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14 lots are up for sale, expected to fetch $350-$370 psf

ALMOST four years after 24 units at the Automobile Megamart Ltd (AML) were put up for auction, the remaining 14 unsold units will again go under the hammer this Friday.

Among those up for grabs are four ground floor car showroom units. Bigger than the used car display lots on the upper floors, they are expected to fetch between $350 and $370 per square foot, according to industry sources. This works out to about $1.10 to $1.15 million for a unit of 3,089 square feet.

One of the showrooms is smaller at 2,798 sq ft, but it has good frontage as it faces the busy Eunos Link and Ubi Avenue 2 junction.

Also available are three adjoining car accessory shops and a food court on the ground floor; five used car display lots on levels four and five; and three lots of offices on three floors.

The auction is being handled by Colliers International, as was the first one in November 2002. Executive director and veteran auctioneer Grace Ng will be conducting it at the AML building’s multi-function hall on the sixth level.

Colliers declined comment on prices when contacted. But market watchers expect interest to be high as the lots come with relatively attractive yields.

The units have a 30-year tenure from July 19, 1996. All have existing tenants, unlike those units sold earlier. In addition, the transacted prices in 2002 were higher. For example, a 2,798 sq ft ground floor showroom was then sold at $1.335 million, which netted a yield of 9 to 10 per cent.

Current expectations have been revised to maintain a similar yield at 10 per cent as it was four years ago.

‘At $9,000 in rental per month, it is seen as a good investment,’ said one source, adding that the owners were taking advantage of the ‘more buoyant market’ to sell.

The properties are jointly owned by the 71 shareholders of AML. The shareholders are used-car dealers who came together and bid $41 million for the site a decade ago.

They invested about $50 million more to build an eight-storey car retail centre - the biggest in Singapore.

When it opened in mid-1999, AML offered a net floor area of 30,260 sq metres with 11 new car showrooms and 80 second-hand car lots, with 71 of the latter sold. The rest, including the upper office floors, were jointly owned by AML.

Source : Business Times - 19 Jul 2006

THE Strata Titles Board (STB) yesterday gave the order for sale of Amberville in the Katong area.

This marks the first collective sale of a privatised HUDC estate to be approved by STB, which has to give its nod for all en bloc sales that do not have owners’ unanimous consent. Rodyk & Davidson represented the majority owners/sellers of Amberville. The estate comprises 168 units, and owners of eight units had objected to the collective sale to Far East Organization for $183 million.

The deal, announced in January, works out to a higher-than-expected unit land price of $396 per square foot per plot ratio, inclusive of two payments Far East will have to make to the state - an estimated development charge of $35.2 million and a further payment of $23.8 million to top up the site’s lease from the remaining 71 years to the original 99 years.

Since Amberville, the only other privatised HUDC estate to be sold is Waterfront View facing the Bedok Reservoir. It has been sold to a joint venture between Far East and Frasers Centrepoint, although this will be subject to STB’s approval.

The collective sale of Gillman Heights in the Depot/Alexandra roads location is being launched today.

Other privatised HUDC estates where collective sales are being worked on at various stages include Minton Rise, Farrer Court, Pine Grove, Laguna Park, Lakeview and Tampines Court, say property agents.

Source : Business Times - 19 Jul 2006

Tipped to do better on takings in hotel, retail, office and residential sectors

INVESTMENT bank UBS reckons prospects for Singapore’s property sector are the best ever.

In its July issue of Singapore Analyser, the bank identifies City Developments, CapitaLand, The Ascott Group, Suntec Reit, CapitaMall Property Trust and CapitaCommercial Trust as its top picks in the sector. These six stocks especially are expected to do well on the back of better takings in the hotel, retail, office and residential sectors.

For the residential sector, UBS expects the high-end to continue improving, with prices appreciating 5-10 per cent - after rising 15-20 per cent in the past 18 months. ‘This is driven by a robust rental market and influx of foreign demand for prime residential sites,’ say analysts Charles Neo and Regina Lim.

Similarly, prices are projected to grow in the office market. UBS thinks the shortage of office space will support a rise in rentals from the current $5.60 psf per month to exceed the 1996-peak of $10 psf per month. Island-wide occupancy is also expected to continue rising and reach the 1995 peak of 94 per cent.

Retailers will also have cause to cheer, UBS predicts. ‘We estimate retail sales to increase 3-4 per cent per annum in the next five years,’ it says. ‘ Given the expected 5-7 per cent per annum growth in tourist arrivals and 10 per cent per annum growth in tourist expenditure, we expect tourist expenditure on shopping to increase from 12 per cent of total retail sales currently to 16 per cent by 2010.’

But retailers will be paying higher rents to mall owners. ‘In the next three years, there is little new retail supply in the Central Area and we expect retail rentals to increase 3-5 per cent per annum,’ UBS says.

However, from 2009, about 2 million sq ft of retail space will be developed in Orchard Road and the Marina Bay integrated resort, leading to the likelihood of the new retail sites in Orchard Road canibalising niche high-end retailers from the adjacent Ngee Ann City and Wisma Atria.

UBS also expects hotel room rates to keep increasing with more visitor arrivals. ‘With tourist arrivals growing 5-7 per cent per annum but hotel rooms growing by around 2 per cent per annum until 2009, we expect hotel occupancies to be very tight and that hotel room rates should increase steadily over the next three years,’ it says. ‘Current hotel room rates are still very competitive, especially against comparable cities in Asia.’

Despite optimism on all fronts, UBS still has a ‘neutral’ call on the real estate sector in Singapore. Developers and Reits remain the sectors most sensitive to concerns of substantially higher US interest rates.

The bank is more optimistic about the financial and diversified industrial (which includes offshore) sectors, with ‘overweight’ calls on both. Together with property, technology and telecoms are rated ‘neutral’, while media and transport are rated ‘underweight’.

Source : Business Times - 18 Jul 2006

Increased demand from relocating expats, prime districts most popular

THE number of residential leasing transactions increased to 8,807 over the first three months of this year. This represents a 15.8 per cent increase compared to the same period last year when the number of transactions was 7,599.

And according to Savills Singapore senior manager Wallace Chu, there have been 3,284 leases registered in April and May so far. ‘These are just the preliminary numbers and I am confident the final figure for Q2 could top the previous quarter,’ he said.

Mr Chu said that Districts 9, 10, 11, 15, 16 and 21 are the most popular residential districts among lessees. An analysis based on the latest full-year figures in 2005 by Savills revealed that District 10 registered the most leases - 17 per cent or 5,887 out of a total of 33,874.

District 15 - which includes Katong, Joo Chiat and Amber Road - came in second with 3,872 transactions, beating District 9’s 3,474 leases. Mr Chu said one explanation for District 15’s popularity could be the sheer number of developments there.

The most expensive homes for rent are in District 10 with developments like Ardmore Park, Spring Grove and The Wilby Residence fetching average rents of $48.64 psm pm, $32.17 psm pm and $34.12 psm pm (as of Q1 2006) respectively.

The Bayshore, costing $17.24 psm pm in District 16, had the most number of units leased - 75 units. Valley Park ($26.99 psm pm) in District 10 had 71 units leased and Aspen Heights ($30.08 psm pm) in District 9 had 66 units leased.

Rents also depend on the age of the development, and Mr Chu noted that the rental gap for developments less than five years old and those older than five years has ranged between 33-38 per cent for the last seven quarters.

Mr Chu said that the increase in leasing activity is due in part to the number of expatriates in Asian countries like Hong Kong and Japan relocating to Singapore. ‘They come from sectors like banking and R&D,’ he said. Based on Savills’ own data, Mr Chu said that these expatriates are senior executives with housing allowances of at least $15,000 per month.

With increased housing allowances, Mr Chu said that expatriates are looking for larger apartments and landed property.

He said that the volume for detached and terrace houses was 20 per cent more in the first quarter of this year than in the first quarter of 2005. He added that apart from the prime districts, landed property in Districts 15 and 16 were also popular with expatriates.

Those keen on buying property as an investment will be interested to know that gross rental yields are on par with Hong Kong at between 3.5-4.5 per cent. Those with a higher appetite for risk may want to consider China; Mr Chu said yields in Shanghai are 7-8 per cent.

Source : Business Times - 18 Jul 2006

It will still proceed with October launch of Ardmore II on Habitat II site

WHEELOCK Properties (Singapore), which has just bagged the Habitat One site along Ardmore Park, is eyeing adjoining properties for a bigger project.

‘If we’re approached by the owners of the adjoining sites, we’ll look at buying them. If not, we’ll go ahead with redeveloping the Habitat One site on its own into a 68-unit condo named Ardmore III. We’ll probably launch it in 2008,’ Wheelock CEO David Lawrence told BT yesterday.

Wheelock will roll out its 118-unit Ardmore II condo next door in October on the amalgamated Ardmore View and Habitat II site - instead of holding back the freehold project and enlarging it by further merging the site with Habitat One.

‘We’ve so many people waiting to buy Ardmore II, we’re going ahead with launching it in October. The average price will be $2,250 psf for the apartments, all of which will be 2,018 sq ft units with four bedrooms,’ Mr Lawrence said.

Both Ardmore II and Ardmore III will be 36-storeys high.

Mr Lawrence did not identify the properties next to Habitat One that he’s keen to buy, but market watchers observe these would include Heritage Apartments, developed by the Fu family of listed Hotel Properties Ltd (HPL), and The Vantage. Wheelock is a substantial shareholder of HPL.

Mr Lawrence also summed up the group’s upcoming residential project launches - Ardmore II this year, followed by 338 apartments on Scotts Road in 2007, and two projects in 2008 - Ardmore III (on the Habitat and any adjoining sites Wheelock manages to buy) and Orchard View at Angullia Park.

The last will be a 36-storey tower with 31 apartments - all around 2,600 sq ft each. It will most likely be launched as a completed project, given the limited number of units. As well, Wheelock hopes to time the project’s launch around the completion of the landmark development that will come up on on the nearby Orchard Turn site.

Wheelock’s Scotts Road project - which will come up on the The Ascott Singapore/Scotts Shopping Centre site - will have 338 apartments comprising, one, two and three-bedroom units, built above a luxury retail centre.

Wheelock yesterday announced that it had inked a deal with majority owners of Habitat One to buy their 54,980 sq ft freehold site in the prime Ardmore Park location for $180 million, confirming BT’s story. Knight Frank brokered the deal.

The price works out to a record $1,228 psf per plot ratio inclusive of a $9.1 million estimated development charge.

Wheelock may buy a small adjoining strip of state land of about 5,388 sq ft - if the Singapore Land Authority is willing to sell it. Acquiring the state land will help lower the unit land price of the Habitat One acquisition by about 6 per cent to $1,155 psf ppr.

Mr Lawrence says Wheelock’s breakeven cost for a new luxury condo project on the site will be about $1,900 psf.

‘Ardmore Park is the best location in Singapore. It’s just like buying at The Peak in Hong Kong or Mayfair in London. Markets go up and down, but these remain the best sites and, long term, you’ll make money. We are very confident buying this site.’

Source : Business Times - 18 Jul 2006