19th September, Wednesday
Residential
Dairy Farm Rd residential plot attracts top bid of $244.32m Source: Business Times A partnership between First Shine Properties and Meadows Bright Development has placed the top bid for a 99-year-leasehold private housing site on Dairy Farm Road. Their bid of nearly $244.32 million works out to $616 per sq ft per plot ratio (psf ppr), ahead of earlier market expectations since the launch of the site in July. The top bid was 9.9 per cent higher than the next highest bid of $560.49 psf ppr from UOL Group unit Secure Development. The tender attracted nine bids in all, with the lowest from a partnership between Capital Development and ZACD Investments at just under $420 psf ppr. Based on the top bid, property consultants' estimates of the breakeven cost for a new condo project range from $950 to $1,100 psf, and the likely average selling price at $1,200 to $1,300 psf. The 188,861.2-sq-ft site on Dairy Farm Road has a maximum gross floor area (GFA) of 396,617.4 sq ft and a maximum building height of part five storeys and part 15 storeys, subject to 140 m above mean sea level. The Urban Redevelopment Authority introduced a development control guideline which stipulates that 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. Going by the formula, the Dairy Farm Road site can be developed into no more than 526 units. Property consultants noted that the top bid was 3.5 per cent lower than the $638 psf ppr that the nearby Hillview Avenue site fetched in March. An analyst said the lower psf ppr price for the latest plot could have been influenced by the new guideline. However, DWG's senior manager Lee Sze Teck said the top bid was above market expectations and that the nine bids received reflected enthusiastic participation on account of the site's attractiveness. "This could mean that the government's guidelines have limited impact on the market as developers can find innovative ways to comply with it - such as by selling more loft space, more private enclosed space or a roof terrace - and yet maintain their profits." He added that the wide disparity in terms of a nearly 47 per cent gap between the top and lowest bids at the tender could be due to developers grappling with the new guidelines. Another analyst said: "Residential sites in the Bukit Timah area released under the Government Land Sales Programme in the past two years have attracted many bidders, so it's not surprising to find nine parties vying for this site. This is partly due to the attraction of the Bukit Timah address, as well as there being relatively fewer projects in this area than, say, in the east and north-east."
Links to the story: http://www.businesstimes.com.sg/print/235851 http://www.straitstimes.com/st/print/485555 http://www.todayonline.com/Print/Business/EDC120919-0000064/Dairy-Farm-residential-site-sees-9-bids http://www.channelnewsasia.com/stories/singaporebusinessnews/print/1226729/1/.html
Commercial
S'pore will keep premium office space competitive Source: Today Singapore will ensure an ample supply of premium office space at competitive prices to meet the needs of global businesses. Officiating at the grand opening of One Raffles Place Tower Two, Deputy Prime Minister and Minister of Finance Tharman Shanmugaratnam said Singapore's office rental rates remain competitive. Grade A office space in Singapore is 50 per cent cheaper than Hong Kong and 70 per cent cheaper than Tokyo. Mr Tharman said: "We'll make sure that this is a source of competitiveness for Singapore having premium Grade A office space and ample supply and at the right price. Our cost is still competitive if you compare Singapore today with other leading centres - say we take Hong Kong or Tokyo, we are still significantly cheaper."
Link to the story: http://www.channelnewsasia.com/stories/singaporebusinessnews/print/1226741/1/.html
Investment Sales
Sale in the offing for Mandarin hotel and gallery? Source: Business Times A sale could be in the offing for the landmark Mandarin Orchard Singapore and the adjoining Mandarin Gallery which were valued at $1.18 billion and $520 million at the end of last year. Owner Overseas Union Enterprise (OUE) is said to have been receiving interest from potential buyers particularly for the hotel for some time now and has maintained that it will sell the property if it receives a price too good to refuse. Now, market talk is that OUE has given exclusivity to a potential buyer to perform due diligence. Some sources point to a US property fund manager - possibly Pramerica - teaming up with a Middle Eastern player, which some suggest could be Abu Dhabi Investment Authority. Mandarin Orchard's $1.18 billion valuation in OUE's books works out to around $1.12 million per key for the 1,051-room property. If a transaction materialises at this price or higher, it would be a record for the Singapore hotel market. While the hotel has been achieving strong cash flow aided by Singapore's tourism boom, analysts note that both the hotel and Mandarin Gallery are on a site with a remaining lease term of about 44 years. The reversionary interest in the land is held by Ngee Ann Kongsi. The hotel comprises two towers of 37 and 39 storeys. Last year, it achieved an average room rate of about $277. Mandarin Gallery - completed in late 2009 and boasting a 152-metre long frontage on Orchard Road - has a gross floor area of 196,337 sq ft.
Link to the story: http://www.businesstimes.com.sg/print/236080
Upper Paya Lebar industrial building going for $32m Source: Business Times A freehold industrial building at 14 Little Road, has been put up for sale with an indicative price of $32 million, or $513 per sq ft per plot ratio. The existing development, Tropical Industrial Building, is located off Upper Paya Lebar Road. The eight-storey building has parking spaces for 20 cars in the basement. It comprises eight strata-titled units with total strata floor area of some 50,289 sq ft and total gross floor area (GFA) of 62,375 sq ft. Although the building sits on a land area of some 22,126 sq ft, with plot ratio of 2.5, no development charge is payable if a developer chooses to redevelop the site to its full potential of 62,375 sq ft (GFA). The subject site is situated close to private and public housing estates and eateries are readily available at the shophouses at the junction of Upper Paya Lebar Road and Little Road.
Link to the story: http://www.businesstimes.com.sg/print/235873
International Markets
Slowdown in M'sia property sector seen continuing into 2013 Source: Business Times Exorbitantly high selling prices, stringent banking rules and a generally cautious sentiment that have been having an impact on the Malaysian property market this year could continue into 2013. Malaysian Institute of Estate Agents (MIEA) deputy president Siva Shanker said that property transactions in the first half of 2012 had slowed down, adding that this trend showed no signs of abating any time soon, according to a report in Monday's StarBiz. Mr Siva said that transactions had been affected because there was a disparity between the asking price of the property and the actual price listed on the valuation report. "We don't think 2013 is going to be much different, but we don't see the Malaysian property market crashing and burning like during the US subprime crisis. What we see is things slowing down, prices will stagnate a bit and not move up so much. In some cases, it won't move up at all,” he said.
Link to the story: http://www.businesstimes.com.sg/print/235863
Home prices keep rising in China but at slower pace Source: Today Prices of new homes in China rose for a third straight month in August from the previous month but in fewer cities than in July, following government efforts to close loopholes in property tightening measures. Average home prices in 70 Chinese cities rose last month as developers boosted sales to first-time buyers and upgraders, extending an upward trend that emerged in June after eight months of decline, data derived from the National Bureau of Statistics (NBS) showed Tuesday. Calculations by Dow Jones showed prices in the 70 cities increased by 0.05 per cent on average in August from a month earlier, compared with a 0.13 per cent increase in July and a 0.02 per cent increase in June. The figures come on the heels of improving housing starts and show a bright spot in a generally weakening economy. This poses a challenge for Beijing, which is trying to prop up its flagging economy and at the same time diminish the threat of resurgence of unsustainably high housing prices. Prices of new homes in 36 of the 70 large and medium cities surveyed by the NBS rose in August compared with the previous month, down from 50 cities in July. Compared with a year earlier, prices of newly built homes fell in 53 of the 70 cities in August, fewer than July's 58 cities.
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