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URA working with other agencies to seek investor feedback, interesting business concepts and ideas for 310 ha of land at Marina South

There is 310 ha (3.1 million sq m) of land at Marina South - and plans are under way to release it over time.

Minister for National Development Mah Bow Tan said yesterday the Urban Redevelopment Authority (URA) is working with other agencies to seek investor feedback and interesting business concepts and ideas for three sites there.

‘We will also identify other sites in the Marina Bay area for office and housing development and release them over time to meet demand,’ he said.

The three sites under review are for an international passenger terminal, a public attraction and a possible boutique hotel. No time-frame has been set for the release of the sites.

Speaking at the Singapore Institute of Architects 45th annual dinner, Mr Mah said a site next to the Garden at Marina South and the Marina Bay Sands would be ideal for a boutique hotel. The site will be connected to the integrated resort via walkways and to an adjacent future MRT station.

URA and Singapore Tourism Board (STB) are also studying a site at the southern end of Marina South for an international passenger cruise terminal and, depending on interest from developers, it could be complemented by a hotel, retail and entertainment facilities.

The third site is for a low-rise public attraction like a museum at the promontory in front of the upcoming Business Financial Centre (BFC).

Yesterday’s revelations took some property analysts by surprise. ‘There was no indication that the government even had these sites in mind,’ said Nicholas Mak, director of research and consultancy at Knight Frank. ‘Perhaps the authorities are experimenting with a new way to sell land.’

Recalling that the BFC site was initially made available for sale around 1998 but not sold until 2005, Mr Mak said releasing a site that garners no interest could have a negative effect.

He reckons a consultative approach to land sales is positive, but believes the industry, especially developers, would be concerned if it signals that more sites will be put on the confirmed list of the Government Land Sales programme.

Colin Tan, head of research at Chesterton International, said: ‘The invitation for concepts is probably the URA’s way of helping to decide if it should be more or less prescriptive in their release of sites and as to what can or cannot be done.’ But a degree of control is required, Mr Tan said. ‘Developers react to profits, and market forces may be such that only a single segment of the market may be adequately catered for. Who is going to cater to the other segments then?’

Notably, the suggested uses for the three sites would likely be less profitable than office or residential development.

Looking at the possible hotel site, Wallace Chu, head of research at Savills Singapore, said there is still huge potential for growth in this sector and the proposed site would suit a high-end branded establishment like the new Armani or Bulgari Hotels. ‘We don’t expect it to be big competition to the current players in the Marina area,’ he added.

As for putting a price on the sites, Mr Chu said: ‘The IR is the important factor in determining price movement in the central area for all property sectors. Whatever the price tag for the site, it will factor the effect of the IR.’

The site for the international passenger terminal could have more takers, as Genting International and Star Cruises are already said to be in talks with The Singapore Cruise Centre for such a development.

Based on the increasing number of cruise passengers, Mr Chu even thinks the market can support two terminals - one at Marina South and the other around Sentosa. The promontory is perhaps the least attractive site, and Mr Chu thinks it would be attractive only if the government provided some form of support. This might be developing plot ratio incentives or even financial support. The upcoming Singapore Flyer, where STB is the landlord, could be a possible precedent.

The three sites are, of course, just pieces of a bigger picture. Lui Seng Fatt, regional director (investment sales) at Jones Lang LaSalle, said: ‘The equilibrium of supply and demand will not be under threat if the growth projection of tourists’ arrival is achieved according to STB’s projection and the supply is phased to meet the demand of arrival over time.’

‘With all these developments it is logical to expect more sites to be released over time to complete the development of Marina Bay as the future hub of business and entertainment.’

Mr Mah also announced other attractions like the floating platform for next year’s National Day Parade and new areas for water sports yesterday. He said: ‘Marina Bay is Singapore’s city of the future.’

Source : Business Times - 28 Jul 2006

Market watchers expect Derbyshire Mansions to fetch about $50m

THE owners of Derbyshire Mansions in Thomson Road near United Square are teaming up for a collective sale for their 36,098 square foot freehold site.

Market observers expect the site to fetch about $50 million or $496 per square foot of potential gross floor area including an estimated $160,000 development charge.

The site is zoned for residential use with 2.8 plot ratio - the ratio of potential gross floor area to land area - and a 36-storey height limit.

This could yield up to 74 units averaging 1,300 sq ft, says Jones Lang LaSalle, which is marketing the property through a tender that will close on Aug 24.

Based on the $50 million price expectation, the proceeds for owners of the existing 33 units housed in a 12-storey block reflect a collective sale premium of about 60 per cent.

Another property put on the market earlier this week is a Good Class Bungalow at Bin Tong Park being offered by its owner, The Asia Life Assurance Society.

The vendor is part of the Asia General Holdings group, which recently sold Asia Insurance Building at Finlayson Green and Hotel Asia in Scotts Road to The Ascott Group, and White House Park Apartments in Stevens Road to Novelty Group.

The asking price for the Bin Tong Park bungalow is said to be $11.8 million to $12.3 million.

This works out to around $450 to $470 per square foot of land area.

A single-storey detached house stands on the 26,254 sq ft freehold site.

The tender for the property, which closes on Aug 21, is being handled by Credo Real Estate.

Source : Business Times - 27 Jul 2006

SINGAPORE Telecom is getting ready to launch a tender for 71 Robinson Road, which now houses Robinson Road Post Office and was formerly known as Crosby House, sources say.

And although SingTel reportedly secured provisional permission last year to redevelop the property into a slightly over 50 storey project comprising more than 300 apartments, six levels of car parks and commercial use on street level, market watchers now think potential buyers could consider redeveloping the site into a full commercial project instead.

The latter would enable a developer to ride on rising office rents amid tightening supply.

Analysts suggest the total land cost for the site could be about $110 million, reflecting a unit land price of about $400 psf of potential gross floor area.

These figures include the purchase cost payable to SingTel plus payments to the state for intensifying the use of the site and topping up the lease from the remaining 45 years to the original 99 years.

The site is now zoned for commercial use with an 11.2 plot ratio under Master Plan 2003.

URA’s provisional permission for a residential scheme with commercial use on ground floor was based on the same plot ratio - but is subject to the site being rezoned from commercial use to residential with commercial use on the first storey.

Based on an 11.2 plot ratio, a development can be built up to a gross floor area of 274,746 sq ft - reflecting a significant enhancement from the existing 99,383 sq ft.

BT understands that SingTel has appointed a property consultant to handle the sale of the leasehold property.

Sources tip the appointee to be Credo Real Estate, which handled the sale of SingTel’s Old Holland Road and West Coast road sites. Credo declined to comment yesterday.

71 Robinson Road has a land area of 24,531 sq ft. SingTel has been divesting non-core property to redeploy resources to its core telco business.

In February, SingTel sold the freehold former telephone exchange at 859 Old Holland Road for $30 million or $513 psf of net land area to a company whose ultimate shareholders include Indonesia’s Tjugito family, linked to the Eagle Indo Group.

The new owner plans a cluster housing project.

SingTel has also sold a leasehold site at West Coast Road to Frasers Centrepoint at a price that reflects an all-in land cost of about $220 psf per plot ratio inclusive of payments to state.

Another property that SingTel divested this year is a prime leasehold site at Hillcrest Road, sold to MCL Land in May for $102.5 million. MCL plans a cluster housing development.

Source : Business Times - 27 Jul 2006

Over 70 units in the 136-unit condo have been sold since November

WING Tai Holdings has sold 70-plus units at its Draycott 8 condo at prices ranging from $1,600 to $1,850 per square foot since it began previewing the development in November last year.

The listed property group now plans to officially launch the leasehold development - marked by the start of an advertising campaign - in late August, at a higher expected price range of $1,700 to $2,000 psf.

As well, the group has started to sell two-bedroom units in the condo, located in the prime Draycott Park area.

Wing Tai began selling the project in November when landscaping work was completed.

The project received its Temporary Occupation Permit in July last year

The 136-unit condo stands on a site with a remaining lease of about 90 years of the original lease of 99 years.

The development comprises three blocks of 24 storeys each.

Two of the blocks each have 44 four-bedroom apartments and two penthouses while the third tower comprises 20 two-bedroom units and 24 two-bedders with lofts.

Wing Tai told BT earlier this week that about half of the 70-odd units sold so far were snapped up by a US fund. The price is understood to be around $1,600 psf.

The company said the rest were bought by individuals from the United Kingdom, Australia, Denmark, France, Russia, Japan, Hong Kong, Taiwan, Indonesia, Malaysia and Singapore.

Wing Tai deputy chairman Edmund Cheng, pleased with the consistent take-up since the preview, attributes this to the development’s prime location, high quality and exclusive services, including a spectacular clubhouse said to be the biggest for a condo here, plus concierge services for residents.

Mr Cheng also believes that Draycott 8 has benefited from the ongoing collective sales of both freehold and leasehold properties in the neighbourhood in several ways.

First, it provides immediate replacement units to occupants of collective sale properties. And from the viewpoint of those investing in Draycott 8, the entry price level is lower compared with a freehold property, resulting in a higher yield on rental income.

Also, investors can eventually look to a collective sale of the estate as a strategic exit option, given the growing phenomenon of en bloc sales involving leasehold properties.

‘These factors, coupled with the changing mindset of buyers towards leasehold properties, bode well for Draycott 8,’ Mr Cheng said.

The Draycott 8 site has a remaining tenure of 90 years because Wing Tai had to hold back the project after it bought the plot for a record price at a state tender that closed in early June 1997 - on the eve of the Asian financial crisis.

Wing Tai paid $1,103.60 psf per plot ratio - the highest amount ever for 99-year leasehold residential land in Singapore.

BT reported in August last year that market watchers reckon Wing Tai could have written down the site’s land value to a level that reflects a breakeven cost of below $1,400 psf, after making provisions in financial years 1998, 1999 and 2002.

Source : Business Times - 27 Jul 2006

CPF Board approves 637 applications as at June 30, against 321 in December

MORE non-related singles have jointly bought property. According to the Central Provident Fund (CPF) Board, as at June 30, it has approved 637 applications from non-related singles wanting to use their CPF savings to buy private property together.

In October 2005, CPF told BT that it had received 159 applications. By December, the number of approved applications hit 321.

The number may not seem very big but CPF only started to allow non-related singles to buy private property with their savings in July 2005 as part of a basket of property-related measures.

Of these measures, the other significant change was that CPF savings could be used to buy properties with remaining leases of 30 to 50 years.

Previously, only private homes with remaining leases of at least 60 years could be bought.

On this change, CPF also announced yesterday that it has approved 29 applications for such property purchases in the same period.

Knight Frank director of consultancy and research Nicholas Mak said that the numbers in both cases are still not significant enough for the industry, including property developers, to ’sit up and take notice’.

‘It would be useful if CPF released more information on the demographics of these people. For instance, it would be interesting to know if they were retirees,’ he said.

He added that he believes these are buyers looking at mid-range developments because high-end buyers would not have problems financing a property purchase.

By Mr Mak’s estimation, the number of non-related singles using CPF savings amounts to only about 3-4 per cent of the number of total property transactions over the last 12 months.

Relaxation on the age of leasehold developments has also not generated many new buyers.

Jones Lang LaSalle regional director and head of investment capital markets Lui Seng Fatt said: ‘Financing providers, banks and finance companies included, generally assess the lending risk of such shorter lease properties more stringently.’

He added that the low numbers of buyers for old leasehold homes could also be due to its lower investment value.

Asked if recent en bloc sales of leasehold developments would change public perception, Mr Lui said: ‘Leasehold properties have been around for more than 30 years and buyers are generally familiar with them but the key issue is how much discount investors want for leasehold properties.

‘The 99-year leasehold properties in prime districts 9, 10, 11 and 15 are generally well received and do not have any difficulty in finding investors.’

The numbers, though small, are still worth noticing, not least because it reflects lifestyle trends.

Noting that couples buying Housing and Development Board flats have to be married, Chesterton International head of research Colin Tan said: ‘Actually the suburban condo market is very stable now and pretty affordable. It is a good opportunity to jump straight into the private sector without having to go through ownership of an HDB apartment.’

He did, however, say that he believes these couples probably intend to marry in the future.

‘Of course, there will be the odd case here and there - such as your gay couples,’ he added.

Source : Business Times - 27 Jul 2006