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PROPERTY developer Hiap Hoe Limited said yesterday that it has bought a residential site at Cavenagh Road - which was put up for en-bloc sale in July - for $46.8 million.

The freehold site of some 43,100 square feet, which right now houses the five-storey Le Chateau consisting of 35 apartments and maisonettes, is in the prime District 9.

Provisional planning permission has been obtained for a residential development comprising three seven-storey and one five-storey blocks, with a total of 89 units.

‘As the development is located in the city area, the directors believe that the development would have substantial development potential,’ said Hiap Hoe in a statement to the Singapore Exchange.

Hiap Hoe bought the site through its wholly owned subsidiary Yong Hock Trading (S) Pte Ltd.

The purchase price was arrived at on a willing buyer-willing seller basis, said Hiap Hoe.

In addition to the purchase price paid, the site comes with a development charge (previously estimated to be $290,000) and state land alienation cost of $5.8 million.

Hiap Hoe’s final cost is estimated to be about $462 per square feet per plot ratio, said Colliers International, which marketed the property.

Colliers said that the site had attracted ‘keen interest’ from a number of parties before it was sold to Hiap Hoe.

The site is next to a piece of state land of about 11,400 square feet, which Hiap Hoe could choose to buy for amalgamation.

Hiap Hoe said that the purchase will be fully funded through internal funds and/or bank borrowings. The transaction is also not expected to have any material effect on the net tangible assets per share or earnings per share of the company for the current financial year.

The purchase marks the second one made by Hiap Hoe in the city area recently. In February, the company said it bought a plot of vacant land at Oxford Road for $12.5 million - also for residential development.

Hiap Hoe’s shares closed unchanged at 4.5 cents yesterday.

The company recently reported that revenue from the sales of residential development properties for the half year ended June 30 increased by 12.6 per cent to $15.2 million, up from $13.5 million in the same six months last year.

Source : Business Times - 1 Sept 2006

DC hike impact varies from $0-$50 psf per plot ratio

Property owners and developers are pondering their next move in the collective sale game as they weigh the impact of the hike in development charge rates on en bloc sales.

Will owners have to trim their price expectations? Or will developers bite the bullet and pay owners what they ask if the outlook for the high-end residential sector remains optimistic?

‘For deals under discussion, it’ll be a matter of who blinks first over the next month or so,’ said Knight Frank executive director Foo Suan Peng.

He and other property consultants whom BT spoke to last night said that they have some en bloc cases with little or no DC component - in which case the rate hikes have either zero or little impact. An example is Grange Tower, which has no DC.

As for collective sales with a more sizeable DC component as a percentage of total land price, the DC rate hike will jack up the total land cost to the developer, assuming that the owners stick to their reserve price. But the extent varies.

In the case of Ardmore Point in the Ardmore Park location where the DC rate has increased by 36 per cent, the total DC quantum will increase by $48 psf per plot ratio or $8.2 million to $30.9 million. That would be under 4 per cent of the total land value of the prime freehold site.

Knight Frank’s Mr Foo reckons yesterday’s DC hikes could raise total land cost by zero to 3 per cent for the cases that his firm is handling.

Giving the impact in terms of unit land price, Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt estimates yesterday’s rate hikes will translate to zero to $30 psf ppr in additional cost for the collective sale sites that his firm is marketing.

CB Richard Ellis executive director Jeremy Lake sums up the work ahead for property consultants: ‘We have to look at the impact of the changes and advise owners. Where the reserve price has been set, we’ve to see how developers react to the higher cost, whether it has any impact on their bids.’

‘Ultimately, the impact will depend on the appeal of the site, how significant the DC component is, and how realistic the owners’ price is,’ he added.

Mr Lui said that going forward, owners’ expectations would have to take into account the rate hikes, ‘especially in areas with ample supply of sites’.

Giving a developer’s perspective, City Developments’ group general manager Chia Ngiang Hong said: ‘The increase in DC rates will certainly have an impact on the assessment on all our future property acquisitions.’

As for its current land bank, the impact will be nominal as most of CDL’s projects in the pipeline have already secured planning approvals and have thus locked in the DC rate.

Putting things in perspective, yesterday’s DC rate hikes might not be such a bad thing after all.

‘They reflect the increased value of property, backed by a strong, thriving economy,’ as Mr Chia says.

Source : Business Times - 1 Sept 2006

RESIDENTS of some 2,300 strata-titled developments can expect better service from their managing agents (MAs) - thanks to the launch of the Singapore Standard for Performance of Managing Agents for Strata Residential Properties, or SS 519:2006.

The standard - a world first - aims to raise the level of professionalism of MAs.

‘While only 15 per cent of the population lives in private housing, the number of condominiums and private apartments being developed has increased in recent years,’ said Spring Singapore, which launched the standard yesterday with the Building and Construction Authority (BCA) and the industry. Typically, once residents start to move into a development, maintenance and care are handed over to a management corporation made up of unit owners. The corporation may then appoint an MA to oversee the management and maintenance of the estate, including common areas.

With the new standard, the industry hopes more management corporations will now hire MAs. Areas covered under the standard include professional ethics, and duties like the protection of funds, fair dealing, and administrative, accounting, financial, consultancy and other services.

Source : Business Times - 1 Sept 2006