Real News‎ > ‎2012‎ > ‎September 2012‎ > ‎

28 September 2012

28th September, Friday




Another 2,000 BTO flats to be rolled out in 2012 to keep lid on prices

Source: Business Times

The Housing and Development Board (HDB) is rolling out more flats this year in a bid to arrest runaway price increases and help meet housing demand.

An additional 2,000 units will be rolled out this year, bringing the new supply of Built-to-Order (BTO) flats up to 27,000 over the 25,000 originally planned.

Said an analyst: "Many resale flat sellers, especially those in mature estates, have increased their asking prices following the recent media publicity on million-dollar resale flats ... These launches are timely as they help to put a lid on runaway resale price increases, in particular those in the mature estates."

HDB said Thursday that a total of 7,055 flats will be launched under the joint Built-to-Order (BTO) and Sale of Balance Flats (SBF) exercises. This is in addition to a further 6,400 flats which will be launched in November.

Seven BTO projects offering 3,727 flats in two non-mature towns (Choa Chu Kang and Woodlands) and three mature towns (Ang Mo Kio, Kallang Whampoa, and Tampines) were launched Thursday.

HDB said first-timers will enjoy priority flat allocation, with at least 95 per cent and 85 per cent of the BTO flat supply - excluding Studio Apartments (SA) - set aside for them in mature towns and non-mature towns respectively.

According to Lee Sze Teck, senior manager, training, research and consultancy at DWG, the September BTO in Choa Chu Kang could see similar or lower subscription rates to the recent May and July BTO at Choa Chu Kang, which had a subscription rate of less than 1.0 from first-timers for four and five-room flats. Second-timers had an application rate of less than 5.0.

He added: "The demand for BTO launches in mature estates in Ang Mo Kio, Tampines and Kallang/Wham- poa should be healthy. Among first-timers, the subscription rate could be around 3.0 while subscription rate among second-timers could be in the high teens."

Separately, a further 3,328 balance flats in 11 non-mature and 13 mature towns will be sold under the SBF exercise.

They comprise 818 SAs, 697 two-room flats, 302 three-room flats, and 1,016 four-room flats 471 five-room flats, and 24 executive flats. At least 95 per cent of the flat supply (excluding SAs) will be set aside for first-timers.

About 23 per cent of the flats are already completed, with the remaining 77 per cent under construction.

That some of the SBF flats are from recent BTO launches with completion dates in 2014 and 2015 shows that the government is serious about satisfying demand for HDB flats by selling the unsold BTO flats now instead of waiting, said Mr Lee.

"On the other hand, the trend of BTO flats being sold under SBF launches is worrying. This means that in certain towns, for example, Sengkang, Punggol and Yishun, quite a number of flats from the BTO launches were not sold," he pointed out.

There are also some abnormalities which buyers can take note, said Mr Lee. "For instance, a five-room SBF flat at Teck Ghee Vista completed in 2012 is being offered at $706,700 while a five-room SBF flat at Boon Tiong Road completing in 2014/2015 is offered at $754,800. Location-wise, the five-room flat at Boon Tiong Road is a better deal," he said.

Applications for new flats launched in the September 2012 BTO and SBF Exercises can be submitted online, up to 3 October 2012. Applicants can only apply for one flat type/category in one town under either the BTO or SBF exercise.

A further 6,400 BTO flats will be launched in November in Queenstown, Bedok, Toa Payoh, Sengkang and Choa Chu Kang.


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Investment Sales


Half stake in 78 Shenton Way changing hands

Source: Business Times

A property fund managed by Keppel Land unit Alpha Investment Partners is said to have inked a deal to acquire a half stake in 78 Shenton Way from a global fund managed by Commerz Real, a fully owned unit of Germany's Commerzbank.

The transaction values 78 Shenton Way at $608 million, or $1,686 per sq ft (psf), on net lettable area (NLA) of around 360,500 sq ft.

Business Times understands the deal is through a sale of 50 per cent of shares in the company that owns 78 Shenton Way. The CommerzReal fund will halve its stake in that company to 50 per cent.

78 Shenton Way is on a site with a remaining lease of about 70 years. It comprises two towers: the original 34-storey tower with about 283,000 sq ft NLA, completed in 1988; and a six-storey new tower built above the carpark podium, completed in late 2009. The new block has NLA of about 77,500 sq ft.

The price was reported to be inclusive of about $16 million in income support and a return on the new tower while it was being developed, paid by the vendors to CommerzReal.

78 Shenton Way is said to be about 90 per cent occupied. The average monthly passing rent from existing tenants is around $6-7 psf for the older tower and $8-9 psf for the newer one. Based on these figures, the net yield would be close to 4 per cent based on Alpha's acquisition cost.

Tenants at 78 Shenton Way include Chartis, Shimizu, IPP Financial Advisors and Executive Ship Management.


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Small industrial plots launched for sale

Source: The Straits Times

Three smaller industrial plots with short leases will be launched for sale by public tender today.

Industrial landlord JTC Corporation said yesterday that the sites are "targeted at industrialists who need to custom-build their own facilities".

It added that the land release was in line with the Government's efforts to make industrial property more affordable.

Two of the sites - both are 0.30ha - are in Tuas South and zoned for Business 2, which allows clean and light development like warehousing and telecommunications. They have leases of 22 years and 8 months and a maximum permissible gross plot ratio of 1.0.

The third site is in Serangoon North Avenue 5 and can be used for Business 1, or clean and light industrial use like utilities and telecommunications. The 0.75ha plot has a 30-year lease has a maximum permissible gross plot ratio of 2.5.

Sites are zoned B1 and B2 according to their impact on the environment. B1 sites have a nuisance buffer - for noise and pollution for instance - of up to 50m. B2 sites have a buffer of more than 50m.

Mr Lee Sze Teck, Dennis Wee Group's senior manager of training, research and consultancy, said the Serangoon North site is considered prime as it is nestled within an established industrial area with little available development land. He added that the HDB blocks nearby could also provide a ready pool of employees.

Mr Lee said the Serangoon North site could attract a top bid of up to $180 per sq ft per plot ratio, pricing the plot at $36 million.

Experts expect mainly end- users to bid for the Tuas sites as they have shorter tenures and smaller sizes. Bids of up to $60 psf ppr or about $2 million are expected.

Tenders for all three sites close at 11am on 23 November.


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Industrial property prices expected to rise in Q3

Source: Channelnewsasia

The Urban Redevelopment Authority's (URA) Price Index for industrial properties is expected to register an increase of about nine per cent in the third quarter.

This is according to analysts ahead of flash estimates to be released by the URA on Monday.

While price increases are set to moderate, there are concerns that the uptrend in industrial property prices may spur policy changes to cool the market.

An analyst said: "Increasingly last year, the URA price index did not quite capture a lot of these caveats lodged for new development projects. But now, they are beginning to populate the basket. And come the fourth quarter, much of this populating of the basket for the index would have been filled up by these new age industrial buildings."

Some analysts are concerned about a potential bubble forming from such high rates of price increase.

One analyst said: "Locally we are facing some economic slowdown and internationally, the US is easing their liquidity. And that will flow into the region and increase the asset prices. It may lead to another bubble in our industrial property."

Another analyst said: "I think the level of speculation is relatively higher than previous property boom of 2006 and 2007. One of the reasons is that there are now a lot more single users, strata-titled units trading in the market."

With such high prices, analysts said industrial property developers are afraid of policy risks but are confident of demand especially from business owners who want to contain rental costs that have gone up by some 30 per cent to 40 per cent in the last few years.


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