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03 January 2013

3rd January, Wednesday




HDB resale flat prices climb to historical high in 2012

Source: Business Times

Resale flat prices grew at their strongest pace in five quarters to reach a historical high, as the Government plans even more Built-to-Order (BTO) flats this year.

The latest flash estimate of the Resale Price Index (RPI) from the Housing and Development Board (HDB) Wednesday showed that prices rose 2.5 per cent to 202.9 in the fourth quarter of 2012 from the previous quarter.

This was the fastest rate since a 3.8 per cent increase in 3Q of 2011.

For 2012 on a whole, prices for resale homes were 6.6 per cent higher than the year before. This was down from 10.7 per cent in 2011 and 14.1 per cent in 2010.

Also on Wednesday, the HDB said it will increase its offering of BTO flats this year to at least 23,000, up from at least 20,000 announced earlier.

Lee Sze Teck, senior manager for training, research and consultancy at DWG, believes the revision in supply by HDB could foreshadow policy changes.

Analysts said both demand and supply factors continued to be at work in the resale market last year.

An analyst said the HDB's new flat programme is heavily skewed in favour of first-time home buyers. This means first-timers with immediate housing needs, singles, permanent residents and second-timers continued to drive demand for resale flats. Under current rules, between 85 and 95 per cent of BTO flats are set aside for first-timers.

DWG's Mr Lee highlighted a "gradual depletion" of available resale flats after several measures introduced in the last few years.

He cited the extension of the Minimum Occupancy Period, the increase in allocation of BTO flats and Executive Condominiums to second-timers and the requirement for private home owners to sell their private residences if they want to stay in their HDB flats.

Another reason, said another analyst, was buyers bringing forward purchases for fear of higher prices in the future.

That said, market watchers acknowledged the moderation in resale prices last year and predicted prices to go up between 4 and 8 per cent for 2013.

Still, it will take a rude shock before prices drop. "In the absence of a recession, property prices are unlikely to dip," one analyst concluded.


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Q4 private home prices up the most in 6 quarters

Source: Business Times

Despite the curbs on housing loan tenure introduced in October, the Urban Redevelopment Authority's private-home price index flash estimate in 4Q 2012 galloped at its fastest clip in six quarters, driven by rising prices of mass-market condos.

The latter were, in turn, buoyed by strong public housing resale flat prices.

URA's overall private-home price index in 4Q rose 1.8 per cent from the previous quarter, after a 0.6 per cent gain in 3Q. This is the biggest increase since the 2 per cent rise in the index in 2Q 2011. For the whole of 2012, the index climbed 2.8 per cent, about half the 5.9 per cent rise recorded in 2011.

Giving a geographical split of prices of non-landed private homes, URA said that the index for the Outside Central Region (OCR) rose 3.4 per cent quarter-on-quarter in 4Q, against a one per cent gain in 3Q. This is the strongest showing in 10 quarters, since a 5.7 per cent jump registered in 2Q 2010.

Some property consultants attribute the OCR's good performance to developers achieving higher price points for projects near MRT stations. Other market watchers, however, reckon that this could have been due to older completed condos in the suburbs slowly catching up with the higher property prices set by new housing projects. More light on what drove up OCR prices in 4Q will be shed on 25 January, when URA releases more detailed price indices for completed versus uncompleted properties.

For the Rest of Central Region (covering city-fringe locations), the 4Q index was up 0.9 per cent, on a par with the 0.8 per cent rise in 3Q. In the Core Central Region - where Singapore's choicest homes are located - the price index rose 0.8 per cent in 4Q, compared with a 0.1 per cent rise the previous quarter.

Analysts note that the government's cooling measures, such as the additional buyer's stamp duty introduced in December 2011 and the mortgage tenure curbs in October 2012, have helped put on lid on private-home price growth. Even so, high liquidity and low interest rates continued to draw investors to the property market last year.

These factors should remain in play this year, while rising land bids at recent state tenders would create upward price pressure at new launches. However, the combination of a weaker economy, more completed private homes coming onstream and affordability issues will help rein in price increases, analysts say. They predict prices in 2013 to rise between 2 and 3 per cent.


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Forestville developer upbeat on reopening

Source: Business Times

The showroom for the Forestville Executive Condominium (EC) will be closed until further notice for maintenance, but the developer for the project said this is not linked to it being stopped from selling the units by the Urban Redevelopment Authority (URA).

The showroom has been closed since Friday.

The spokesman said the showroom was closed for "general maintenance work", but declined to give more details.

Hao Yuan said it "acknowledges that there were some technical issues with regard to Forestville Executive Condominium. The architects are working closely with the relevant authorities to resolve the said technical issues as expeditiously as possible".


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Keen interest in Pasir Panjang freehold units

Source: The Straits Times

A new residential project in Pasir Panjang by boutique developer Link (THM) has received strong interest from buyers even before its formal launch.

About 100 cheques have been collected for the freehold 52-unit development, SeaSuites, which will be launched this Saturday.

Average prices are expected to be about $1,650 per sq ft. Most of the units are one- and two-bedders ranging from 517 sq ft to 1,410 sq ft. The three-bedroom units are 1,066 sq ft to 1,615 sq ft.

It has two other developments in the pipeline, including a landed housing site in Holland Road - where the homes are expected to fetch between $10.5 million and $11 million each - and another light industrial project off Bukit Merah Road.


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'Healthy demand' for office space in Q4

Source: The Straits Times

Demand for office space remained healthy in the fourth quarter last year, which helped cushion rental declines, according to a property consultancy.

Occupancy rates for suburban Grade A offices - which include those in places such as Tampines and Jurong East - climbed to 95.6 per cent, a striking 4.3 percentage points higher than in the third quarter. The bulk of the increase was driven by tenants taking up space in Tampines, particularly at the NTUC Income Tampines Junction block and the Abacus Plaza complex.

The robust demand for Grade A suburban offices was partly due to some large tenants leaving the Central Business District (CBD) to save on costs in the wake of the cautious economic outlook. Another contributing factor came from the demand by tenants who were previously sourcing or have been occupying industrial space, but no longer fall within the list of allowable users stipulated by the authorities.

Still, occupancy rates in suburban districts have not caught up with those in areas closer to the city centre.

City fringe Grade A office space retained the highest occupancy rate at 98.3 per cent in the three months to 31 December. This area includes districts such as HarbourFront and Novena.

Overall, the average occupancy rate of Grade A offices in the CBD grew from 93.1 per cent in the third quarter to 94.1 per cent in the fourth quarter last year.

The higher overall occupancy rates in the fourth quarter helped to offset rental declines for yet another quarter, it added. Average monthly gross rents for Grade A office space in the CBD fell a smaller-than-expected 6.9 per cent for last year overall.

The office property market is likely to continue to experience "firm" demand from occupiers and investors this year.


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Investment Sales


Income to fully own 16 Collyer Quay

Source: Business Times

NTUC Income will be taking full ownership of 16 Collyer Quay, a prime office building in the Central Business District (CBD) area.

It has inked a sales-and-purchase agreement with Goldman Sachs, and the deal is scheduled for completion at the end of January, Income said Wednesday.

Under the current transaction, the building is valued at $660 million, or less than $2,400 psf. Based on this valuation, it is believed that Income would be paying about $336.6 million for the 51 per cent stake, giving it full control of 16 Collyer Quay.

The building, with a net lettable space of 278,356 sq ft, is 94 per cent occupied. It has stable rental income from a diverse mix of office and retail tenants. Income plans to renovate the building to increase its asset value and attract office tenants.

Income also owns, fully or partially, a number of other commercial properties, including NTUC Income Centre, Capital Square, Prinsep House, Parkway Parade, Ang Mo Kio Hub, EastPoint Mall and Clementi Mall.


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Paya Lebar industrial site up for en bloc sale

Source: Business Times

A freehold industrial "white site" in Paya Lebar has been launched for collective sale, with an expected price in excess of $58 million, or $837 per sq ft per plot ratio (psf ppr)

Guang Ming Industrial Building now stands on the 19,789 sq ft site in Tai Seng Industrial Estate; the 20 units within it are separately occupied by various businesses such as Seaward Chemicals and Horizon Auto Services.

The plot's status as a "white site" means it can be developed for commercial, residential, retail or hotel purposes. Based on a maximum allowable plot ratio of 3.5, developers can build a property with gross floor area of up to 70,000 sq ft, including 20,000 sq ft of retail and commercial space.

The tender exercise closes on 5 February.


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Kismis Lodge up for en bloc sale again

Source: Business Times

Kismis Lodge is being put up for collective sale for the second time.

Located off Toh Tuck Road, Kismis Lodge occupies a land area of 70,283 sq ft. The plot, comprising 64 walk-up apartments, was first put up for tender on 16 July last year.

This time, the owners are expecting at least $90 million, which translates to some $1.4 million per owner.

The Kismis Lodge site is zoned for "three-storey mixed landed housing" and can be redeveloped to yield around 43 strata terraces, or other combinations of landed housing subject to approval.

Because there is a high development baseline for the site, developers do need not pay a development charge.

The tender for Kismis Lodge closes on 24 January at 2.30pm.


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Joo Chiat hotel put up for tender

Source: The Straits Times

A hotel in Joo Chiat is up for sale by tender with a guide price of $75 million to $80 million.

The 99-year leasehold four- storey hotel, owned by Classic Holdings, is part of the Hotel 81 chain. It is bounded by Onan, Joo Chiat and Changi roads, and has 115 hotel rooms.

Some significant transactions in the area over the past two years include the former Lion City Hotel being sold for $313 million, 55 Changi Road sold for $44.9 million and New Changi Hotel sold for $53.2 million.

The tender closes on 5 February.


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