Singapore Property News This Week #201

Residential

Site at Sturdee Rd draws 16 bids

16 bids were placed for a 99-year condominium site at Sturdee Road. The site is located near to City Square Mall and Farrer Park MRT Station. SL Capital Pte Ltd won the top bid, at a bid price of $181.19 million or $786.92 psf ppr. The site is expected to be built into a 30-storey condo with 306 units. According to Douglas Ong from SL Capital Pte Ltd, the condo will be launched either at the end of this year, or next year. Due to its close proximity to the CBD, Desmond Sim from CBRE believes that would have been one of the key draws of the site. Thus, the winning bid was significantly higher than the expected top bid. Previously, market experts had predicted that the winning bid would be around $600 to $750 psf ppr.

(Source: Business Times)

Property auction sales double to $34.3 million this year

Since the start of this year, $34.3 million worth of properties were transacted in the auction market. This is twice the $13.7 million that was transacted in Q4 2014. Of the 10 properties sold in Q1 this year, 9 were put up by mortgagees. A total of 8 residential homes, one factory unit and a row of shophouses were sold since the start of the year. Shophouses are highly sought after due to their limited supply, said Grace Ng from Colliers. On the other hand, high-end properties have commanded prices that are about 20 to 30 percent lower than in 2007 and 2008, when prices were at a record high. According to the Business Times, a total of 187 properties were put up for sale by auction in the first quarter this year. The number of properties put up by lenders increased by 19 percent, quarter on quarter, in Q1 this year.

(Source: Business Times)

21 units at Emerald Hill are on sale

Residences at Emerald Hill have gone on sale. The project has 12 floors and has received its Temporary Occupation Permit in June 2011. A balance of 21 units out of the 33 available at Emerald Hill will be sold. The expression of interest exercise will cease on March 30. The project is estimated to be valued at $105.5 million at the end of 2014. The unsold units would have a combined area of about 62,800 sq ft. This would mean that for the unsold units, the project should be valued at about $1,680 psf. Market experts believe that Lafe Corporation would ask for a higher price than that. According to the Business Times, previously, units at Emerald Hill had sold from $2,000 psf to $3,182 psf. Market experts believe that Lafe Corporation will conduct a bulk sale for the units at Emerald Hill so as to avoid paying extension fees.

(Source: Business Times)

Commercial

Property investment sales hit $3 billion in Q1 this year

While property investment sales are below the $4 billion mark in Q1 last year, the sale of big ticket transactions have hit more than $3 billion this year. About 74 percent of the total investment sales were from the private sector, according to the Business Times. Particularly, the sale of the AXA Tower had accounted for about 40 percent of overall investment sales, said Desmond Sim from CBRE. On the other hand, the remaining 26 percent of investment sales deals came from the public sector. This was a drop from the share of public land sales in Q4 last year. Last year, about 27.64 percent of all investment transactions were from the public sector. Sim said that the total debt servicing ratio framework could have slowed demand and thus reduced investment sales volume. Nonetheless, the public sector’s share of investment sales is predicted to increase in the coming quarter due to an increase in the number of tenders.

(Source: Business Times)

Experts divided on the effects of higher interest rates on Reits

The Singapore real estate investment trusts (Reits) is expected to be affected by the increase in interest rates. Pearly Yap from Eastspring Investments believe that the increase in interest rates will not have any substantial impact on Reits as the impact of the interest costs will be spread out over many years. On the other hand, Ong Kian Lin from RHB Research Institute believes that as the Singapore dollar depreciates, investors may be less willing and able to invest in Singapore Reits.

(Source: Business Times)

Price moderation will increase Asia’s real estate investment volumes by 102 percent

Market experts predict that real estate investment in Asia will increase by about 102 percent from US$13.2 billion last year. Colliers said that inbound real estate capital in 2015 should increase as prices moderate. As more properties are sold at reasonable prices, investors are flocking back to Asia, said market experts. Terence Tang from Colliers said that compared to the UK and the US, growth in Asia’s economies are slowing. Therefore, capital yield will increase. Singapore, Hong Kong, Tokyo and China are expected to be hot favourites among investors. According to market experts, Singapore’s high-end luxury apartments are good investment opportunities as the stock of such apartments increases.

(Source: Business Times)