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The fourth level of Heartland Mall near Kovan MRT Station was sold for $8.5 million on Thursday at a DTZ Debenham Tie Leung auction. According to some auction regulars present, the buyers are believed to be members of the Cheong family who developed International Plaza on Anson Road and who still have some units there.

The family members are believed to be cousins of Simon Cheong of SC Global Developments fame. The other star attraction at the auction - Jurong Reptile Park - was withdrawn after receiving a top offer of $860,000. But immediately after the auction, an individual is said to have made an offer of over $1 million and negotiations are expected to take place. The investor is expected to continue leasing out the retail outlets at the park. However, he may remove the reptiles and introduce some new sports and recreational attraction.

The 206,304-square-foot site has a remaining lease of about nine years. The park - formerly known as Jurong Crocodile Paradise - drew four bidders. The opening price of $1.8 million sought by DTZ auctioneer Shaun Poh found no takers. Instead, there was a counter offer by a bidder at $600,000, and bidding continued until it reached a high of $860,000, at which point the property was withdrawn.

The property was put up for sale by liquidator Stone Forest Corporate Advisory Pte Ltd.

The fourth floor of Heartland Mall drew just one bid - of $8.5 million - from the Cheong family. But that was good enough for seller Wang Lei Investment, understood to be linked to the company that owns karaoke chain Kbox. The space comprises six units adding up to 21,131 square feet of lettable area. Five of the units are leased until August 2012 to private schools, at a combined monthly rental of about $67,200. This reflects a net yield of just over 8 per cent. The four-storey mall stands on a site with a remaining lease of 76 years.

Wang Lei bought the six units for $6.8 million from mortgagee Maybank last year.

Source : Business Times - 31 Mar 2007

Fourth floor of Heartland Mall also up for auction next week

JURONG Reptile Park is back on the auction block, this time as a liquidator’s sale. Also in the line-up for DTZ Debenham Tie Leung’s auction on March 29 is the fourth floor of Heartland Mall near Kovan MRT Station.

DTZ said the indicative price for Jurong Reptile Park - which is on a 206,304 sq ft site with a remaining lease of about nine years - is about $2 million to $2.2 million. The attraction, formerly known as Jurong Crocodile Paradise, is a two-storey property.

Jurong Bird Park, which is understood to have been interested in the property when it went under the hammer five years ago, could be interested again, say market watchers.

After all, the two parks are just a stone’s throw away from each other, and even share a car park, allowing Jurong Bird Park to tap synergies from the two properties.

The site is zoned for ‘Sports & Recreation’ use, according to DTZ. The property is being put up for sale by liquidator Stone Forest Corporate Advisory Pte Ltd. It was formerly owned by ‘Geylang King’ Eric Tan, before mortgagee United Overseas Bank took over the asset. UOB tried in vain to sell the property during a 2002 auction.

The park was once famous for its crocodiles, but today the only reptiles there are some iguanas and snakes. Existing tenants - which include a KTV lounge, eateries and a beer garden - pay a total rental of almost $27,000 a month, not much more than the monthly ground rent of about $20,000 payable to JTC Corp.

‘Clearly, potential bidders will be looking at a major revamp, to make their investment profitable,’ says DTZ auctioneer and director Shaun Poh.

Heartland Mall

Over in Hougang, the strongest contender for Heartland Mall’s fourth level, market watchers reckon, would be the tie-up between a Lend Lease managed fund and Guthrie that owns the lower three floors of the mall, which stands on a site with a remaining lease of 76 years.

The fourth level space is being sold by owner Wang Lei Investment, understood to be linked to the company that owns karaoke chain Kbox.

The space comprises six units adding up to 21,131 sq ft of lettable area. Five of the units are currently leased to private schools. The sixth is vacant.

Wang Lei bought the six units for $6.8 million from mortgagee Maybank last year. It is understood to have upped rents of the tenants and extended their leases to August 2012. The monthly rental collection for the five leased units is about $67,200. The properties are being sold with existing tenancies.

The $9.5-9.8 million asking price reflects a property yield of about 7.4-7.6 per cent.

DTZ’s auction will begin at 2.30 pm next Thursday at Amara Hotel.

Meanwhile, the former factory building of Asia Pulp & Paper at 118, Pioneer Road was withdrawn from a Knight Frank auction yesterday after the company settled outstanding property tax owed to the Inland Revenue Authority of Singapore.

Source : Business Times - 23 Mar 2007

The offerings at auctions have evolved from the typical mass market property to include more prime properties. And they are attracting international buyers as well, writes GRACE NG

AUCTIONS are fast gaining acceptance by both sellers and local and foreign buyers as a mode of sale for non-mortgagee properties. In fact, one will be amazed by the wide selection of properties available at auctions.

In recent years, the market has seen a growing trend of property owners putting up their properties for sale via public auction. This is very different from the situation a decade or two ago, when vendors were reluctant to take the auction route due to the stigma it had of being the province of financially strapped sellers. Last year, 600 owners chose to sell via auctions, a jump of 67 per cent from 2005.

An auction sale has the appeal of transparency, with its open system of bidding. In the current buoyant market, many sellers feel that an auction is a quick way to get the most competitive price for their properties. The list of properties for auction is also made available to the public through newspapers and auction house websites about two weeks before the auction.

With the growing popularity of auction sale, the market is also seeing increased response to auction advertisements. Property buyers - both local and foreign - are flocking to auctions to bid for the property of their choice. Nowadays, it is not surprising to see foreigners, particularly from Malaysia and Indonesia, at local auctions bidding for property.

Over the years, the offerings at auctions have also evolved from the typical mass market property to include more prime properties. Such properties, which include conservation houses, prime strata-titled commercial properties, good class bungalows (GCB), properties with en bloc potential and luxury homes, are highly sought after due to their location and scarcity.

Conservation properties

Conservation properties located at historical areas, such as Boat Quay, Chinatown, Joo Chiat and Little India, are one category of property that investors and home buyers eye for their prime locations and heritage value.

Just this month, an owner sold a conservation terrace house at Emerald Hill for $4.4 million at an auction. Last year, owners successfully sold shophouses at Dalhousie Road, Joo Chiat and Syed Alwi Road for $2.4 million, $2.95 million and $1.03 million, respectively.

Strata-titled commercial properties

There are an increasing number of sellers putting up strata-titled commercial properties for auction. Leveraging on the rejuvenation of Orchard Road, Singapore’s most popular shopping corridor, owners are taking the auction route for shop units in developments like Lucky Plaza and Orchard Plaza.

In view of the current tight office supply and the lack of strata-titled office space available for sale, sellers who put up their prime office space for auction were amply rewarded. For instance, two office units at Suntec Tower were sold for $6.5 million ($832 per sq ft) in April while an office unit at Peninsula Plaza was sold for $1.65 million ($1,111 psf) in November last year. In March, an office unit at Peninsula Plaza was sold by the owner via auction for $650,000 ($1,259 psf).

Properties with en bloc potential

An auction sale may be the next best alternative for owners who do not want to wait for the outcome of a potential collective sale. Some examples are units at Tulip Garden and The Beaumont, which were sold for $1.73 million ($650 psf) and $1.38 million (S$1,562 psf), respectively.

These properties often see good response at auctions as investors are willing to pay top dollar to join the en bloc bandwagon. This has been fuelled by the active en bloc sales market in recent years.

Good class bungalows

GCBs with land sizes starting from 15,000 sq ft, generally located within designated areas such as districts 9, 10 and 11, have drawn much interest at auctions. Properties at Gallop Park and Astrid Hill, which were put up for auction last year, were sold for about $7.5 million and $11 million, respectively. More owners are willing to put their GCBs up for auction due to their rising value and limited supply. There are only about 2,500 GCBs in Singapore and prices have climbed by nearly 20 per cent in the past 12 months.

High-end homes

With the recent hype over the luxury/high-end residential sector, developers have also taken the auction route in selling their high-end projects. For instance, Sentosa Cove Pte Ltd put up 12 bungalow parcels at Sentosa Cove for auction last year via the partnership of Colliers International and Christie’s Great Estates.

The session was attended by high net worth individuals, both locals and foreigners from Hong Kong, India, Indonesia and Malaysia. It was also the first time that a local auction was broadcast live via satellite to countries like Australia, China and Hong Kong. All 12 parcels were successfully sold - amid competitive bidding - for a total value of $86.34 million, achieving a record price of $1,039 psf.

Tuan Sing Holdings is another developer which is tapping the international auction scene. The developer will be putting up 12 condominiums at Botanika, a 34-unit luxury development next to the Singapore Botanic Gardens, for auction this year. This is the first time an uncompleted project is being offered for international auction.

With many unique advantages - including a strategic location, stable government, a competitive workforce and a pro-business environment - Singapore is well-positioned as a global city and the gateway to Asia. In addition, Singapore is evolving into a wealth management and education hub. This, coupled with the increased emphasis on the biomedical, multimedia and tourism industries, has attracted an influx of foreign investors and expatriates, enhancing the appeal of properties here.

Going forward, while the spectrum of properties being offered at auctions is likely to be much wider, the reach of auction will also extend from the local to the international arena.

The writer is deputy managing director (agency and business services) and auctioneer at Colliers International

Source : Business Times - 22 Mar 2007

Authority acts to recover more than $1.8m property tax on building

ASIA Pulp & Paper’s former factory at Pioneer Road is being put up for auction by the taxman.

118 Pioneer Rd

APP - part of the Sinar Mas Group, which defaulted on US$14 billion in debt in 2001 - failed to make property tax payments for the four-storey detached building at 118 Pioneer Road. IRAS, the Inland Revenue Authority of Singapore, is owed more than $1.8 million in property tax on the building, a sum which has built up since 2003, IRAS spokeswoman Lee Leng Kiong said in response to BT’s queries.

The indicative price of the former APP factory is understood to be $10 million to $12 million.

IRAS will return any balance on the sum received to the owner, after recovering outstanding tax, penalty payment, interest, and the cost of recovery.

IRAS auctions off properties only as a last resort to recover property tax - after the owner repeatedly fails to pay or defaults on his payment, despite many reminders, Mrs Lee said.

Last year, IRAS served notice of sale to eight property owners, including APP for 118 Pioneer Rd. Three owners came forward to settle the tax arrears after receiving the notice, and four properties have been sold. The Pioneer Road factory is due for sale at a Knight Frank auction at 2.30 pm on March 22 at Carlton Hotel.

Mrs Lee said that since January, the authority has issued notices of sale for two more properties - a site at Fernhill Road and 8 Tong Watt Road. IRAS is owed $52,920 in tax arrears for the first property, and $58,035 on the other.

‘We are currently reviewing another 10 cases and may resort to auction sale if property owners do not settle the long outstanding taxes within a reasonable time,’ Mrs Lee said.

The notice of sale issued by IRAS serves as a final warning to the property owner that the Comptroller of Property Tax intends to seize and sell his/her property to recover long outstanding property tax. The owner has up to three months from notice date to settle tax arrears.

If tax is still not paid up by the end of the three months, or if the owner does not come forward to make arrangements to pay for the taxes, the Comptroller will sell the property by public auction, Mrs Lee said.

Industry sources say APP had once used the Pioneer Road factory for storage and paper-related manufacturing. The factory is believed to have been vacant for almost five years, during which it has been on and off the market several times. The most recent attempt by APP to dispose of it was around last July/August when CB Richard Ellis attempted to sell it through a tender. While that exercise is said to have drawn some bids, these were not accepted by the owner.

The factory stands on a 173,223 sq ft site with a 30-year leasehold tenure from January 1996. A land rent of nearly $220,000 is payable annually. The site is zoned for Business 2 use, which means it is suitable for light industry, general industry, warehousing, utilities or telecommunications.

The building - at the corner of the main Pioneer Road and Tuas West Road - has a gross floor area of 414,647 sq ft. It is being sold with vacant possession.

Knight Frank will also offer during the same auction six adjoining restored freehold shophouses on three plots of land at North Bridge Road near its junction with Kandahar Street, within the Kampong Glam conservation district.

The indicative price of the entire block of six shophouses is $8 million to $8.2 million, although Knight Frank may also offer them separately as three lots.

On offer at the same auction is a batch of five adjoining two-storey shophouses at the Lorong 25A Geylang/Sims Avenue corner on an 8,297 sq ft freehold site.

The indicative price is $10 million, and the properties will be sold with existing tenants - which include an eating house and Singapore Pools - currently paying about $40,700 a month. The five units are on a single land title and being offered for sale by their owner.

Colliers International’s March 21 auction at Amara Hotel will offer a 99-year leasehold, conserved, three-storey corner shophouse with an attic at 31 Stanley Street. The ground floor is leased to an eating house until May 31, 2008, while the upper levels are occupied by the owner, Multi-Tradeplus (Asia) Pte Ltd, which will vacate the premises.

Source : Business Times - 15 Mar 2007

AN unnamed developer has entered a bid of $79.4 million for a 0.24 hectare hotel site at the corner of Tanjong Pagar Road and Gopeng Street, triggering a public tender for the site. Market watchers, however, reckon that the plot could fetch around $100 million in the tender.

The site has a plot ratio of 8.4, giving it a maximum potential floor area of 19,900 square metres, which means that the trigger price works out to about $370 per square foot (psf) of gross floor area.

However, a price tag of around $500 psf is achievable, said Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean.

‘Looking at past transactions, bids were all around $500 psf,’ Ms Chee said. ‘The winning bid will probably be about the same.’ At $500 psf, the price for the site works out to $107.3 million.

This site is the first hotel site to be triggered for sale from the reserve list in 2007. Under the government’s reserve list system, a site is only offered for public tender if it receives an application from a developer who commits to bid for the site at a price which is acceptable to the government.

URA has received an application from a developer who has committed to bid a price of at least $79.4 million for the site. The government body said that the identity of the applicant will not be released.

URA will launch the public tender for the site in about two weeks’ time. The launch date will be announced later and about nine weeks will be set aside for the tender.

‘The land parcel is conveniently situated in close proximity to the Tanjong Pagar MRT station, which will provide hotel guests the convenience of travelling to other parts of the city and the rest of the island,’ said URA. ‘Complementary retail, restaurant and entertainment uses within the development will also add to the diversity of amenities and vibrancy of the area.’

Source : Business Times - 15 Mar 2007