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THE en bloc fever is infectious - this time, the owners of the freehold Newton Meadows have caught it. Sources say the price expected is about $75 million, or about $680 per square foot of potential gross floor area inclusive of an estimated $6.9 million development charge.

Based on this, the breakeven cost for a new condo is about $900-$950 psf, say analysts. The 42,886 sq ft elevated site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area). The plot can be redeveloped into a 36-storey condo with about 95 units averaging 1,300 sq ft each.

Assuming the 10-storey Newton Meadows does fetch $75 million, owners of the existing 28 units stand to receive about $1.4 million to $3.5 million in proceeds, depending on the size of their units, which range from about 1,200 to 3,600 sq ft. The sums the owners will receive are roughly 60 per cent higher than what the apartments would have fetched if sold individually.

Jones Lang LaSalle is marketing Newton Meadows through an expressions of interest exercise that closes on April 27.

Source : Business Times - 28 Mar 2006

For some residents, there is more to home than just the windfall from a collective sale, even if that means blocking their neighbours’ bid to sell

THESE days, 72-year-old Madam Mavis Lee postpones her morning walk until her neighbours have left for work, so that she does not have to worry whether they will interrogate her, or just ignore her completely.

She is neither a criminal nor a bad neighbour, just one of several home owners in her Adam Road estate who rejected a collective sale proposal. And many of her neighbours are upset about it.

‘They used to smile and said ‘hello’ when we met, but now they just stare right through me. Sometimes, they would ask why I’m so stubborn and what’s the point of holding on. It’s very stressful,’ said Madam Lee.

With the promise of windfall sales sparking a new wave of ‘en bloc’ fever, stories like hers are being played out across the island.

Housewife Marie Tan, for example, loved her apartment in Bukit Timah so much that she wrote to The Straits Times Forum page earlier this month, lamenting that collective sale bids often create tension in her estate between those who agree to sell and those who do not.

Like Madam Lee, 35-year-old Madam Tan does not want to sell. She has lived in her freehold three-bedroom apartment with her husband and three children for eight years.

‘Those who wanted to sell have been civilised enough to not do anything negative to those who didn’t, but the whole community is split and there is a certain tension in the air,’ she said. ‘You belong either to the yes or no group. There’s a lot of second-guessing and awkwardness.’

In fact, all five home owners The Sunday Times spoke to asked for their estates not to be named to avoid bad blood with their neighbours.

For an entire development to be put up for collective sale, 80 per cent of home owners must agree. If the estate is less than 10 years old, that number is increased to 90 per cent.

It is not difficult to see why there has been a renewed surge in collective sale proposals in the past year, after a downturn in 2000.

Earlier this month, the freehold Eng Lok Mansion in Napier Road was sold en bloc and each of the 64 owners there will receive $2.16 million, about twice the market value.

Last weekend, Paterson Tower was sold for $266 million, with the owners of each apartment to receive $3.7 million.

Owners of apartments in collective sales typically pocket between 30 and 50 per cent more than what their properties are worth individually on the open market.

The buyers are usually developers, who tear down the existing properties and replace them with new estates with more units and communal facilities like swimming pools.

But to the five home owners interviewed, the notion of home is more important than the prospect of pocketing up to $900,000 for an apartment that may have cost $500,000.

Madam Tan said: ‘It is our first home after marriage, a place where I became wife and then mother to my three children. Their first steps and their first words all happened in this humble but cosy nest.’

Madam Lee, a widow, is afraid of having to start afresh. ‘I can’t imagine moving to a new estate at my age. I’ll have to find out things like where to buy groceries and what bus to take to visit my grandchildren,’ she said.

Said businessman H.C. Lim, 43, who lives in East Coast with his family of five: ‘My apartment is more than a home. It is from my late parents and it reminds me of their love.’

Sentimental ties play a big part in residents’ decisions to reject collective sales, said Mr Jeremy Lake, executive director, investment properties, at property consultant CB Richard Ellis. The property’s location and the fear of not being able to find a comparable home in the area are other important factors, he said. Of course, Mr Lim, Madam Tan and Madam Lee would have no choice but to move if 80 per cent of the owners agreed to the sale of their estates.

According to Mr Karamjit Singh, executive director of collective sale specialist Credo Real Estate, there are several grounds for objection - like if the process to sell the estate en bloc was not carried out according to guidelines or the collective sale proceeds were not enough to pay off existing housing loans - but sentimental attachment is not one of them.

For now, home owners opposing collective sales can only hope neighbours see beyond the dollars and cents of their property.

Said Madam Lee: ‘Part of a person’s identity is tied to the neighbourhood he lives in. How I wish the rest could see that.’

ngsls@sph.com.sg

‘It is our first home after marriage, a place where I became wife and then mother to my three children. Their first steps and their first words all happened in this humble but cosy nest.’ — HOUSEWIFE MARIE TAN on why her private apartment is not for sale

Source : Sunday Times - 26 Mar 2006

AS PRICES of brand-new luxury condominiums skyrocket, prices at lower-end projects are quietly being slashed by as much as a quarter of their original price-tag.

The developers involved are eager to unload unsold units in a market that is beginning to stir.

Some of these empty units have sat unsold for up to five years after the projects were finished, as the property sector’s downturn in recent years took its toll.

Most units where big discounts and other incentives are being offered are in large-scale, 99-year leasehold suburban projects.

This market segment has not yet enjoyed the spectacular recovery seen in prime areas, where some prices have topped the market’s peak a decade ago.

Hong Kong tycoon Li Ka-shing’s Costa Del Sol in the Bayshore area, for instance, was launched in May 2000 at $765 per sq ft (psf), or about $1 million for a 1,300 sq ft apartment.

But slow sales have since prompted Cheung Kong Holdings, which developed the 906-unit condominium during the property market peak in the late 1990s, to slash unit prices.

Last month, a new batch of units was launched for as little as $550 psf for apartments on the lower floors. That would add up to about $715,000 for a 1,300 sq ft unit. The Straits Times understands that over 400 units in the project are unsold.

At nearby Sanctuary Green, prices have fallen to about $569 psf from an average of $720 psf when the East Coast project was first launched in January 2000.

About 170 units remained unsold as at Feb 9, according to the 2005 annual report of GuocoLand, which developed the 522-unit project.

Keppel Land’s The Caribbean at Keppel Bay, launched in September 2000, has had prices cut from $850 psf to about $640 psf, with more than 20 per cent of its 969 units still unsold.

Apart from cutting prices, developers are also rolling out incentive schemes to attract potential home buyers.

At its most recent launch, Costa Del Sol offered an early move-in plan, whereby buyers could take possession of their units within two weeks of paying a deposit of just 5 per cent of the sale price, with the rest to be paid within a year.

Property consultants say developers are keen to offload these unsold units as soon as possible, as they have already been completed and have received their temporary occupation permits (TOP), which means the clock has started to tick on the 99-year leases.

Costa Del Sol obtained TOP between 2003 and 2004, while Sanctuary Green and The Caribbean did so in 2004.

To make things worse, completed projects incur maintenance and tax costs for the developers, which amount to about $5,000 a year per unit for a typical 99-year leasehold suburban condominium, he added.

And with several new launches of large suburban projects planned for the second half of this year, developers are racing to get rid of their unsold units before new competition arrives, said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Source : Straits Times - 24 Mar 2006

RIDING on the recent wave of collective sales, the owners of Beverly Mai have put their Tomlinson Road estate up for sale in the hope of raking in a cool $4.4 million each.

The freehold site was launched for public tender yesterday with a price tag of $238 million, or about $1,184 per sq ft per plot ratio (psf ppr) inclusive of a $16.8 million development charge.

At this price, the 76,888 sq ft plot is set to become Singapore’s second most expensive collective sale site.

Eng Lok Mansion at Napier Road was sold earlier this month at an all-time high of $1,218 psf ppr.

Beverly Mai is located opposite City Developments’ St Regis Residences, whose upcoming launch is expected to boast record-breaking prices of up to $2,600 psf.

Based on the last sale of a Beverly Mai unit at $2.5 million last August, each of the estate’s owners stands to gain a 60 per cent premium over what they would get if they had sold their units on the market.

About 85 per cent of the 52 owners have agreed to the collective sale, said the site’s marketing agent CB Richard Ellis in a statement yesterday.

A 36-storey project with 107 units averaging 2,000 sq ft each can be built on the site, which has a plot ratio of 2.8.

The tender for Beverly Mai will close on April 25.

Source : Straits Times - 23 Mar 2006

PRICES of Singapore’s most desirable homes - good class bungalows (GCBs) - have shot up by about 20 per cent in the first two months of this year alone and are set to climb further.

This follows a record year in 2005, when 104 GCB deals worth about $845 million were recorded, according to property consultancy Savills.

In a report yesterday, another property consultancy, Jones Lang LaSalle, said that the average per sq ft (psf) price of GCBs had increased to $476 psf by mid-February, up from $394 psf in the second half of last year, when prices first showed signs of picking up.

In the first half of last year, average GCB prices were languishing at $375 psf, it said.

And between 2002 and 2004, average GCB prices were just a little higher at about $385 psf, it said.

To qualify as a GCB, the homes must sit on at least 1,400 sq m, or 15,070 sq ft, of land.

They are found only in the 39 areas set aside for their construction, including Nassim Road, Leedon Park and Chatsworth Park.

But a new supply of qualifying land has come from the sub-division of large plots within these areas.

Jones Lang LaSalle’s head of research for South Asia, Dr Chua Yang Liang, said that at least 10 GCB deals have been done so far this year, including a deal for a 15,108 sq ft Ladyhill Road site that came with a house and was sold at $662 psf or $10 million. Just before that, a Bishopsgate site was sold at $579 psf or $9.8 milion.

Most of the deals done last year were between $6 million and $10 million. ‘As the economy picked up in 2005, more transactions above the $10 million mark were recorded,’ said Dr Chua. ‘GCBs are observed to be the first to react positively whenever there is a recovery in the property market.’

GCB buyers are mostly chief executives, high-end professionals and successful businessmen who have the advantage of better market knowledge to help them decide based on where they see the property and business cycles heading, said Dr Chua.

Indeed, said Savills Prestige Homes’ director, Mr Steven Ming: ‘GCB buyers are well-connected businessmen. Obviously, they see something in the market. They see that prices are rising.’

He expects prices to rise by 10 per cent to 15 per cent this year, on the back of an improving economy and the increasing rarity of good quality sites for sale. Knight Frank’s Mr Douglas Wong, who handles GCB deals, also sees a similar double-digit rise this year.

Said Mr Ming: ‘Prices are catching up. For example, in the Swettenham Road area, the GCBs there which cost below $7 million a few years ago are now going for over $9 million.’

In top addresses such as Bishopsgate and Cluny Hill, GCBs that cost around $580 psf last year could cross $600 psf this year, he said.

Source : Straits Times - 23 Mar 2006