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12 April 2013

12th April 2013, Friday




Sengkang West Way site attracts strong interest

Source: Business Times

A 99-YEAR leasehold private residential land parcel at Sengkang West Way drew a top bid of $262.1 million, or about $488.84 per sq ft per plot ratio (psf ppr).

UOL Group unit Secure Development made the highest bid for the approximately 179,900 sq ft site, which has a maximum gross plot ratio of 3.0.

The site's maximum gross floor area is just over 536,000 sq ft.

An analyst said: "It shows that developers are confident of demand for mass-market homes being sustained following the cooling measures imposed in January."

Another analyst added that sites such as Sengkang West Way with water views are generally popular with developers and homeowners.

UOL's bid was 3.4 per cent higher than the next highest bid by Bayfront Land, a joint venture between Aspial Corporation and Fragrance Group Ltd. They bid $253.6 million for the site, which translates to $472.89 psf ppr.

Bids also came in, in descending order, from a joint venture - between Frasers Centrepoint's FCL Topaz, Far East Organisation and Sekisui House - and Qingjian Realty, among others. CapitaLand's Athens Residential Development submitted the lowest bid, at $111 million or $207.01 psf ppr.

UOL president Liam Wee Sin said the developer planned to build a 20-storey development comprising around 600 units on the plot, hoping to "tap the upgrader demand in the north and north-east of Singapore".

Analysts estimate a break-even price of around $900 psf for the site, and expect UOL to launch the project at $1,000-1,100 psf.


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Foreigners adjust budgets to buy Singapore properties

Source: Channelnewsasia

Foreign buyers of Singapore properties have not totally fled the market, despite the higher taxes that they have to pay following tough cooling measures. More are finding it worthwhile to adjust their budgets, just to get their hands on their dream homes.

A market flushed with cash and low borrowing rates has made investors all over the world to seek safe havens in Singapore properties in the last few years.

This has propped property prices faster than economic growth can catch up.

It has also led the government to come up with a series of cooling measures.

Among them is the introduction of Additional Buyer's Stamp Duty (ABSD).

When an ABSD of 10 per cent was first imposed on foreigners buying Singapore property in December 2011, the number of foreign buyers dipped 73.3 per cent on-quarter in the first quarter of 2012. But when the ABSD was raised to 15 per cent in the seventh round of cooling measures introduced in January, the number of foreign buyers decreased at a slower rate of 15.9 per cent.

DWG's senior research manager, Lee Sze Teck, said: "For the previous cooling measures, when the government came out with that, foreigners were shocked they had to pay ABSD - Additional Buyers' Stamp Duty - on their first property purchase.

"This time round, when the revised ABSD came out, it is only an increase in the tax rates. So in a way it is more acceptable to them. So the dip in foreigners is less pronounced than the dip in Singaporeans and permanent residents."

From 12 January, Singaporeans must pay ABSD of 10 per cent on their second property and permanent residents 5 per cent on their first property.

Still, foreigners who are exempted from paying ABSD - mainly those from countries which have Free Trade Agreements with Singapore - could be a potential market for developers.

Another analyst said: "For foreign buyers, I think they (the developers) can look at the groups of foreign buyers that are not affected by ABSD measures, the ones that have the same tax treatment...US citizens, nationals from Iceland, Switzerland, Norway and Lichtenstein."

Most analysts Channel NewsAsia spoke to said it would take some months for a clearer direction of where the property market is heading after the seventh round of property measures was imposed in January.

Demand could still come from a large pool of first-time Singaporean buyers who are unaffected by any cooling measures, which are fast becoming a norm in Singapore and Hong Kong.


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Tuas Bay Close draws top bid of $37.1m

Source: Business Times

The tender for a 2.5 ha plot in Tuas Bay Close has closed with a top bid of $37.1 million, from among the four received. The offer, a joint bid by ZACD Investments, formerly known as SLP Property Investments, and Bohai Investments (Sengkang), works out to $81.19 per sq ft per plot ratio.

Bohai is a subsidiary of Bohai Investments Group, a company incorporated in 2011 and which counts Welltech Construction and a number of Chinese individuals as its stakeholders.

The 30-year-tenure land parcel, put up for tender by JTC Corporation at end-February, has a plot ratio of 1.7 and is zoned for Business 2 development.

ZACD and Bohai's offer was 19.4 per cent above the next-highest bidder OKH Holdings's $31.08 million, or $68.01 psf ppr. The bid was 45.61 per cent more than the third-highest bid of $25.48 million, which translates to $55.76 psf ppr, from Tuas One. Soilbuild put in the lowest bid of $33.09 psf ppr.

The tender results drew mixed readings from analysts. One analyst said the top bid was a high price for the location, which he described as not very ideal. The plot ratio means that the development has to be multi-level, likely a ramp-up factory. "Industrial developers are pretty cautious about the site. That's why there are only four bidders," he said.

Another analyst said the top bid is within expectations. But the prices in the latest tender had fallen short of the $100 mark due to the plot's features and conditions of the tender.

"The plot is a long narrow strip. You may lose out in terms of frontage and, if you want to be visible, then it is not as good as the ones facing major roads, like previous sales of sites that were along the major roads of Tuas South Avenue 3 and Tuas South Avenue 5," he said.

The conditions of the tender include a requirement that the successful bidder build at least 12 factory units, of which 10 are contiguous and 1,000 sq m each, and two are factory units of 3,000 sq m. "These units are bigger units and it is more difficult than usual to sell," he said.

The estimated selling price is around $300 psf.


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