With the economic slump still going on in the Unites States as well as Europe, Singapore’s luxury home market is facing a minor setback. Adding on to that is the stiff competition the local market faces, against strong contenders such as those in London, who’ve swooped in on high-end investors.
(Reminiscent of a brave new world: iLiv@Grange. Image courtesy of the agency.)
Thankfully, it seems these overseas buyers are returning their attention to choice spots on our sunny shores, such as The Boutiq. Located at Killiney Road (where Mitre Hotel used to be), it is a 130-unit freehold project by co-developers KSH Holdings and Tee International. 39 of 52 units launched – with 10% off the listed price – have since retrieved a warm $2,350 per sq ft (psf), half of which were bought by Malaysians.
Just last month, nearby Devonshire Residences sold off 53 of 84 units at a median price of $2,505 psf. Heeton Holdings chief operating officer Danny Low told The Straits Times that the decision to sell its luxury units at a lower price was not a reaction from the Government’s market cooling tactics – which have proven useful in curbing speculation and calming price hikes – but from the lower cost it had incurred by purchasing the site at a ‘very good price’.
In hopes of riding the wave of growing buyer interest, iLiv@Grange, Heeton’s other luxury development will be re-launched later this year. The 30-unit Grange Road project has been much less fortunate that its successor, having had zero sales since its June launch last year. Mr. Low thinks its price and size are the reasons behind the stark contrast in buyer reaction. At more than $3,000 psf for a much larger unit, it caters to a different target market.
While Mr. Low predicts that prices will crawl upwards this year, he is sceptical that it would surpass the standard previously set at the start of this year, much less reach its 2007 record high.
Other upcoming launches include Wing Tai's Foresque Residences, which will launch at $1,000 to $1,200 psf.
VivoCity, Singapore’s largest mall, is part of real estate investment trust called Mapletree Reit. The trust is to be listed on the Singapore Exchange (SGX) sometime this month. This should raise up to $648.7 million from selling 712.9 million units to investors.
(Retail investors will soon be able to own a piece of VivoCity. Images courtesy of Singapore Tourism Board.)
Mapletree Reit earns its money through the rent from a portfolio of property, then make regular payouts to its investors. Their initial portfolio of three properties – VivoCity, Bank of America Merrill Lynch Harbourfront building and the PSA Building – have a combined market value of $2.8million and an average occupancy rate of 98%.
The trust says it is “positioned to capitalise on Singapore’s robust retail sector and the recovery in Singapore’s office sector”. It is also poised to benefit from the growth in tourism, as those tourists visiting Sentosa help to boost the profits of VivoCity, due to the Sentosa Express station located within it. The trust added that “to date, almost a third of all visitors to Sentosa used the Sentosa Express to reach the island. VivoCity is a key beneficiary of the increase in visitor arrivals at Sentosa, with annual shopper traffic and retail sales registering 9.9 per cent and 12.3 per cent year-on-year growth respectively.”
Bedok Reservoir, a quiet area previously only known for its water sports activities and public housing estates, has become its own little property bubble. Prices for suburban condominiums have continued to rise with each successive launch of new properties. In the past decade or so, at least eight properties have been raised, such as Aquarius By The Park and The Clearwater, opened in 1999 to a cost of $460-480 per square foot. A more recent launch, the Waterfront Key which opened in 2009, had prices hitting $800 per square foot – and prices continue to rise.
(Boom town Bedok. Image courtesy of Allanjarina Images.)
One reason for this, apart from the snowballing amount of new condos, is upcoming development in the area. The 16-station Downtown Line Stage 3, due to be finished by 2017, will link together the Singapore Expo, Bedok Reservoir, MacPherson and Jalan Besar areas. Currently, the East-West Line Bedok station is more than a kilometre away from the reservoir area itself. The Housing Board has also unveiled a plan to gentrify the zone with updated F&B establishments and cycling paths. The $1 billion Remaking Our Heartland project will also improve Hougang, East Coast and Jurong Lake.
While some nearby residents decry the rising prices, others, such as Madam Ho Lai Ping who lives in Aquarius By The Park, are pleased. She bought her property for $610,000 and recently received a million-dollar offer. For the moment though, she is sitting tight, she told The Straits Times: “It’s a gold mine which will appreciate when more amenities like the MRT come up.”
Cairnhill Mansions development has been put up for collective sale. The site measures in at 43,103sq ft and will have a reserve price of around $2,308 per sq ft or a grand total of £361.5 million. However, the previous guide price, when the property was up for sale late in 2007, was far higher than this at a staggering $443.6 million.
The new owners will have a 2.8 plot ratio (ratio of maximum potential gross floor to land area) and a height limit of 36-stories to play with when they start a new construction. According to The Straits Times, analysts suggest that unit prices could be $3,000 to $3,100 per sq ft, in order for the buyers to break even. However, a new build could be priced at $3,500psf due to the area code.
Similar properties in the area have been sold recently, giving buyers a look into what the future for Cairnhill Mansions may be. Take the Ritz-Carlton Residences nearby for example. An apartment within the complex that measured 3,057 sold for $3,762psf back in February. A 2,734sq ft unit within Tomlinson Heights sold for $3,238psf, and another at Scotts Square, measuring 947sq ft, sold for $4,626psq – all according to caveats data.
The sale will close on May 31st and is being handled by property consultancy group CB Richard Ellis (CBRE). The group’s executive director of investment property, Jeremy Lake, said to The Straits Times that “the market has not seen an offering like Cairnhill Mansions for the best part of three years. This tender will also be a test of where land prices are for super luxury sites.”
The current residents of Cairnhill Mansions stand to gain around $5.7million each, whilst the one penthouse owner could get $15.5million if the sale reaches the reserve price.
Cairnhill Mansions development has been put up for collective sale. The site measures in at 43,103sq ft and will have a reserve price of around $2,308 per sq ft or a grand total of £361.5 million. However, the previous guide price, when the property was up for sale late in 2007, was far higher than this at a staggering $443.6 million.
The new owners will have a 2.8 plot ratio (ratio of maximum potential gross floor to land area) and a height limit of 36-stories to play with when they start a new construction. According to The Straits Times, analysts suggest that unit prices could be $3,000 to $3,100 per sq ft, in order for the buyers to break even. However, a new build could be priced at $3,500psf due to the area code.
Similar properties in the area have been sold recently, giving buyers a look into what the future for Cairnhill Mansions may be. Take the Ritz-Carlton Residences nearby for example. An apartment within the complex that measured 3,057 sold for $3,762psf back in February. A 2,734sq ft unit within Tomlinson Heights sold for $3,238psf, and another at Scotts Square, measuring 947sq ft, sold for $4,626psq – all according to caveats data.
The sale will close on May 31st and is being handled by property consultancy group CB Richard Ellis (CBRE). The group’s executive director of investment property, Jeremy Lake, said to The Straits Times that “the market has not seen an offering like Cairnhill Mansions for the best part of three years. This tender will also be a test of where land prices are for super luxury sites.”
The current residents of Cairnhill Mansions stand to gain around $5.7million each, whilst the one penthouse owner could get $15.5million if the sale reaches the reserve price.
There’s a new smart phone application (or app) in town, and no, it’s not about slinging frowning birds at pigs. It is a home buying guide launched by the Urban Redevelopment Authority (URA), aptly named ‘Property Market Info’.
(Have Apple device will travel, or at least find property information from the URA. Image courtesy of Singapore Tourism Board.)
The service was developed in-house by URA to equip buyers with comprehensive and timely real estate information before they make their decision, and to enhance transparency of the proper market in Singapore for developers, owners and the public in general.
It shows sale prices of private housing projects, as well as rental rates for different projects, on a map-based system, and conveniently allows users the option to sort information provided by Project, Street or District.
To keep up with ever-changing information needs, the URA has also updated its website. People using the Property Market Information eServices system can now access different sets of information, including prices and rental rates, with a single search. Previously, system users had to do separate searches for each category.
Other new functions on the website include a new map-based search function which displays data on recent closed deals, and one which enables users to plot graphs using property data. For non-landed properties, information on transaction details such as land tenure, postal district, market segment and floor level range is also available. Data on sales will be extended from 12 to 24 months.
The free application is currently only available on the iPhone and iPad, but the URA has revealed plans to release a similar version for Android phones in the fourth quarter.
With 12 successful deals totalling $37.1 million, the start of this year has been buzzing with en bloc activity, with more still to come.
(Going en bloc adds value to a building. Image by Ryan Tan, courtesy of Singapore Tourism Board.)
Bloc Party Selling an apartment en bloc means that all apartment unit owners sell their properties as a collective whole, so as to earn substantially more than if they sold their units individually. It is also known as a collective sale. An en bloc sale is feasible when the plot ratio of the land can be increased, the land can be applied to better use and/or if the land’s potential is not being fully utilised.
Around 24 collective sale tenders have already entered the market, the newest project being Pearl Bank Apartments, going on sale just yesterday at $750 million, or $1,495 per sq ft per plot ratio. The tender closes on 25 May.
And there doesn’t seem to be any signs of the en bloc party slowing down. In fact, some experts suspect that 10 to 20 more sale sites could hit the market this month and the next. Others expect this year’s total collective sales to beat last year's in volume as well as value. 34 sales worth $1.7 billion were closed last year. En bloc site buyers include foreign developers like China Sonangol Land, smaller boutique ones like Heeton Holdings, and even big players like Far East Organization and CapitaLand.
While January's property market cooling measures may have dampened spirits, developers are still nurturing an appetite for such deals. But with so much uncertainty in the market, developers may find it too risky to commit to larger sites – as seen in projects like Tulip Garden, who’s yet to secure concrete deals – prompting expectations that smaller sites will be doing well this year. Many attractive sites in mature, well-established estates are taken by older projects, and the only way developers can access these sites is through a collective sale.
Analysts predict seeing sites from a wide range of districts going on sale this year, including the rise of more high-end collective sales. This is because prices of en bloc sites in suburban and mid-tier markets have risen while those of high-end sites haven’t, so as the price gap between high-end and mid-tier sites narrows, developers are bound to start taking notice.
The Tanjong Rhu freehold plot, Fortredale, has sold for a believed price of around $65 million. This price would mean mean that the property is valued at around $1,342 per square foot.
(Fortedale benchmarks a new price for Singapore property. Image courtesy of Singapore Tourism Board.)
The buyer, a Chinese developer whom, the Straits Times reported, wishes to keep himself out of the spotlight, is also developing a project in the Balestier area.
The sale closed on 29 March, and should provide a benchmark price for similar plots, including that of Austral View situated just next door. Plus, this latter site is being marketed by the same company as Fortredale, CBRE. Market analysts say that the buyer of Fortredale may well purchase Austral View as well, in order to combine the plots and redevelop them into a condominium project with a floorage of 112,476sq ft.
Both of these sites are for residential zone use only, with a limit of 24-story buildings and a 2.1 plot ratio – meaning the ratio of maximum potential gross floor area to land area.
This sale of Fortrevale will be the second time the site has been sold via a collective sale. Previously, it was sold (en-bloc as in this instance) to T3 Investments Ltd in 1996.
Since its completion in the late 1990s Fortredale has been a landmark for the location due to its use of blue and green grass. It even won a bronze award from the Singapore Institute of Architects: the ICI Colour Awards for best use of colour.
Despite global turmoil including the Japanese earthquake crisis and the Arab unrest, latest figures seem to suggest that the sale of new private homes have held firm. They seem to have, as yet, been unaffected by the Government’s cooling measures brought in at the beginning of the year. For now, buyers are still eager to spend their money.
(Sky high. Prices in the Singapore property market continue to rise. Image courtesy of Singapore Tourism Board.)
The compilation of sales figures that have been collected, indicate the price of private homes climbed 2.1% during the first ten weeks of the year. The group that climbed the highest was the suburban homes with a gain of 3.1%.
Head of research at SLP International, Mr Nicholas Mak, speaking to The Straits Times said that while prices may not fluctuate, the amount of sales in March could drop. He continued by saying “these sales figures from these suburban projects may not be an accurate reflection of the number of property transactions for this month, because they consist of many small units which are usually quite popular with investors”.
However, Ku Swee Yong, International Property Advisor chief executive has a more optimistic view of the market. The property market, he says, will be supported by factors such as a high employment rate, wages and a growing economy. He also said that the crisis in Japan may even persuade people to buy now, as construction costs will vastly increase when Japan begins to rebuild itself.
ERA Realty Key executive officer Eugene Lim said to The Straits Times that “generally, whatever affects the stock market will also affect buying sentiment, but the stock market has been doing well”. Though, he said that he believes that the buyers may still be cautious: “while luxury developments won’t be moving so quickly, mass and mid-market projects should continue to do well”.
If residents of Arcadia – an early-generation condominium – had their way, the lease for their ageing estate would be extended back to 99 years, a feat yet to happen in Singapore.
(Green is good, but Arcadia won't be seeing its 99-year leasehold extended. Image courtesy of Singapore Tourism Board.)
One of Singapore’s oldest condominiums, Arcadia has already been setting records since 1983. Inspired by the Hanging Gardens of Babylon, it was the first building in Singapore to feature vertical landscaping. Despite its age, it prides itself in being green, with large garden terraces on every level. Arcadia Road itself is a heritage road; trees are preserved and no development is allowed within 10 metres. It was included in a 2008 Urban Redevelopment Authority (URA) exhibition as “one of the most dramatic green developments in Singapore”.
Council treasurer and former nominated MP Edwin Khew feels Arcadia epitomises a green lifestyle the Government encourages, and should be conserved instead of left to an en bloc sale, its resulting demolition, and wastage of resources. In fact, one reason highlighted in its application to extend the lease was to protect its buildings for heritage, architectural and environmental value.
Which is why residents were surprised when it was rejected, even with the required 100 per cent resident consent. The condominium has 66 years left on its lease; the value of private properties with less than 60 years usually depreciates quicker due to buyer shortage. Central Provident Fund (CPF) Board rules disallow Singaporeans and permanent residents to use their CPF savings to buy private homes with less than 60 years. Similarly, banks are reluctant to finance loans for them.
Recently, the Singapore Land Authority (SLA) informed residents of the rejection, citing conditions for lease extension, including land use intensification and urban rejuvenation. When contacted by The Straits Times, SLA declined to elaborate, stating “the specific circumstances of each development determine if a lease extension should be granted and, if so, the length of the extension”. It said, “for residential uses, the Government may allow lease extension if it results, for example, in land use intensification and mitigation of property decay”.
Meanwhile, if Arcadia is not granted the lease top-up, it could attract attention from collective sale investors. At 3,800 sq ft to 7,000 sq ft per unit, it could be redeveloped into smaller, more profitable ones.
Residents are undeterred, intending to make an appeal and set an example for other private housing residents.
