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18 September 2012

18th September, Tuesday




Property here may sizzle from QE3 heat

Source: Business Times

The possibility of a fresh wave of capital flows into Singapore as a result of the latest round of quantitative easing (QE3) in the United States has raised the prospect that the property market could heat up again. This, in turn, could lead to a new round of government measures to keep prices in check.

An influx of foreign funds into the property market here could well push the government to introduce new measures or tweak existing ones to prevent a bubble from forming, said economists and property consultants.

"If the Fed is going to pump in this amount of money, and if the eurozone is not brewing out in a bad way, a lot of these funds will find their way to Asia as they last did. They can't go into public sector HDB, but they could go into the mid-range to luxury segments, and that mops up the supply that was supposed to dampen prices", said an analyst.

Already in the region, Hong Kong has moved swiftly to introduce mortgage curbs. In its fifth round of mortgage-tightening measures, the Hong Kong Monetary Authority announced that it would limit the Cashmaximum term of all new mortgages to 30 years.

A series of measures have been levied in Singapore too, chief among them being the ABSD. The measure has worked to reduce the proportion of foreign buyers from 30 per cent in 2011 to 22 per cent in 2Q 2012.

The Real Estate Developers' Association of Singapore (Redas) reacted cautiously. "It is too early to ascertain the impact QE3 may have (if any) on the Singapore property market. Redas is of the view that last December's ABSD measure has so far been effective in curbing asset inflation in the real estate sector resulting from sudden influx of foreign funds."

The government has repeatedly stated that it remains ready to take further action to cool the property market should the situation call for it.


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Private home sales down 27% in August

Source: Business Times

A dearth of major new project launches in August as developers avoided the Hungry Ghost month led sales of private residential homes, excluding executive condominiums (ECs), to fall 27 per cent from a month ago.

URA's monthly developers' sales statistics for August showed that 1,421 units were snapped up last month, lower than the 1,946 in July. Property consultants say that the drop in sales was expected because the Hungry Ghost month typically sees slower transactions, and that sales figures this year are still expected to smash last year's record.

What is noteworthy, they say, is that the lack of fresh launches sparked an interest in homes of projects that were first launched before August. Just one in three of the 1,118 homes launched in August were from new projects - which in turn made up just 14.5 per cent of the 1,421 units sold.

August saw a jump in interest for projects in the mid- to high-end segment compared with July, with 28 per cent of units sold at prices above $1,500 per square foot (psf). In July, 18 per cent of sales were for mid- to high-end projects.

Notably, a unit at SC Global Developments' The Marq on Paterson Hill was sold for $4,921 psf, the highest median price achieved for a private residential apartment this year.

Sales in Outside Central Region (OCR), where mass market projects are located, fell by 45 per cent to 835 units as there were no new mega mass-market projects launched in August, but take-up in the Rest of Central Region (RCR) bucked the trend by seeing a higher number of units sold in August compared with July.


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700 lodge e-applications for Heron Bay's 394 units

Source: The Straits Times

More than 700 interested buyers had lodged e-applications for the lavish 394-unit Heron Bay executive condominium (EC) as of 5pm Monday.

Units are priced between $715 and $720 per sq ft on average. The smallest unit, at about 775 sq ft, is expected to cost around $560,000, while the five-bedroom penthouse is 2,841 sq ft and expected to cost between $1.5 million and $1.6 million. Such five-room units are firsts for an EC development.

The EC, between Serangoon River and Punggol Park, is being developed by a consortium comprising Ho Lee Group, See Hup Seng, CNH Investment and Evia Real Estate Management. Construction is due to be completed some time in 2016.

A ballot will be held after applications close on Sept 23, as the number of applications has exceeded that of the units. Successful applicants can book their units from 26 October.


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Investment Sales


CPF Board's space at 79 Anson Rd up for sale

Source: Business Times

The Central Provident Fund Board has put its space at the freehold 79 Anson Road up for sale. The price expected to be achieved for the mostly office space is at least $2,000 per sq ft on strata area of 100,007 sq feet, or $200 million.

The space being offered by the CPF Board comprises eight levels of office space (spanning levels 16-23) and a ground-floor retail unit facing Anson Road.

The space comprises 17 strata titles, with most floors having two separate strata titles of about 4,746 sq ft and 6,339 sq ft each. The board's space equates to 43.81 per cent share value for 79 Anson Road.

The net lettable area of CPF Board's space is 88,636 sq ft based on the current leasing configuration.

CPF Board's space is marketed through an expression of interest exercise which will close on 23 October.


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Cambridge Industrial Trust buys 2 properties

Source: Business Times

Cambridge Industrial Trust (CIT) is acquiring two industrial properties in the northern part of Singapore for $56.3 million.

The consideration for the first property, a light industrial building located at 30 Marsiling Industrial Estate Road 8, is $39 million.

It currently houses Beyonics International Pte Ltd's (BIPL) production, cleanroom, warehouse and ancillary and has a gross floor area (GFA) of about 20,249 sq m.

BIPL has agreed, on completion of the acquisition, to lease the property for three years. The site is also a Housing Development Board (HDB) leasehold estate with a land tenure of 30 years commencing from Dec 1, 1989, with an option to renew for an additional 30 years.

The second property will be acquired from Hup Fatt Brothers Engineering Pte Ltd (HFB) for $17.3 million.

Located at 11 Woodlands Walk, the property has a GFA of about 8,977 sq m and a balance land tenure of about 43 years. HFB has agreed to lease the property for five years on completion of the acquisition.

CIT intends to fund the acquisitions through cash, existing debt facilities and/or the net proceeds from divestments.


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Green Lodge sold for $191.888 million

Source: Business Times

In the largest freehold residential collective sale so far this year, Green Lodge at Toh Tuck Road has been sold for $191.888 million.

The buyer is a private investor.

Green Lodge, located off Jalan Jurong Kechil in Upper Bukit Timah vicinity, has a land area of 151,075 sq ft. Under Master Plan 2008, the site can be developed into a five-storey condominium at 1.4 plot ratio (ratio of maximum gross floor area to land area).

The $191.888 million price for Green Lodge works out to $907 per sq ft per plot ratio (psf ppr), based on the 1.4 plot ratio.

However, Green Lodge has an approved density of equivalent plot ratio 1.4896 (based on a slighter larger original land area) - translating to a lower unit land price of $833 psf ppr. This would allow about 8.9 per cent balcony space on which no development charge (DC) is payable to the state.

Should the developer decide to tap the maximum 10 per cent balcony allowance, an estimated DC of $827,000 would be payable, resulting in an all-in unit land price at around $828 psf ppr.

Based on this, the breakeven cost for a new condo development would be around $1,100 psf.

The deal is subject to approval from Strata Titles Board.


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