construction.

The Quayside Collection will be sold through a two-envelope system. Parties have until April 28 to submit their price and concept proposals.

Sentosa Cove, the company overseeing the planning and development of the area, will award the site in the third quarter. And by the end of the first quarter, it will launch the Lakefront Collection, comprising 15 bungalow sites beside Serapong Lake. The site will be sold en bloc to a developer, which will be allowed to build structures and amenities such as a verandah over the water.

The 12,327.2 sq m Lakefront Collection has the last bungalow sites to be offered for sale in north Sentosa Cove. Only three other bungalow sites in the north Cove launched earlier remain unsold.

Sentosa Cove will also soon offer the north Cove’s last condominium site. This has a four-storey height limit and could accommodate up to 160 units. The other available plots in Sentosa Cove are in the southern section. These will be marketed later this year.

So far, Sentosa Cove has sold 57 per cent of its planned 2,518 residential units.

Source : Straits Times - 15 Feb 2006