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MCL Land Ltd, through its wholly owned unit MCL Land Development, has bought the Boon Teck Heights property off Balestier Road for $22.88 million.

The en bloc purchase price for the freehold property was arrived at after taking into account various commercial factors including the development potential, location of the property and the recent transacted prices for properties in the vicinity, said MCL Land.

The $22.88 million price tag works out to be $300 per square foot (psf) of potential gross floor area inclusive of development charges for the freehold property, BT understands.

This is slightly lower than the $344 psf per plot ratio City Developments paid for a combined en bloc purchase of Lock Cho Apartment, Comfort Mansion and a four-storey walk-up apartment building earlier this month. The three adjoining properties are in nearby Thomson.

The collective sale of Boon Teck Heights was carried out through a private treaty brokered by DTZ Debenham Tie Leung.

The 27,368 sq ft site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area). Analysts estimate that MCL Land’s break-even costs for a new apartment project on the site could be about $550 psf.

Boon Teck Heights, a 19-storey apartment building, is more than 10 years old and is located along Boon Teck Road, close to the Toa Payoh town centre and MRT station.

In a statement yesterday, MCL Land said that its offer for the site has been accepted by the majority of subsidiary proprietors holding not less than 80 per cent of the share value of the property.

MCL Land also said that the acquisition and development of the property will be financed by internal funds and/or bank borrowings.

The transaction is not expected to have any material effect on the consolidated earnings and net tangible assets per share of MCL Land for the financial year ending Dec 31, 2006.

Source : Business Times - 27 Apr 2006

A NEW hotel behind Novena Square is on the cards after the Government made available for tender the first hotel site this year.

Consultants envisage a four-star hotel with up to 400 rooms on the site at Sinaran Drive.

As the site is on a reserve list, the tender will not commence until a developer agrees to bid a minimum price that has been determined.

But market watchers expect keen interest in view of the recent pick-up in the hotel sector.

Located near two hospitals, the site is likely to appeal to hoteliers who also want to cater to health tourists, they said.

This 99-year leasehold site is one of three sites planned for release under the Government’s land sales programme for the first half of this year.

The other two are in backpacker haunt Bencoolen Street, and Clemenceau Ave/Unity Street.

The 5,788.8 sq m site has a gross plot ratio of 4.2, allowing it to generate a maximum gross floor area of about 24,313 sq m or 261,703 sq ft.

Property consultancy Knight Frank’s director of consultancy & research, Mr Nicholas Mak, expects a four-star hotel with 290 to 350 rooms on the site.

The site, he said, could attract bids of between $39 million and $55 million when up for tender.

Hospitality consultants HVS International’s managing director, Mr David Ling, said the site could accommodate a four-star hotel with about 300 to 400 rooms, and cost around $35 million to $45 million. There should be no lack of takers, he said.

‘The investment climate is good. Room rates have gone up by 15 to 20 per cent last year and we are expecting double-digit growth this year,’ said Mr Ling.

Occupancy has also strengthened, with four-star hotel occupancy at 85 per cent last year, up from the mid-70s in 2004, he said.

Four-star hotel room rates rose 11 per cent to an average $129 last year, he added.

‘We expect a surge in demand for the three- to four-star hotel market. The growth is in the regional tourist market, from China and India particularly,’ he said. ‘They tend to spend more on shopping than on accommodation. ‘

Source : Straits Times - 26 Apr 2006

AT $400 million, Lucky Tower will be the largest amount ever paid for a collective sale site.

This is the asking price that owners of the 91-unit condominium want for their 25-year-old building.

Located on Grange Road, the large 169,188 sq ft site has a potential gross floor area of 355,295 sq ft. At the asking price of $400 million, which includes a $20 million development charge, it will cost $1,126 per sq ft per plot ratio (psf ppr). This makes Lucky Tower cheaper than the record-breaking $1,218 psf ppr for Eng Lok Mansion (on Napier Road) which was sold in March. Being a smaller site, however, Eng Lok Mansion only cost $138 million.

Indeed, Lucky Tower will likely top the previous record of $315 million paid by Li Ka-shing’s Glenfield Investments for Cairnhill Court in 2000.

Jeffrey Goh, head of investment sales of Newman and Goh, which is marketing agent for Lucky Tower, said that owners stand to make 65-80 per cent more than if they sold their units individually.

Mr Goh said that 165 ’super luxurious’ units of about 2,000 sq ft each can be built. At an estimated price of about $2,000 psf for each unit, a new development could be worth $660 million. Yet, he believes that Lucky Tower has been ‘priced competitively’ compared to other recent collective sale sites.

Also for sale is the 33-unit Furama Tower on Leonie Hill Road. At 33,821 sq ft, it is a significantly smaller site and is expected to fetch $82 million or $952 psf ppr, including a $6.6 million development charge.

Ho Eng Joo, director for investment sales at marketing agent Colliers International, said owners will make 60-80 per cent more than the current market price of individual units.

Source : Business Times - 25 Apr 2006

Furama Tower going for $82m, Lucky Tower up for whopping $400m

TWO prime residential sites near Orchard Road have been put up for collective sale, but the record price being asked for one of them left some property experts shaking their heads.

The sites are the 33-unit Furama Tower in Leonie Hill Road, on sale for a relatively modest $82 million, and Lucky Tower, a potential $400 million Grange Road goldmine.

The latter comprises 91 units over 169,188 sq ft, including a shop, but market-watchers are sceptical about its whopping asking price, despite the prime location.

They cite signs that developers are baulking at acquiring increasingly expensive properties being sold en bloc.

‘Developers have a limited budget and appetite,’ said an industry source.

‘Developers can’t soak up all the plots out there at higher and higher prices,’ said another industry source.

‘Tender bids are not as aggressive as six months ago. Almost every developer has bought something in the past one to two years so they would be more cautious now.’

Lucky Tower could find itself in the super league of properties sold for over $1,000 per sq foot. Its asking price is at $1,126 on a per sq ft per plot ratio (psf ppr) basis, inclusive of a $20 million development charge.

That puts it above the $1,064 psf ppr price, or $266 million, SC Global paid for Paterson Tower last month.

Since February, three sites have been sold for over $1,000 psf with Eng Lok Mansion in Napier Road reaching $1,218 psf last month. This all-time high was likely achieved because the site is conducive for medical suites.

Lucky Tower is being marketed by its managing agent, Newman & Goh Property Consultants, in what is the firm’s first collective sale launch. The tender closes May 24.

Its breakeven is estimated at around $1,500-$1,700 psf. But nearby projects, such as The Grange, are selling for only around $1,500-$1,600 psf, said a source.

‘There are a lot of comparables in the Orchard Road area. Where Lucky Tower is, if you’re not careful, you’ll be walking into River Valley!’

But Newman’s head of investment sales, Mr Jeffrey Goh, is optimistic as foreign and local developers are keen.

Newman said Lucky Tower has an estimated value of $600 million and could accommodate 165 luxurious apartments costing around $2,000 psf each.

Mr Goh, who plans to advertise the site in Hong Kong, said a listed Hong Kong developer and a Dubai-based one have told him they are keen.

Meanwhile, Colliers International is putting Furama Tower up for sale at $82 million, or $936 psf ppr, including a $6.6 million development charge. Its tender closes on May 23.

While some experts talk of a more cautious market, the deals so far this year have been eye-catching.

Last week, Hilltops Apartments at Cairnhill Circle was sold for $294 million, or $951 psf ppr, putting sales this year at 20 deals worth $1.9 billion.

Compare this with last year when 49 deals worth $2.2 billion were done, according to Credo Real Estate, which specialises in collective sales.

Executive director Karamjit Singh said: ‘Developers and investors still have a lot of confidence in the high-end market, particularly in foreigner-led demand.’

But the pace at which deals are being done suggests a slowdown is on the horizon: ‘The market will likely take a breather in the third quarter.’

Until then, collective sale fever seems to remain unabated as sellers race to get the best offer.

‘Everybody is trying to test the market,’ said Jones Lang LaSalle regional director Lui Seng Fatt.

‘It has recovered but there is a fair bit of stock around. The sites that are priced more realistically will go first.’

Hitting the jackpot?

LUCKY Tower could find itself in the super league of properties sold for over $1,000 per sq foot.

Its asking price is at $1,126 on a per sq ft per plot ratio basis, inclusive of a $20 million development charge.

But observers say there are signs that developers are baulking at acquiring increasingly expensive properties being sold en bloc.

Source : Straits Times - 25 Apr 2006

The plot is expected to fetch $6m or $36 psf of potential gross floor area

THE Urban Redevelopment Authority (URA) yesterday released an industrial site at Woodlands Industrial Park. The 167,034 sq ft confirmed list site is being sold on a 60-year lease and is zoned for Business 2 use.

It has a 1.0 plot ratio (the ratio of potential gross floor area to land area). The tender closes on June 20.

Colliers International managing director Dennis Yeo expects the plot to fetch a price of about $6 million or $36 per square foot of potential gross floor area - which was the top bid that a plot at Woodlands Ave 4/Woodlands Industrial Park attracted at a state tender that closed in October last year.

Mr Yeo said the latest Woodlands site should attract demand, especially from industrial developers.

Singapore is still experiencing a glut of industrial properties, especially in Tuas, where there is over 10 hectares of either undeveloped or developed but unoccupied properties on sites sold by the state in the 1990s, according to Mr Yeo.

However, on an islandwide basis, occupancy of completed industrial and warehouse space has been picking up on the back of the improving economy, he says.

As well, industrial property developers do see money in developing sites like the Woodlands plot launched yesterday.

‘The investment is not that huge. All the developer needs to do is to make sure it gets it at a lower price than those developers who bought their sites at the peak of the market. As long as they can sell off their newer development to industrialists, they’re not really bothered by the industrial property glut elsewhere on the island,’ says Mr Yeo.

He also noted that an additional draw of the latest Woodlands site is that with a plot ratio of only 1.0, the plot can be developed into a one-and-a-half to two storey terrace, semi-detached or detached factory, which is still much sought after by industrialists - unlike the multi-storey developments that can be built in places like Tuas sold with higher plot ratios earlier.

The Woodlands plot released yesterday by the URA is the third industrial site the government has launched for tender under the confirmed list for the first half of this year.

The earlier two are in Tuas South Avenue 2/3 and Bedok North Avenue 4. Another two plots - at Serangoon North Avenue 4 and Ubi Road 2 - are slated for release in May and June.

Meanwhile, CB Richard Ellis said yesterday that average rents for high-tech and factory space increased in the first quarter of this year - marking the first gains since 2003.

Occupancy rates also continued to move upwards for all categories of industrial space in Q1.

Average monthly rents for prime factory space (covering locations like Alexandra and Henderson in the central area of Singapore) increased by five cents psf, for both ground and upper floors to stand at $1.25 psf and $1 psf respectively.

For high-tech space, average rent posted a quarter-on-quarter rise of almost 6 per cent to $1.85 psf in Q1.

However, average warehouse rents remained unchanged.

Source : Business Times - 25 Apr 2006