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05 September 2012

5th September, Wednesday




Govt acts to contain rash of shoebox units

Source: Business Times

The Urban Redevelopment Authority (URA) has acted to manage the proportion of shoebox units in suburban areas. It is seeking to cap the number of homes in new developments, based on an average unit size of 70 sq m gross floor area.

At the same time, Singapore's planning authority is giving flexibility to developers to include some smaller housing units in their projects to cater to diverse demographic groups and lifestyles. Notably, URA has not stipulated a minimum apartment size.

National Development Minister Khaw Boon Wan said in his blog yesterday: "Developers are still free to build small apartments if there is demand, but there must be a good mixture of large and small units, in order to meet the URA guidelines."

URA's announcement was generally welcomed in most quarters, though some players say it could dent land prices for smaller en bloc sale sites as developers typically tend to mint a higher proportion of small units on such sites.

From 4 November, the maximum number of units in non-landed private housing projects outside the Central Area will be capped based on an average area of 70 sq m. This also applies to the residential component of mixed-use developments.

Central Area includes locations such as Raffles Place, Tanjong Pagar, Singapore River, Marina Bay, Orchard and Newton, as well as places such as Beach Road, Ophir Road, Jalan Sultan, Syed Alwi Road, Tekka Lane and Outram Road.

The formula used is identical to the one URA introduced last November for all new condo and flat projects in residential areas with 1.4 plot ratio islandwide. Similarly, a guideline on the maximum number of homes based on an average size of 100 sq m, introduced last year in Telok Kurau Estate, will be extended to Kovan and Joo Chiat/Jalan Eunos estates from 4 November.

According to URA, the stock of completed shoebox units (up to 50 sq m) will increase more than four-fold from about 2,400 units at end-2011 to about 11,000 units by end-2015. There is concern that some may be left empty if there is insufficient demand. Also while rental yields of shoebox units are relatively attractive now, the trend may not be sustained as more shoebox supply is completed. Shoebox units also tend to inject more cars in a neighbourhood than planned.


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Qingjian is top bidder for Punggol site

Source: Business Times

Chinese developer Qingjian Realty has put in the top bid for yet another Punggol site - a 99-year- leasehold executive condominium (EC) at Punggol Way/Punggol Walk.

It offered $189.87 million, or $313.63 per sq ft (psf) of potential gross floor area, beating the next highest bidder, Verspring Properties by less than one per cent.

The state tender drew just three bids, fewer than what market analysts had expected.

"With only three bidders for the subject site, tender participation is below expectations, especially since the Waterbay site at Punggol Central/Edgefield Plains attracted 10 parties earlier in March," said an analyst.

"Qingjian has a significant market share in Punggol," said Lee Sze Teck, Dennis Wee Group senior manager. "This means that they have superior knowledge of the ground conditions including buyers' profile. With many projects in the area, they can also manage their resources better."

The top bid reflects a breakeven cost of between $580 and $630 psf and an estimated selling price of between $700 and $750 psf, Mr Lee added.


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