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Luxury home buyers will have their pick of 6,000 units in choice locales in the next few months

IF YOU missed out on last year’s rush to snag a luxury condominium, fret not, a slew of upmarket property launches is coming your way.

Home buyers can look forward to as many as 30 potential condo launches in the next few months offering a total of about 6,000 apartment units.

This is according to property consultancy Colliers International. It says the list is ‘dominated by small to mid-scale luxury and prime projects’.

Almost half the potential launches are in prime locations such as Sentosa Cove and Districts 9 to 11, and mid-range areas such as District 15. This continues a trend skewed towards the mid- and high-end markets that started last year.

One of the most anticipated launches this year is City Developments’ (CDL) super-luxurious St Regis Residences, widely tipped to fetch benchmark prices of over $2,000 per square foot. The 999-year leasehold condo at Tomlinson Road is due to be launched next month, CDL told The Straits Times on Friday.

The more upbeat sentiment overall has led developers to expect a bullish property market this year, said Ms Tay Huey Ying, the associate director of research and consultancy at Colliers International.

‘We would expect developers to capitalise on this sentiment by being more aggressive in their launches,’ she said.

This seems borne out by the success of the year’s first launches in the past few weeks.

MCL Land’s freehold project, The Esta in Katong, has sold more than 60 per cent of its 400 units, ahead of its official launch this weekend. The nits sold since the January preview have averaged more than $700 psf, the firm said.

GuocoLand - which will officially launch its 162-unit West Coast Road condo, The Stellar, this weekend - has sold some of the 60 units offered at a preview last month, at $550 psf on average.

But not all developers are in a hurry to launch, said Knight Frank director of research and consultancy Nicholas Mak.

‘Some developers will carefully gauge market sentiment before launching major prime projects, to try to push the price envelope in the high-end market even further,’ he said.

He added that, despite the bullish sentiment, there will probably be fewer launches in the first half than in the same period last year as the potential supply of residential properties available for launch has fallen.

At end-2004, about 11,200 units had not been launched for sale despite having a sales licence; at the end of last year, the figure was 7,300, he noted. However, he added, the situation could change later this year, as many developers snapped up en bloc sites last year that they have yet to put up for sale.

Also, some are biding their time to launch projects aimed at the mass market in the hope that optimism in this segment will pick up later in the year.

‘In the second half of 2006, sales activities in the mass-market segment are likely to pick up with the launches of a few major suburban 99-year leasehold projects targeted at HDB upgraders,’ Mr Mak said.

Source : Sunday Times - 12 Feb 2006

A SIX-STOREY freehold service apartment block in Tiong Bahru was snapped up on Wednesday at an auction for $10.2 million.

The property at 3 Seng Poh Road was bought by a small investor who was represented by a lawyer, according to Colliers International, which conducted the auction. The property was put up for sale by mortgagee United Overseas Bank. The mortgagor was Kim Koon Garment Industries, according to an earlier report.

The property has a land area of 9,143 sq ft and a gross floor area of 27,451 sq ft. The building has an eating house on the first storey, a car park on the second and third storeys, and 61 service apartments occupying the upper levels. Colliers had earlier said that buyers may continue operating the building as a service apartment or apply to convert it into a boarding house or budget hotel. Bidding for the building began at $9 million and the property attracted 12 bids in all before it was sold.

Colliers also sold two strata office units at the auction. One was an 18th floor unit at High Street Centre, which changed hands at $325,000 or $593 psf. The other was a 19th floor unit at International Plaza which fetched $470,000 or $502 psf.

Source : Business Times - 10 Feb 2006

Move will better safeguard interests of minority unit holders, some believe

Listed real estate investment trusts (Reits) could soon be covered by the takeover code - in a move some players believe would better safeguard the interests of minority unit holders.

Reits have boomed here, with some having market capitalisations that run to hundreds of millions of dollars. There is currently no framework to govern potential mergers and acquisitions involving them.

But the Monetary Authority of Singapore told BT: ‘The Securities Industry Council (SIC) is studying whether to extend the Singapore Code on Takeovers and Mergers to Reits.’

Sources say MAS has met industry players and sought their views on whether to extend the takeover code to cover Reits.

Hypothetically, because Reits are not subject to the takeover rules, a party can acquire a 30 per cent interest in a Reit - the trigger for launching a mandatory offer with listed firms - without needing to make an offer to other unit holders.

The CEO of CapitaMall Trust Management, Pua Seck Guan says it is a ’shortcoming’ that Reits are currently outside the takeover code, which came about because they were fitted into the existing unit trust framework.

Mr Pua believes that having the takeover code apply to Reits will allow for consolidation in the sector, which could be good for Reit investors.

‘If the unit prices of some Reits are not performing, more efficient vehicles can take them over and deliver more value to unit holders,’ he explained.

As to when consolidation may kick in, Yeo See Kiat, CEO of ARA Trust Management (Suntec), said: ‘Our Reit industry is in its infancy and still growing. I do not see consolidation happening presently.’

Bankers believe that Reit activity in Singapore this year will continue to be dominated by new issues coming to the market and secondary fund-raisings. But consolidation in the sector could start from next year.

The experience of more mature Reit markets like Australia suggests the growth phase of the sector, when many Reits sprout, is followed by a consolidation phase. Reits will merge so they can better exploit economies of scale, and stronger Reits will acquire weaker ones.

Bankers note that in Singapore, certain Reits enjoy a lower cost of capital than others. Investors believe specific Reits can grow successfully by acquisition and drive up their unit prices in anticipation of accretive growth. This creates a virtuous cycle in which these Reits are better placed to pursue acquisitions because they have access to cheaper capital. Such acquisitions could be in the form of physical assets or other Reits.

Industry players note that Singapore and Hong Kong are locked in competition to be the Reit hub for Asia ex-Japan. Given the size of Hong Kong property developers and the speed at which they are embracing Reits, the Hong Kong Reit market is looking at tremendous growth this year.

But players say Singapore has had an edge in terms of its Reit framework, such as having tax transparency. They believe, therefore, that regulators may be keen to continue to position Singapore as having the best Reit regulations in Asia by quickly making the relevant changes to have takeover rules apply to Reits.

Singapore’s first Reit was successfully listed in mid-2002. Today the island has seven listed Reits. And several more are expected to be listed this year, such as serviced apartment Reit Ascott Residential Trust and office Reit K-Reit Asia.

The Singapore takeover code is issued by the MAS pursuant to the Securities and Futures Act. The code is nevertheless non-binding in that it does not have the force of law. Its primary objective is fair and equal treatment of all shareholders in a takeover or merger situation.

The code is drafted with listed public companies in mind, and because Reits are unit trusts, experts believe that some work needs to be done before the code can be made applicable to Reits. MAS said: ‘Public consultation will be conducted before any amendments are made to the Takeover Code.’

Source : Business Times - 10 Feb 2006

The former is going for $550 psf on average and the latter, $462 psf

AFTER the Chinese New Year break, two projects will be launched officially this weekend - GuocoLand’s The Stellar condo at Pasir Panjang, on the former Greenacres site, and Novelty Group’s Amanusa cluster terrace housing development in the Upper Thomson area. Both projects are freehold.

The five-storey Stellar condo is priced at $550 psf on average and GuocoLand is offering buyers a deferred payment scheme. The group sold about 30 units at the project during a preview before the CNY break - half of the 60 units it had released then.

Marketing agent Knight Frank will release more units at this weekend’s official launch, marked by the start of an advertisement campaign. In total, the condo, at the corner of Clementi and West Coast roads, comprises 162 apartments ranging from 614 sq ft to 2,271 sq ft. Some units come with private pools.

BT understands that over in the Paterson Road area, GuocoLand has sold about 70 of the 104 apartments in Paterson Residence freehold condo. The average price has gone up to around $1,470 psf from about $1,400 psf in October, sources say.

The apartments are in a 24-storey tower. The project includes six strata townhouses which GuocoLand has yet to begin selling. The three-storey houses are expected to be priced at $5.3 million to $6 million each and range in strata area from about 3,800 sq ft to 4,100 sq ft.

Buyers looking for landed homes outside the city might want to check out Novelty’s Amanusa strata cluster homes along Upper Thomson Road, a short distance from Peirce Reservoir. Marketing agent DTZ Debenham Tie Leung has sold seven of the 36 homes in the development since a soft launch on Jan 5.

The houses comprise five levels - three storeys, a basement for two car park lots, and a roof terrace. Each house will have a private lift. Strata areas range from 2,874 sq ft to 3,875 sq ft and the homes are priced between $1.3 million and $1.8 million. The average price works out to $448 psf of strata area for buyers who opt for normal progressive payment and $462 psf for those who prefer deferred payment.

While market watchers will certainly track the response to the two developments this weekend, what they are more keenly waiting for is the release of more price-defining projects, like Hong Leong Group’s St Regis Residences at Cuscaden-Tomlinson roads in the luxury segment and GuocoLand’s 625-unit condo next to Buangkok MRT Station in the 99-year leasehold mass-market suburban category.

While luxury residential values in Singapore escalated last year on the back of strong foreign interest, growth has been more sluggish in the entry-level private housing market, which relies more heavily on local buyers. This has further accentuated the two-tier property market that has emerged in Singapore, and market watchers say the gap is set to widen further.

CB Richard Ellis has forecast that luxury home prices will rise 20 per cent this year after appreciating 15 per cent last year. It also predicts a 5 per cent increase in the Urban Redevelopment Authority’s overall private home price index this year after a 3.9 per cent gain last year.

Source : Business Times - 9 Feb 2006

Price works out to $550 psf ppr, inclusive of charges, premium

MCL Land has bought the freehold Waterfall Gardens in Farrer Road and two smaller adjoining sites for $131.75 million. The price works out to $550 per square foot of potential gross floor area inclusive of development charges and a development premium payable to the state to maximise the site’s redevelopment potential.

MCL Land’s breakeven cost for a new 12-storey condo could be about $800 to $850 psf. The total land area is 160,932 sq ft.

The group is buying the property through an en bloc deal from its owner Farfor Investments, controlled by members of a family with Indonesian and Hongkong connections, although some family members are now Singapore citizens.

The family members go by two surnames - Tan and Lim.

This is the same family that developed the Shearesville project in Holt Road and bought one block of Cuscaden Residences for $1,028 psf in early 1999 from Hotel Properties - and later sold it to the Hong Leong Group and Japan’s Mitsui group for $1,380 psf in August 2000.

Waterfall Gardens was sold through a private tender handled by DTZ Debenham Tie Leung. It closed late last month and attracted a handful of bids. Farfor’s offer was the highest.

Farfor originally bought Waterfall Gardens, with a site area of 138,016 sq ft, in 1999 for $102 million. It later bought a remnant strip of private land next door for a couple of million dollars, sources say. And it recently purchased an adjoining state site of 20,602 sq ft for about $7 million.

These three parcels, involved in the latest sale to MCL Land, add up to 160,932 sq ft. The site is zoned residential with a 1.6 plot ratio - ratio of potential gross floor area to land area - and has a 12-storey height restriction.

MCL Land could build about 200 units averaging 1,800 sq ft each and is expected to get the project launch-ready by the fourth quarter of this year.

This weekend MCL is officially launching its Esta freehold condo in Katong. It has sold about 250 units in the 21-storey development since last month and is expected to raise the average price from $700 psf to $710 psf. Another MCL project that is expected to hit the market later this year is an exclusive low-rise condo comprising fewer than 50 units in Fernhill Road.

For Waterfall marketing agent DTZ, this is the second major investment sale deal it has announced in as many days. It also handled the $120 million collective sale of Angullia Mansion to Far East Organization.

Source : Business Times - 9 Feb 2006