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31 August 2012

31st August, Friday




Property prices to ride high on Thomson Line

Source: Business Times

Residents in the northern region of Singapore can expect the announcement of the upcoming Thomson MRT Line to boost property prices almost immediately, say consultants, although they differ on the extent of the rise.

An analyst expects residents living in the Springleaf, Seletar, and Lentor area to see the most benefit from the Thomson Line given that they are currently underserved by the public transport system, with prices rising by 10 per cent at least.

Broadly speaking, consultants BT spoke with expect home prices to spike closer to the completion of the line.

According to another analyst, properties near the planned MRT stations might see a gradual increase of 3-5 per cent in the short term, and later enjoy a 20-30 per cent premium over properties that are not as close to the stations.

Senior manager for training, research and consultancy at DWG, Lee Sze Teck expects a near term price increase of 5-10 per cent, with a price appreciation in the range of 20-30 per cent when the MRT line is completed.

That being said, prices of properties close to major construction work sites may take a momentary dip to the tune of 5-15 per cent, said an analyst.

The Thomson MRT Line will be launched progressively in three stages from the north to the south, with three stations from Woodlands North to Woodlands South ready by 2019, six stations from Springleaf to Caldecott ready in 2020, and 13 stations from Mount Pleasant to the Gardens by the Bay fully operational by 2021.

Indeed, properties and projects near train stations tend to do fairly well in terms of rental opportunities, pointed out another analyst.

However, there may eventually be less disparity in prices in different parts of Singapore as the transport network improves connectivity and reduces travelling time.


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Valuation suspense grips Pearls Centre

Source: Business Times

Consultants peg the market value of the strata-titled Pearls Centre in Chinatown between $450 million and $600 million. One consultant suggested that the government compensation may fall within this range, or 5 to 10 per cent either side of the valuation.

Pearls Centre, which spans some 47,000 sqm (about 505,903.3 sq ft) is split into 17 per cent office space, 43 per cent shopping space, and 10 per cent residential. The remaining 30 per cent is carpark space.

According to a Singapore Land Authority spokesperson, compensation will be pegged to the market value of the property, taking into account past transactions, the condition of the property, and other reasonable expenses including legal fees, relocation costs, and stamp duties.

According to an analyst, collective sales that do transpire tend to fetch a 20-30 per cent premium over current market value. That being said, this property has a leasehold tenure, so any premium depends on whether the government will allow the current stakeholders to refresh their lease.

According to David Ng, executive director, valuation, at DWG, retail units at Pearls Centre are transacting in the range of $1,100-$2,500 psf depending on the size and floor on which the unit is located. Residential apartments range from about $850-$1,050 psf.

Opened in 1969, the 23-storey Pearls Centre currently houses 44 residential units and 199 commercial units. Occupants have 24 months to vacate, while the rest have 18 months to do so.

Following the acquisition of Pearls Centre, the site will be integrated with the adjoining state land for a high-density mixed-use development to optimise land use around the future Thomson Line station at Outram Park.

According to a spokesperson from the Urban Redevelopment Authority, the gross plot ratio for both sites is 5.6. The total area after amalgamating the land is around 2.8 ha (0.53ha from Pearls Centre and 2.29ha from the vacant state land).

Said DWG's Mr Ng: "The (Pearls Centre) site is currently zoned commercial, which is one of the highest valued use in the property market. However, if it is rezoned as a white site, it could be as successful as the Clarke Quay site that was won in 2000 and developed in a retail and SOHO development with an MRT station below... If fully commercial, it would mirror the Robinson Road/Cecil Street site sold in September 2011 at $9,494 psm per plot ratio (approximately $311million)."


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Yishun industrial site with 30-year lease gets 8 bids

Source: The Straits Times

Eight developers have submitted competitive bids for a Yishun industrial site with a 30-year lease.

When the tender closed Thursday, Soon Hock Tuas Development emerged on top with an offer of $51.4 million, or about $95 per sq ft per plot ratio (psf ppr).

This was followed by Capital Development and ZACD Investments, with a joint bid of $45.6 million, or about $84 psf ppr. Soilbuild Group Holdings came in third, with a bid of $38.4 million, or about $71 psf ppr. The lowest bid of $25.3 million, or about $47 psf ppr, came from Wee Hur Development.

The 20,074.7 sq m site in Yishun Avenue 9 is zoned for Business 1 development - that is, clean and light industries.

Mr Lee Sze Teck, Dennis Wee Group's senior manager of training, research and consultancy, said that the top bidder appears to be pitching higher than what the market had expected.

"This could be because it has different development plans that allow it to go in at a higher price," he said. He noted that there are unsold units in some of the existing projects in the area.

The plot, being quite sizeable, will thus face some competition, especially because the others there are on 60-year leases.

Another analyst said the bullish bids reflected some successful launches in the area. He estimated that the break-even price for developers is between $220 psf and 240 psf, putting the selling price for the project at $300 psf at least. "The developer may want to avoid direct competition with other projects there, so it must try to find a way to differentiate its product," he said.


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