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One is an en bloc offer at $110.6m, the other a hotel plot from URA

EVEN as some market watchers wonder if developers’ appetite for land will be hit by the stockmarket rout, new sites continue to be rolled out.

The latest offerings include a 44,663 sq ft freehold site at Paterson Road/Lengkok Angsa being offered by collective sale, and a 99-year hotel site along Unity Street/Clemenceau Avenue on the government’s reserve list offered by the Urban Redevelopment Authority.

The Lengkok Angsa site, currently occupied by 14 houses, has an asking price of $110.6 million or about $1,184 per square foot (psf) of potential gross floor area including an estimated $421,000 development charge.

This matches the unit land price that Hotel Properties paid for last month’s collective sale of Beverly Mai at Tomlinson Road.

In the case of the latest Lengkok Angsa site, if the developer succeeds in applying to buy a part of the road separating the houses, this is expected to lower the developer’s all-in unit land price to about $1,100 psf per plot ratio (psf ppr) inclusive of payment to the state.

Still, this is nearly 70 per cent higher than the $650 psf ppr all-in unit land price that Bukit Sembawang paid for the next door site of 32 houses in July last year.

This reflects the escalation in prime land values over the past 12 months as developers snapped up sites in response to strong demand for luxury homes led by foreign demand.

Whether new benchmarks in land prices will keep on being set remains to be seen.

The stockmarket slide is expected to be used by some developers as an excuse to offer lower land prices, some industry observers suggest.

‘This is part of the posturing process. But it’s still early days. So far, nobody has panicked,’ said a seasoned property consultant.

‘However, moments like these give everybody a time to take a breather and take stock. Lately, the prices that developers have been paying for land does not leave them with much of a profit margin. It’s based on future price increases.’

Notwithstanding this, if developers bite at the latest Lengkok Angsa site and the owners of the 14 houses on the site receive their asking price of $110.6 million, they will reap a collective sale premium of more than 100 per cent.

The site is zoned for residential use with a 2.1 plot ratio (ratio of potential gross floor area to land area).

There is a 24-storey maximum height.

The second site on offer is a 42,503 sq ft hotel plot at Unity Street and Clemenceau Avenue, with a 2.8 plot ratio.

This translates to a maximum gross floor area of 119,006 sq ft.

By some calculations, a hotel development on the site can yield about 190 rooms.

The maximum height for the new development is four storeys fronting the Singapore River, with a higher limit of 10 storeys away from the river.

A hotel consultant said that the site could attract new players into the market given the shortage of hotel development sites.

However, she said that it would be difficult to forecast how much potential bidders would be prepared to pay, as this depends on how they deal with the restrictions like the four-storey height limit next to the river.

Another drawback is the site’s configuration.

There is just a small frontage on the Singapore River, and most of the site faces either a busy stretch of Clemenceau Avenue or Unity Street, say market observers.

This is the second of three hotel sites on the government reserve list for the first half of 2006 that have been made available for application by developers.

The first, at Sinaran Drive in the Novena medical hub, was made available last month.

The final plot, in the traditional budget hotel/backpacker haunt of Bencoolen Street, will be offered next month.

Being reserve list sites, they will be released for tender only upon successful application by developers undertaking to bid minimum prices acceptable to the government.

Source : Business Times - 24 May 2006

Price tag of $80.5m to $83.5m expected

A 69,189 sq ft freehold site in the Chatsworth Good Class Bungalow (GCB) area has come on the market with an expected price tag of $80.5 million to $83.5 million.

At present, 25 townhouses stand on the site - at Nos 2 to 50 Bishopswalk - and their owners have decided to band together for a collective sale.

Although the site is within the Chatsworth GCB area, it may be developed into low-density housing with a maximum 1.4 plot ratio - the ratio of potential gross floor area to land area - under Master Plan 2003. Observers suggest this is in keeping with the existing development on the site.

DTZ Debenham Tie Leung, which is marketing the property, says the site can be redeveloped into a low-rise condo with about 43 units averaging about 2,000 sq ft. Alternatively, developers may consider developing 16 strata bungalows.

An estimated development charge (DC) of $8.45 million is payable for either redevelopment scheme. The $80.5 million to $83.5 million being sought by the owners works out to a unit land price of about $920 to $950 psf of potential gross floor area inclusive of DC.

The breakeven cost for a luxury low-rise condo could be about $1,400 psf, and if the developer opts for the alternative of 16 strata bungalows, the breakeven cost would work out to about $6.5 million per bungalow.

DTZ is marketing the site through an expression of interest that closes on June 14. Developers may make an all-cash offer or offer replacement units in a new development to the sellers, or come up with a combination offer.

Based on their asking prices, owners of the existing 25 townhouses stand to walk away with $3.2 million to $3.3 million per unit, representing a premium of about 50 per cent on the current value of their townhouses if sold separately.

Source : Business Times - 23 May 2006

MAPLETREE Logistics Trust Management (MLTM), manager of Mapletree Logistics Trust (MapletreeLog), yesterday said it signed a put and call option agreement to buy a warehouse in Paya Lebar Industrial Park for $38 million.

The deal, done through MapletreeLog’s trustee HSBC Institutional Trust Services (Singapore), is structured as a sale and leaseback transaction. The seven-storey warehouse building will be leased back to the vendor for five years, with an option to extend for another term of up to five years.

The Paya Lebar property is currently undergoing some upgrading works which are expected to be completed in the third quarter of this year. It has a gross floor area of about 23,367 square metres which sits on leasehold land covering an area of about 8,968 square metres. Lease tenure for the land is expected to expire in 2053.

MLTM said yesterday that the deal will be accretive to MapletreeLog’s distribution per unit (DPU) and the pro forma financial effect of the acquisition on the DPU for the financial year ended Dec 31, 2005 would be an additional 0.14 Singapore cents per unit.

MLTM chief executive officer Chua Tiow Chye said in yesterday’s statement: ‘Beyond the initial accretion, the rental escalation built into the lease agreement for this property adds moderate increase to the steady base of rental cashflows - a feature typical of our Singapore assets.’ The acquisition is expected to be completed in the third quarter of this year and is likely to be funded entirely by debt.

Source : Business Times - 22 May 2006

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

A STAGGERING $16 million for a condo apartment - that is what one of the super-penthouse units at SC Global Developments’ luxury development The Boulevard Residence fetched.

The buyer, a foreigner, heads an international hedge fund which will be setting up an office in Singapore.

For the 7,000 sq ft penthouse, it works out to $2,286 psf - which is still lower than what other units in the development fetched previously.

But because of the sheer size of the unit, industry watchers said that the $16 million could be the highest ever lump sum paid for a condo apartment.

The Boulevard Residence, branded simply as BLVD, has two super penthouses and two junior penthouses of 4,000 sq ft each in addition to 42 smaller units of about 2,000 sq ft each.

The development is at Cuscaden Walk, near the prime Orchard Road shopping belt.

Negotiations are going on with a potential foreign buyer for the sale of the second super-penthouse, said SC Global which is controlled by Simon Cheong.

Both junior penthouses were sold last year for more than $6 million each. To date, about 10 units in the development remain unsold, BT understands.

Since BLVD was launched in January 2003, prices have averaged $1,500 psf. But since last October, four of the smaller units have been sold for more than $2,000 psf. The last sale in February 2006 was at $2,329 psf, said SC Global.

Joseph Tan, a director at property services company CB Richard Ellis, said that the prices are comparable to what luxury penthouses were fetching during the peak of the property market in the mid-90s.

‘The high-end market is fairly active now and prices here are still more attractive than in other parts of Asia such as Hong Kong,’ he said.

And there have been quite a few buyers of late looking specifically for penthouses, said Knight Frank’s executive director Peter Ow.

‘The buyers are looking for quality and are willing to pay,’ he said.

Source : Business Times - 18 May 2006