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I Refer to Mr Michael Rebaczonok-Padulo’s letter, ‘He stood to lose if collective sale had gone through’ (ST, Nov 18), Mr Tan Koh Young’s letter, ‘Apartment owners in this mixed development lose out’ (ST, Nov 18), Mr Adrian Tan Beng Kiat’s letter, ‘Authorities should clarify stance’ (ST, Nov 25) and Mr Robert Stone’s letter, ‘40% floor area but 5% share values’ (ST, Nov 25).

Under the law, the Strata Titles Board (STB) can disapprove an en-bloc sale application if an objecting owner can show that he will suffer financial loss or that the proceeds of sale are insufficient to redeem any mortgage or charge in respect of his unit.

The Land Titles (Strata) Act (available at http://statutes.agc.gov.sg/) provides that an owner would be considered to have suffered a financial loss if the proceeds of sale for his unit, after any deduction allowed by the STB, are less than the price he had paid for the unit.

The stamp duty and legal fees which an owner incurs when he purchases his unit have been permitted as deductions by the STB.

An owner could furnish to the STB evidence of relevant expenditures incurred in relation to the unit for the board to decide what it will allow as deductibles.

The law does not specify how the sale proceeds should be distributed among the unit owners. The distribution method is to be determined by those who sign the collective-sale agreement, i.e., the majority owners, usually in consultation with their property consultants.

Nevertheless, the STB hearing the en-bloc sale application has to be satisfied that the transaction was made in good faith, taking into consideration, among other things, the method of distributing the proceeds of sale.

Mr Adrian Tan asked how the Singapore Land Authority (SLA) arrives at a decision to allow for the lease on leasehold properties to be topped up. SLA will look at several factors, principally as to whether the landowner’s proposal would result in land optimisation and whether it is in line with the Government’s long-term planning intention.

Mr Tan Koh Young and Mr Stone do not agree that share value should be used to determine voting rights for purposes of an en-bloc sale. They suggest that floor area be used instead. This matter is not so straightforward. For example, the owner of a shop in a mixed development may argue that the use of floor area is unfair to him as he had paid several times more for his shop on a per-square-foot basis, compared to a residential unit.

In deciding on the method to determine voting rights, the Government had considered the experiences and practices of other jurisdictions and adopted share value as the basis. This approach has generally worked well. Nevertheless, we will take into account feedback as we review this and other aspects of en-bloc sales in the light of our own experience.

Radha S. Khoo (Ms) Head (Corporate Communications) Ministry of Law

Source : Straits Times - 29 Nov 2006

The Urban Redevelopment Authority (URA) has awarded the tender for a hotel site at Mohamed Sultan and Nanson roads to Hong Leong group’s Republic Hotels & Resorts for $45.8 million or $5,578 per square metre.

The tender for the 2,932 sq m leasehold site was launched on Sept 25. The Hong Leong group had put in the highest bid when the tender closed on Nov 21.

Separately, URA also said yesterday that two reserve list hotel sites at Tanjong Pagar are up for application.

Developers can submit a minimum bid and request that these sites be put up for tender.

One is at Tanjong Pagar Road/Gopeng Street and the other at Tanjong Pagar Road/Tras Street. The 99-year leasehold sites are part of the government land sales programme for the second half of 2006.

URA said yesterday that the new projects would help meet demand for hotel rooms, which is expected to increase given the Singapore Tourism Board’s target of 17 million visitors by 2015.

Together with existing hotels in the vicinity, developments at the new sites will help turn the area into a hotel cluster.

The Tanjong Pagar Road/Gopeng Street site is about 0.24 of a hectare and has a gross plot ratio of 8.4, which translates to a maximum permissible gross floor area of 19,933 sq m.

At Tanjong Pagar Road/Tras Street, the land is about 0.29 ha and has a gross plot ratio of 5.6, giving rise to a maximum permissible gross floor area of 16,047 sq m.

Source : Business Times - 29 Nov 2006

Mapletree to include its office buildings in HarbourFront 

The new VivoCity mall has been named as anchor asset for a $2.5 billion mixed real estate investment trust (Reit) which Mapletree Investments says it could launch by the end of next year.

Other properties likely to be included in the Reit could include some of Mapletree’s office buildings in the HarbourFront precinct and its PSA Building at Alexandra Road.

Mapletree CEO Hiew Yoon Khong said yesterday that the final size of the ‘diversified’ Reit will depend largely on the actual launch date of the trust.

He was speaking at the ground-breaking ceremony of Mapletree’s latest office development at the HarbourFront precinct, provisionally named Mapletree Lighthouse. He said that the building, when completed in the last quarter of 2008, would go into the Reit.

He also said that the Reit would initially consist of properties in Singapore but would eventually grow to include overseas property.

The fully-owned unit of Temasek Holdings had earlier planned to float this Reit by the end of 2008 but the strong performance of VivoCity is thought to have accelerated its launch plans, market watchers said.

The mall, with slightly over one million sq ft net lettable area, opened early last month. Mapletree said rentals for retail space there are between $5 and $30 psf and that its committed leases are yielding a net profit income yield of 10 per cent on its total development cost.

Mapletree COO Tan Boon Leong also said that VivoCity is estimated to be valued between $1.7 billion and $2 billion.

Mapletree also owns HarbourFront Centre, formerly known as World Trade Trade Centre, and the nearby entertainment hub, St James Power Station.

Office buildings are, however, likely to make up a significant part of Mapletree’s diversified Reit. In the HarbourFront district, Mapletree owns a 61 per cent stake in HarbourFront Office Park Towers One and Two and a 30 per cent stake in Keppel Bay Tower.

Bullish on the prospect of the market office there, Mr Tan said he expected rents to rise by 20-30 per cent in 2007.

Adding to its growing portfolio, Mr Tan confirmed that Mapletree is planning to build another office building on the site of the current Singapore Port Institute building on the waterfront. ‘We are still working on planning issues but it could kick off in one year’s time,’ he said.

Mapletree’s maiden Reit, Mapletree Logistics Trust, was floated on the Singapore Exchange last year. Earlier this year, BT reported Mapletree also has plans to launch an industrial property Reit by end-2007 and is negotiating to buy more than US$2 billion of industrial property in the region.

Asked about the timimg of the launch of the diversified Reit, in light of comments from market analysts that what was needed was larger Reits and not just more Reits, Mr Hiew said that what was important for a Reit was a ‘growth plan’ and that ‘there is still room to grow in Singapore’.

Source : Business Times - 29 Nov 2006

Another new housing project has been entirely sold on the day of its launch. All 85 units of Hoi Hup Realty’s The Ford @ Holland were sold out within a few hours of its launch yesterday, with the most expensive unit - a 4,000 sq ft townhouse with basement and attic - going for just over $4 million.

Ford @ Holland

More than 200 people turned up for the launch that started at 11.30am yesterday, and within hours, the 10 townhouses and 75 apartments had been snapped up.

‘More than 80 per cent of the buyers are locals,’ said Ms Margaret Thean, executive director, DTZ Debenham Tie Leung (SEA). ‘Of course, there were some expats too, who bought the units for investment and for their own stay.’

The smallest studio units - about 420 sq feet - were sold for just over $500,000, which makes the average selling price of The Ford @ Holland about $1,218 per sq ft.

The smallest townhouse, of about 3,300 sq ft, went for about $3.7 million.

Recent new projects in prime areas have been snapped up, fuelled by a recovery in the real estate market.

Katong’s Grand Duchess at St Patrick’s sold out within 36 hours of its launch, even after its price was raised twice over last Friday and Saturday to $740 per sq ft, or about $1 million for a three-bedroom unit.

The first phase of the 99-year leasehold Metropolitan at Redhill - 250 apartments - also sold out in a weekend, with prices going up to $780 per sq ft.

The Ford @ Holland’s appeal was its location, said Wong Sjew Hung, director in charge of residential projects at Hoi Hup. The project is situated at the junction of Ford Avenue and Holland Road, near the future Holland Village MRT station.

The project also has a 25-metre pool.

‘Our studio units also came with kitchen fittings and some furniture, so most buyers bought these to invest in, as it’s easier to get tenants,’ said Ms Wong.

Following this launch, Hoi Hup will have two new projects for sale early next year. One is at River Valley and the other at Cairnhill.

The River Valley project will have 118 units and will be launched in January and the Cairnhill one, with 48 units, is likely to be launched in March, Ms Wong said.

These will be luxury developments, she said, but she cannot say for now how much the projects will fetch. Both, like The Ford @ Holland, are freehold estates.

‘It’s still a few months away so nobody can tell how the market will move,’ she said.

Source : Business Times - 29 Nov 2006

MCL Land is set to increase its presence in the Holland/Farrer roads area after it emerged as the top bidder for the collective sale of Holland Hill Mansions, BT understands.

Its $292 million price works out to about $750 per square foot of potential gross floor area. No development charge is payable. The price is 36 per cent higher than the $550 psf ppr unit land price MCL paid for the nearby Waterfall Gardens and a couple of smaller adjoining sites at Farrer Road in February.

Both Holland Hill Mansions and Waterfall Gardens are on freehold sites zoned for residential use with a 1.6 plot ratio (ratio of maximum potential gross floor area to land area). Both sites have a 12-storey maximum height. The deals were handled by DTZ Debenham Tie Leung.

The Holland Hill Mansions has a land area of 243,525 sq ft and can be redeveloped into a new condo with about 205 units averaging 2,000 sq ft. Based on MCL’s purchase price, the breakeven cost works out to about $1,100 to $1,200 psf, say analysts. Market watchers suggest that MCL Land may take a partner to develop the project.

The existing Holland Hill Mansions have 116 apartments, a penthouse and a shop unit. Through the collective sale, owners stand to receive sums which could be 65 to 85 per cent more than they might have had by selling their homes individually, according to some estimates.

On the stock market yesterday, MCL ended one cent higher at $1.70.

Source : Business Times - 29 Nov 2006