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08 January 2013

8th January, Tuesday




URA to review guidelines on private enclosed space

Source: Business Times

The Urban Redevelopment Authority (URA) has been directed to review and fix guidelines on private roof terraces and private enclosed space on ground floors that allow developers to profit off bonus floor area that is given to them for free.

National Development Minister Khaw Boon Wan said in a blog post Monday that super-sized executive condominiums (ECs) units were offered and snapped up by buyers at some recent launches who did not appear to be from the sandwiched class.

Currently, developers do not have to pay development charges for outdoor spaces that are open to the sky, as they are not considered part of gross floor area (GFA). This exemption applies to all developments, including ECs. Developers can build either private or communal open spaces. This is aimed at encouraging more outdoor space for residents to enjoy, Mr Khaw noted.

However, when developers price a unit, they offer the entire space (including the outdoor space) for sale and make additional profits.

Making use of bonus space like this reduces construction costs for developers, but leads to a higher quantum for buyers, said an analyst.

"Developers selling off free space to make additional profit for themselves is not improper under current URA rules," the minister pointed out. "But as more developers do so, with larger private roof terraces and PES, communal space in the development that benefits all residents will correspondingly shrink."

These open spaces also cannot be covered up or enclosed, he added, which could disappoint buyers down the road.

Analysts believed that even if these open spaces become part of the GFA allowed for each development, developers can still pocket the profit after development charges. He also reckoned that it is unlikely that any new rules will be applied retroactively to projects that already have their planning approvals.

But some analysts expressed doubts over the review.

Lee Sze Teck, senior manager for training, research and consultancy at DWG, said that the current policy has been in place for many years, and shows that buyers value the open spaces. Furthermore, developers' margins will be squeezed if sales of such spaces are indeed prohibited or limited.


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CDL's Echelon more than three-quarters sold

Source: Business Times

More than three-quarters of City Developments Limited's Echelon private condominium project next to Redhill MRT have been sold since its launch over the weekend.

This translates to 390 units out of the 508-unit development at Alexandra View being sold as at Sunday, CDL said Monday.

The average selling price for the development was $1,700 per sq ft. This was the "early bird selling price", CDL said, and subsequent releases of units will be sold for 2 per cent and 4 per cent more.

City Developments is developing Echelon, which is expected to be completed in 2016, with its joint-venture partners, Hong Leong Holdings and Hong Realty.

CDL said that 80 per cent of buyers were Singaporeans, with the remaining 20 per cent of units sold taken up by permanent residents and foreigners.

Echelon will be a 43-storey, twin-tower development. Units will range from one to four-bedroom apartments, and there will also be four penthouses.


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Investment Sales


Mohd Sultan shophouse up for sale

Source: Business Times

A 999-year leasehold conservation shophouse at 15 Mohamed Sultan Road has been put up for sale by its owner with an asking price of $15.5 million.

This works out to about $2,259 per sq ft based on the property's existing's gross floor area (GFA) of 6,862 sq ft spread across three storeys and an attic.

Under Master Plan 2008, the property, which has land area of 2,606 sq ft, is zoned for residential use with commercial on the first storey and has a 3.8 plot ratio.

Based on this, there is potential to build a further GFA of about 3,000 sq ft at the rear, which would take the property up to five storeys. Based on the maximum 9,903 sq ft GFA and assuming it costs about $2 million to build this (development charge is not payable), the $15.5 million asking price translates to $1,767 psf on GFA.

The tender closes on 20 February.


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