Singapore Property News This Week #110

Residential

YTL Land aims to create homes for discerning buyers

According to its vice president Joseph Yeoh, YTL Land and Development’s projects in Singapore aim to create “one-of-a-kind homes” for discerning buyers before it can expand its portfolio and commit the best practices to add value to the company. The first project of YTL Land in Singapore was launched in 2008 at Sandy Island in Sentosa Cove, which consisted of 18 villas of 7,500-9,200 square feet. The unique design of the villa with boat berths and underground garages was by Claudio Silvestrin, the designer for Giorgio Armani’s flagship stores, and was awarded several design awards including FIABCI Prix d’Excellence and the Best Architectural Design (South East Asia) at the South East Asia Property Awards. Another project by YTL Land is Kasara the Lake in Sentosa Cove, comprising 13 bungalows between 9,000 and over 14,000 sq ft. The next project will be the luxury condominium project at Orchard Boulevard which used to house Westwood Apartments. YTL Land bought the site for $435 million or $2,525 psf ppr in 2007, and will redevelop it into a 77-unit apartment.

(Source: Business Times)

Court to decide fate of Thomson View’s en bloc sale

The $590 million collective sale of Thomson View Condominium will be decided at a week-long hearing in the High Court starting this week. The issue is whether the sale of the site to a joint venture of Wee Hur Development and Lucrum Capital was made in good faith and should be approved. Owners of 215 units, translated to 84 percent of share value, agreed to the sale for $590 million. However, 17 owners of 12 units objected to the sale for the reason of undervaluing the site. They cited a report that valued the site at $728 million instead. They also objected the sale because they believed secret payments were made by marketing agent HSR to owners of four units so that those owners would sign the collective sale agreement. HSR was alleged to have paid $548,000 to those owners and also their travel expenses as an incentive, all of which amounts to bad faith. Lawyers for Thomson View Collective Sale Comittee chairman Philomene Ngui and other CSC members representing the consenting owners said the CSC did not make any inducement payments, nor was it aware of HSR’s payment arrangement with the four units’ owners, which was confirmed by HSR.

(Source: Business Times)

Two pairs of GLS sites have same tender close

Under the Government Land Sales Programme (GLS), tenders for a pair of private housing sites in Upper Serangoon View will close at the same time in September. Similarly, tenders for a pair of executive condominium (EC) housing sites in Choa Chu Kang Grove will also close at the same time. This move is to encourage more prudent bidding by developers, especially that the sites in each pair are adjacent to each other, of similar size and unit yield. The Choa Chu Kang Grove EC sites can generate 575 units for one and 580 units for the other. The Upper Serangoon View sites are expected to yield 510 private home for one and 410 units for the other.

(Source: Business Times)

Thomson View case looks at buyer option

The case of Thomson View en-bloc Collective Sales Committee (CSC) being accused of acting in bad faith continued to take place when the court looked at the buyer option in which the committee gave the buyer an option to rescind if it has to pay more than $95 million to redevelop the land. Lawyers representing sellers objecting the $590 million sale argued that the CSC should not have given the buyer the option of cancelling within six months of accepting the tender because valuer Chesterton-Suntec International had put the lease upgrading premium to redevelop the 255-unit site at $125 million at the close of tender on Sept 4, 2012. However, the CSC representative said that the objection is a red herring, and that the consenting owners of 84 percent of the share value are happy with the purchase because they have been waiting for the purchase since 2008 and this offer is better than selling in the open market. Regarding the incentive payments made by HSR International Realtors to the owners of four units, it was reported that HSR, under its terms of engagement, isn’t a fiduciary, and therefore doesn’t have a duty of evenhandedness. Hence HSR’s incentive arrangement has no impact on the sale price.

(Source: Business Times)

No loophole for parents who buy properties in their children’s names

It is no longer possible for parents who try to outsmart regulators by buying properties in their children’s names. The loophole that used to allow homebuyers to circumvent the original intent of lowering the loan-to-value (LTV) ratio and imposing the additional buyers stamp duty (ABSD) is now closed. The Monetary Authority of Singapore (MAS) has announced new rules that discourage property loans resulting in borrowers using more than 60 percent of their monthly incomes to service debt, and now when granting property loans, banks must consider all of a borrowers’ outstanding debt obligations such as loans for cars, renovations and credit cards. “Guarantors” will now have to be brought in as co-borrowers and one of the purchasers on the OTP (option to purchase). Consequently, this will discourage investors who tried to avoid paying the ABSD and obtain a higher LTV ratio by using their children’s names to purchase a second property.

(Source: Business Times)

Central Region home prices perform best

According to NUS, prices of completed private apartments and condos (excluding small units) in the Central Region continued to outperform the rest of the market for the third consecutive month. This is in accordance with investors caring more about older apartments in the Central Region, where prices are looking relatively attractive. Central Region is defined as districts 1-4 (including the financial district and Sentosa Cove) and the traditional prime districts 9, 10 and 11. NUS’ Singapore Residential Price Index (SRPI) for Central Region increased by 1.5 percent in May over April, compared to a drop of 1.6 per cent in the SRPI for Non-Central Region.

(Source: Business Times)

Strong demand of J Gateway condo

Before its official launch for sale on June 29, MCL Land’s J Gateway condominium already attracted 1,400 blank cheques from prospective buyers at its showflat. The development comprises of 738 units located beside shopping malls JCube and Jem, and its price is expected to hit a record high. It is estimated by marketing agent Huttons that the average prices of homes in the development can range from $1,650 psf for a 474 sq ft one-bedder to $1,450 psf for a 1,163 sq ft four- bedder. The development has 259 one-bedders, 245 two-bedders, 181 three-bedders, 47 four-bedders and six penthouses. It will be completed in 2016.

(Source: Business Times)

Commercial

Strata office market could see prices rise

Transaction volumes for the strata office market only crossed a third of last year’s levels in the first five months of 2013, and are unlikely to match 2012’s peak. Nevertheless, the strata office market could see prices rise by 5 to 8 percent. Strata office buildings account for 12 percent of the total islandwide office stock. 91 percent of these buildings are in the CBD and fringe areas. 1.2 million sq ft more of strata office will be completed by 2016, and strata office buyers are reported to enjoy future better returns on investments if the office rents take off from 2014 onwards. Prices of new projects are reported to be 15 to 20 percent higher than resale buildings in the same locations.

(Source: Business Times)

Park Regis sold for $250m

Park Regis Singapore has been sold to a China buyer at $250 million; the seller is Park Regis Investments. The asset is located along New Market Street/Merchant Road and comprises a 203-room hotel and a seven-storey office block. The hotel is managed by Australia-based StayWell Hospitality Group. The hotel room is expected to be value at between $859,000 and $818,000 respectively per room, while the office space can be valued at $67.3 million or $1,600 psf.

(Source: Business Times)

18th floor of Samsung Hub to be on sale

The 18th floor of Samsung Hub at Church Street is now up for sale, following the recent sale of six strata units on the 17th floor at a record psf price for the building of $3,500 psf. The marketing agent for the sale is CBRE. The 18th floor is owned by Buxani Group and a group of investors advised by Capital Management Group. Average transacted prices at Samsung Hub are said to have risen 14 per cent in the last two years. The guide price for the 18th storey has been set at $43.3 million, or $3,300 psf.

(Source: Business Times)

Resale strata factory units decreased by 17% in Q2

The number of resale strata factory units sold decreased by 17 percent in Q2 from the first quarter of the year to 266 units. This followed a 26 per cent drop in Q1 to 320 units. Resale prices of first- and upper-storey space increased by 0.3 per cent and 0.6 per cent respectively in Q2, compared to the 7.8 per cent and 6.5 per cent growth in the second half of last year. Buyers were reported to be more cautious following the introduction of sellers’ stamp duty (SSD), which might have had a dampening effect on the industrial real estate market.

(Source: Business Times)

Logistics Holdings steps into property development

Logistics Holdings will go into property development with its first acquisition of Minton Court for $13.4 million, which translated to $1,010 psf. The site is located at 21 Paya Lebar Crescent, and will be developed into a high-end cluster housing development comprising six to eight units. The cost of the acquisition and redevelopment will be financed by the group’s internal funds and bank borrowings.

(Source: Business Times)

Tuan Sing buys Robinson Point for $348.9m

Tuan Sing has acquired Robinson Point for $348.9 million, which translated to $2,579.5 psf. This is thought to be the most expensive office this year. Tuan Sing would acquire the entire issued share capital of Robinson Point Limited which legally and beneficially holds the entire issued share capital of 39 Robinson Road Pte Ltd. This amounts to $346.3 million after taking into account the agreed value of Robinson Point and adding back balances of a related bank loan and shareholder’s loans. Tuan Sing is understood to hold the asset for long-term share value appreciation purposes.

(Source: Business Times)

PoMo sold for $336m

PoMo, a retail and office property on Selegie Road, was sold to EH Property and Investments Pte Ltd, a joint venture between BS Capital Pte Ltd and Enviro-Hub Holdings Ltd, for $336 million, or $1,894 psf based on a net lettable area (NLA) of 177,381 sq ft. Previously known as Paradiz Centre, PoMo is on a remaining lease term of 69 years. Education provider Kaplan is expected to move into the offices later this year. Other vacant retail space awaits new owners to reposition the asset.

(Source: Business Times)