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04 October 2012

4th October, Thursday




Leftover flats top pick at latest launch

Source: The Straits Times

Out of the 7,000 flats on offer in the Housing Board's latest flat launch, leftover flats proved the most popular as applications closed Wednesday.

The number of interested home buyers per balance unit - flats either returned to the agency or with no takers - was 4.4.

These included sought-after rarities, such as a three-room terraced house in Jalan Bahagia and a handful of units at Pinnacle@Duxton.

As for Build-to-Order (BTO) flats, the application rate was 2.4.

Property market watchers say this turnout was expected, given the upward climb of resale prices so far this year.

An analyst noted that demand for the 3,328 balance units was keenest in mature estates such as Bedok, Ang Mo Kio, Tampines and the Central area. There aren't many new launches in those estates, so new flats, which are cheaper and starting on a fresh 99-year lease, are always snapped up quickly. Compared to their resale counterparts in these areas, these units are at least 20 per cent cheaper, he added.

Another analyst said balance flats are typically more popular as they are either already built or closer to completion. Overall, there were 71 second-timer applications for every balance flat available to them. These applicants are allocated up to 5 per cent of the leftover units. He added that more aid given to second-timers would help "take some heat off" the resale market.

Dennis Wee Group spokesman Lee Sze Teck said the HDB could provide more targeted help.

"The HDB could look into fine-tuning its policy to help certain groups of buyers, rather than applying a broad-brush policy of allocating more BTO flats to all second-timers," he said.


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203 bids for one Pinnacle flat

Source: The Straits Times

There were 203 bids for a five-room Pinnacle@Duxton flat by the time applications closed Wednesday.

The 1,140 sq ft unit was going for $736,000.

Considered one of the Housing Board's best projects, the Pinnacle sits at the edge of the Central Business District, near the Outram and Tanjong Pagar MRT stations.

Dennis Wee Group spokesman Lee Sze Teck said the demand was mainly due to location. "News that these flats will likely surpass the recent $1 million record attracts buyers. They also give good rental yields," he said.

Another interesting unit in this latest offering was a three-room Housing Board terrace house in Jalan Bahagia selling for $795,000.

Unlike the Pinnacle units, which were open to all ethnic groups, this 1,860 sq ft two-storey property with two bedrooms is open only to Malays and Indians/Others. In addition, the 99-year lease starts from 1972, when it was completed.

An HDB spokesman said the house was repossessed after the owner defaulted on his mortgage payments and sublet it illegally. Calling the unit an "exception", he said that given its unique attributes, "it would naturally command a higher price compared to other flats".

He added: "Generally, such a unique property would appeal to a niche group of buyers looking for a specific housing option who are willing and able to pay more."


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Freehold penthouses at Amber sold for $1,100 psf

Source: Business Times

All six penthouses at the freehold Amber Residences, which was completed early last year, are said to have been sold recently by its developer in separate transactions for $1,100 per sq ft (psf).

As recently as May this year, potential buyers were being quoted a price of around $1,600 psf for the penthouses, with the qualification that the developer, Voda Land, was open to negotiations.

When the 21-storey project was previewed in November 2007 during the heyday of the high-end residential market, market indications were that the penthouses will be priced at around $1,900 psf.

Amber Residences' six penthouses range from around 4,100 sq ft to 6,700 sq ft with each unit spanning three levels - levels 20 and 21 and a roof terrace with a swimming pool.

A caveat for only one of the six penthouses in Amber Residences sold recently has been lodged so far. This is for the biggest unit of 6,717 sq ft, which has five bedrooms. Options on the other five penthouses have probably not been exercised yet by their respective buyers.

The six penthouses add up to around 30,000 sq ft, which means Voda Land would have fetched around $33 million from selling them.

Market watchers say it made sense for Voda Land to clear the unsold units, given that this is its only residential project. The company's key shareholder is Expand Construction.


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Rents down, occupancy up for prime office space

Source: The Straits Times

Demand from legal firms, insurance companies and other businesses helped prop up demand for prime office space in the third quarter but rents were still down.

The influx of these less traditional tenants into Grade A offices managed to offset the reduced demand from traditional players like financial institutions, which usually take up large amounts of prime space. Their need for space has gone down since the global economy slowed, according to a report Wednesday.

It said the euro-zone debt crisis, shaky economic recovery in the United States and slowing growth momentum in Asia have affected business confidence and forced major banks and other financial institutions to pull back from leasing.

This has sent average monthly rents for Grade A offices in the central business district (CBD) down 1 per cent from the second quarter, to $8.37 per sq ft (psf) per month as of 30 September.

Rents in the City Hall and Marina areas fell 0.9 per cent to $9.12 psf per month while rents at the Raffles Place and New Downtown areas slipped 2.2 per cent to $9.26 psf.

While rents were down, occupancy was up, with Colliers observing that tenants who planned to remain in Singapore took the chance to upgrade to better premises while more foreign companies expressed interest in setting up entities here.

The average occupancy rate of Grade A office space in the CBD rose from 92 per cent in the second quarter to 93.1 per cent in the third - the highest in five quarters. Similarly, the occupancy rate in City Hall and Marina recorded a jump of 2.6 per cent while that in the Raffles Place and New Downtown areas, which includes the Marina Bay Financial Centre (MBFC), rose 1.7 per cent.

Nearly 90 per cent of the 129,000 sq ft space vacated by Citibank last year at Centennial Tower in the City Hall and Marina areas has been re-leased. The overall commitment or take-up rate at MBFC Tower 3 rose from 68 per cent in the second quarter to 76 per cent in the third.


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Investment Sales


Bloc of freehold strata industrial units up for sale

Source: Business Times

Thirty one freehold strata industrial units in Century Warehouse have been put up for sale, with an asking price of at least $40 million, or some $800 per sq ft (psf).

The strata area for sale comes up to about 50,489 sq ft, which will give the buyer 89.3 per cent ownership of the eight-storey freehold strata industrial building.

The property has both surface and basement car park lots, and is zoned "Business 1" under the Master Plan 2008. The successful buyer will have naming rights to the building.

The EOI closes on 1 November at 3 pm.

Separately, a 6,760 sq ft freehold retail space at Katong Shopping Centre is up for sale by private treaty.

Located at the north-eastern part of the basement retail floor, the space has a rectangular configuration and two access points which make it ideal for various retail and entertainment/recreation businesses.


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Potential buyer doing due diligence on Murray Terrace

Source: Business Times

Murray Terrace, an award-winning row of 14 conserved shophouses just off Maxwell Road and opposite the URA Centre, could be sold for around $75 million, Business Times understands.

A local high net worth investor is said to have been given exclusivity for doing due diligence for a potential acquisition of the shophouses, 13 of which are three storeys high and the remaining one, four storeys high.

The interested party is thought to be looking at converting the block, zoned for commercial use, into a hotel. The premises, numbered 2 to 28 Murray Street, are now leased as offices, with advertising agency Leo Burnett as the main tenant.

Murray Terrace offers 17,000 sq ft per floor. With a total net lettable area (NLA) of about 50,000 sq ft, it should provide enough space for 100-odd hotel rooms.

Murray Terrace, located within the Chinatown (Tanjong Pagar) Conservation Area and a short walk from Tanjong Pagar MRT Station, sits on a 25,151-sq-ft plot which has a remaining lease of about 60.5 years.

Assuming the sale goes through, it will be the third Singapore property to be sold this year by AEW Value Investors Asia Fund, reported to be in the midst of being wound up.

The fund owns another Singapore asset, 2 Havelock Road (2HR), which will be put on the market again after a couple of attempts in the last two years. The price expectation is said to be around $300 million, unchanged from the previous round in March this year.

2HR is on a site with around 70 years left on its lease. AEW acquired the property, formerly known as Apollo Centre, for $205 million in 2007 and completed an extensive refurbishment two years later.

2HR now has seven storeys, an attic and 96 carpark lots in two basement levels; of its total NLA of 175,300 sq ft, 36,200 sq ft is retail space, and the remaining 139,100 sq ft, offices.

Under the Master Plan 2008, the 54,560-sq-ft site is zoned for commercial use. Outline approval has been secured to redevelop the property into a 12-storey hotel, which should appeal to investors keen on riding on Singapore's buoyant hospitality market.

The hotel component of the proposed redevelopment scheme could potentially yield some 400 to 450 rooms and the commercial component, some 75,000 sq ft of saleable area, most likely shop units which could be strata-titled for sale.

Another angle for potential investors would be to keep the asset as it is, that is, predominantly for office use. 2HR's occupancy rate is around 97 per cent. Besides Estee Lauder, which occupies around 50,000 sq ft, other tenants include DSM Nutritional Products and MOL Tankship Management.

A third angle for potential buyers would be to strata-title the building's existing office and retail space and sell the units individually - subject to obtaining approval from the authorities.


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Property investment picks up in third quarter

Source: The Straits Times

Major property investors were far more active in the third quarter than in the second quarter, leading to a jump in hotel and residential property deals.

Property investment activity surged 15.6 per cent quarter on quarter to $8.7 billion in the three months ended 30 September, said a report Wednesday.

This brings the total investment volume for the first nine months of the year to nearly $21 billion, just shy of last year's $21.4 billion for the corresponding period.

Last quarter, deals involving hotels jumped fourfold, and those involving residential property leapt threefold. The deals, mostly in the private sector, made up almost 40 per cent of total investment value in the third quarter.

Major deals included the sale of seven hotels and four serviced residences worth $2.1 billion by Far East Organization to its Far East Hospitality Trust.

Nine collective sales worth about $1 billion were also made last quarter, compared to 15 deals worth $960 million in the first half of the year. For instance, Thomson View Condominium was sold for $590 million last month, partly due to the announcement of a nearby station on the upcoming Thomson Line. Green Lodge on Toh Tuck Road was sold for $191.9 million last month.

Real estate investment trusts and corporates were net buyers in the third quarter, with the former accounting for 28 per cent of total investment volume. Funds were net sellers, selling about $1.4 billion of assets. Funds managed by Pramerica, AEW Capital Management and Commerzbank sold their stakes in shopping mall nex, and office buildings Robinson Point and 78 Shenton Way, respectively.


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