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A freehold apartment block in Nassim Road understood to be owned by motoring tycoon Peter Kwee has been put on the market with an indicative price of $30-32 million.

Nassim Gardens, located at No 49A to 49K Nassim Road, is a three-storey apartment block comprising 10 apartments with a swimming pool. The property is in the process of being refurbished. Mr Kwee has stopped work ahead of his planned sale of the property.

It will cost the buyer about $2-3 million to complete the refurbishment work. Adding this sum to a price of, say, $30 million for the property would give a per square foot price of about $1,680 to $1,740 for the block’s estimated total saleable strata area of about 19,000 sq ft.

‘On this basis, even a developer would find this project a very lucrative proposition,’ says Credo Real Estate executive director Karamjit Singh, ‘given that the high-end residential market is expected to surpass past record levels, going by recent successful tenders for prime redevelopment sites at Eng Lok Mansion at Napier Road and Angullia Mansion at Angullia Park.’

Credo, which is marketing Nassim Gardens, did not identify the owner of the property but BT understands that it is Mr Kwee.

Credo also expects interest from large families and groups of individuals banding together to buy Nassim Gardens. An additional draw is that foreigners are eligible to buy. A rule change in July last year allows foreigners to buy apartments in non-condo developments of less than six levels without the need to obtain prior approval.

Nassim Gardens has a land area of 45,006 sq ft and is located in a designated Good Class Bungalow area. ‘Even if the buyer disregards the existing incompletely refurbished building and redevelops it into Good Class Bungalows (GCBs), the indicative price range ($30-32 million) reflects a land price of $666 to $711 per square foot of land area,’ says Mr Singh.

He also drew attention to the record price of $647 psf fetched for a bungalow plot at Nassim Road in August 2003.

According to past reports, that record was set by none other than Mr Kwee himself when he sold a 39,383 sq ft site for $25.5 million to Oei Siu Hoa, a member of Indonesia’s Widjaja family and sister of businessman Oei Hong Leong.

However, market watchers say that it may prove costly to redevelop the Nassim Gardens site into GCBs. This is because the site can be carved up for only two GCBs given the minimum land area of 1,400 sq m or 15,069.5 sq ft stipulated by the Urban Redevelopment Authority.

Based on the expected price tag of $30-32 million, this works out to $15-16 million for the land cost alone per bungalow. Adding about $3 million for construction would result in a total development cost of about $18-19 million - higher than the $12-15 million for the price of a new GCB with a comparable land area in the location.

The tender for Nassim Gardens closes on April 28.

Source : Business Times - 20 Mar 2006

Paterson Tower in District 9 is sold for $266 million over the weekend

SEVENTY-TWO owners of apartments at Paterson Tower will walk away with an average $3.7 million each in the largest collective sale deal since 2000.

The District 9 site was sold en bloc for a whopping $266 million over the weekend to Mr Simon Cheong’s SC Global, a boutique developer known for prestigious luxury projects such as The Ladyhill in the Nassim Hill area and The Boulevard Residence at Cuscaden Walk.

The lucky owners each stand to rake in roughly twice what their apartments would have fetched had they sold them individually.

The sale is the biggest since Cairnhill Court was sold for $315 million at the height of collective sale fever in 2000.

And it was a case of persistence paying off for Paterson Tower residents, who unsuccessfully put their 29-year-old estate up for sale six years ago with a price tag of $240 million.

An owner who asked not to be named said he was ‘happy with the sale’.

But he added: ‘It’s not as much of a jackpot as people perceive it to be. Replacing this apartment in the same location will cost a lot of money. I probably will get an apartment outside of the Orchard Road area.’

The deal comes amid a rush of collective sales and launches this year, with at least 12 sites being snapped up since the start of this year.

Property owners are putting their apartments on sale as the market shows signs of recovering, in a bid to cash in on the improving sentiment.

Earlier this month, Eng Lok Mansion at Napier Road made waves as the most expensive collective sale in history in terms of unit land price, fetching $1,218 per sq ft per plot ratio (psf ppr).

Paterson Tower, which has twice the gross floor area of Eng Lok, will fetch $1,064 psf ppr.

The 19-storey block will be torn down to make way for a high-end luxury development with apartments selling at more than $2,000 psf, Mr Cheong told The Straits Times yesterday.

‘I think we paid a fair market rate for the site, as it’s one of the largest sites in the Orchard Turn area,’ he said.

With a potential gross floor area of 254,112 sq ft, the Paterson Tower site can accommodate a 24-storey condominium with about 108 units of 2,000 sq ft each, said real estate agent United Premas, which marketed the site.

Property consultants told The Straits Times yesterday that while high, the price fetched by Paterson Tower was no surprise. In fact, the sale price was below the residents’ asking price of $280 million.

Mr Lui Seng Fatt, head of investments at Jones Lang Lasalle, said: ‘The supply of prime sites in Districts 9 to 11 is still quite tight, especially sites that are sizeable enough to produce more than 100 units.’

Source : Straits Times - 20 Mar 2006

SC Global Developments will pay $266 million or $1,064 per sq ft per plot ratio (psf ppr) for 8 Paterson Hill, Paterson Tower.

In a press release yesterday, SC Global said that its offer, made by wholly owned subsidiary Grandon Pte Ltd, for the en-bloc purchase of all 72 units at Paterson Tower, had been accepted by a majority of unit owners.

Paterson Tower was put on the market in February and its marketing consultant United Premas had indicated an asking price of $280 million. The failure to achieve this price suggests that prices for such prime redevelopment sites may have plateaued.

Prices for prime redevelopment sites had been rising steadily this year. In February, Far East Organization paid $120 million or $1,058 psf ppr for Angullia Mansion, the highest price achieved since 1997. Then, earlier this month, Hasetrale Holdings paid $138 million or $1,218 psf ppr for Eng Lok Mansions, an all-time high for a collective sale site. Both properties are within a stone’s throw of Paterson Tower.

The price for Paterson Tower may not have broken any records but owners will still walk away with about double the market price for their homes. The current market price is about $1.85-1.9 million per unit.

The $266 million price tag includes the price for a 6,459 sq ft adjoining plot of state land. The combined land area is 121,006 sq ft and the plot ratio is 2.1. This will give the new development on the site a potential gross floor area of 254,112 sq ft and a building height of 24 storeys.

In line with SC Global’s niche development strategy, a high-end luxury residential development will be built.

The Boulevard Residences around the corner, which was also developed by SC Global, made the headlines last year when a three-bedroom unit sold for $2,200 psf in October, a record high.

Source : Business Times - 20 Mar 2006

Q I REFER to your article on reverse mortgages on March 12. My father, aged 70, is the sole owner of a three-room HDB flat. He paid for the flat fully about 30 years ago.

Currently, my mother and brother live with him. My mother and brother paid for the renovations, and have paid the electricity and water bills all these years.

If my father decides to reverse mortgage the flat to NTUC Income without his family’s knowledge, is there any law to protect the interests of his spouse or the occupiers of the flat?

Before a reverse mortgage is approved, is my mother’s consent needed?

When my father dies, will NTUC Income boot my mother and brother out of the flat?

A NTUC Income offers the reverse mortgage scheme to benefit older HDB owners whose savings have been depleted.

We start this new scheme with an interest rate of 5 per cent a year for HDB owners. This rate is much lower than rates for many other forms of debt in the market.

Under the scheme, owners mortgage their properties to NTUC Income and draw cash regularly as a loan from us. These regular cash advances are used to meet retirement expenses. They continue to retain ownership and stay in their homes.

When the application is made for the reverse mortgage, a family member of the applicant needs to be present, and to confirm that he or she is aware that the property will be placed under reverse mortgage.

The family member will also witness the acceptance of the Letter of Offer and take part in the execution of the mortgage documents.

When the property owner dies, we will discuss options with family members on how the deceased’s estate will settle the outstanding loan.

These options include allowing a family member to take over the loan and the property.

Any person who intends to take up a reverse mortgage should consider the interests of the spouse and children. He should consider if it is necessary to reflect their interests as joint legal owners in the property.

To learn more about reverse mortgages, you can call our hotline at 6788-1122 or check out our website at www.income.coop

We invite you and your family members to attend an educational session conducted by us. We will explain how the reverse mortgage works and answer your questions.

You might wish to seek independent professional advice regarding the legal rights of your mother and brother.

Tan Kin LianChief Executive OfficerNTUC Income

Q A PERSON dies with $800,000 worth of stocks in his Central Depository (CDP) account and $500,000 in cash.

In his will, can he instruct that someone, such as his stockbroker, sell off the entire portfolio within a year to maximise the gains?

If this is allowed, how is estate duty computed?

Is it done at the point of his death or when the portfolio is completely sold?

Assume also he has a new car worth $100,000. Is this to be sold immediately and turned into cash for tax purposes? Who decides the ‘right price’ to sell at?

What if he owns property worth $800,000 in the United States?

Must it be immediately sold, and who decides that the price offered is a fair price when it is finally sold after six months?

This person, 2 1/2 years before his death, gave $20,000 to his granddaughter and put it into her bank account.

Will it be considered as part of the taxable amount too?

As he is a good stock investor, can he instead open a joint CDP account and use this money to purchase stocks?

Suppose this amount has doubled at the point of his death. Will it be taxed too?

Finally, what happens to those items that were not specifically mentioned in the will, such as a stamp collection worth $50,000? Are such items taxable?

A Estate duty is payable on the aggregate market value of all Singapore assets (both immovable and movable) and movable assets outside Singapore belonging to a deceased at the date of his death.

His immovable assets (such as land and buildings) outside Singapore are not liable to duty.

Movable assets include cash, bank accounts, insurance monies, shares, CPF balances and motor vehicles.

A $600,000 estate duty exemption is given for all assets other than residential properties owned by the deceased. The exemption is not given for cash alone. That is to say, it does not matter if the assets are cash or non-cash in nature.

For estate duty purposes, the open market value of the assets at the time of death is used to determine the value of the assets. This is regardless of whether the assets are mentioned in the will.

In this example, the motor vehicle bought for $100,000 would have depreciated over time.

For the purpose of estate duty, the car as well as stamp collection would be valued at the open market value as at the date of death.

If the open market value of an asset is not readily available, a professional valuer may be engaged to assess its value.

The property in the US worth $800,000 is considered immovable property outside Singapore and hence not dutiable in Singapore.

If the US property is sold after death, proceeds from the sale would also not be included in the value of the deceased’s estate.

We assess all gifts made by a deceased within five years of his death. In this case, the $20,000 given away 2 1/2 years before death may be assessed under either of these situations:

The money was given as an outright gift. The sum assessed would be $20,000.

If the deceased had used the $20,000 to invest in stocks and shares under a joint CDP account, their market value as at the date of death would be subject to estate duty, whether it is higher or lower than the original amount invested.

Whether a person dies testate (with a will) or intestate (without a will), all his assets as at the date of death are subject to estate duty.

If there is a will, his assets would be distributed according to his wishes as specified therein. However, the executor cannot deal with the deceased’s assets, such as by selling the shares on the stock market, until the Grant of Probate is extracted.

If there is no will, the assets would be distributed according to the Intestate Succession Act.

The assets given in your example that are subject to estate duty are as follows:

Value of shares in CDP account: $800,000

Cash: 500,000

Car: Market value as at date of death (say, $80,000)

Cash gift to granddaughter: $20,000

Stamp collection: Value, as at date of death (say, $50,000)

Total value of assets: $1.45 million

Less exemption of $600,000

Net value = $850,000

Estate duty is levied on this $850,000 at 5 per cent = $42,500.

Mrs Lee Leng Kiong Director (Corporate Communications)Inland Revenue Authority of Singapore

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

Source : Sunday Times - 19 Mar 2006

Lippo said to be front runner, may use S’pore vehicle Auric Pacific in deal

(SINGAPORE) A new major shareholder is expected to emerge soon at Robinson, as OCBC nears a deal to sell its stake of up to 36 per cent in the retailer.

Sources say Indonesia’s Lippo Group, set up by Mochtar Riady, is the front runner - at least for now.

Market watchers suggest the price could be $7 per Robinson share or even higher. In the stock market yesterday, Robinson closed 10 cents lower at $6.45.

Assuming Lippo buys OCBC’s Robinson stake at $7 per share, and after stripping out the group’s investments and cash holdings totalling $218 million as at June 30, 2005 or $2.53 per share, it would be paying about 24 times Robinson’s pre-tax earnings from retail operations for the financial year ended June 2005.

Details are being worked out, including the vehicle Lippo will use to buy into Robinson and the size of the stake it will take.

One view is that it may acquire slightly more than 29 per cent - shy of the 30 per cent threshold that would trigger a mandatory takeover offer. OCBC Group, including its insurance units Great Eastern and Overseas Assurance, hold about 36 per cent of Robinson.

As for the vehicle that Lippo - which controls Indonesia’s largest retailer Matahari - will likely use to buy into Robinson, some market watchers suggest it could be Lippo’s Singapore-listed unit Auric Pacific, which is involved in the consumer and property businesses.

Lippo was one of four bidders that took part in a recent closed tender handled by Credit Suisse for OCBC’s stake in Robinson. The other three contenders were:

Tecity Pte Ltd, controlled by the family of the late Robinson and OCBC chairman Tan Chin Tuan, which already owns an under 5 per cent stake in the retailer.

PT Mitra Adiperkasa TBK, an Indonesian department and speciality store operator that is part of the Gajah Tunggal group.

A party from Dubai. Industry market watchers suggest the Dubai party could be members of the Al-Futtaim family, which has retail interests, or the Landmark Group, a retail group.

BT understands that Lippo will give an undertaking, even if it is not a legally binding one, that it will continue to operate the Robinson group’s established trade names - Robinsons, John Little and Marks & Spencer - and retain key staff.

Some industry observers think such an undertaking - to assuage concerns in some quarters about control of Singapore’s oldest retailer falling into foreign hands - may not be necessary. The thinking is that Lippo is probably looking to ride on Robinson’s historic trade names - not destroy them.

‘Robinson does not own its store space. So its main asset, other than cash holdings, is really its retail business including its established trade names and the service quality of its employees,’ said an experienced Singapore retailer.

‘It will be folly for Lippo or whoever the new investor is to destroy the trade names,’ he said. ‘Instead it will make good business sense to continue with the names and even grow them, may be bring them to Indonesia and other parts of Asia as offshoots of the original Robinson company in Singapore - unlike some of the copycat ‘Robinson’ stores that have sprouted in some parts of Asia.’

The view now in industry circles is that a foreign party taking the major shareholding in Robinson may not create a public relations nightmare for OCBC - unlike in 2003. Back then, the Robinson board - in anticipation of OCBC and GE divesting their shares, which amounted to a 38 per cent stake - announced a proposal to sell Robinson’s retail business. But some of Robinson’s long-time customers banded together to petition against this, and the scheme eventually fell through.

Such a problem is not expected this time around. ‘Just see how nobody batted an eyelid when Raffles Holdings sold its entire hotel business, including the historic Raffles Hotel along Beach Road, to US-based Colony Capital,’ said an observer. ‘And frankly, the shock effect of OCBC selling its stake in Robinson should be worn off by now. After all, it has been in circulation for more than two years now.’

Also, the Lippo Group and the Riadys are no strangers in the Singapore business scene. They have been stepping up their property presence here over the past couple of years. These interests include a substantial interest in 78 Shenton Way, bought in August 2004 and since renamed Lippo Centre, and a 55 per cent stake in the freehold 79 Anson Road office block acquired in January. Last month, Auric Pacific bought One Phillip Street in the Raffles Place area.

Lippo has also been investing in the Singapore residential market and has participated in all the high-profile land tenders in Singapore over the past year including the Business and Financial Centre and the Orchard Turn sites.

Source : Business Times - 17 Mar 2006