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10 October 2012

10th October, Wednesday




Woodlands EC site draws top bid of $150.2m

Source: Business Times

Demand for executive condominium (EC) sites in Woodlands remains strong, with a top bid of $150.18 million, or $302 per sq ft per plot ratio (psf ppr), submitted for a 99-year leasehold site there.

That bid came from a joint venture between Fraser Centrepoint's unit Opal Star and Lum Chang's unit Binjai Holdings, which have a 70-30 per cent stake in the venture.

The site is on Woodlands Avenue 6 and Woodlands Drive 16, next to another EC development, La Casa.

The tender, which closed at noon Tuesday, attracted five bidders - comparable to a site on Woodlands Avenue 5 sold in May which also pulled in five bidders and was sold at $318 psf ppr.

When the tender for the site was launched in August, property consultants polled by Business Times had predicted that the winning bid would be in the $300-350 psf ppr range, and that 3-7 bids would be submitted. The tender outcome was thus within expectations.

A Fraser Centrepoint spokesman said Tuesday that plans have been made for 447 units in eight blocks of 12 storeys each, and that the units will mainly be three- and four-bedroom ones.

Property consultant DWG's senior manager for training, research and consultancy Lee Sze Teck estimates the project's break- even cost at $600-650 psf, and that its estimated sale price would be between $680 and $730 psf.

One analyst described the combined Fraser Centrepoint and Lum Chang bid as a display of confidence in the demand for ECs in this north Singapore neighbourhood. "The top bidder for the subject site would have taken into account the adjacent site's time advantage in sales launching and so tendered a little lower to be competitive in pricing when he launches his sales," he said.

Although the bids were relatively optimistic, DWG's Mr Lee cautioned that the take-up rate may be slow, given the wide variety of options for buyers. "Developers will have to differentiate their project from others in the market in the areas of design, theme and quality," he said.


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Rentals for private homes expected to ease: experts

Source: Today

Rentals for private homes are expected to ease in the next 12 months, especially those in the luxury segment.

It used to take about a month to secure a tenant for private homes in the rental market last year. Now, it takes about three to four months, according to analysts.

While rentals have edged up slightly in recent years, the vacancy rate too has gone up, especially for high-end units.

An analyst said: "In the luxury segment, if we were to include Sentosa Cove, then the vacancies are as high as 9 to 10 per cent, whereas islandwide, we are still seeing...average vacancies of about 5.5 to 6 per cent." On average, it would cost about S$5 to S$8 per sq ft per month to rent a luxury home.

Some analysts said rentals for high-end units could come under pressure over the next 12 months, in view of the uncertain economic outlook and the additional supply of new units hitting the market.

They said average rentals could dip by 3 to 5 per cent next year.

Another analyst said: "Corporates are looking at reducing its cost, and part of the cost that will be reduced is expatriate housing allowances, so the first top-tier of that market being the luxury end of the residential apartments, some good class bungalow projects have seen a drop in terms of actual transacted rents."

Meanwhile, the rental prospect of mass market units remained fairly stable.

Some analysts said the rents for such homes could see a 1 to 2 per cent upside in the year ahead. Industry players said average rental for mass market homes currently ranges between S$3 and S$4.50 per sq ft per month.

But there will be stiffer competition for areas like Hougang, Pasir Ris, Sengkang and Punggol, where many new housing projects are lined up.

With some key events coming up, industry players expect overall rental rates to stay soft in the coming months. The events include the US presidential elections in November and the ongoing efforts to fix the eurozone debt crisis which is now into its third year.


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Resale prices of industrial space on the rise

Source: Business Times

There are signs of speculation developing in areas of the industrial property sector, analysts say, but they are divided over whether there is overheating and if the government should step in.

A report from a consultancy Tuesday showed that resale prices for industrial space continued to rise in the third quarter, while industrial rents held firm.

The report showed that resale industrial prices for first-storey conventional industrial space rose 4 per cent in 3Q, to $600 per sq ft (psf), compared with the previous quarter. This was at the same rate as the previous quarter.

For upper-storey industrial space, prices grew 3.5 per cent to $445 psf from the previous quarter, slowing from 4.9 per cent growth in 2Q.

Rents for first-storey conventional industrial space were at an average of $2.15 psf per month, while upper-storey rentals averaged $1.75 psf per month, the same levels as 2Q. Hi-tech industrial rents edged up 0.07 per cent from the second quarter, to $3 psf per month.

The report said the lack of a seller's stamp duty for commercial properties could be a reason for the increase in speculation, as there is no penalty if buyers sold their units within a short period of time. "In addition, industrial properties generally have a lower overall quantum, so the barrier to entry is lower for investors hoping to flip the units for a quick buck."

But another analyst feels the shift from residential properties to commercial assets is to be expected.

"Industrial properties have the highest yields among the asset class of properties," he said. "And since everyone wants to seek higher returns and banks are offering lower rates, there is interest in industrial properties."

He believes it is not time to declare overheating in the market, pointing to the stable industrial rent outlook and the moderating of prices from the first two quarters of the year from his research. He said current measures, including recent efforts to cool the industrial market by the government, are sufficient.


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Investment Sales


Mountbatten condo up for collective sale

Source: The Straits Times

A 30-year-old condominium in Mountbatten has been put up for collective sale.

The project, Katong Park Towers, sits on 99-year leasehold land with a site area of about 13,077 sq m. The 118-unit condo is still occupied.

But soon, the site could be sold for between $330 million and $340 million, or $1,145 to $1,178 per sq ft per plot ratio (psf ppr), including 10 per cent of balcony space, the marketing agent said in a statement Tuesday.

The firm said the site can be developed into a 24-storey condo with a maximum gross floor area of about 27,462 sq m. Assuming an average apartment size of about 753 sq ft, the developer will be able to build about 392 units.

The sale period opens today and closes on 6 November.


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