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Sales to private sector account for $3.67b

The government collected $5.8 billion from selling state land in the year ended March 2006 - more than double its $1.96 billion take the year before.

The Singapore Land Authority (SLA) - custodian of all state land and properties - revealed this in its latest annual report.

The bulk of the latest year’s bumper takings came from selling land to the private sector for a total of $3.67 billion, it said. Examples include the sale of the Business and Financial Centre site and the landmark Orchard Turn plot.

In addition, land sales to statutory boards, including Sentosa Development Corporation, Housing & Development Board, JTC Corp and PUB Corp, totalled $2.18 billion.

SLA does not retain the money it collects on the government’s behalf by selling state land.

But SLA does get to collect agency fees for some sales. Basically, it is paid agency fees for land it sells directly to the private sector or other government bodies.

However, it gets no fee if another statutory board - for instance, the Urban Redevelopment Authority or the Housing & Development Board - is appointed to market and sell state sites.

SLA’s latest annual report shows that agency fees increased slightly from $50.2 million to $50.8 million, partly because of higher fees from land sales.

But other fees and charges dipped from $32.6 million to about $30 million, mainly due to lower takings from survey inspection services.

As a result, SLA’s total income fell from $82.8 million to $80.8 million, which eroded its net surplus from $13 million to $9.8 million.

Other factors behind the lower bottom line were higher spending relating to agency functions and a slight increase in manpower costs. The latter went up from $30.6 million to $31.1 million, due partly to higher medical subsidies, long service awards and staff welfare.

There was also termination compensation of almost $500,000 as SLA outsourced some IT functions, such as management of scanned and microfilmed records.

SLA also reported a record volume of transactions for the year just ended for its Integrated Land Information Service (Inlis) which provides online searches on property ownership and information.

Source : Business Times - 28 Sep 2006

Tange Associates’ design exceeds URA height limit; special approval sought

OCBC is poised to make a decision soon on redeveloping the ageing Specialists’ Shopping Centre in Orchard Road, sources say - a move that will complete the rejuvenation of the area immediately around Somerset MRT Station.

Sources say retail tenants in the building - including Robinson group, which operates a John Little store - have been told to get ready to pack up by the middle of next year, as the bank prepares for various options, including complete redevelopment.

BT understands that OCBC has commissioned renowned architectural firm Tange Associates, which has come up with a design for a new project rising about 20 storeys on the Specialists’ Centre site and Hotel Phoenix plot behind it.

The tower, which is said to front Orchard Road and which will house hotel rooms, will stand above a retail podium, sources say.

BT understands it will be business as usual for Specialists’ Centre anchor tenant John Little, as operator Robinson group has made plans to move the outlet diagonally across the road to the former OG store’s location. The retailer will lease the space from OG group’s Tay family.

Some of the smaller tenants at Specialists’ Centre are also scurrying to nearby locations. Some plan to move to Orchard Plaza, which is undergoing a $6 million refurbishment. The tired-looking building will get a new facade and an internal make-over including new escalators, lighting and fancy toilets

Far East Organization, the original developer, retains some shop units in Orchard Plaza’s retail podium, giving it about 27 per cent of share value in the building.

Observers note that Tange Associates’ proposed design for the freehold Specialists’ Centre/Hotel Phoenix site exceeds both the 16-storey height limit the Urban Redevelopment Authority has set for the area, as well as the maximum plot ratio - ratio of potential gross floor area to land area - allowed for the site.

However, the proposal stands a chance of being approved by URA if it receives a recommendation from the Orchard Road Development Commission (Ordec) - an inter-government agency group set up last year that has been empowered to allow new projects that deviate from current planning parameters.

But to be deemed worthy of Ordec’s recommendation, proposals must create new, innovative buildings that will generate tourism and other economic spin-offs.

At 20 storeys, the proposed development will tower over neighbouring buildings planned on either side of the Specialists’ Centre. Far East Organization is developing a 10-storey mall on the former Glutton’s Square site, while Lend Lease is expected to build a mall up to six storeys high on the Somerset Central plot.

Industry observers reckon OCBC’s proposed redevelopment scheme probably also involves a much higher plot ratio than the maximum 5.39 allowed for the site - inclusive of bonus plot ratio for proximity to MRT Station - under Master Plan 2003 or the estimated 6.62 already tapped based on Specialists’ Centre/Hotel Phoenix’s existing GFA.

Property consultants say in such instances, URA would normally allow a new project to retain the existing GFA (based on 6.62 plot ratio in this case) even if it exceeds that allowed under the Master Plan. But BT understands Tange’s scheme involves an even higher plot ratio - possibly of around 9.0.

The scheme assumes the bank will tear down both Specialists’ Centre and Hotel Phoenix and develop a new mall and hotel project on the site. The Hotel Phoenix site is safeguarded for hotel use by URA, which means any new project on the site must have a hotel component.

However, OCBC’s plans are not cast in stone, sources suggest. ‘If for instance, URA turns down Tange’s scheme, the bank may decide to retain the hotel at the back and just do a massive refurbishment,’ an industry observer said.

OCBC spokeswoman Koh Ching Ching said yesterday: ‘We are certainly keen to consider all mutually beneficial possibilities which will help to strengthen Orchard Road’s appeal as a major retail, commercial and entertainment belt.

‘For our part, OCBC Bank intends to hold on to the Specialists’ Shopping Centre and Hotel Phoenix property for long-term investment. The property is in need of refurbishment and it may be appropriate to do so in conjunction with the new developments at the adjacent plots.’

Source : Business Times - 28 Sep 2006

Redevelopment of old office buildings set to slow with rebound in sector

WITH the rebound of the office property sector, redevelopment of old office buildings is likely to slow down with the few new residential apartments in the CBD becoming highly sought after.

One, The Clift, by Far East Organization (FEO) on the former NatWest Centre site, is already close to 50 per cent sold, and it has not yet even been officially launched.

FEO began preview sales of the 312-unit, 99-year leasehold development in July at between $1,050 and $1,100 per square foot, and sales have been so brisk that prices are expected to be jacked up when the project is officially launched.

The current average selling price is $1,200 psf with some units going for about $1,350 psf.

BS Capital will also launch Lumiere, formerly HMC Building, soon.

Its chief executive Chin Teck Chuan noted that the office market has picked up much more quickly than the residential one, making redevelopment of old offices unfeasible.

‘I have heard that there are a few office buildings which are being rented out on short leases, but there is no news that they will be redeveloped,’ he added.

HMC Building, which is opposite the MAS Building, was bought about a year ago when it seemed that inner-city living would be all the rage. But when the Lumiere is launched in the fourth quarter of this year it will be pitched at the ‘dual usage’ home-office market.

The 168-unit Lumiere will have small studios, one- or two-bedroom units of 499 to 906 square feet, priced at $1,200-$1,500 psf. Eighty per cent of the units will be studios or one-bedroom units. Mr Chin said smaller units are more cost effective especially if the owner or tenant intends to use the apartment as a home office.

Under Urban Redevelopment Authority guidelines, home offices cannot have more than six non-resident employees.

BS Capital has done feasibility studies on the use of space, and Mr Chin said a home office with a staff of four can fit comfortably in a space of about 500 sq ft.

Mr Chin also said that investors can expect rents of $5-$6 psf, which is the asking price for similar units at Spring leaf Tower next door.

With rental returns likely to rise with the completion of the integrated resorts, Mr Chin said BS Capital may even keep 30-40 per cent of the units for the rental returns.

Other CBD residential developments that will be launched in the fourth quarter include City Developments’ 351-unit One Shenton Way (formerly Robina House) and the 428 residential units at the Business Financial Centre (BFC) by Keppel Land, Hong Kong Land and Cheung Kong, built on a greenfield site.

BFC development head of residential marketing Kan Kum Wah said that its marketing agents have received offers ahead of the project’s launch from buyers who want to buy entire floors at prices expected to be between $1,400 and $1,700 psf.

The BFC site was bought over a year ago.

Any new development, commercial or residential, will now be subject to the latest development charge (DC) rates.

Chua Yang Liang, associate director and head of research at Jones Lang LaSalle, said: ‘All things being equal, the prevailing DC rates may have some bearing on the financial attractiveness of a redevelopment site, be it residential or commercial.’

He also noted that DC rates for commercial uses are up to $250 higher than that for non-landed residential uses in areas like Raffles Place, Cecil Street, Robinson Street and China Square.

‘This was unlike a couple of years back when DC rates for commercial uses heavily outweighed DC rates for residential (non-landed) uses,’ Dr Chua added.

DC rates, which are revised every six months, were last revised on Sept 1.

For the prime Raffles Place/Golden Shoe area, DC rates for commercial developments rose by about 10 per cent year-on-year while DC rates for non-landed residential properties in the same area increased by 40 per cent.

For the Cecil Street/Robinson Road area, the increase was 15 per cent and 30 per cent respectively.

Developers will also have to consider current capital values. According to JLL, luxury residential capital values for the third quarter of 2006 are $1,662 psf. This represents a quarter-on-quarter increase of 6 per cent and a year-on-year increase of 33 per cent.

For prime Grade A office, the current capital value is $1,280 psf, a quarter-on-quarter increase of 5.8 per cent and a year-on-year increase of 28 per cent.

Source : Business Times - 28 Sep 2006

Residential projects around the island making their way to the market

DEVELOPERS are revving up the pace of their property launches, now that the Hungry Ghost Festival has ended.

First up is The Centris at Jurong West, which will be previewing this weekend. The 99-year leasehold project has 610 units and is being developed by Prime Point Realty Development.

The Centris is located next to Boon Lay MRT station and Jurong Point shopping mall. When completed, the 16-storey development will have a bus interchange on the first level, while the second to fourth floors will be given over to retail, allowing for an extension to the often crowded Jurong Point mall.

Residential units, which are expected to go for between $500 and $550 per square foot (psf), will start from the fifth floor onwards. This weekend’s preview will be limited mostly to business associates of the developer, BT understands.

The Centris preview comes hot on the heels of Wheelock Properties’ soft launch of the prime Ardmore II on Tuesday. And Frasers Centrepoint’s freehold One St Michael’s on Serangoon Road also started selling last weekend.

Wheelock, which priced the 118 units at Ardmore II at an average of $2,300 psf, saw more than half the units snapped up on Tuesday itself. The 131-unit One St Michael’s is going for about $600 psf.

Other recent previews include Tiong Aik Group’s 120-unit The Inspira at Arnasalam Chetty Road and Hong Leong Holdings’ 49-unit Buckley 18 at Buckley Road.

The new launches come towards the end of this year’s double Hungry Ghost month, which ended on Sept 21. Traditionally, property launches slow down during the period.

But now, agents and developers are stepping up the pace of their launches. Apart from the projects mentioned, at least another seven residential developments with a total of close to 3,000 units could make their way to the market by the end of this year, BT understands.

Among them is the 472-unit Ferraria Park at Flora Drive, which plans a mid-October launch with prices at about $500-$550 psf.

In the prime district, buyers can look forward to two 99-year leasehold condominiums - a 400-unit condo at the Business and Financial Centre site and a 351-apartment project on Shenton Way by City Developments.

Other projects include a 380-unit condo at Alexandra Road/Tiong Bahru Road by CapitaLand and Lippo Group; The Pharos, a 175-unit freehold project by CityDev in Jiak Kim Street; and United Overseas Land’s 161-unit condo at Chay Yan Street. Ho Bee is also expected to launch its 256-unit Sentosa Cove condo soon.

Source : Business Times - 28 Sep 2006

M’sian, Indon home buyers tie in top spot: report

THE proportion of foreign property buyers rose to 24 per cent in the third quarter, up from 22 per cent in the previous quarter, with Malaysians and Indonesians tying as top foreign buyers of property here.

Purchasers from these two countries made up 5 per cent of all buyers in Q3 with those from India making up 3 per cent and China, along with the UK, following behind with 2 per cent each.

According to a report by Knight Frank, the percentage of foreign buyers has been increasing steadily this year, up about one per cent every quarter. Foreigners were responsible for about 24 per cent of the estimated 2,000 transactions in Q3.

Nicholas Mak, director of research and development at Knight Frank, also noted that the trend for developers to suspend launches over the Ghost Month (which occured in Q3) was reversed. ‘One notable phenomenon is that though developers’ sales in the mass and mid-end market dropped, the number of developers’ sales in the high-end market soared by about 20 per cent,’ he said, adding that it indicated strong demand for properties in the high-end segment. The most prominent development launched in the quarter was The Oceanfront @ Sentosa Cove.

The proportion of foreigners buying high-end properties costing $5 million and above also increased to 5 per cent, up from 2 per cent in Q2 and 0.2 per cent in Q1.

And demand for these high-end projects spilled over into the sub-sale market with foreigners buying units from investors and speculators. Sub-sales in Q3 hit 139 transactions and Mr Mak says that 6.7 per cent of foreign buyers bought sub-sale units, while 34.8 per cent bought new units and 58.5 per cent bought resale units.

Based on preliminary data, Knight Frank estimates that the number of developers’ sales in Q3 fell by 30 per cent quarter-on-quarter (q-o-q) to between 1,600-1,800 units, largely attributed to the double Ghost Month effect this year. Similarly, sales in the secondary market recorded a fall of about 13 per cent q-o-q to 2,700 units. ‘This may be a sign of that the collective sales frenzy that began in early 2005 is cooling,’ Mr Mak said.

Source : Business Times - 28 Sep 2006