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The CK Tang department store and adjoining Marriott Hotel on the prime Orchard/Scotts Road corner are not for sale.

This is despite interest in buying the properties expressed by a string of suitors, including Real Estate Investment Trusts, according to CK Tang chairman Tang Wee Sung.

There has also been confusion among some of CK Tang’s small shareholders and even analysts who think that the listed retailer owns the entire complex including the hotel, Mr Tang says.

The freehold hotel/retail complex - known as Tang Plaza - is a strata titled property. CK Tang owns its department store space, giving it only about 28 per cent of the total share value in Tang Plaza.

Tang Holdings - a private entity which is majority controlled by Mr Tang’s younger brother Wee Kit - owns the Marriott Hotel, translating to 72 per cent share value in Tang Plaza.

Tang Wee Sung holds a minority interest in Tang Holdings.

A spokesman for Tang Holdings has also confirmed that Tang Plaza is not for sale. ‘We’ll sell our own homes first before we sell this place,’ Mr Tang Wee Sung said in a recent interview with BT.

‘And once and for all, we want to make it clear that CK Tang does not own Marriott Hotel,’ he added.

Mr Tang, however, acknowledges that the site does have redevelopment potential, as widely speculated about - but he adds that redevelopment is currently not an option.

‘It’s not as simple as that. First of all, there’ll be a huge development charge payment involved. And we’ll need to be careful how to do it without jeopardising the business,’ Mr Tang said.

Currently, the Orchard Road department store is the predominant source of income for CK Tang and pulling down the outlet for a redevelopment project will leave a big vacuum in the group’s accounts.

‘There are no plans to redevelop the property right now. It’s a landmark, an icon. I think there are too many glass buildings, personally,’ Mr Tang says.

If, however, in future there is any redevelopment proposal, Tang Holdings will take the lead (as it is Tang Plaza’s majority owner), albeit with CK Tang’s agreement.

‘We’ll not agree to any plans to redevelop that will jeopardise our business,’ Mr Tang said.

In any case, he stressed that CK Tang is a retail, not property, play. So CK Tang will own just the strata retail portion of any possible redevelopment scheme which may come up in the long term, Mr Tang insists. ‘We need the space for the store. We’re becoming quite small compared with the other major players like Takashimaya, Isetan and Robinson.’

Under Master Plan 2003, the freehold site can be redeveloped into a new project with a total maximum gross floor area (GFA) of about 874,000 sq ft, of which at least 60 per cent must be for hotel use and the rest can be for commercial and residential uses, say property consultants. The potential GFA is about 37 per cent more than Tang Plaza’s existing GFA.

Market watchers reckon that based on the site’s redevelopment potential, the total value of the site (inclusive of development charges payable to the state) is easily worth over $1 billion.

Rather than a total redevelopment, which will involve tearing down the existing property and incurring drastic loss of income for CK Tang at least, what’s more likely in the near future is exploring ways to increase the store’s selling area, for instance, by relocating backroom functions.

What could make a redevelopment project more feasible for CK Tang is if it succeeds in expanding its store count significantly to the point where the group’s bottom line could withstand closure of the Orchard Road store for a few years while it is redeveloped.

Source : Business Times - 28 Nov 2006

Sales boosted by firms launching prime sites they have held for years 

The number of homes sold above the ‘ultra-luxury’ benchmark price of $2,000 per sq ft (psf) this year has already surpassed the combined total for the past 10 years.

There were 183 transactions of these pricey homes in just the first 10 months of this year, according to a check of caveats lodged.

This is 25 per cent higher than the 147 deals done between 1995 and last year.

The trend is led by super-posh projects in which all units are priced above $2,000 psf, a new phenomenon that appeared only this year.

This price level, somewhat of a psychological barrier over the past 10 years, was previously breached only by choice units in selected condominiums rather than whole projects.

One major reason for this new trend could be that developers, sniffing a strong market recovery in the making, are seizing the chance to develop prime sites they have been sitting on for years.

‘The classic example of this is St Regis Residences, which is being built on land that has been around for some time,’ said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

‘City Developments (CDL) knows this is a prime site and has been waiting for the right concept.’

The 999-year leasehold St Regis plot, located along Cuscaden Road near the junction of Tomlinson and Tanglin roads, has been held by CDL for more than 20 years.

The record-breaking development, which breached $3,000 psf in June, accounted for almost 40 per cent of this year’s transactions above $2,000 psf.

In some cases, developers have held back their prime launches because the land was acquired at high prices during the last property boom in the mid-1990s. For the last decade, the weak market has been unable to support the kind of home prices necessary to make these sites profitable, said consultants.

Such plots include the Draycott 8 site, a 99-year leasehold plot picked up by Wing Tai for a record $1,103 psf per plot ratio in June 1997 on the eve of the Asian financial crisis.

The developer started selling units in Draycott 8 only in November last year. Despite having only about 90 years left on the lease, however, three Draycott 8 apartments crossed the $2,000 psf mark this year.

Similarly, CDL’s parent Hong Leong Holdings bought its freehold Tate Residences site along Claymore Road during a mini property recovery in 2000. Market prices dropped soon after that and stayed low until last year.

When Hong Leong finally started selling Tate units in August, demand was so strong during the preview that the project - which made up nearly a fifth of all sales above $2,000 psf this year - was close to being sold out.

‘Projects like Draycott 8 and Tate Residences have not been able to find price support from the market for a long time,’ said Mr Mak.

‘The fact that more homes above $2,000 psf have been sold this year alone than in the last 10 years indicates that this is a once-in-10-years kind of bull run that has come back.’

Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, added that more luxury homes are now being fitted with premium finishes that increase the value of these units.

‘All else being equal, luxury prices might rise 10 per cent to 15 per cent, but in a rising market you throw in branded fittings and that allows you to charge 20 per cent more,’ he said.

Another project that made it to the all-star price bracket this year was the 99-year leasehold The Sail @ Marina Bay. It hit the magical price of $2,009 psf in a sub-sale transaction last month, after already changing hands the previous month for $1,355 psf.

It was first sold for $1,097 psf a year ago, around the time the project was launched at $1,080 psf.

Source : Straits Times - 27 Nov 2006

It hopes to feature 7 flagship luxury stores as retail space is bumped up 

CROWN Hotel At Orchard is to undergo an $80 million revamp that will replace its facade with a modern glass frontage.

It will also feature a gallery of flagship luxury stores in the league of Louis Vuitton, as it more than doubles the amount of retail space on offer at the hotel.

These stores, which span the basement level to the third floor of the property, will have their own individual ground-floor, street-front access.

All 311 hotel rooms, located on levels five to 11, will also undergo an overhaul.

‘We’re going to revamp it into a more trendy and upmarket hotel,’ said Mr Allen Law, director of the hotel’s owner and operator Park Hotel Group.

The revamp will start in January 2009 and is due to be completed in the third quarter of that year.

The timing will roughly coincide with the completion of the Orchard Turn mall and the integrated resort at Marina Bay.

After the revamp, the lobby of the four-star hotel will move from the ground floor to level four of the 11-storey building. And the hotel’s basement two will have 100 carpark lots.

The lettable area at the current retail podium will increase from 4,000 sq m to 9,000 sq m.

The group hopes to attract, at the most, seven luxury fashion brands to set up their flagship property at the revamped arcade.

The brands will each have an entrance that spans a height of two floors and their own internal staircases or lifts, said Mr Law.

‘We’re already in discussions with numerous potential tenants,’ he said.

Feedback is that these retailers have been looking for just such a space in Orchard Road, but so far, no developer has been willing to build such large units, he said.

‘In our case…we want to fully utilise the prominent frontage that our location can offer.’

Mr Law expects the new retail podium to contribute half of Crown Hotel’s earnings, up from the 35 per cent to 40 per cent that is contributed by the existing retail space.

Source : Straits Times - 27 Nov 2006

Some are buying multiple condo units and making them into one 

TEAR down the walls.

That is the unusual request to property developers from some home buyers with a hankering for more spacious living.

These cash-rich buyers are snapping up multiple units on the same floor and combining them into a single, larger apartment.

High-end developers City Developments (CDL) and SCGlobal say they have received requests from buyers to remove walls between adjacent units to create bigger apartments.

Some buyers at CDL’s ultra-exclusive St Regis Residences have even reportedly bought entire floors with this purpose in mind, although CDL declined to verify this.

St Regis apartments, which cost at least $4 million a piece, range from 1,507sq ft to 7,287sq ft.

This new appetite for spacious living has led developers to pitch their bigger units at a higher price per sq ft (psf) than smaller ones, a new trend first highlighted by The Straits Times earlier this month.

The average price of apartments bigger than 2,500 sq ft has risen by 40 per cent over the last year, compared to just 20 per cent for smaller units, according to property consultancy Savills Singapore.

Other developers are also entertaining requests to merge units.

Wheelock Properties says there have been ‘two to three requests each’ for two of its recently-launched projects: The Sea View in expat-friendly Marine Parade and The Cosmopolitan in Kim Seng Road.

The Straits Times understands that Far East Organization has also received similar requests for its Vida condominium in Cairnhill Rise.

At another new condominium, Metropolitan in Alexandra Road, joint developers CapitaLand and Lippo Group have gone a step further.

They have put aside 28 two-bedroom apartments to sell in pairs, offering buyers the flexibility of removing the partition between the two adjacent units.

This allows buyers to combine the two units to a total of 1,787 sq ft, with the option of reinstating the partition in future.

One such pair costs around $1.39 million, compared to $1.35 million to $1.47 million for a four-bedroom apartment in the project.

All 14 pairs of these apartments were snapped up within the first two weekends of the launch, said CapitaLand. It added, however, that it was too early to reveal how many buyers had asked for the partitions to be removed.

Most developers are not charging extra for combining multiple units, but property consultants say it may still be ‘costly and impractical’ to combine two apartments.

Joining units may result in an awkward layout, said Mr Lui Seng Fatt, regional director and head of investment at Jones Lang LaSalle.

Also, added Mr Ku Swee Yong, director of marketing and business development at Savills Singapore: ‘If you buy two units, you end up with two maid’s rooms and two kitchens, and you may need to do rewiring and re-plumbing for the kitchens and toilets.’

Consultants say these requests to combine smaller units are probably isolated to selected developments that buyers insist on living in, even if there are no units big enough for their tastes.

Developers agreed, saying that there is no ’significant trend’ yet of buyers requesting that adjacent units be combined.

But the current paucity of sufficiently large units may be one reason for such requests surfacing now, said Mr Ku.

During the property downturn, developers built smaller units that were more affordable for buyers, he said.

‘Big units only started being launched again last year and it will take some time for them to be completed,’ he added.

On the whole, however, Singapore’s apartment sizes are still bigger than those in Hong Kong and Japan and comparable to those in central London and Manhattan, said Mr Lui.

Source : Straits Times - 27 Nov 2006

It was as hot as Katong laksa.

Hundreds of potential buyers were turned away yesterday from a new Katong condominium that was sold out within 36 hours of its soft launch on Friday.

Grand Duchess at St Patrick’s was so popular that all 121 units were unexpectedly snapped up by Saturday night at its invitation-only soft launch.

But hopeful buyers continued to turn up in droves yesterday, having received invitations for ‘previews’ that were to be staggered until Wednesday.

The demand was ’stronger than expected’ and Singaporean buyers formed 85per cent of those who managed to snare units, said Mr Vito Koh, group general manager of developer United Industrial Corporation (UIC).

‘When we started taking orders on Friday, all hell broke loose. We had to turn away hundreds of people yesterday,’ he added.

However, the showflat in St Patrick’s Road will be kept open for another two weeks, as planned.

Advertisements scheduled this week to announce the condominium’s public launch this coming weekend will also be run, but as ‘thank-you advertisements’ instead, said Mr Koh.

The robust take-up for Grand Duchess occurred despite a price tag some 10per cent higher than those of neighbouring properties.

The freehold condominium’s price was raised twice over Friday and Saturday to $740persqft (psf), or to about $1million for a three-bedroom unit.

This compares to $650psf for nearby St Patrick’s Loft and less than $700psf for Poshgrove East down the road.

However, just over 20 out of the 37 units at St Patrick’s Loft have found takers over the last two months.

At 76-unit Poshgrove East, only 57 units were sold within a month in August, before developer Tong Eng Group halted sales temporarily.

Property consultants said that the surprisingly keen interest in Grand Duchess could stem from the unique colonial villas fronting the condominium. These villas were previously owned by the family of Straits Chinese tycoon Tan Kim Seng.

One of the villas will be converted into a clubhouse with extensive facilities, such as a theatre lounge and spa treatment rooms.

‘It is very unusual for a condo to sell out like that so quickly,’ said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

‘It’s definitely not typical of lower-end condos, although some selected projects that have been very well-publicised do move fast.’

But Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, said the strong sales may indicate growing demand for mid-tier homes, which have so far lagged behind luxury properties in the current market rebound.

‘There is interest at the mid-tier level for sure, and if they are reasonably priced and provide good value for money in terms of design and features, they will sell,’ he said.

Source : Straits Times - 27 Nov 2006