Thomson V: Buyers ballot for units at Upper Thomson condo

Demand for a condominium off Upper Thomson Road has been so overwhelming that the units have been balloted out – the first time such a move has been needed for private homes in more than 10 years.

The dramatic rush, which even caught the marketing agents by surprise, was triggered when the 95 units in Thomson V were released at 3pm on Tuesday. Within four hours, more than 300 cheques had poured in, despite minimal advertising.

Marketing agent Huttons Real Estate Group opted to ‘draw lots for the units that had more than one interested buyer’, said its project director, Ms Peggy Ngiam, told The Straits Times.

‘The buyers had already identified the units they wanted, and we had to draw lots for most of the apartments.’

The ballot was a further indication, like the recent overnight queues and blank cheques, of the intense demand for new homes, said property experts.

‘It is yet another piece of the puzzle to show that the market has got a demand not filled by the current home supply,’ said Mr Ku Swee Yong, the director of marketing and business development at consultancy Savills
Singapore.

Balloting for apartment units has not been been seen here for over a decade but the practice is unlikely to become more widespread, said Mr Peter Ow, the executive director of residential marketing at Knight Frank. 

‘It is a very orderly and very fair sales method, but it is unlikely that more developers will start using it because the prices have to be fixed beforehand,’ he added. In a rising market, many developers choose to release units in phases and raise prices progressively for each successive phase.

Mr Ow said the first project to be balloted here was the Merasaga, near Holland Village, which was snapped up within a day in 1993. Buyers had to draw lots for queue numbers.

The object of the latest frenzy, Thomson V in Sin Ming Road, comprises two four-storey residential towers, one freehold, the other 99-year leasehold. It is part of a mixed project that also has 60 shops still up for sale. 

It is being developed by boutique firm Macly Group, which also developed Soho 188 in Race Course Road. 

The keen interest for Thomson V was ‘a bit surprising’ because of its relatively high per sq ft (psf) prices and limited pre-marketing activities, said Ms Ngiam.

The development’s 71 freehold units went for an average of $880 psf, while the leasehold units fetched $760 psf on average. The highest price achieved was $989 psf.

There are no comparable new projects in the vicinity, but a market watcher said he would expect to pay slightly more than $700 psf for a new freehold development in the area.

However, Thomson V’s units are unusually small, which means they would still be affordable.

The apartments, mostly one-bedroom units, range in size from 355 sq ft to 1,098 sq ft. A typical unit would cost about $377,000.

But there was also little buzz about the property. Huttons had placed a few four-line advertisements in the classified ads, but project brochures were distributed to property agents only last Friday.

And Thomson V’s showflat and price lists were only made available on Tuesday afternoon itself.

Mr Ku of Savills said the strong demand was in part because there are few projects on the market with small units catering to singles or retirees.

There have also not been many new launches in this area or within this price bracket, he added.

Source : Straits Times, 06 April 2007

Two CityDev projects get Green Mark Platinum awards

CITY Developments Ltd (CDL) has been conferred two BCA Green Mark Platinum awards by the Building and Construction Authority (BCA) for 2007.

CDL won the awards for its City Square Mall commercial development and its Oceanfront @ Sentosa Cove residential project. It is the first private developer to get a Green Mark Platinum award. Previously they have gone to public sector developments.

The 700,000 sq ft City Square Mall is a prototype eco-friendly, community-friendly mall projected to use almost 40 per cent less energy than a standard design.

A project must achieve 30 per cent energy and water savings and incorporate environmentally-sustainable building practices and innovative green features to be in the running for a Green Mark Platinum award. CDL has gained more green mark awards than any other private developer – 14 so far.

‘Minimising the impact of our business on the environment has always been an integral part of CDL’s corporate mission,’ said managing director Kwek Leng Joo. ‘We have been adopting the green building approach since 2001 and we are glad that our efforts are in line with the government’s vision to be a socially responsible, environmentally conscious global city.’

Source : Business Times – 06 Apr 2007

Far East buys Ocean Apartments for $39m

Far East Organization has bought Ocean Apartments in East Coast Road for $39 million or $481 psf of potential gross floor area including an estimated $150,000 development charge (DC).

The collective sale, brokered by Colliers International, is understood to have taken place about a fortnight ago.

Just before that, Far East is said to have bought Sheridan Court next door for $13.5 million or $483 psf per plot ratio including an estimated $50,000 DC.

Assuming Far East combines the plots, it will have a freehold land area of 78,195 sq ft. The combined plots could be redeveloped into a project with about 80 units averaging 1,500 sq ft.

Both plots are zoned for residential use with 1.4 plot ratio – the ratio of maximum potential gross floor area to land area – and a five-storey height limit.

Ocean Apartments now comprises a couple of four-storey walk-up blocks totalling 48 units. Owners will receive more than $800,000 a unit from the collective sale – about 35 per cent more than if they had sold individually.

As for Sheridan Court, which comprises 14 apartments, industry sources say another investor had signed a deal to buy all the units through a collective sale, but before the deal could be completed in July this year, he ‘flipped’ the properties to Far East.

Market watchers note that because the Ocean Apartments/Sheridan Court combined site is slightly L-shaped, Far East could consider buying some adjoining properties to give the site a more squarish shape. ‘But this is just speculation at this stage,’ said a source.

Last week, Far East teamed up with Frasers Centrepoint in an equal joint venture to buy Tampines Court for $405 million or $260 psf per plot ratio inclusive of DC and a premium to top up the site’s lease to 99 years. The 702,162 sq ft site is zoned for residential use with a 2.8 plot ratio and can be redeveloped into 1,600 condo units.

‘It will likely be a master-planned development, given the very large site and an opportunity for both developers to join forces to produce some innovative housing in Tampines,’ Far East CEO Philip Ng said in a statement last week.

Frasers Centrepoint chief executive Lim Eee Seng said that the duo would create ‘a landmark residential project’.

Source : Business Times – 05 Apr 2007

Warehouse rents up nearly 5% in first quarter

Warehouse rents rose almost 5 per cent in the first quarter of this year – the first increase since Q2 2003.

According to a report by CB Richard Ellis (CBRE), average monthly rent for warehouses improved by 4 to 4.8 per cent in Q1. It edged up to $1.30 per sq ft for ground-floor units and $1.10 psf for upper floor units.

Previously, these rents had been stagnant at $1.25 psf and $1.05 psf.

CBRE director of industrial and logistics services Bernard Goh said yesterday: ‘More logistics companies are setting up distribution centres in Singapore, given its proximity to the growing economies of China and India and its good air and sea connections with Asia and the rest of the world.’

Dubai-based shipping and logistics company CargoGulf set up its global headquarters here recently, Mr Goh noted. And Computer firm Dell had said that it would move its global supply chain management manufacturing operations to Singapore.

Average rent for high-tech space also rose in Q1 this year – by 5 per cent to $2.10 psf from $2 in the previous quarter. Year on year, high-tech rent increased 13.5 per cent.

Mr Goh attributes this to demand from companies looking to high-tech space as an alternative to traditional office space, which is in short supply.

Some companies are also opting for high-tech and business/science park space for back-up recovery offices.

The average monthly rent for factory space rose five cents psf in Q1 this year to $1.30 psf for ground floors and and $1.05 psf for upper floors.

Ascendas Reit was the most active Reit in Q1. It bought $81.7 million of properties including 27 International Business Park for $18.6 million. Cambridge Industrial Trust bought 55 Ubi Avenue 3 for $18.8 million. Mapletree Logistics Trust did not buy any properties in Singapore.

Source : Business Times – 05 Apr 2007

Spottiswoode Apt sets new benchmark

UOL’s $79.5 million acquisition of Spottiswoode Apartment, announced late on Tuesday, works out to a unit land price of $732 per square foot per plot ratio including an estimated $167,000 development charge.

This is a new benchmark for the Neil Road/Cantonment Road area, says United Premas, which brokered the freehold collective sale and released unit land price details yesterday.

Based on a land cost of $732 per sq ft per plot ratio, UOL’s breakeven cost for a new condo project will be about $1,050 psf, market watchers reckon.

The 38,878 sq ft freehold site is zoned for residential use with a 2.8 plot ratio – the ratio of potential maximum gross floor area to land area – and a 36-storey maximum height under Master Plan 2003.

The site can be redeveloped into a new condo of about 100 units averaging 1,200 sq ft.

Source : Business Times – 05 Apr 2007

Another site available for hospital-cum-hotel project

The Urban Redevelopment Authority (URA) says a reserve site on Race Course Road can now be developed with a hospital component.

The 1.36ha site, which has a maximum allowable gross floor area (GFA) of 57,225 square metres, was put on the reserve list of the Government Land Sales (GLS) programme last year.

Zoned a white site, residential and commercial use, as well as a stipulated minimum 40 per cent GFA of hotel use, was expected.

In a statement yesterday, URA said: ‘In line with increased interest in hospital development, URA has been working with the Ministry of Health and EDB (Economic Development Board) to review new sites for hospital development.’

A URA spokesman said later: ‘We have received some market feedback that the site could be suitable for a hospital development.

‘Allowing hospital use for this site also supports the government’s plan to release more land for medical facilities to cope with the increased needs of local patients and the 20 per cent annual growth in foreign patients.’

On whether growing medical tourism was a factor, the URA spokesman said: ‘An investor could choose to build a proposed hospital-cum-hotel development that could be suitable for tourists who visit Singapore for leisure purposes or to seek medical treatments, and in doing so, would contribute to the SingaporeMedicine’s initiative to attract one million foreign patients by 2012 with an expected spending of $3 billion.’

SingaporeMedicine is a multi-agency government-industry partnership set up to develop and promote Singapore as a medical hub.

Its latest figures – for 2005 – show that 374,000 international patients came to Singapore specifically for health care.

In January, another GLS hotel site aimed partly at medical tourism was sold to Far East Organization for $131.1 million or $501 per square foot per plot ratio.

Located strategically at Sinaran Drive, the site is close to Tan Tock Seng Hospital and Far East’s Novena Medical Suites.

There does appear to be demand for hospital sites.

It emerged in June last year that Parkway Holdings initially planned to convert a residential site it bought at Napier Road for $138 million into a medical centre. But URA turned down the application for a change of use.

Source : Business Times – 05 Apr 2007

Soft interbank rates bode well for economy

A period of softer interbank rates is expected to be generally positive for the economy and lending; although for individual banks, the impact could be mixed.

Interbank rates – the rate at which banks lend to one another and to which most loans are pegged – have been volatile of late, with sharp falls seen in recent weeks to levels not seen since 2005.

The benchmark three-month Singapore Interbank Offered Rate (Sibor) fell to a low of 2.93 per cent in mid-March, and is currently hovering at just above 3 per cent.

With loans growth and domestic consumption still lagging the strong rate of economic expansion, analysts say, softer interbank rates may help to narrow the gap.

After no meaningful increase for a decade, loans growth is starting to pick up, and some now expect double-digit expansion this year on the back of the strong domestic economy and the revival in the property market.

Credit Suisse said in a recent research report that the fall in interbank rates is likely to benefit banks by boosting asset prices and increasing demand for loans.

Recent figures released by the Monetary Authority of Singapore (MAS) show that total loans amounted to $198.4 billion in February, up 7.9 per cent from a year ago. Manufacturing loans grew 4.7 per cent to $10.7 billion, while construction loans increased 18 per cent $27.6 billion. Housing loans grew 2.7 per cent to $63.8 billion.

Brandon Ng, bank analyst at Phillip Securities, said: ‘This decline seems beneficial to local banks in the near-term as time deposits will adjust accordingly and will ease some funding pressures, whereas floating loans usually take longer to re-price.’

For home loan borrowers, it also signals the end of a cycle of upward re-pricing, although rates are not expected to drop. While the interbank rate cycle had peaked at the end of last year, some home loan borrowers were still asked to pay higher interest rates because of the lag effect.

‘Further mortgage rate hikes now look less likely, but they will also be sticky downwards,’ said Citigroup bank analyst Robert Kong.

However, while lower interest rates are broadly welcomed, the net impact of a lower Sibor on each of the three Singapore banks is dependent on the size of their deposits relative to their loan books and the composition of their loan and investment portfolios.

In an analysis of the impact of a falling Sibor on the banks, Mr Kong said that DBS Bank is likely to be a loser, with OCBC Bank a relative winner.

‘The speed and severity of the fall could mean margin concerns for DBS in 2Q/3Q,’ he said.

DBS has the most rate-sensitive earnings of its peers because of factors such as a low Singapore loan-deposit ratio, a high level of interbank loans and a large amount of low-cost funds, as well as a high exposure to corporate loans which are Sibor sensitive, according to Mr Kong.

As three-month Sibor surged between Q3 2005 and Q1 2006, DBS enjoyed the largest boost (at a time when volume growth was weak), followed by United Overseas Bank (UOB), while OCBC suffered.

OCBC, however, has a high dependence on Sibor time deposits, which re-price more quickly than asset yields. Hence, it tends to benefit from a lower Sibor, while UOB lies somewhere in between.

One implication for bank customers is that deposit rates, which peaked in the later part of last year, will now soften.

Interbank rates are not expected to reverse their current trend in the near term, but could stabilise at around current levels.

‘As long as moderate appreciation of Singapore dollar according to MAS remains on track and no major movements in the interest rates within the $NEER (Sing-dollar nominal effective exchange rate), we should not see much adjustment in local interest rates,’ said Mr Ng.

Source : Business Times – 05 Apr 2007

Home sellers hope for bigger profits via auctions

BIDDING WAR: Auctions are gradually shredding the stigma of being associated with morgtgagee sales, says property agency CKS. It is arranging an auction next week for eight homes in high-end projects such as Icon.

A SMALL group of home owners are putting their luxury apartments up for auction, but not because they cannot afford them.

These sellers are hoping a bidding war will yield higher profits for their homes than if they go down the normal sales routes.

Eight homes go under the hammer next Thursday. All are in popular projects – The Sail @ Marina Bay, The Oceanfront and The Coast at Sentosa Cove, Caribbean at Keppel Bay and Icon at Tanjong Pagar – where several units have already changed hands.

All the condos are 99-year leasehold and are not yet ready for occupation.

These home sellers are the clients of property agency CKS Property Consultants, which hit on the idea of using an auction as a sales channel.

CKS said yesterday that this would be one of the first auctions in Singapore comprising only owners’ properties.

Usually, property auctions here are conducted regularly by bigger property firms and include both owners’ properties as well as repossessed assets.

But CKS believes that auctions are gradually shedding the stigma of being associated with mortgagee sales.

‘More Singaporeans are eager to utilise the mode of auction to fetch lucrative prices for their properties,’ it said in a statement.

Its clients see this auction as the best way to take advantage of the booming demand for high-end property, the agency added.

‘Though many of them have already attracted offers via open listings, they want to generate wider exposure for their properties so as to capture the highest, most competitive price possible,’ CKS told The Straits Times.

The agency will absorb the administrative fees of the auction, which amounts to $1,000 for each property.

The auction, which will be called ‘hot spots’, will be held next Thursday at 2.30pm on Level 6 of Raffles City Tower.

CKS is not the first to jump on the auction bandwagon.

Property auctioneers have been seeing an increasing number of owners’ sales, as more sellers turn to auctions as an alternative sales method for luxury homes.

Last weekend, developer Tuan Sing Holdings held the first auction of uncompleted condo units in Singapore.

It put 12 units at its high-end Botanika in Holland Road on offer and sold them all at prices within its expectations.

While the units fetched benchmark prices of up to $2,400 per sq ft, reports said the bidding was slow-going, partly because of the high value of the properties.

But while the Botanika auction was open only to invited bidders, the ‘hot spots’ auction is welcoming all interested buyers and investors.

Source : Straits Times – 05 Apr 2007

Business is brisk at residential projects

Residential properties continue to sell and prices are expected to keep going up.

CapitaLand and Sun Hung Kai Properties have sold more than half of the 175 units at The Orchard Residences at an average price at $3,213 per sq ft – a new high-end benchmark.

This will help lift the official property price index for the first quarter. Already, flash estimates reveal it rose 4.6 per cent.

The index, which rose 3.8 per cent in Q4 2006, is widely expected to climb as much as 5 per cent for Q1 2007.

The Orchard Residences units were sold on an invitation-only basis. A spokesman for CapitaLand said that half of the buyers are foreigners, mostly from Indonesia, Japan, India and Hong Kong.

Some of the remaining 77 units will be sold by invitation only, but a public launch is expected in May.

Keppel Land has also done brisk business at its 1,129-unit Reflections at Keppel Bay. About 130 units were sold yesterday – and this was only to Keppel directors, staff and business associates at a private preview.

A Keppel Land spokesman said the average price so far is $1,900-$1,950 psf.

Private previews are expected through the week, with a public launch set for as early as end of the week. Only 500 units will be launched in the first phase.

The Solitaire, a 59-unit project at Balmoral Park by City Developments Ltd (CDL), is fully sold – after it was soft-launched just a week week ago. CDL says the average price achieved is $2,000 psf, with one penthouse going for $7.4 million.

Foreigners made up about 40 per cent of buyers.

CDL will launch a condo on the former Kim Lin Mansion site next and has roped in designer architect Carlos Ott to give it global appeal. For starters, the development will have 360 degree views because, ‘a good view is important, anywhere in the world’.

Two of the three blocks will also have units that occupy an entire floor, with lifts opening out into each unit exclusively. ‘You may never meet your neighbours,’ said the CDL spokesman.

Hearteningly, suburban launches have also been selling well.

Sim Lian Group’s 338-unit Carabelle off West Coast Road, launched last week, is almost 50 per cent sold. Sim Lian executive director Diana Kuik said the average price so far is $638 psf.

She reckons at least 25 per cent of buyers so far are public housing upgraders and the rest are mostly local buyers with private residential address.

Although Ms Kuik could not say who these buyers are, Knight Frank director of research and consultancy Nicholas Mak reckons some could be buying for ‘capital gains’ and to ‘lock in’ prices. ‘It’s not so much panic buying as it is kiasu buying,’ he said.

Mr Mak also believes that those seeking replacement units for homes sold through collective sales make up a significant number of buyers.

He estimates that they accounted for 14 per cent of all buyers in 2006.

Interest in new launches has been strong, with queues outside showflats at Reflections and CapitaLand’s Seafront on Meyer. This surprises Mr Mak. ‘There is no need to queue. Nowadays, there are buyers with more influence and clout who will beat you to it anyway,’ he said.

Source : Business Times – 4 Apr 2007

Office and retail property markets stay firm: reports

The Singapore office and retail property markets continue to be firm, judging by separate releases from CB Richard Ellis and Knight Frank yesterday.

Knight Frank, in an update on the retail sector, said that rentals of prime shopping space in the Orchard Road belt as well as the Marina Centre, City Hall and Bugis locations were stable in the first quarter of the year compared with levels at the end of last year.

‘These areas were not affected by the recent surge in new retail space. Renewals of leases were also not at significantly higher rental rates,’ the property firm said.

‘As a result, rentals in those areas were stable,’ the report added.

The average gross monthly rental of prime retail space in the city fringe edged up 0.4 per cent quarter on quarter to $22 psf a month in Q1 2007, with the opening of a couple of malls such as Square 2 and The Central towards the end of 2006 and early 2007.

In the suburbs, the gross average monthly prime retail rent rose one per cent quarter on quarter to $27.20 psf. Knight Frank said the completion of Ang Mo Kio Hub contributed to the increase.

‘Developers of some of the new malls in the Orchard Road area have begun to lease their shop units. There is room for further rental appreciation in Q2 2007. For the whole of this year, prime retail rentals are projected to increase by 8 to 10 per cent, while islandwide, rentals are expected to increase 3 to 5 per cent,’ Knight Frank said.

CBRE, in its office sector report, said that with supply remaining extremely tight, the vacancy rate for Grade A office space continued to fall, from 0.8 per cent in Q4 2006 to 0.4 per cent in the first quarter of this year.

Source : Business Times – 4 Apr 2007