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MORE help is on the way for retailers in Housing and Development Board (HDB) shops.

HDB says that as part of its continuing efforts to help retailers cut business costs and improve efficiency, it will further relax rules on commercial properties. This will mostly help those renting shops from HDB.

By July 1, HDB will offer more rental rebates for shops effected by upgrading. Depending on whether works are carried out in shops, blocks or precincts, rebates have been increased to 75, 50 and 25 per cent. This represents increases of between 50 and 67 per cent.

Discharged bankrupts who rent from HDB will no longer need to pay two months’ rental deposit or provide two personal guarantors. Only a one-month rental deposit is required.

Tenants are not allowed to sub-let their shops and risk eviction for their third infringement. The penalty will now be reduced to a flat fee of $500.

To cut paperwork and time, tenants will only have to sign an acceptance form from HDB instead of two sets of tenancy agreements to renew their tenancy.

Tenants who wish to change their company’s name will not need to notify HDB through the HDB InfoWEB and pay an administration fee of $105. Under the revised procedure, they will only need to submit their latest Accounting and Corporate Regulatory Authority printout to HDB as long as there is no change in their shareholders and business registration number.

For owners of HDB shops, it will soon be easier to sell their property by lodging their resale via the HDB InfoWEB and obtaining the approval on the same day instead of waiting 14 days. The administration fee has also been cut from $525 to $105.

Source : Business Times - 20 Jun 2006

Owners asking for a total of $175 million or $1,143 psf ppr

AFTER a flurry of collective sales in the Cairnhill and Orchard Boulevard areas in recent months, en bloc fever has headed towards Orange Grove Road.

Orange Grove Condominium is the first property to be put up for collective sale in Orange Grove Road this year, says marketing agent Jones Lang LaSalle.

Market sources say the owners expect about $175 million, which works out to $1,143 per square foot of potential gross floor area inclusive of an estimated development charge of $6 million. The 98,953 sq ft freehold site at the corner of Orange Grove and Stevens roads is zoned for residential use with a 1.6 plot ratio - the ratio of potential gross floor area to land area - with a 12-storey height limit.

Analysts estimate a new condominium project on the District 10 site could break even at about $1,650 psf.

We expect keen competition for the site. There is a very limited supply of sites for sale in Orange Grove Road. Most of the stock is tightly held - there’s Shangri-La Hotel, RELC and several serviced apartments. Also, the location is close to Nassim Road, which is highly sought after,’ says JLL’s regional director and head of investments Lui Seng Fatt.

Other prime district residential sites now on the market include Habitat One with an asking price that works out to a $1,280 psf per plot ratio including DC, Nassim Park with an asking price of $1,218 psf ppr and a site at Lengkok Angsa in the Paterson Road vicinity at $1,184 psf ppr.

Assuming Orange Grove Condominium’s owners get the price they expect, they will pocket on average $5 million to $6 million per unit, with the biggest unit fetching about $10 million. These sums are almost 90 per cent more than the units would fetch if sold on an individual basis.

The existing development comprises two four-storey blocks housing a total 31 apartments and maisonettes with floor areas ranging from 2,917 sq ft to 7,276 sq ft.

The development is about 18 years old. A few Hong Kong investors collectively own four units in the development.  Currently, owners controlling more than 80 per cent of share values in the estate have agreed to a collective sale. The tender closes on July 19.

Source : Business Times - 20 Jun 2006

A RESIDENTIAL redevelopment site in Sinaran Drive that was put on the reserve list of the Government Land Sales programme nine months ago is being offered for sale after an unnamed developer committed two weeks ago to bid $173.8 million.

The plot, near Novena MRT Station, is 1.25 hectares and can be built up to a maximum gross floor area of 43,639 sq m (469,725 sq ft).

Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt reckons developers could bid bullishly as the Novena area is seeing upside from healthy prices in the nearby Orchard Road area.

As such, bids for the Sinaran Drive site could hit $500 per sq ft per plot ratio or $235 million.

Mr Lui believes the 99-year leasehold site could be a good hedge against the high prices that developers paid for prime Orchard Road sites recently.

A top-end bid of $500 psf ppr would mean a breakeven cost of about $900 psf.

This is high compared with other 99-year leasehold sites sold in the past year.

CapitaLand’s CRL Realty and Indonesia’s Lippo Group International paid $180 million, or about $350 psf ppr, for a site next to Redhill MRT Station, while a site near Tanah Merah MRT Station went to an NTUC Choice Homes/Wing Tai tie-up for $210 million, or $318.50 psf ppr.

Closer to Novena, however, freehold Newton One, by Lippo Group is said to be selling at $1,230-$1,420 psf.

Source : Business Times - 20 Jun 2006

OCBC Bank has appointed DTZ Debenham Tie Leung to auction off three freehold bungalows at Jalan Ampang in District 10 later this month. The expected price is understood to total around $14 million.

The bungalows, off Coronation Road West and near Astrid Hill, will be offered for sale individually at DTZ’s auction on June 29 at Amara Hotel.

The three bungalows - at 46, 48 and 48A Jalan Ampang - were in the news in April this year after the Moey family which had developed the properties was ordered to vacate them and hand them over to mortgagee OCBC Bank, to whom the Moeys owed about $23 million in all.

All the bungalows are three-storey properties. No 46 has a land area of 4,386 sq ft, No 48 has a land area of 5,783 sq ft, and 48A has 4,412 sq ft.

The bank is said to be expecting $4.3 million-$4.6 million for the two smaller properties and around $5 million for the third. These prices reflect prices ranging from $865-1,049 psf of land area.

It remains to be seen if OCBC will achieve its price expectations, given that these are considerably higher than the $597 psf and $771 psf fetched for two transactions in Jalan Ampang last year.

The three properties are part of a four-bungalow development embarked upon during the height of the property market in 1996 by Moey Keng Weng, former chief financial officer of Malaysia-Singapore Airlines (the fore-runner of Singapore Airlines), and his wife and daughter, as part of their retirement plan, according to an earlier report in The Straits Times.

Instead, the family was caught in the market downturn and Asian financial crisis. The family managed to sell one of the bungalows - No 46A - but were saddled with the remaining three. They occupied No 48 until April, when the court ordered them to vacate and hand over the three properties to OCBC.

The original loan on the properties was granted by Tat Lee Bank, which later merged with Keppel Bank, and the new entity Keppel TatLee Bank in turn eventually merged with OCBC Bank.

The family had tried a novel defence to avoid repaying the loan to OCBC, claiming it had been written off by Tat Lee before its merger with Keppel Bank and OCBC had no right to recover the loan because it was not a party to the original transaction.

OCBC argued that even if the debt had been written off, the bank could still sue to recover the money, as a write-off is merely an ‘internal accounting entry’ - not the same as ‘forgiving’ a debt. OCBC won its case and the court ordered that the family had to pay up.

Source : Business Times - 20 Jun 2006

THE owners of Balmoral Condominium, located next to Garden Hotel which City Developments (CityDev) bought in 1999, are teaming up to sell their homes.

Their asking price is nearly $70 million, which works out to around $750 per square foot (psf) of potential gross floor area inclusive of an estimated development charge (DC) of $4.35 million.

This is also about the same unit land price that CityDev’s $108 million acquisition worked out to in June 1999, during the previous collective sale fever boom. Both sites are freehold. At the peak of the property market in 1996, sites in the Balmoral area had changed hands for as high as about $940 psf per plot ratio including DC, recall property agents.

Balmoral Condominium is diagonally opposite the Belmond Green condo developed by CapitaLand and close to Balmoral Residences developed by MCL Land.

Market watchers expect CityDev, the listed property arm of Hong Leong Group, to be the top contender for Balmoral Condominium. The latest site is 61,199 sq ft and if CityDev indeed clinches it, the combined area of the two sites will be 163,382 sq ft. This can be redeveloped into a 12-storey condo with about 175 units averaging 1,500 sq ft.

Both sites have a 1.6 plot ratio (ratio of potential maximum gross floor area to land area). And with the property market looking up, the time could be ripe for CityDev to develop Garden Hotel, which the group is currently understood to be leasing back to seller Kechapi Pte Ltd on a year-to-year basis.

Kechapi is controlled by the Chua family, who once controlled Cycle & Carriage.

Balmoral Condominium is also a stone’s throw from Goodwood Gardens apartments developed by Trade and Industrial Development, a long-standing joint venture between Singapore’s Hong Leong Group and Japan’s leading real estate company, Mitsui Fudosan.

Balmoral Condominium is being marketed by DTZ Debenham Tie Leung through an expression of interest exercise that will close on July 19. Owners of the 45 apartments at Balmoral Condominium stand to get $1.3 million-$1.6 million per unit, or over $1,000 psf of strata area of their units. This is higher than the $700-$750 psf at which their apartments can fetch if sold individually in the current market.

‘Behind the site are the Goodwood Park conservation houses which should give ‘protected views’ to units in a new condo that can be built on the Balmoral Condo site,’ says DTZ Debenham Tie Leung director Tang Wei Leng.

Source : Business Times - 19 Jun 2006