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Two freehold industrial sites - at 18 Howard Road and 27 New Industrial Road, in the north-eastern part of Singapore - are for sale by tender at indicative prices of $30 million ($272 per sq ft per plot ratio) and $14 million ($278 psf ppr) respectively.

Charles Hoon, director of investment properties at marketing agent CB Richard Ellis, said the sites are zoned Business 1 under Master Plan 2003. This means 40 per cent of gross floor area can be used for purposes such as offices, showrooms or workers’ dormitories.

‘While industrial capital values and rents have recovered, industrial space still presents an attractive option, compared with office space, for businesses to relocate their backroom operations.’

The two sites are conveniently located and of regular shape, he said. And their freehold tenure is an ‘added advantage’.

The 18 Howard Road site is a 44,000 sq ft vacant plot in Macpherson Industrial Estate. The 20,000 sq ft 27 New Industrial Road is in the New Industrial Road cluster.

Separately, DTZ Debenham Tie Leung is marketing a 999-leasehold Good Class Bungalow (GCB) site in Yarwood Avenue. The 69,540 sq ft site, close to Binjai Park, has been put up for sale through an expression-of-interest exercise at an indicative price of $750-$800 psf.

According to DTZ, it has redevelopment potential to accommodate four GCBs. It now houses a single storey detached house with an outhouse, swimming pool and tennis court.

Shaun Poh, DTZ’s senior director for investment advisory services and auction, said: ‘This is a rarely available large plot of land in a prime location, offering a myriad of possibilities.’

Recent transactions of GCB land in the area include sites on Kilburn Estate for around $860 psf and Binjai Park for around $850 psf, he said.

Source : Business Times - 06 May 2008

Condo unit to be auctioned off to recover money owed

An unusual auction of an apartment worth over $1 million is scheduled for next week - after the mysterious disappearance of the owners.
The three-bedroom unit at King’s Mansion off Tanjong Katong Road has been vacant for more than 10 years.

Repeated attempts by the condo’s management corporation (MC) to get in touch with the owners and their lawyers have failed.

The four owners, all foreigners, owe possibly $30,000 or more in maintenance fees.

So the MC is taking the rare step of putting the flat up for sale to recover the money without the owners’ cooperation. The auction is set for next Wednesday.

Little information is available about the owners but it is believed they are Malaysians.

Although MCs are legally able to seize the property of debtor owners, such action is rare as few want to take action against their neighbours, property consultants say.

But this case is unusual as the owners have been absent from the freehold unit for so long - even ignoring the recent property boom.

The guide price for the 1,604 sq ft high-floor unit is about $1.1million to $1.2 million, said auctioneer Mary Sai of Knight Frank, which is conducting the auction. She said numerous attempts by the MC to get in touch with the owners and their lawyers had failed.

It is not known how much is owed by the owners as the MC has refused to comment.

But based on the condo’s current fees, it could be up to $35,000 over 10 years - not counting interest.

MCs are permitted to lodge a charge against an owner’s property if contributions are unpaid for more than 30 days after they have served a written notice of demand, said lawyer Vijai Parwani. They then have the authority to sell the property as if they were a registered mortgagee, he said.

If the owner wants to sell his property, he would not be able to complete the sale until the debt is settled.

MCs can also go to court or the Small Claims Tribunal to recover outstanding contributions. If owners still refuse to pay, the MCs can get a writ to seize and sell some household items to pay the debt, he said.

If the debt exceeds $10,000, the MC can apply to make the owner a bankrupt.

No matter what, seizing a defaulter’s property for sale is absolutely the ‘last resort’, said Mr Raymond Choo, executive director of Chesterton International’s property, assets and facilities management department.

It is a ‘tedious and costly’ process, he said.

It involves upfront costs, getting a resolution for the sale, doing a property valuation and engaging an auctioneer.

‘There are other ways you can use before you resort to the power of sale,’ he said.

Property consultants say they have not heard of any such cases recently as owners usually appear when threatened with a sale.

Ms Sai says the MC of Pandan Valley tried to put a unit up for auction a few months ago, but the owner appeared and paid up before the sale could happen.

Source : Straits Times - 25 Apr 2008

Landed-Housing sites at Sembawang were sold yesterday at prices 22 per cent lower on average than nearby plots a few months ago. Yesterday’s auction by the Urban Redevelopment Authority was for 11 plots with 99-year leasehold tenure. All were sold - for a total of $45.29 million, or $223 per sq ft (psf) on average.

The plots come under phase two of Sembawang Greenvale estate. URA sold the 12 plots in nearby phase one in October last year for about $285 psf on average. Smaller developers and individuals turned up yesterday to bid for the phase two plots, which can be developed into 90 dwellings - one bungalow, 16 semi-detached houses and 73 terraced houses.

Fragrance Homes reaped the biggest harvest, winning four plots that can house eight semi-detached houses and 40 terraced houses. The largest plot, in Penaga Place, designated for 18 terraced houses across 35,624 sq ft, cost Fragrance $8.7 million or $244 psf. This was the highest psf price for any of the 11 plots.

Odeon Properties’ $1.66 million bid for a plot in Kerong Lane represented the lowest psf price of $151. The 10,989 sq ft site can accommodate one bungalow and two semi-detached houses. Reflecting the better market last year, prices on a psf basis in phase one ranged from a higher $210 to $327 psf.

The only individual to submit a wining bid yesterday, Christina Sui Fong Fong, bought the third-largest land parcel for $6.65 million or $221 psf.

Asked about plans to release more landed-housing parcels, URA’s director of land administration Choy Chan Pong said: ‘We will be releasing according to market demand.’

Source : Business Times - 23 Apr 2008

A LARGE commercial unit at The Riverwalk, Upper Circular Road, is up for sale at an indicative price of $23 million.

The unit, which has a strata area of 20,161 sq ft that represents a 12.11 per cent ownership stake, is owned by private investors. The indicative price works out to about $1,140 per square foot.

CB Richard Ellis (CBRE), which is marketing the 99-year leasehold property, says rent of $5 to $6 per sq ft is being asked for comparable office space in the area. Assuming rent of $5.50 psf, the $1,140 psf guide price reflects a net yield of about 5.5 per cent.

The current lease expires in mid-July this year.

In March, a unit at High Street Centre was sold for about $1,500 psf.

CBRE associate director of investment properties Liau Wee Boon said of the Riverwalk unit: ‘In addition, there is collective sale potential as the development is undergoing an en bloc exercise. The potential payout is more than 50 per cent above the guide price.’

The Riverwalk comprises 181 commercial units ranging from 54 sq ft to 20,161 sq ft, plus 118 apartments ranging from 818 sq ft to 3,821 sq ft, plus 290 parking lots. It was put up for collective sale late last year at an indicative price of about $700 million or $1,735 psf per plot ratio (psf ppr) and zoned for residential and commercial use.

Meanwhile, in the Victoria Park area off Holland Road, a good class bungalow (GCB) has been put up for sale by DTZ Debenham Tie Leung (DTZ).

The 999-year leasehold GCB sits on a site of 32,687 sq ft. DTZ said that a recent valuation put the value of the site at $26.5 million.

The land is now occupied by an old two-storey detached house with a garage and swimming pool.

DTZ said recent transactions of GCB land in the area include sites in Leedon Park for $914 psf and Victoria Park Road for $920 psf.

DTZ director (Investment Advisory Services) Quek Soh Hoon said: ‘Given the positive attributes and distinctive location, the subject property would be an attractive and choice acquisition for high-net-worth individuals looking for land to build their dream house or investment property.’

Source : Business Times - 22 Apr 2008

By GRACE NG

IT was a stellar year for the Singapore property market in 2007, and auction activity, a barometer of market confidence, did well in tandem.

Auction sales hit a record $407.43 million in 2007, the highest in eight years and a shade below the figure achieved in 1999 when the market was recovering from the Asian financial crisis.

The record figure was mostly due to a vibrant residential market in the first half of 2007 where sales were dominated by high-end condominiums and old apartments with en bloc potential. The other sectors which had contributed to this remarkable result were shops/shop houses and development sites.

Owners are increasingly turning to auctions to sell their property. In fact, their numbers have been doubling every year since 2005. Last year, the number of properties put up by owners hit a 10-year high, with 810 properties auctioned with a value of $264.7 million. This compares with $129.54 million for 2006.

The transparency of the auction method is the chief reason for its popularity. This assures sellers that they are getting a good price for their properties. Its popularity extends beyond individual owners to companies that are looking to divest or restructure their property portfolio.
 
The auction market this year is likely to see a 25 per cent drop in value transacted to $300 million, as we expect fewer high-end homes and old apartments with en bloc potential to be put under the hammer.

However, those sectors that have yet to experience sharp price increases are likely to see more activity this year. One such sector would be commercial properties like shophouses. According to Urban Redevelopment Authority numbers, residential prices climbed 31.2 per cent in 2007, while the retail sector only gained 13.2 per cent.

Spotlight on shophouses

Last year, a total of 527 shops/ shophouse units were put up for sale via auction by both individual owners and companies. A total of $78.1 million worth of such units were sold under the hammer, against just $28.75 million in 2006. That’s a jump of 172 per cent!

The sale value of shops/shop houses is expected to moderate to $50 million this year due to the cautious mood in the market.

With the US sub-prime debacle crimping sentiment in the property market this year, particularly the lacklustre residential sector, savvy investors could consider turning their attention to strata titled shops, private shophouses or HDB shops.

Shophouses, like other types of property, are assets that can hedge against inflation, enabling investors to benefit when the capital value appreciates in times of rising prices. Additionally, for owner occupiers, the shop/shophouse acts as a hedge against rental increases. By purchasing a unit, owner occupiers are typically converting their monthly rent to mortgage payments, which could turn out to be much lower.

Auctions are a good avenue to source for shops/shophouses that are affordable, strategically located, limited in supply and have attractive yield or en bloc potential.

Many strata titled shops were successfully transacted at auctions at affordable prices, many of them below $500,000. Such a price range is considered a bargain, particularly when some of them are located in the heart of town or next to future MRT stations.

For instance, two strata titled shops at Excelsior Hotel and Shopping Centre located at Coleman Street, near the City Hall MRT station, were sold for $318,000 and $340,000, respectively. Additionally, several shop units at Grandlink Square, near the future Paya Lebar MRT interchange, were sold at prices ranging from $51,000 to $226,000.

There are also many attractive picks among HDB shophouses put up for sale by mortgagees at auctions and such properties are usually attractively priced. These shophouses consist of shop space on the ground level and living quarters, often a three-room flat, on the upper level. Considering the high cash over valuation done on some HDB flats, HDB shophouses priced between $600,000 and $700,000 are some of the attractive options appearing at auctions. Some successful transactions include HDB shophouses located in Chai Chee and Bedok North Avenue 1, which were sold for $640,000 and $700,000, respectively.

Investors and business owners see shops and shophouses as alternative office space, which is facing a current supply crunch. Shophouse units located near or within the CBD are in high demand and they are usually near MRT stations. For instance, a three-storey shophouse unit with dual frontage at Stanley Street was sold for $4.21 million last year. Similar properties include shophouse units located at Outram Park and South Bridge Road, which were successfully auctioned off at $2.73 million and $2.6 million, respectively.

HDB shops/shophouses located in high pedestrian traffic areas like the town centre, MRT station or bus interchange are in demand and can fetch record prices at auctions. For example, a shop unit at Heartland Mall in Hougang was sold for $8.5 million, while another shophouse at Upper Changi Road, which is situated beside an upcoming mall and near the Bedok bus interchange and MRT, was sold for $7 million at an auction last year.

Similarly, an HDB shop at North Bridge Road was sold for $528,000 last year, while a shop at Crawford Lane located opposite a future hotel at Victoria Street, was sold for $495,000 this year.

Limited supply

There are a limited number of strata titled shop units available in the market as the majority of shopping centres in Singapore are owned by Reits like CapitaMall Trust, Frasers Centrepoint Trust and Macquarie MEAG Prime Reit.

For new developments like the Icon at Tanjong Pagar, the developer would usually hold on to the commercial component for lease instead of selling the individual units.

Conservation shophouses are popular with investors due to their limited supply and architectural characteristics. Last year, a three-storey conservation shophouse located in the Kampong Glam conservation area and near the MRT station was sold for $2 million. Another shophouse at Prinsep Street, opposite the future Singapore Art School, was sold at an auction for $3.78 million.

Attractive yield

One compelling reason why investors are keen on shops/shophouse units is because such properties can generate a yield of 4-6 per cent. The yield attained from such investment exceeds the paltry interest rate of fixed deposits which is currently under 2 per cent.

En bloc potential

Shop/shophouse units that are located within old developments usually attract keen bidding at auctions. Investors would have explored the possibility of such old developments being sold collectively in future. Last year, two shop units in Katong Plaza, which had en bloc potential, were successfully auctioned for $225,000 and $325,000, respectively.

Grace Ng is deputy managing director and auctioneer at Colliers International
 
Source : Business Times - 27 March 2008