Singapore Property News This Week #214

Residential

Site at Dundee Road sold for $483m in tender

In a recently closed tender, a residential site at Dundee Road was sold to the top bidder for $483.18 million or $871.14 psf ppr. The site, which has a 99-year lease, is likely to be developed into a 700-unit condominium according to the Business Times. The land parcel is located near to Queenstown MRT Station and is about 10,516 sq m. It is expected to be launched in Q1 of 2016. Desmond Sim from CBRE said that the high bid price reflects developers’ interest in the land parcel. Nonetheless, Chua Yang Liang from JLL pointed out that the number of bids placed in that tender was the lowest for a residential site in the rest of central region since Q3 2014.

(Source: Business Times)

High vacancy rates in condos suggest oversupply

According to the Business Times, rising vacancies in the private housing market may suggest that there is an oversupply. A year ago, the Business Times photographed 10 completed condo projects to show that many condo units are still unoccupied. In May this year, a similar photography project was conducted for the 10 developments. However, only one out of the 10 developments was visibly more lit up than last year, said the Business Times. Jacqueline Wong from Savills Singapore said that these developments may appear unoccupied as their tenants may be foreigners who are based here but travel around the region for work. Not only so, these units may be used as holiday homes. Furthermore, Ong Kah Seng added that some local high-net-worth individuals may be holding off from renting out the newly-completed projects due to the weak rentals. On the other hand, experts believe that the unoccupied condos in the sample that Business Times photographed, could suggest that there is a problem of oversupply. The number of units that have obtained TOP surged from 13,150 units in 2013 to 19,941 units in 2014, up by 51.6%. Also, the vacancy rates of private homes increased by 2.8% from end-2010 to end-2014. While the vacancy rate had fallen from 7.8% in 2014 to 7.2% in Q1 of 2015, market experts expect the occupancy rates to drop for the rest of the year due to an increase in supply of private homes.

(Source: Business Times)

Redevelopment site at Amber Road up for tender

Located at Katong, a redevelopment site that is about 22,800 sq ft has been put up for tender. The freehold site at Amber Road has a gross plot ratio of 2.8. It is about 150 meters from Amber MRT Station, which is expected to be operational in 2023. It has been zoned for residential use under the 2008 Master Plan. According to the Business Times, the property is expected to attract bids that are about $60 million or $941 psf ppr before factoring in development charges. Yong Choon Fah from JLL added that for a redevelopment up to a gross plot ratio of 2.8, the development charges may be around $18.47 million. Therefore, for a land price of $60 million, the land rate would be around $1,230 psf ppr. The tender will close on July 28.

(Source: Business Times)

More renters may switch to buying private homes in 2016

According to a report by Nomura, more Singaporeans are choosing to rent their private homes. However, Sai Min Chow believes that when rental contracts are up for renewal in 2016, this group of renters may opt to purchase private homes instead. Sai added that the motivation to buy in 2016 may be due to a change in policy that raises the CPF salary ceiling to $6,000, and also due to weak leasing environment. According to Sai, landlords may choose to sell their homes at a discounted price if they find it hard to lease out their properties. This may lead to a larger number of resale transactions. In 2014, 56,000 private homes were leased out. This was an 11.9% increase from the previous year. Due to low rental prices, in Q1 this year, leasing transactions in the private housing market rose by 17.2% year-on-year, said the Business Times.

(Source: Business Times)

Commercial

Tampines industrial plot sold for $5.9m in tender

An industrial site at Tampines was sold for $5.9 million or $68.85 psf ppr in a tender. The plot is about 5,686 sq m large. It has a 1.4 permissible gross plot ratio and has been zoned for heavy industrial use. Nicholas Mak from SLP believes that the top bid for the land parcel has been priced lower than a similar-sized plot at Tuas because of the restrictions on land usage. Mak believes that the land parcel may be developed into a storage facility for bulky construction equipment.