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Development charge higher than expected, says buyer

The $162.8 million collective sale of Makeway View in the Newton area to an associate of Bravo Building Construction has been rescinded.

BT understands that the one per cent of purchase price paid by Bravo so far has been forfeited.

A Bravo spokeswoman told BT yesterday that it had earlier sought payment extensions to ascertain the quantum of development charge (DC) payable.

Confirming the move to rescind the sale, she added: ‘We decided not to proceed with the Makeway deal as the actual DC turned out to be higher than what we had been told. So the breakeven price would end up being much higher than what we expected. That’s why my partner (in the proposed acquisition) decided not to proceed further.’

She confirmed that the initial information about the DC did not come from Knight Frank, which was the marketing agent representing the owners of Makeway View.

The $162.8 million deal for Makeway View announced in early November last year, reflected a unit land price of about $1,583 psf ppr including an estimated $21.5 million DC at the time.

Bravo group was one of the biggest buyers of collective sale sites last year, with deals like Tulip Garden for $516 million. Bravo formed separate associate companies for the acquisitions of the various collective sales sites, as the plan was to have different partners for each project.

A Bravo associate has so far paid the initial 5 per cent deposit on Tulip Garden, amounting to about $25 million.

Tulip Garden’s collective sale was approved by STB in late February and the Bravo associate was supposed to have made the second 5 per cent payment shortly after that. However, it requested for an extension on this till early April.

Bravo’s spokeswoman said her company is seeking a further extension to early June to pay this sum and to also extend the completion deadline for the deal from late May currently to early August.

‘We need time to sort out an agreement with our partner and at the same time, sort out the financing arrangement.’

Tulip Garden’s owners are expected to meet this weekend to decide whether to give the payment extensions. Tulip Garden’s price works out to $1,018 psf per plot ratio price (no DC is payable).

Source : Straits Times - 1 Apr 2008

PROPERTY owners can now run businesses from home for five-year periods instead of the previous three-year terms.

The change, which kicked in today, was to ‘provide greater convenience to home office users’ and help them formulate longer-term business plans, said the Housing Board (HDB) and the Urban Redevelopment Authority (URA) yesterday.

The Home Office Scheme was launched in 2003 to encourage entrepreneurship by giving ‘private property and HDB home owners the flexibility to conduct small-scale business from their homes’, the two agencies said.

Applications are granted subject to certain conditions such as having low noise levels and not involving selling physical goods.

Since its introduction, about 21,000 applications have been approved, primarily for companies in IT consulting, Web design, advertising and real estate services. About 95 per cent of successful home office applications are for public housing.

For more information on the scheme, call the HDB service hotline on 1800-225-5432 or the URA’s customer hotline on 6223-4811. Applications and renewals cost $20 each.

Source : Straits Times - 1 Apr 2008

I WOULD like to voice my frustration over the unfairness of the recent so-called ‘launch’ of the Jade Spring Phase 2 project. I’m sure many other unsuccessful applicants for Phase 1 feel the same way.

My girlfriend and I applied for Jade Spring Phase 1 (we didn’t know there were two phases when we first applied) in December last year and again received an impossible ballot number of over 1,000 (we have tried balloting a couple of times before). We resigned ourselves to our fate, hoping something better might come our way when we finally get to choose our first flat.

However, Phase 2 of the Jade Spring build-to-order project was announced recently on the HDB website. What infuriates us is that it is open to applications again. What happens to applicants who applied unsuccessfully in December? According to the the friendly HDB helpdesk staff: ‘They have to send in their applications again, as this is a new announcement.’

What does this mean? It means, like all other couples who applied in December, my girlfriend and I must pay $10 (more than the cost of a lottery ticket, by the way, although chances of striking the lottery seem higher) again to take part in another draw. With perhaps another few thousand people, for the same project, on the same site, for which we applied barely three months ago.

My question is, why is this considered a new project? I’m sure there are more than enough applicants in December to fill these flats on offer now.

Even if there aren’t, shouldn’t these applicants be given priority?

Because we paid, because we endured the pain of large ballot numbers and because Phase 2 should not be considered a new project at all. Why do we have to pay to re-enter the balloting system?

Lim Yong Chuan
 
Source : Straits Times - 1 Apr 2008

Among the restrictions: Developer must build a park in the middle of the 1.77ha plot

IT IS hardly one of Singapore’s must-see tourist destinations, but Balestier Road is getting the sort of boost that might make it more visitor-friendly.

The Government yesterday released a sprawling hotel site for sale between Balestier Road and Ah Hood Road, in front of the Sun Yat Sen Nanyang Memorial Hall.

And there is an unprecedented twist: The developer must build and manage a park that takes up a quarter of the land right in the middle of the site.

It has even been named - Zhongshan Park - and its use has also been decided, with the Urban Redevelopment Authority (URA) stating that it wants it to, among other things, ‘enhance the experience for…visitors to the memorial hall’, which draws about 50,000 tourists a year.

Other restrictions, such as a required public event space and outdoor food and beverage or retail outlets in the park, also apply.

The URA said yesterday that the land release provides a ‘great opportunity to develop a unique hotel development’ in an area rich with heritage.

While Balestier is better known for famous eateries and lighting shops, it is also lined with shophouses, many of which have been earmarked for conservation and are a niche tourist attraction.

But the site’s large size and many restrictions mean that there are likely to be few bidders in the public tender, said property experts.

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, expects fewer than five offers, with bids coming in at $150 million to $200 million, pricing it at $350 per sq ft (psf) to $470 psf per plot ratio.

The 1.77ha plot is the biggest hotel site released by the URA since 2001 and is a tad smaller than the Orchard Turn parcel, where the Ion Orchard mall and The Orchard Residences condominium are being built.

Sixty per cent of the site’s total gross floor area of 430,556 sq ft must be used for a hotel, which would yield about 675 rooms - slightly more than the 663 rooms at the Grand Hyatt Singapore in Scotts Road.

The rest of the land can be used for homes, shops, offices or more hotel rooms.

Even the hotel’s design, envisioned as contemporary Chinese, must be approved by a URA advisory panel.

The agency had previously offered a smaller version of the site for sale, without the park. But that plot - half the size of the present one - lingered on the market for a year without any takers before the URA took it off in October last year to combine it with other vacant land nearby.

It is now on the URA’s confirmed list, so it is up for sale regardless of demand.

Consultants noted the challenges inherent in the site.

Bidders will need a strong design concept and a strategy to make the park generate income, said Mr Mak.

He added that the site is not near an MRT station and is in fact ‘on the outskirts of everything’.

But some developers may still be attracted ‘because the challenges may reduce the number of competitors’, Mr Mak said.

‘This site could attract niche developers who are experienced in developing hotels with strong themes.’

Another bright spot is the strong sentiment in the hotel sector, especially for the mid-tier segment, said Ms Tay Huey Ying, director of research and consultancy at Colliers International.

‘The market is quite short of mid-tier hotels, so the prospect is good,’ she said.

The hotels dotting Balestier Road are mainly budget stays, including multiple outlets of Fragrance Hotel and Hotel 81.
 
Source : Straits Times - 1 Apr 2008

Bravo’s deals involve Tulip Garden for $516m and Pender Court for $80m

A SMALL property firm that snapped up enough sites to place it among the top en bloc players last year has put off completing two deals while it ties up funding.

Because of the delays, owners at one condo are still waiting to pick up cheques for well over $1 million each. They expected payment in late February but an extension put this back to March and now the due date is late this month.

The payments are pending from Bravo Building Construction, a relatively new firm on the property scene. It bought freehold Pender Court condominium in the Telok Blangah area for $80 million last July and soon after purchased Tulip Garden near Holland Road - also freehold - for $516 million.

But completion of both deals seems to have stalled.

Completion is at the final stage of the sale process and triggers the final payment - usually around 95 per cent of the purchase price - to owners. The remaining 5 per cent is paid when the owner vacates.

These headaches for the owners come amid a slowing market for collective sales. The first quarter this year saw just one relatively small deal, compared with some 25 notched up in the same period last year.

The Tulip Garden transaction is expected to be completed late next month but Bravo has already asked for two postponements - first to July 23 and then Aug 7.

It has also asked for extensions to pay an additional 5 per cent of the purchase price - $25.8 million.

This is a routine payment required once the Strata Titles Board approves a sale. An initial 5 per cent deposit was paid when the sale was done.

The deadline for the second 5 per cent payment was March 13 but Bravo won approval to move it to April 7. Then in mid-March, it again asked to move the date, this time to May 5.

However, before the sale committee could respond to the request, it is understood that Bravo asked again to have the date moved even further back, to June 7.

Tulip Garden sold for about $1,018 per sq ft. It has 164 units comprising 96 flats, 66 maisonettes and two shophouses. Flat owners stand to reap $2.5 million to $4.2 million while maisonette owners will receive about $3.4 million each. The shop units will get about $1.1 million each.

The owners are meeting this weekend to consider Bravo’s requests that the completion date be pushed back to Aug 7 and the deadline for the $25.8 million payment be extended to June 7.

The Pender Court deal is even further behind schedule.

Bravo was supposed to have completed the sale on Feb 25 but had it postponed, initially to around mid-March. It then asked for a further extension to April 24, which has apparently been granted.

Pender Court’s 48 owners should each get $1.6 million or so for their flats, which sold for about $872 psf.

Sources have told The Straits Times that they understand Bravo is committed to completing the two purchases and just needs more time to arrange funding.

Bravo, which was registered in 2002, reportedly picked up $824.5 million worth of en bloc sale deals last year, making it the fourth-largest buyer of en bloc sites.

Bravo’s directors could not be reached for comment, despite numerous telephone calls and a visit to its office in an industrial building in Geylang Road last Friday. A Bravo staff member said that the company directors were away on business.

Source : Straits Times - 1 Apr 2008