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Some are buying multiple condo units and making them into one 

TEAR down the walls.

That is the unusual request to property developers from some home buyers with a hankering for more spacious living.

These cash-rich buyers are snapping up multiple units on the same floor and combining them into a single, larger apartment.

High-end developers City Developments (CDL) and SCGlobal say they have received requests from buyers to remove walls between adjacent units to create bigger apartments.

Some buyers at CDL’s ultra-exclusive St Regis Residences have even reportedly bought entire floors with this purpose in mind, although CDL declined to verify this.

St Regis apartments, which cost at least $4 million a piece, range from 1,507sq ft to 7,287sq ft.

This new appetite for spacious living has led developers to pitch their bigger units at a higher price per sq ft (psf) than smaller ones, a new trend first highlighted by The Straits Times earlier this month.

The average price of apartments bigger than 2,500 sq ft has risen by 40 per cent over the last year, compared to just 20 per cent for smaller units, according to property consultancy Savills Singapore.

Other developers are also entertaining requests to merge units.

Wheelock Properties says there have been ‘two to three requests each’ for two of its recently-launched projects: The Sea View in expat-friendly Marine Parade and The Cosmopolitan in Kim Seng Road.

The Straits Times understands that Far East Organization has also received similar requests for its Vida condominium in Cairnhill Rise.

At another new condominium, Metropolitan in Alexandra Road, joint developers CapitaLand and Lippo Group have gone a step further.

They have put aside 28 two-bedroom apartments to sell in pairs, offering buyers the flexibility of removing the partition between the two adjacent units.

This allows buyers to combine the two units to a total of 1,787 sq ft, with the option of reinstating the partition in future.

One such pair costs around $1.39 million, compared to $1.35 million to $1.47 million for a four-bedroom apartment in the project.

All 14 pairs of these apartments were snapped up within the first two weekends of the launch, said CapitaLand. It added, however, that it was too early to reveal how many buyers had asked for the partitions to be removed.

Most developers are not charging extra for combining multiple units, but property consultants say it may still be ‘costly and impractical’ to combine two apartments.

Joining units may result in an awkward layout, said Mr Lui Seng Fatt, regional director and head of investment at Jones Lang LaSalle.

Also, added Mr Ku Swee Yong, director of marketing and business development at Savills Singapore: ‘If you buy two units, you end up with two maid’s rooms and two kitchens, and you may need to do rewiring and re-plumbing for the kitchens and toilets.’

Consultants say these requests to combine smaller units are probably isolated to selected developments that buyers insist on living in, even if there are no units big enough for their tastes.

Developers agreed, saying that there is no ’significant trend’ yet of buyers requesting that adjacent units be combined.

But the current paucity of sufficiently large units may be one reason for such requests surfacing now, said Mr Ku.

During the property downturn, developers built smaller units that were more affordable for buyers, he said.

‘Big units only started being launched again last year and it will take some time for them to be completed,’ he added.

On the whole, however, Singapore’s apartment sizes are still bigger than those in Hong Kong and Japan and comparable to those in central London and Manhattan, said Mr Lui.

Source : Straits Times - 27 Nov 2006

It was as hot as Katong laksa.

Hundreds of potential buyers were turned away yesterday from a new Katong condominium that was sold out within 36 hours of its soft launch on Friday.

Grand Duchess at St Patrick’s was so popular that all 121 units were unexpectedly snapped up by Saturday night at its invitation-only soft launch.

But hopeful buyers continued to turn up in droves yesterday, having received invitations for ‘previews’ that were to be staggered until Wednesday.

The demand was ’stronger than expected’ and Singaporean buyers formed 85per cent of those who managed to snare units, said Mr Vito Koh, group general manager of developer United Industrial Corporation (UIC).

‘When we started taking orders on Friday, all hell broke loose. We had to turn away hundreds of people yesterday,’ he added.

However, the showflat in St Patrick’s Road will be kept open for another two weeks, as planned.

Advertisements scheduled this week to announce the condominium’s public launch this coming weekend will also be run, but as ‘thank-you advertisements’ instead, said Mr Koh.

The robust take-up for Grand Duchess occurred despite a price tag some 10per cent higher than those of neighbouring properties.

The freehold condominium’s price was raised twice over Friday and Saturday to $740persqft (psf), or to about $1million for a three-bedroom unit.

This compares to $650psf for nearby St Patrick’s Loft and less than $700psf for Poshgrove East down the road.

However, just over 20 out of the 37 units at St Patrick’s Loft have found takers over the last two months.

At 76-unit Poshgrove East, only 57 units were sold within a month in August, before developer Tong Eng Group halted sales temporarily.

Property consultants said that the surprisingly keen interest in Grand Duchess could stem from the unique colonial villas fronting the condominium. These villas were previously owned by the family of Straits Chinese tycoon Tan Kim Seng.

One of the villas will be converted into a clubhouse with extensive facilities, such as a theatre lounge and spa treatment rooms.

‘It is very unusual for a condo to sell out like that so quickly,’ said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

‘It’s definitely not typical of lower-end condos, although some selected projects that have been very well-publicised do move fast.’

But Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, said the strong sales may indicate growing demand for mid-tier homes, which have so far lagged behind luxury properties in the current market rebound.

‘There is interest at the mid-tier level for sure, and if they are reasonably priced and provide good value for money in terms of design and features, they will sell,’ he said.

Source : Straits Times - 27 Nov 2006

Number of deals highest since 2001;median price rises 26% from Q2 

The number of sub-sale deals for private apartments and condos - often used as a gauge of speculation in the real estate market - hit 233 in Q3 this year, up 69 per cent from the preceding three months and the highest quarterly figure since 2001.

The median sub-sale price rose 26 per cent from $789 per square foot (psf) in Q2 this year to $997 psf in Q3 - busting the previous peak of $830 psf in Q2 1996 during the heydays of property speculation in Singapore.

The price surge in Q3 reflects the high-priced projects that featured among sub-sales in the July to Sept quarter this year, DTZ Debenham Tie Leung said in its latest analysis of caveats captured by Urban Redevelopment Authority’s (URA) Realis system. Such projects include The Oceanfront @ Sentosa Cove, The Sail @ Marina Bay and The Imperial.

Sub-sales are defined as secondary market transactions in a project before it receives its Certificate of Statutory Completion. This is usually issued a year after a project receives its Temporary Occupation Permit (TOP).

The 233 sub-sale deals in the third quarter accounted for just over 6 per cent of the total 3,827 caveats lodged for private apartments and condos covering both primary and secondary markets during the period.

For the first nine months of this year, sub-sale deals totalled 481, making up only 4.1 per cent of the 11,594 total caveats for apartments and condos in the period. This is a far cry from 1996, when sub-sale deals had a 22.4 per cent share.

In that year, there were a total of 3,410 sub-sale deals for private apartments and condos.

DTZ said that collectively, the two highest price bands in its five-tier analysis - units costing $1.4 million and above, and those priced between $1 million to under $1.4 million - accounted for about half of all sub-sale deals in Q3.

In fact, sub-sale deals in the top price band jumped from 33 deals in Q2 this year to 89 transactions in Q3.

All 19 sub-sales for The Oceanfront @ Sentosa Cove in Q3 were at $1.4 million and above, while 21 of the 53 sub-sales at The Sail in Q3 were in this price band.

In fact, The Sail has seen a total of 130 sub-sale deals since the project was first released in late 2004 - working out to 12 per cent of the total 1,111 units in the project.

With 53 sub-sale deals in Q3 2006 alone, The Sail topped the list of projects with sub-sale deals in the quarter, followed by The Icon (23 deals). In third position was The Imperial, with 22 sub-sales at a median price of $1,091 psf, up from the project’s launch price of about $890 psf in 2003.

DTZ reckoned the development’s large-sized apartments and the fact that it has been completed (it received TOP in June this year) accounted for its strong interest in the sub-sale market. Twin Regency in Tiong Bahru also saw 17 sub-sale deals in Q3.

Market watchers reckon the level of speculation is set to rise with upcoming launches like One Shenton and Marina Bay Residences both near The Sail, as well as new launches in the prime districts.

Sub-sale activity developments that have been completed or are nearing completion is also set to gather pace, especially if there are upcoming launches in the vicinity at higher prices which can serve as price benchmarks for sub-sale deals.

Source : Business Times - 27 Nov 2006

Sub-sales fetch profits of 7-35% for projects in Sentosa Cove, caveats show 

Property speculators are having a field day in Sentosa Cove, reaping profits of between 7 and 35 per cent from sub-sale deals in condominium developments there.

One of the most lucrative deals reflected a gain of about $1 million over a mere two-month holding period for a unit at The Oceanfront @ Sentosa Cove.

A sample analysis of sub-sale transactions by DTZ Debenham Tie Leung - based on caveat data captured by URA’s Realis system - shows that on average, speculators have reaped a gross premium of $647,000 from sub-sale transactions in the 15-storey The Oceanfront @ Sentosa Cove condo, which was launched by City Developments and TID in July this year.

Over at Ho Bee’s The Berth by The Cove - the first condo to be launched in Sentosa Cove when it was released in late 2004 - the average speculation premium is $387,000.

At Frasers Centrepoint’s The Azure which was released last year, the average sub-sale premium is $321,000. These are gross premiums and about 4.5 per cent has to be deducted to arrive at net gains - to factor in 3.5 per cent for stamp duties and legal fees when buying a unit, and one per cent agent fees when selling it.

Oceanfront, Berth by The Cove and Azure are the first three condo projects in Sentosa Cove. All three have 99-year leasehold tenure.

Sub-sales - often used as a proxy for the level of speculation in the property market - refer to secondary market transactions in a project before it receives a Certificate of Statutory Completion (CSC). This certificate is usually obtained within a year of a project receiving a Temporary Occupation Permit.

Sub-sale deals at The Oceanfront appear to have been the most lucrative in terms of absolute-dollar profit. But percentage-wise, the biggest gains were reaped at The Berth by The Cove. This was launched two years ago when prices were relatively low, translating to high profit margins for those who have sub-sold units this year. Sub-sale premiums ranged from 7 to 35 per cent at The Berth by The Cove.

The single most lucrative sub-sale deal - in absolute-dollar terms - was for a 5,242 sq ft unit on the 11th floor unit of The Oceanfront. This property changed hands last month for $6.8 million - a premium of slightly over $1 million to the original $5.7 million the seller had paid the developer for the unit in August.

Typically, a sub-sale involves buyers who have bought properties from developers selling units in the secondary market before a project’s CSC. There can also be repeat sub-sales, where a unit changes hands more than once in the secondary market before the project receives CSC.

DTZ’s analysis reflects two repeat sub-sales - one each at The Oceanfront and The Azure. The Oceanfront unit, on the eighth floor, which was sub-sold in August for $4.4 million and then sub-sold again less than a month later for almost $5.3 million, creaming a handsome $850,000 premium.

Data on the original price at which the developer sold the unit was not available. A market watcher suggested that those who bought units from developers did so with an eye of flipping them soon and so may not have bothered to lodge a caveat.

DTZ’s sample analysis is based on 27 sub-sale transactions, but BT understands that there have been more than 60 sub-sale deals for condos in the upscale waterfront housing locale. Data on the original developers’ sale prices for the other 36 or so units is not available. The 60-odd sub-sale deals so far at the three Sentosa Cove condo projects reflect about 10 per cent of the total number of units in these developments.

The latest condo in Sentosa Cove, Ho Bee’s 249-unit The Coast, is 85 per cent sold and is also said to have attracted speculators, although caveats of sub-sale deals will only emerge later, market watchers say.

DTZ executive director Ong Choon Fah says that despite the lucrative gains from sub-sales in Sentosa Cove, on a macro basis sub-sales remain confined to a few locations and developments such as Sentosa Cove, The Sail @ Marina Bay and Icon.

Highlighting the draws of Sentosa Cove, she says: ‘This is the only place in Singapore where you get true waterfront homes, meaning your home is open to the water’s edge. And there’s a limited supply. A lot of effort has been made to market the precinct to high net worth foreigners.’

According to Mrs Ong: ‘A little bit of speculation provides liquidity. If somebody has a good eye and business acumen and is rewarded for it, I don’t think we should be too concerned. It’s a willing-buyer, willing-seller situation.’ Q3 sub-sales of S’pore apartments surge 69%, P2

Source : Business Times - 27 Nov 2006

Q WHEN my dad reached 55, he did not withdraw his Central Provident Fund (CPF) savings.

He is now 61 and was recently made a bankrupt due to a business failure.

Do the Official Assignee (OA) or creditors have the right to go after his CPF money that has not been withdrawn?

Does my father have to declare to the OA the retirement cheque that he will receive monthly when he reaches 62?

A CPF money is protected from creditors.

This includes excess CPF beyond the CPF Minimum Sum and the Medisave Required Amount or Medisave Minimum Sum, whichever is higher - which was not withdrawn.

The monthly retirement amount your father will receive from the CPF Board from age 62 is not subject to any claim by the OA or his creditors.

The reason is that the source of these payments is the CPF Minimum Sum, which is protected under the CPF Act.

The OA or creditors do not have the right to ‘go after’ his CPF that is not withdrawn.

If he withdraws his CPF savings, however, they will not be protected from creditors for debts incurred after the withdrawal date.

Leong Sze Hian President Society of Financial Service Professionals

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 26 Nov 2006