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New COO says it will be on the lookout for further acquisitions

UNITED Overseas Land is extending its buying spree into the new year with its latest acquisition of a residential redevelopment site in Akyab Road for $20.9 million.

And UOL’s new chief operating officer Liam Wee Sin, who was previously group general manager and promoted yesterday, confirms that it is actively looking to expand its land bank.

The freehold Akyab Road site, which is in the Novena area, will be amalgamated with a smaller adjoining site in Minbu Road that it bought in October 2005. Last year, UOL made a slew of acquisitions which included Maryland Park, Eng Cheong Tower, Oasis Garden and Bo Bo Tan Mansion/Gardens.

Mr Liam said UOL expects to launch several projects this year, including one in Kuala Lumpur.

Indeed, of its new land bank, more may be expected to be overseas. ‘For en-bloc sales sites especially, we are increasingly faced with fast escalating and unrealistic asking prices,’ he added.

Saying that today’s property market is ‘highly competitive’, Mr Liam noted that an ‘immense amount of energy is spent on product development’. Some of UOL’s better known products include the award winning One Moulmein Rise in Novena.

New niche products include its new economy condominium at One-North in Buona Vista, a joint venture project with Kheng Leong Company and Low Keng Huat. As COO, Mr Liam will oversee the investment, project, marketing and engineering divisions. UOL is also looking to expand its service apartment arm which will also fall under the COO’s purview.

‘We have just bought One Residency in Kuala Lumpur and we plan to operate it as service apartments. Locally, we will also be launching our proposed service suites at Somerset Road sometime next year,’ he added.

Also promoted was general manager of finance Wellington Foo who will now serve as CFO of UOL.

Perhaps more indicative of UOL’s expansion plans is the confirmation that Kam Tin Seah, former Centrepoint Properties’ assistant general manager of development, has joined UOL and is now general manager of investments.

Source : Business Times - 7 Feb 2006

Seven sites already launched, as market rides on positive economic outlook

IT IS no surprise that optimism is flowing in the property market: The year has barely begun, but already seven collective sale sites have been launched.

And that is coming off a record year in 2005 when 37 collective sales of residential sites worth $2.09 billion were completed - more than double the deals and value achieved in 2004.

Ms Soon Su Lin, executive director of property consultancy CB Richard Ellis, said such sales will continue at the same pace as last year thanks to a good economic outlook.

Supply and demand tells the story: Sites sold en bloc last year generated a potential supply of 3,860 new homes, while overall, 8,955 new homes were sold last year.

‘So potential supply from the sites being sold en bloc is expected to meet good demand when they are ready for launch,’ said Ms Soon.

Home owners in collective sales typically get at least 30 to 50 per cent more than what they would have reaped from an individual sale. But the risk, said consultants, is that owners may have unrealistically high price expectations.

Typically, potential collective sale developments are more than 10 years old with rising maintenance costs.

Selling these sites require the consent of at least 80 per cent of the owners; those less than 10 years old need 90 per cent acceptance.

Because people looking to rent tend to migrate to new projects, owners of older projects find it harder to find tenants. And with maintenance costs rising, they may be keener on a collective sale, said DTZ Debenham Tie Leung director Tang Wei Leng.

But that does not mean everyone can cash in.

Prime sites in districts 9, 10 and 11 clearly have the best chances. The Cairnhill area appears to have the most potential sites, though projects in posh Ardmore, Draycott, Nassim, Leonie Hill and St Thomas Walk are also very popular, said Credo Real Estate executive director Tan Hong Boon.

‘Sites in Cairnhill are very sought-after and the success rate will be good if they are not over-priced,’ he said.

In general, most owners ask for about $800-$850 per square foot per plot ratio, though some want as much as $1,000 psf ppr, he said.

Still, the highest residential collective sale land price last year was only at $876 psf ppr - made by Wheelock Properties in September for The Habitat II in Ardmore Park.

Areas in Tanjong Katong Road, Meyer Road, Amber Road, East Cost Road and the Telok Kurau area also have good chances, said the head of investments at Jones Lang LaSalle, Mr Lui Seng Fatt.

The best candidates are developments of six storeys or less, with a small number of units or a large plot of land, said DTZ’s Ms Tang.

‘Those with facilities would have good rental value so the owners won’t be very motivated to sell,’ she said.

Credo Real Estate’s executive director, Mr Karamjit Singh, said: ‘The poorer the physical conditions, the better the chances.’

Surroundings also play a part. For instance, a low-rise development in an area with mostly high-rise projects could be a strong target, he said.

It could be tricky for mixed developments as shop owners may not want to sell. ‘The revenue they derive from the shops may be much better than the property’s value,’ said Ms Tang. ‘If they move out, they will lose the goodwill they have established over the years.’

Consultants said many former HUDC estates like Pine Grove, Gillman Heights and Farrer Court have expressed interest in selling collectively.

So have some owners of ageing private properties such as Grand Tower in Moulmein Rise, Eng Tai Mansions at St Thomas Walk, Peck Hay Mansion in Cairnhill and The Ardmore at Ardmore Park.

But getting enough owners to agree to a collective sale could take years. ‘It’s a waiting game,’ said Ms Tang.

A home owner Gerald sold his Parry Gardens home near Yio Chu Kang in 1993, even though a neighbour said there may be plans to sell en bloc.

‘I missed out on making money but the deal was only concluded in 2005! I would have had to wait for more than a decade,’ he said.

Source : Straits Times - 31 Jan 2006

DEVELOPER SC Global, better known for its high-end residential projects, is paying $17.8 million for a Martin Road freehold property that can be redeveloped on a residential-cum-commercial basis.

Through its wholly owned subsidiary Kimmingston Pte Ltd, SC Global struck the deal with Hock Giap Company Pte Ltd for the 17,664 sq ft property at 38 Martin Road.

With an estimated development charge of $9.1 million and a gross plot ratio of 2.8, the cost works out to about $544 per sq ft per plot ratio.

An eight-storey warehouse building now sits on the site, with tenants. It has a zoning of residential, with commercial enterprises on the first floor.

SC Global owns a vacant freehold site next to it measuring 26,813 sq ft with a plot ratio of 2.8. It could combine that site with its newest acquisition, giving a land area of 44,477 sq ft.

That could be developed into a 15-storey residential and commercial development with a potential gross floor area of 124,536 sq ft.

Other residential developments near the site include CapitaLand’s 43-storey Rivergate and City Development’s The Pier at Robertson.

Kimmingston has put down 10 per cent of the purchase price for 38 Martin Road and is expected to pay the balance in 12 weeks. The acquisition is expected to be completed in April. Meanwhile, SC Global has called an EGM on Feb 15 for shareholders to vote on whether to allot and issue 5,754,000 placement shares to Mass Noble Ltd at an issue price of $1.35.

Source : Business Times - 27 Jan 2006

PROPERTY developer Hoi Hup, part of Straits Construction Group, is understood to have bagged the 877-year leasehold Kim Yam Mansion, off River Valley Road, for about $63 million through a collective sale.

The price works out to about $460 per square foot of potential floor area inclusive of a development charge of about $300,000.

Owners of Kim Yam Mansion’s 40 apartments will receive more than $1.5 million each, or up to three times the $500,000-$600,000 the units would have fetched if they were sold individually.

This premium is one of the highest since en bloc sales began in Singapore in 1994. Sellers in most deals these days see collective premiums of about 30-50 per cent.

Jones Lang LaSalle brokered Kim Yam Mansion’s sale.

The four-storey development is about 40 years old.

It has a land area of 49,080 square feet and the site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area).

Based on its purchase price, Hoi Hup’s breakeven cost for a new condo on the site will be about $670-$700 psf, say analysts.

Kim Yam Mansion is the first collective sale to benefit from a new law that took effect last month, facilitating en bloc sales of estates where the original landowner/developer retains the freehold title despite giving flat owners leases ranging from 850 to just under 999 years.

In such estates, strata titles were not issued under an old law, so the developer issued long leases instead. In the past, some of these landowners demanded hefty payments - amounting to millions of dollars - before they would consent to an en bloc sale.

This ate into proceeds for the flat owners, sometimes effectively blocking an en bloc deal.

Jones Lang LaSalle, Kim Yam’s marketing agent, worked with real estate lawyer S K Phang to highlight the anomaly in the law to the authorities.

This was fixed through an amendment to the Land Titles (Strata) Act that took effect on Dec 1, under which such landowners lose all rights to the land upon an en bloc sale.

The Singapore Land Authority has said that in all, 24 sites will be affected by the rule change - but did not identify them to protect the privacy of the present unit owners.

Source : Business Times - 26Jan 2006

AMBERVILLE was snapped up yesterday for the bumper price of $183 million and in the process became the first former HUDC estate to be sold collectively.

Its 168 owners have plenty to celebrate. The price exceeded their reserve of $171 million and each will get an average $1.089 million for their unit, at least 85 per cent above market value, said sale manager Knight Frank.

‘For a 99-year site, it’s a record price,’ said Ms Tang Wei Leng, director of property consultancy DTZ Debenham Tie Leung.

Far East Organization outbid rivals City Developments, Wing Tai and MCL Land for the Katong site in a tender process that closed on Tuesday.

Its price translates into $396 per square foot per plot ratio (psf ppr), after accounting for a development charge of about $35.2 million and a differential premium of $23.8 million to top up the lease from 71 years to 99 years.

Knight Frank said the price indicates ‘developers’ confidence in the property market’. The price also surpassed recent prices of nearby sites. Centrepoint paid $280 psf ppr in 2001 for a nearby 99-year leasehold site, which is now home to the 612-unit Cote d’Azur next to Parkway Parade.

Recent freehold collective sales in the Katong area were also made at lower levels: Maryland Point site went for $351 psf ppr and the Sea View condominium site for about $370 psf ppr.

Knight Frank said the Amberville site is a ‘rare and substantial’ one where Far East can capitalise on the unblocked views of the sea and East Coast Park.

Amberville is likely to break even above $600 psf to $650 psf. Knight Frank said it can accommodate a condominium of up to 36 storeys, with 474 units of 1,200 sq ft on average each.

The firm also brokered the sale of Eng Cheong Tower, the first 99-year leasehold property to be sold en bloc, and the deal that sparked interest in collective sales of such leasehold properties.

Other ex-HUDC estates, such as Pine Grove and Farrer Court, also hope to land a collective sale.

Next week, the tender closes for the 342-unit Minton Rise - the first ex-HUDC estate to get in-principle approval for a lease top-up to 99 years.

Source : Straits Times - 19 Jan 2006