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The Arc sees strong foreign interest; Yishun houses also launched this week

BS Capital’s The Arc at Draycott luxury apartment project and Allgreen Properties’ The Shaughnessy cluster housing development in Yishun are being officially launched this weekend, marking the start of ad campaigns, following earlier previews.

BS Capital has sold 39 of the total 58 units at its freehold project, The Arc at Draycott, for about $1,700 per sq ft on average since November/December last year when it first marketed the project in Hong Kong and Jakarta.

It is now raising the average price for the remaining 19 units to about $1,800 psf.

Foreigners are understood to have bought about 60 per cent of the units sold so far in the 36-storey development.

The 4,144 sq ft duplex penthouse was sold for $7.25 million to a Pakistani investor, who also bought another apartment in the development. A Hong Kong family bought five units.

The project has also seen strong interest from British, French, German, New Zealand and Indonesian buyers.

‘We have received a very encouraging response from buyers around the globe during our soft preview,’ BS Capital’s CEO Chin Teck Chuan said in a statement yesterday. CB Richard Ellis and Savills are jointly marketing The Arc.

The remaining 19 apartments in the project are mostly two or three-bedroom units with prices ranging from $1.9 million to $2.5 million.

BS Capital is developing The Arc at Draycott on the former Falcon Crest site which it bought in 2004 for $40 million through a collective sale.

That price worked out to $671 psf of potential gross floor area inclusive of an estimated development charge of $11.25 million. The breakeven cost was reported at about $1,000 to $1,100 psf at the time.

Over in the Yishun area, Allgreen is also raising the average price of The Shaughnessy, a 99-year leasehold strata terrace housing project, from $245 psf during the preview in October last year to $250 psf for this weekend’s official launch.

It is releasing another 28 units now after selling all 50 units which it had earlier released during the preview.

The project comprises a total of 254 units of three-storey strata terrace houses which come with a roof garden plus a basement.

The strata areas of the units range from 3,250 sq ft to 4,300 sq ft, says marketing agent DTZ Debenham Tie Leung. Prices range from $790,000 to $890,000 per unit. The developer is offering buyers a deferred payment scheme.

BS Capital is also expected to release later this year a 43-storey development in the Shenton Way area called The Lumiere.

The CBD apartments will offer a ‘home-office living concept’. BS Capital will develop the project on the site currently occupied by the HMC Building at Mistri Road.

Source : Business Times - 9 Mar 2006

IN a further sign of the recovering property market, the Urban Redevelopment Authority’s (URA) successful public auction of 11 parcels of unrestored conservation shophouses yesterday not only drew strong bidding, but the prices fetched were also higher than those in the last auction in May 2005.

The highest price per square metre (psm) then was $4,735.06. Yesterday, the top price was $6,438.74 psm. That winning bid came from Kim Eng Holdings’ managing director Ooi Thean Yat Ronald Anthony, who paid $1.86 million for a shophouse with an area of 288.1 square metres. The shophouses on offer for both auctions are in the same area - the Kampong Glam conservation area, around North Bridge Road. All are zoned for commercial use and are between 94.7 and 288.1 sq m. Buyers will have to restore the shophouses, which are sold on a 99-year leasehold tenure.

At yesterday’s auction, slightly over a hundred bidders turned up at the URA Centre for the four-hour event. Observers said that competition for each parcel was intense. Corner parcels also seemed more popular.

A bidder who bought three of the shophouses was Shriniwas Rai, believed to be the veteran lawyer and former nominated member of parliament. He could not be contacted for comment last night. Mr Rai paid a total of $1.36 million for the three shophouses, paying between $3,126.17 and $4,554.87 psm for them.

Source : Business Times - 9 Mar 2006

Market is segmented and upswing confined to selected projects, say property watchers

HOMEOWNERS thinking about cashing in on their properties through the hot collective sale market should not assume that every sale would fetch handsome returns.

Property consultants say that despite the recent highs reached for collective sales of properties, it is not an across-the-board phenomenon.

The recent sale of Eng Lok Mansion along Napier Road made waves, as the freehold property went for $138 million or $1,218 per sq ft per plot ratio (psf ppr) - making it the most expensive collective sale site ever. Far East Organization’s $120 million, or $1,058 psf ppr land price last month, for Angullia Mansion also created a stir, as its price was 65 per cent higher than the $643 psf ppr that Wheelock Properties paid in December for Angullia View, just opposite Angullia Mansion.

A check of successful collective sales transactions that were publicly announced this year showed that over $1 billion worth of property, or around 10 sites, has been sealed to date. Over 25 sites have been launched for collective sale so far this year.

Owners excited

Knight Frank’s executive director Foo Suan Peng estimates that 50 to 60 estates are considering going down the collective sale route, although not all will eventually take off.

‘Because of a few high profile sales, owners are getting excited. Because they get excited, everybody starts exploring and putting their estates on the market,’ he says.

Investment sales of property are seen by developers and big investors as a bellwether of confidence in the real estate market in the medium to long term.

While there’s no denying that the market has taken a turn for the better, property watchers cautioned that it is still segmented and confined to selected projects.

As they say, property is all about location, location and location. But home sellers in the prime district 9 and 11 areas can’t guarantee that developers will necessarily bite when offers are made.

‘When you say prime, it must be around the stretch from Scotts Road and Orchard Road vicinity. Some district 9 and 11 are not that fantastic,’ Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt said.

He notes that some homeowners are seeking prices northwards of $1,000 psf ppr, which is not always realistic.

‘Angullia Mansion by itself has factors that others cannot provide, because of its address, its being next to Four Seasons Park, and so on,’ he explains.

But already industry insiders see a glut of collective sale candidates. ‘To a certain extent, developers are inundated with sites. Over the next few months, they will perhaps become more choosy and the success rate will decrease,’ cautions CB Richard Ellis’ executive director Jeremy Lake.

Still, developers will compete for good sites as they look to replenish their landbank, especially before land prices rise even further.

‘There’s strong demand for good sites, so there’s competition, which means that the price you pay may not be determined by what the owners want but what the next guy is going to bid,’ Mr Lake says.

Besides the sale of Amberville, also to Far East recently, Mr Lui expects collective sales of other HUDC sites to be tough as developers don’t favour large sites.

The strategy, he says, is for developers to go for sites with half a million sq ft of potential gross floor area or less, so that the project can be sold in one phase and the developers can move on to another project.

With the recent hike in development charge rates announced last month, property consultants say breakeven costs for developers are affected. The costs may be absorbed by the properties’ buyers for a coveted site, but sellers might be forced to bear part of the burden when the collective sale market becomes a buyer’s market.

Still, the consultants believe that the market fundamentals are there to allow the collective sales market to keep growing, albeit largely confined to the top-end market.

Foreign buyers

It helps that there is foreign buyers’ presence. Knight Frank’s Mr Foo believes that foreigners’ willingness to buy will boost developers’ confidence in offering higher land bids.

‘The presence of foreigners in the market, whether they be buyers of new units or whether they be buyers of land, is a sign that the market is strong,’ CBRE’s Mr Lake concludes.

Source : Business Times - 9 Mar 2006

BUKIT Sembawang Estates has snapped up Chez Bright Apartments at St Thomas Walk in the River Valley area through a collective sale.

The price it is paying is $54 million, or $625 per square foot of potential gross floor area inclusive of an estimated $6.25 million development charge.

The breakeven cost for a new apartment block on the freehold site works out to about $950 to $1,000 psf, say analysts. The owners of the existing 22 units at Chez Bright Apartments stand to get about $2.45 million on average, or 80 per cent more than what their units would have fetched if sold individually, says Jones Lang LaSalle regional director and head of investments Lui Seng Fatt, whose firm brokered the deal.

The 34,402 sq ft site is zoned for residential use with a 2.8 plot ratio. It can be redeveloped into a 36-storey project with about 67 apartments averaging 1,300 sq ft, according to JLL.

Bukit Sembawang Estates last month reported that its net profit for the third quarter ended Dec 31, 2005 surged to $21.8 million from $2.6 million. For the first nine months of its financial year, the property group’s net earnings rose from $7.2 million to $29.4 million.

Chez Bright Apartments is the fourth major property the group has bought after a seven-year hiatus. Last year, it bought Carlton Terrace on Holland Road, Woodleigh Grove and a site at Lengkok Angsa near Paterson Road comprising 32 landed houses.

As for JLL, this is the second collective sale it has sealed in a week. Last week, it announced the sale of Pacific Court in Pasir Panjang for $27.2 million to Far East Organization. The deal was the property giant’s fourth major acquisition since the start of the year - after Amberville, the former Glutton’s Square site, and Angullia Mansion.

Source : Business Times - 8 Mar 2006

MR NG Tiow Seng, 45, is sitting on what he hopes is a potential jackpot prize.

His home - a 1,700 sq ft walk-up apartment at Haig Gardens in Haig Road - is worth about $680,000. But he is hoping to get $1 million for it through a collective sale of the 16-year-old apartment block.

‘With the money, I can get a condo with better facilities such as a pool,’ said Mr Ng, an administrative manager.

He is one of the development’s 54 owners who have pinned their hopes on selling their apartments en bloc. He is the sales committee chairman.

Haig Gardens is among dozens of properties put on the market in recent months following several successful sales last year.

Collective sales of entire developments or estates promise owners a shot at a windfall of 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.

Collective sales were the rage in the 1990s property boom, but after the downturn in 2000, they slowed to a crawl.

They have returned with a vengeance since last year, when 49 sites were sold for a total of $2.2 billion, according to estimates from property consultancy Credo Real Estate.

That was a 10-year high in terms of the number of transactions, and more than tripled the 14 sales in 2004.

The result: More property owners want to sell en bloc. In the first two months of this year, at least 15 collective sales were launched and nine sites sold.

Last week, the freehold Eng Lok Mansion in Napier Road notched up the priciest collective sale yet when it sold for $138 million.

Its 64 owners will get about $2.16 million each, about twice the market value.

Market watchers note that the rush to clinch a deal this time round is also driven by anxiety among property owners that the current recovery in property prices may not last.

As Mr Anthony Low, who sits on the sales committee of 36-year-old Rose Garden in Katong, said: ‘En bloc is hot, and it is a question of who moves the fastest. You don’t know how long the interest will last.’

The development has 188 units, and most properties of that size typically take at least six months to get their act together. But his committee has met 10 times in three months and, so far, 76 per cent of the owners have said yes to a collective sale bid.

The figure is near the mandatory 80 per cent needed for an estate aged 10 years and above, before they can proceed. Estates under 10 years old require 90 per cent support.

‘We want to do it quickly because we already have offers,’ said Mr Low, a business development manager. So far, though, no developer has matched the owners’ asking price of $167 million.

For now, there is no slowing the pace of the action.

‘The collective sale market is very hot. Everyone wants to get in,’ said Mr Foo Suan Peng, executive director of property consultancy Knight Frank.

Besides private properties in the prime areas, former HUDC estates have also jumped on the bandwagon. These were estates built by the Government in the 1970s for middle-class residents whose incomes disqualified them for Housing Board flats, but who could not afford private property.

Many have now been converted to private estates. Former HUDC estates such as Gillman Heights, Minton Rise, Pine Grove and Farrer Court are giving developers more choices.

The 168-unit Amberville at Marine Parade, a former HUDC estate, was picked up by Far East Organisation in January for $183 million, more than the $171 million the owners had asked for.

The lucky owners are raking in an average of $1.089 million, or a whopping 85 per cent above the market value of their properties.

Far East stirred up the market further by paying $120 million last month for Angullia Mansion, off Orchard Boulevard.

That is a record-busting $1,060 psf, higher than the $1,020 psf fetched by the currently empty lot in Orchard Turn, at the junction of Paterson and Orchard roads.

With such going rates, it is no wonder that many owners are keen to sell en bloc.

‘Even if the market improves further, it will not be easy to get a 30 to 50 per cent premium for an individual property,’ said Nationwide Realty’s director, Mr Sam Tan.

Credo Real Estate, which specialises in collective sales, said that since late last year, it has been receiving an average of six enquiries a day from home owners, compared with the one or two calls previously.

‘Some days, we get up to 10 or 12 calls,’ said executive director Karamjit Singh.

But he warned: ‘Prices of prime land have already gone up 30 to 40 per cent in some areas. Sites are being put out very quickly, but developers will inevitably slow down their land acquisitions.

‘They will also slow down if their new projects do not sell as fast, since it is still unclear if the property market is poised for a broad-based recovery,’ he said.

‘In any case, the pace at which land parcels, including collective sales, have been selling over the last six months has been unnaturally high and is not sustainable.’

He predicted a slowdown in the collective sale market in the second half of this year.

Property consultants added that some owners may be asking for unrealistic prices.

‘Not all developers will share Far East’s optimism,’ said Knight Frank’s Mr Foo.

‘Everybody says Far East can pay, so let them pay. When prices go up too quickly, there is the concern of prices racing ahead of fundamentals. The question is: Will the run-up in prices last?’

With new land sites being offered, some developers are not prepared to pay the amounts which sellers ask.

Home owners such as 62-year-old part-time teacher Ted Han are aware of this reality, even as they aim for top dollar in a collective sale.

‘If developers have built up enough landbank, they won’t have the appetite to buy more even if the en bloc sites are good,’ said Mr Han, whose apartment is in the 36-unit Duchess Court in Bukit Timah.

At Haig Gardens, Mr Ng and his neighbours will be happy with a ‘a more reasonable’ $50 million - $12 million less than what they asked for in 1999 when they first tried to sell en bloc.

Keenly aware of the competition from other developments, he believed too that the property cycle has shortened. ‘If we don’t sell now, we may have to wait another three to four years,’ he said.

Source : Straits Times - 8 Mar 2006