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21 June 2013

Landed homes outperform non-landed ones

Terrace houses the most popular choice in landed home market

Source: Straits Times | Money 
By Cheryl Ong

RESALE prices of landed homes rose at a faster rate than that of apartments in the first half of the year, according to a report yesterday.

The DTZ survey detailed price rises for various categories of freehold and leasehold homes across the island to give an overall picture of the market.

It found that prices of freehold landed homes in the prime districts of 9, 10 and 11 rose 3.1 per cent in the first six months of the year while freehold apartment values rose only 1 per cent.

In suburban districts, resale prices of leasehold landed homes rose 5.1 per cent while apartments recorded a price growth of only 2.2 per cent. However, prices of suburban landed freehold homes rose just 2.6 per cent - the lowest rise in the landed segment but still a tad ahead of the 2.5 per cent increase for suburban freehold apartments.

"In general, landed prices have risen more strongly than non- landed," said DTZ's head of Singapore research, Ms Lee Lay Keng.

Terrace houses, whether freehold or leasehold, were the hottest segment in the landed home market.

Resale prices for both freehold and leasehold terrace homes located in prime and suburban areas rose by between 4.1 per cent and 5.6 per cent in the first half of the year, while resale prices of detached and semi-detached homes across the board increased by 0.5 per cent to 2.7 per cent, she noted.

DTZ said it expects prices of landed homes to continue to rise at a faster rate than those of apartments in the second half of this year.

Data from the Urban Redevelopment Authority in the first quarter showed that about 495 landed homes could be available for sale in the prime districts 9, 10 and 11. These include the 140 units that could be built on the Coronation Road site which was sold when the Government Land Sales (GLS) tender closed yesterday.

This would represent only 4.5 per cent of the total number of landed homes in districts 9, 10 and 11, said DTZ.

In addition, about 33,000 non-landed homes are expected to be launched islandwide compared to 2,000 landed homes, going by the various GLS sites that have been sold or are available and projects on the drawing board.

"On the back of a limited pipeline supply (of landed homes), we expect the outperformance to continue into the second half of 2013," said Ms Lee.

DTZ also noted that foreign buyers were less deterred by the cooling measures implemented in January and continued to snap up homes in the luxury segment.

"Notwithstanding that some caveats for purchases in May and June may not have been lodged yet, there were already 28 foreign purchases costing more than $5 million in the non-landed resale market in the first half of 2013, higher than the 24 made in the second half of 2012," noted DTZ executive director of residential Margaret Thean.

Ms Thean noted that foreigners who buy such high-end homes have deep pockets and a longer investment horizon, and so recognise the long-term potential of freehold non-landed units in prime locations.

DTZ also expects that sales of new homes in the luxury segment will increase as buyers scout around for trophy assets.

These condos include Far East Organization's Ferra, designed by Italian car designer Paolo Pininfarina.

Prices start from $2.3 million for a 732 sq ft unit.

Landed housing plot gets top bid of $366m

District 10 site in Coronation Rd could yield 140 landed homes

Source: Straits Times | Money 
By Cheryl Ong

A RARE find - a large landed housing plot in upscale Coronation Road - has attracted a top bid of $366 million in a 12-way tussle between developers.

CapitaLand's Athens Residential Development put in the highest bid - $908 per sq ft (psf) per plot ratio (ppr) - for the 37,441 sq m site, which could yield 140 landed homes. The next highest bid came from Far East Organization - 17 per cent lower at $313.3 million or $777 psf ppr.

The tender closed yesterday.

Experts expected the bids to range from $880 to $990 psf ppr, pegging the number of bidders at five to 17. The 99-year leasehold site was released in March as part of the Government Land Sales (GLS) programme.

Other bidders included Chip Eng Seng, City Developments and Wing Tai Holdings. The lowest bid came in at $163.1 million, or nearly $405 psf ppr.

CBRE's executive director of residential services Joseph Tan said the main draw was probably the site's prime location - it sits in District 10, next to a Good Class Bungalow zone.

Experts also said landed housing development sites offered for sale draw a strong response from developers as they are quite rare.

"The last GLS sale for such developments was in December 2011 - a site in Chestnut Avenue went for $70.8 million or $510 psf," said SLP International's executive director of research and consultancy Nicholas Mak.

R'ST Research director Ong Kah Seng said another attraction was the site's proximity to popular schools such as Nanyang Primary and Hwa Chong Institution.

Moreover, developers are bullish over demand for landed homes as their prices have outstripped those of non-landed properties.

"Prices of landed properties, as of the first quarter of this year, were 87 per cent above the trough in 2009. In contrast, prices of non-landed homes were only 53 per cent above the trough in 2009," said OrangeTee head of research and consultancy Christine Li.

Mr Mak said recent transactions for freehold and 999-year leasehold landed homes in the area saw prices of $1,280 to $1,830 psf. But he believes that if CapitaLand is awarded the 99-year leasehold site, it will launch its project at $1,600 psf to $2,000 psf.

The Urban Redevelopment Authority will announce the winner of the tender later, though the top bidder generally is well placed.

Plans for the site include building a mix of semi-detached houses and bungalows that will be ready for launch in the second quarter of next year, a CapitaLand spokesman said yesterday.

Asia dominates the world's most expensive office spaces

Source: Straits Times | Money 

NEW YORK - Five of the six most expensive office areas in the world are in Asia, as demand by global companies to locate there outstripped the supply, according to a semi-annual report released yesterday by real estate services company CBRE Inc.

For the third consecutive time, Hong Kong's Central business district had the highest overall occupancy cost, which includes local taxes and service charges.

Hong Kong's Central averaged US$235.23 (S$296) per square foot annually at the end of March, ahead of London's West End at US$222.58.

Beijing's Finance Street followed at US$195.07 psf, with the Chinese capital's central business district next at US$187.06.

"Demand is coming from a lot of multinational corporations which want to place a stake in these developing economies," said Mr Raymond Torto, CBRE's global chief economist.

"When they look around some of these cities, they want to be in the best locations because there's not a lot of good infrastructure. You want to be close to other businesses. You want to be close to transportation. And you want to be in a quality property."

Meanwhile, supply is muted by either height restrictions or ownership, where even in the best buildings separate floors can be owned by different landlords.

At No. 5, New Delhi's Connaught Place's occupancy cost was US$178.96 psf, with Hong Kong's West Kowloon area at US$173.90, according to the report that covers 127 markets around the globe.

Next on the list are Moscow, Tokyo's Marunouchi/Otemachi district and London's Central City, followed by Midtown Manhattan making 10th place at US$120.65 psf.

Jakarta saw the biggest increase, with occupancy costs jumping 38.9 per cent compared with a year earlier.

Two of Houston's office areas also made their way into the top five areas where occupancy costs increased the most.

In suburban Houston, occupancy costs jumped 21.2 per cent to No. 2. Houston's downtown occupancy costs rose 14.9 per cent, fourth behind downtown Boston, where occupancy costs rose 15.4 per cent.

Globally, occupancy costs rose by 1.4 per cent.

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