Singapore Property News This Week #15

RESIDENTIAL

34 properties were put up for auction and only one was sold during Hungry Ghost Festival

According to Colliers International, 34 properties were put up for auction during the lunar seventh month in 2011 and only one property was sold. The property, which was sold for $1.66 million, was a terrace house at Da Silva Lane at Serangoon. So far, the total sale value achieved at auctions for 2011 is $80.4 million, and Colliers International expected the total sale value for 2011 to surpass $110 million.

SRPI revealed a gloomy market situation where prices for non-landed houses increase by a mere 0.2% in July

SRPI showed that the overall price index for non-landed houses increased by only 0.2% month-on-month in July, lower than the 0.7% month-on-month hike in June. Excluding small units and several houses in districts one to four, and nine to 11, the sub-index for the Central region showed a larger month-on-month decline from -0.1% in June to -1.3% in July. The SRPI for the Non-Central region, which similarly excludes small units, stayed at +1.2% for July. Knight Frank believes that situation will improve after the Chinese seventh month and more projects are already planned to launch in September.

Gradual price increase expected for upgrader private housing

Wing Tai’s chairman Cheng Wai Keung mentioned that the upgrader section of private housing market is expected to see a gradual increase in price as the upcycle for the upgrader segment has reached a mature stage. Also, high-end market is likely to see price growth as policies have more impact on public housing. Other factors that contribute to the price growth, as mentioned by Mr. Cheng, are generation of wealth, liquidity, and limited supply. Wing Tai will be more cautious when it comes to bidding for sites as some top bids for mass-market private housing plots at state tenders are just too high for developers to earn a profit, Mr. Cheng noted.

14,580 sq ft Riviera Point up for sale via tender

Situated along River Valley Road, freehold 14,580 sq ft Riviera Point was launched for sale via a tender. The site can potentially yield a GFA of 49,303 sq ft and a gross plot ratio of 3.38. The estimated sale price is $70 million ($1,420 psf ppr). Judging from the potential GFA of approximately 54,233 sq ft, the land price could be reduced to $1,353 psf ppr due to a 10% balcony area. The tender ends on Sept 29, 3 pm.

Sale price of $2,081 psf for No. 6 Chatsworth bungalow set a new record for GCB sales

The sale of No. 6 Chatsworth Road at $2,081 psf ($22 million) set a high record price for GCB sales, surpassing the previous record of $2,038 psf set by the sale of 16 Cluny Road in February 2011. No. 6 Chatsworth Road, which is a bungalow standing on a land area of approximately 10,571 sq ft, is much smaller than the usual minimum GCB land size of 1,400 sq metres (15,069.46 sq ft). The property was purchased by Cheong Sim Lan, who is also involved in the Robinson Suites and Cecil Suites developments in CBD.

Whitley Heights sold for $159 million in collective sale

At Thomson Road, a District 11 freehold condo development Whitley Heights was sold to Hoi Hup Realty for $159 million ($1,222 psf of land area). Based on the price, the owners can receive a gross sale price that ranges between $3.3 million and $3.8 million. The 130,165 sq ft site, which consists of 45 units of walk-up apartments in three three-storey blocks, is zoned for two-storey mixed landed houses upon redevelopment. Credo Real Estate mentioned that Hoi Hup can build up to 80 strata terrace houses or about 60 strata semi-detached houses on the land parcel.

Condo plot at Punggol Field Walk fetched top bid of $169.9 million in a state tender

At Punggol Field Walk, a 99-year leasehold condo housing site attracted a total of eight bids at a state tender, higher than market watchers’ expectations. Despite the good responses, the bids reveal developers’ caution. The top bid of $323 psf ppr ($169.6 million), which was submitted by Capital Development and ZACD Investments, was lower than the $420 psf ppr predicted by analysts. Colliers predicted that the breakeven cost for units at the new site could fall between $660 psf to $680 psf.

COMMERCIAL

Rents for space on Orchard Road expected to stabilize in 2011

A report by Savills revealed that rents on Orchard Road are likely to stabilize despite the limited supply and continuous demand. Also, suburban rents are expected to stabilize despite the introduction of new supply. URA noted that the vacancy rate decreased from 6.1% in Q1 to 5.8% in Q2, and the URA rental index for central areas showed a 0.7% hike in Q2, with average base rents for Q2 remaining at $34.4 psf pm for Orchard Road first-rate space.

JTC Corporation launched 2.86 ha industrial site for sale

JTC Corporation put up a 2.86 ha industrial site, which is located at the junction of Lavender Street and Kallang Avenue, for sale via a public tender. Zoned for Business 1-White use, the 60-year lease site can contain a combination of shops and offices. With a maximum permissible gross plot ratio of 3.0, Colliers International expects the site to fetch a price that falls in the range of $343 psf ppr. The tender for the site ends on October 27.

DC expected to increase in September

Judging from the increase in land values over the past six months, DCs are predicted to rise from September onwards. However, the rate of increase may be slower than the past six-monthly review due to the current economic uncertainties. JLL and DTZ both estimated that the rise in average DC rate for commercial use will be around 5% to 10%, while Savills predicted an increase of approximately 8.5%. JLL estimated that the average DC rate for industrial use will increase by 10%, and DTZ predicted a rise of 5% to 10%. DTZ also mentioned that areas with newly introduced or completed projects, such as Ubi, will see a higher increase in DC.

Property shares trading at discount up to 48% off their RNAVs

Property stocks are now trading at a price of up to 48% lower than their RNAVs and analysts believed that this number will become larger as share prices may decline further in the next few weeks. CIMB Research noticed that eight largest developers in Singapore were trading at prices that were 15% to 48% lower than their RNAVs. Capitaland was trading 48% lower than its RNAV, Singapore Land at 47%, and Keppel Land at 45%, were the top three developers who were trading at the largest reduction to their RNAVs.