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Government plans to ease the squeeze by releasing more white sites: Minister
 
The squeeze in the Central Business District (CBD) area may have sent office rents sky-high, but the Government looks set to release more land to ease the demand.

National Development Minister Mah Bow Tan said the Government would step up the quantum of releasing white sites — that can be used for mixed development, such as commercial and residential — in the area.

“I think the quantum will have to be stepped up, whether it’s one site or several sites … because we see there is a tightening up of the supply,” he told reporters at an event yesterday.

In May, the Government will release one white site — situated at Central Boulevard — and more will follow, he said.

“The Central Boulevard site is the next phase of development so after the second site is awarded and depending on the market situation, we will probably move down south,” he said.

The crunch on supply of office space has sent rental prices soaring over the past few years. According to a Debenham Tie Leung (DTZ) report, prime rentals in Raffles Place rose by 28 per cent in the first quarter of this year, averaging $10.90 per square foot — past the peak of 1996.

As a sign of growing confidence in Singapore’s property market, the Government will also add more sites to the confirmed list — which means that land is put up for tender at a pre-determined date, without the need for it to be triggered by any application.

Said Mr Mah: “For the first half, we have already put a lot more into the confirmed list which is quite a significant departure from previous years and we’ll probably need to do more of that as we go along.”

Apart from its land sales, the Government is also prepared to release existing sites for temporary use, such as freeing up vacated government buildings for office use. “Another area is to encourage more people to make better use of existing sites,” he said.

But Mr Mah believes that all these measures “will deal not just with the immediate problem but also with the longer term issue of supply and demand”.

“Rest assured that there is sufficient space for expansion of the commercial sector and the office sector in the longer run. But we need to deal with the immediate term as well and this is what I want to emphasise,” he added. Mr Mah’s assurance on sufficient land supply was made on the sidelines of the groundbreaking ceremony for a new bridge linking the Bayfront to Marina Centre.

The 280-metre pedestrian bridge, shaped like the double-helix of human DNA, will be an “iconic landmark” that will link the attractions around the Marina Bay area, said Mr Mah.

“We already have the flyer; we’ve the IR (integrated resort), BFC (Business and Financial Centre), the Sail and Collyer Quay. So the bridge is, in a way, starting to tie up all these developments together and when it is completed, it will physically tie everybody together.”

The developments around the bay have already attracted some $10 billion worth of investment in public-private sector collaborations.

Source : Weekend Today - 31 Mar 20

105 such homes sold to foreigners last year, the highest since 1995

An increasing number of landed homes in Singapore are going to foreign buyers, especially in the prime districts.

Home Sweet Home

Foreigners (including permanent residents) picked up 105 landed homes in Districts 9, 10 and 11 last year, which was 66.7 per cent higher than 2005 and the highest figure since 1995, the earliest date included in the Urban Redevelopment Authority’s Realis caveats database, an analysis by DTZ Debenham Tie Leung shows.

UK nationals were the biggest buyers of prime district landed homes last year, with 18 purchases. Other major buyers were Australians, Americans, Malaysians and Indians.

DTZ highlighted that buyers from India have increased their share of landed home purchases in prime districts from three or fewer transactions a year in the past to 11 in 2006. Similarly, Australians increased their purchases from four transactions in 2005 to 13 last year.

These various nationalities bought prime district landed homes predominantly in District 10.

Foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property.

Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under Singapore Land Authority. Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.

Among the criteria that the Minister for Law will consider when asked to approve foreigners/PRs buying a landed home in Singapore are the applicant’s qualifications and whether the applicant has made or will be able to make adequate economic contribution to Singapore.

Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to under 48 hours under a special fast-track approval scheme.

The landed properties that foreigners and PRs may be permitted to buy must have a land area of no more than 15,000 sq ft, although exceptions have been made, with some PRs buying Good Class Bungalows, which have a plot size of at least 1,400 square metres (about 15,070 sq ft).

Foreign buyers may acquire an unlimited number of non-landed private homes - condominiums and apartments.

The only foreigners who may buy HDB flats on the resale market are PRs.

‘So there are regulations in place to guard against foreigners speculating in landed homes or buying landed homes excessively in Singapore as landed properties are a relatively scarce commodity in Singapore,’ observes DTZ executive director Ong Choon Fah.

But the trend of foreign buying of landed homes is set to continue, she predicts. ‘We have to accept it, if we want to be a global city, and if we want to open our doors to attract talent to our shores,’ she said.

The 105 landed properties that foreigners bought in the prime districts last year gave them a 15.8 per cent share of total landed home purchases in these locations in 2006, up from a 12.1 per cent share in 2005.

Islandwide, foreigners bought 249 landed homes last year, up 65 per cent from 2005. The 2006 figure represented 7.2 per cent of the total landed homes that changed hands in Singapore in that year.

Foreigners’ share of landed home purchases last year, whether in the prime districts or elsewhere, is significantly lower than the 23 per cent of overall private home buying they carried out last year.

Source : Business Times - 30 Mar 2007

 Residential sector accounts for 60% of $9.23b total, says CBRE

SENTIMENT in the property market has continued to be bullish into the new year with figures for investment sales in the first quarter showing an increase of more than 50 per cent from the same period last year.

According to CB Richard Ellis (CBRE), $9.23 billion of investment sales has been recorded for the first three months of the year. This is up 53 per cent from the $6 billion recorded in Q1 last year.

CBRE’s analysis of data reveals that the residential sector accounted for 60 per cent of total investment sales, or $5.58 billion (including good class bungalow sales).

The collective sales market saw 26 sites transacted, amounting to $3.84 billion.

CBRE also noted that the quarter witnessed two significant transactions in terms of absolute dollar quantum - Gillman Heights was sold to CapitaLand for $548 million while Horizon Towers was sold to Hotel Properties and two foreign funds for $500 million.

Other big-ticket transactions in the quarter include the sale of Anderson 18 to City Developments/Wing Tai for $477.7 million, and Sing Holdings’ acquisition of Hillcourt Apartments for $361 million.

The commercial sector contributed 36 per cent of total investment sales or $3.15 billion in Q1, supported by foreign funds and institutional investors.

CBRE executive director (investment properties) Jeremy Lake said: ‘In view of ongoing strong economic fundamentals and the supply in the medium term, office deals will continue to be very sought after by property funds, institutional investors and Reits in the anticipation of further capital value and rental appreciation.’

Major commercial property transactions include the sale of Temasek Tower to Macquarie Global Property Advisors for $1.04 billion, and the sale of the office block at Vision Crest as well as The House of Tan Yeok Nee to Union Investment Real Estate for $260 million.

Of the total investment sales in Q1, 17 per cent or $1.55 billion came from the public sector, comprising five government land sale (GLS) sites and the tender awards of the Sentosa Cove residential land parcels.

A GLS hotel site at Sinaran Drive was sold to Far East Organization for $131.12 million while a condominium site and selected bungalow plots at Sentosa Cove were sold for a total of $549.5 million.

Mr Lake said: ‘The investment market is also likely to see more activity in the public sector in the next quarter and the rest of 2007, going by the positive response to the sites in the confirmed GLS list.’

Source : Business Times - 30 Mar 2007

Record $9.23b of properties sold in first quarter, says CB Richard Ellis

DEVELOPERS and investors continued to snap up properties in the first three months of this year, setting yet another record for investment sales.

They bought $9.23 billion of investment properties, the highest quarterly value in at least 11 years, said property consultancy CB Richard Ellis (CBRE) yesterday.

This comes on the heels of a bumper year for investment sales, which amounted to a decade-long high of about $27 billion last year.

And the momentum is likely to continue, leading to a new record this year, said Mr Jeremy Lake, CBRE’s executive director of investment properties.

‘We’re at a rare point in time where all the sectors are experiencing strong demand,’ he said.

‘In any market at any point, you normally find one sector that stands out and another that is weaker, but right now in Singapore, all five engines are roaring away.’

These five ‘engines’ are the residential, office, retail, hotel and industrial sectors, said Mr Lake.

For each sector, investment sales - comprising property sold for more than $5 million - are often used to measure medium- to long-term confidence from the view of developers and major investors.

Although all five sectors did well in the quarter, residential sales took the lion’s share of deals, accounting for 60 per cent of total investment sales, said CBRE.

This was boosted by the record amounts paid for Gillman Heights, Horizon Towers and Anderson 18.

The three estates, which were all sold this year, alone accounted for $1.5 billion of the quarter’s investment sales. They now hold the top three spots in terms of dollar value paid for a residential collective sale site.

In all, 26 residential sites were sold en bloc, fetching a total value of $3.84 billion.

But the office sector saw the biggest deal of the quarter - the $1.04 billion sale of Temasek Tower to a fund.

Trailing that in the sector were the Singapore Exchange’s sale of its SGX Centre stake for $271 million, and OCBC Bank and CapitaLand’s sale of their stakes in Samsung Hub for $275.3 million.

In total, commercial deals made up 36 per cent of investment sales in the quarter, or $3.15 billion, said CBRE.

Hotel sales also remained ‘very healthy’, said Mr Lake.

He expects activity in the hotel and office sectors to keep buzzing in the light of the limited supply of properties in both categories.

Even the industrial sector, which has remained relatively low-key so far, did well. It was buoyed by active acquisitions by real estate investment trusts, Mr Lake said.

In the public sector, the sale of five Government sites and some Sentosa Cove land parcels boosted its share of investment deals to $1.55 billion. And this sector is likely to do better in the months to come, with more Government sites slated to come on the market, said Mr Lake.

These include highly anticipated commercial sites such as the former Non-Commissioned Officers Club on Beach Road and a land plot at Marina Bay.

So far, there has been ‘positive response to the sites in the confirmed Government land sales list’, said Mr Lake.

He added that in general, it is ‘extremely likely that investment sales for this whole year will set another record’.

It will probably surpass last year’s record, ‘which was in itself a quantum leap over the previous record’, he said.

Source : Straits Times - 30 Mar 2007

WING Tai Asia will roll out at least three new residential launches over the next few months including two on recently acquired collective sale sites.

Helios Residences on the former Phoenix Mansion site at Cairnhill Circle will be launched in May while the yet-to-be-named development on the former Belle Vue site at Oxley Walk will be launched in July.

Riverine By The Park

The third development will be The Riverine by the Park on Kallang Road, to be launched in April.

Wing Tai deputy chairman Edmund Cheng would not reveal launch prices but said that it would take its ‘cue’ from new properties in the same vicinity.

Wing Tai bought Phoenix Mansion for $57.9 million or $716 per square foot per plot ratio (psf ppr) in July 2005 and Belle Vue for $227.3 million or $665.95 psf ppr three months later.

Although it has helped to boost the collective sales market here - with the $1,369 psf ppr price it paid for Ardmore Point in October last year, and more recently paying $1,650 psf ppr for Anderson 18 (with City Developments) - Wing Tai does feel that owners’ price expectations for collective sale sites are getting quite high.

‘They are asking for prices that are higher than what developers are selling,’ said Mr Cheng. ‘I think they have to be a bit realistic also,’ he added.

Still, as Mr Cheng conceded, the sentiment in the market is, ‘good’. ‘The market is strong and economic growth is there. Singapore is transforming from a local to a global market, so of course your asset will have a global value,’ he added.

On future acquisitions, Mr Cheng said: ‘We will continue to see how the market develops. If the market continues to be strong, we will respond and consider if there is economic viability or not.’

Wing Tai does already have a sizeable stable of new products. In April 2006, it acquired a large development site with NTUC Choice Homes in Tanah Merah and Mr Cheng says that this development, which will have around 500-units, will also be launched this year.

The new development on the site of Newton Meadows, acquired in May 2006, could also be launched this year, he said.

In the ’super, super luxury’ segment, Wing Tai is expected to launch the new developments at Ardmore Point and Anderson 18 early next year. These will be two separate developments, Mr Cheng said, quelling speculation that both sites could be amalgamated.

Other high-end products that Wing Tai has on the market include The Light @ Cairnhill and VisionCrest Residences. The former is almost fully sold while the latter is more than 50 per cent sold. For its high-end developments, foreigners make up about 50 per cent of the buyers, Mr Cheng revealed.

Source : Business Times - 29 Mar 2007