Plunge in August auction sales partly due to US sub-prime woes

SALES of properties on auction here plummeted last month, in one of the first signs that the global credit crunch may be taking a toll on Singapore’s property market.

Only $10.79 million of properties were sold under the hammer in the month, less than one-fifth of what was fetched in each of June and July, said property firm Colliers International, one of the biggest auctioneers here.

Since March, the value of properties sold via auction each month has ranged from $33 million to $108 million. But this plunged last month, said Colliers, which released a report on auction sales yesterday.

In previous years, August has traditionally been a slow month for property sales due to the Hungry Ghost Festival.

But superstitious buyers were not the reason auction sales turned in an exceptionally poor showing in this year’s hungry ghost month, which stretched from Aug 13 to Monday.

Colliers said the nosedive in sales was mainly due to the recent stock market volatility caused by United States sub-prime mortgage worries, new government policies, and higher asking prices by sellers.

‘Given the good property market performance, many sellers have raised their expectations and upped their asking prices, especially for properties with en bloc potential,’ said Ms Grace Ng, Colliers’ auctioneer and deputy managing director.

She added that these properties have also become less appealing, thanks to the newly announced rules governing collective sales, which will make it more difficult for developments to sell en bloc.

In addition, the ’stock market turmoil amid the US sub-prime woes’ has also contributed to the ’slowdown in the market, as buyers take a cautious stand’, Ms Ng said.

Only 10 properties were sold via auction in this year’s hungry ghost month, less than one-tenth of the 131 that were put up for sale in the period.

The properties that were sold fetched $9.56 million in all – a tiny fraction of the $133.86 million achieved in last year’s double hungry ghost month and ‘one of the lowest seen in the past 10 years’, Colliers added.

Although the hungry ghost month typically sees fewer property sales due to superstitious buyers and sellers, the firm said this is unlikely to be the reason for the plunge in auction sales of property.

Indeed, the number of properties put up for auction by their owners in the period surged to 88, the highest level in at least a decade.

On the other hand, the number of repossessed properties – traditionally the main source of supply for auction sales – fell to 43, down from 239 last year and the lowest level since 1998. This was largely due to the buoyant economy and climbing property prices, said Colliers.

All this shows that auction sales in the hungry ghost month were being moved more by market conditions than superstitious beliefs, the firm added.

But Ms Ng was quick to point out that the firm is still receiving plenty of inquiries about auction properties from potential buyers.

‘The inquiries are still there, but people are thinking twice before jumping in,’ she said. ‘They may be taking a step back and reassessing the prices.’

Colliers also noted that while auction sales may have plunged in the hungry ghost month, other segments of the property market appeared to still be going strong.

For instance, the total number of homes sold in the period is ’still at a very healthy level’, although it has been falling since May, the firm said.

Source : Straits Times – 12 Sept 2007

Two good class bungalows fetch $35.5m at auctions

Two good class bungalows were sold at auctions this week – 2A/2B/2C/2D White House Road at $19.03 million or $566 per sq ft of land area, and 3C Swettenham Road, which fetched $16.5 million or $640 psf of land area. Both properties are freehold.

3C Swettenham Road, with a land area of 25,802 sq ft, was sold at a DTZ Debenham Tie Leung auction on Tuesday. The buyer is believed to be a Mr Lim, an industrialist with a factory in Tuas. He is believed to have bought the bungalow to live in after renovations.

It was sold with vacant possession by mortgagee bank HSBC. The opening bid sought for the property at the auction was $17.8 million, but there were no takers at this price. Instead a bidder made a counter offer of $15.8 million. Bids increased gradually to $16.5 million, when it was sold.

3C Swettenham Road had been offered at an auction last year and fetched a top offer of $12 million, which was not high enough for HSBC, BT understands.

DTZ’s auction, conducted at Amara Hotel, also saw two other properties being sold. One was a three-bedroom freehold apartment at Wilkie Vale at Wilkie Road (near Sophia Road) which fetched $1.05 million or $912 psf based on the unit’s 1,151 sq ft strata area. Another was a 1,001-sq ft freehold apartment at Casa Sarina in District 14 which changed hands for $560,000 or $560 psf.

Colliers International successfully sold the White House Road bungalow, with a 33,610 sq ft land area, at an auction yesterday. Two old bungalows stand on the site but provisional permission has been granted for the site to be subdivided into two plots. The new owner, a Singaporean, is expected to build two new bungalows on the site.

Other properties sold at the auction included an office unit on the seventh floor of Peace Centre at Sophia Road, which fetched $2.5 million or $656 psf based on its floor area of 3,810 sq ft. Peace Centre, with a remaining lease of 62 years, has been put up for en bloc sale, together with the next-door Peace Mansions. The expression of interest for the en bloc sale of the two properties closed in May.

At the same auction, a three-bedroom apartment at the 999-year Cashew Heights off Upper Bukit Timah Road was sold for $1.22 million or $736 psf. Cashew Heights, with a land area of over 900,000 sq ft, is also said to have potential for a collective sale.

Source : Business Times – 12 Jul 2007

Auction volumes grow on en bloc demand

The auction market here is being fuelled by the en bloc fever.

Colliers International observed that the Singapore auction market has witnessed a burgeoning increase in the number of property owners choosing the auction route to sell properties with en bloc potential – a trend in tandem with the sizzling collective sale market. ‘Competitive bidding for properties with en bloc potential was seen among keen buyers, with final transacted price being 20-30 per cent above the opening price,’ said the property firm.

‘It is really an interesting phenomenon – we see a striking difference in the number of bidders present in the auction hall on the days when there are properties with en bloc potential being put up for sale, compared with those days when there are none,’ said Grace Ng, Colliers’ auctioneer. ‘The number of attendees jumps from the usual 100 to as many as 200 people, jam-packing the auction hall.’

Attendees comprise punters, ’specu-investors’, speculators, investors and home sellers/buyers alike, Ms Ng said.

Some examples of properties with en-bloc potential that were successfully sold at auctions include a unit in Watten Estate Condominium which was sold for $2.4 million, a residential unit in Lagoon View that went for $910,000 and a shop unit in Katong Shopping Centre which sold for $280,000.

The same trend can be expected for the second half of the year, Colliers said. ‘With the en bloc fever still running high, we can expect to see positive response for condominium and apartment units in the suburban areas from HDB upgraders and collective sale owners who are priced out of the prime areas, for the second half of this year,’ Ms Ng said. All this activity is adding to the robustness of the auction market. Colliers’ figures show that the total sale value of properties (owners’ sale and mortgagee sale) sold at auctions climbed 25 per cent to $263 million in the first half of 2007, up from $210.3 million in the second half of 2006.

Similarly, Knight Frank, which yesterday auctioned off a conservation bungalow at 781 Mountbatten Road for $13.95 million, said that the number and value of properties sold at auctions scaled new heights in the first half.

The firm estimates that with 132 properties sold in the first six months of the year, the number of properties sold rose by more than 36 per cent versus the second half of 2006.

It put total sales value for the first half of 2007 at about $286 million – also about 36 per cent higher than sales in the year ago period.

Going forward, the auction market will remain robust in the second half given the strong performance in the economy and property market as well as assurance from the government that it will not clamp down on the current buzzing property market, predicted Mary Sai, Knight Frank’s auctioneer. She expects a greater variety of properties will be offered at auctions in the coming months.

Source : Business Times – 30 Jun 2007

For sale: Mountbatten conservation bungalow

A CONSERVATION bungalow at 781 Mountbatten Road is going under the hammer on June 29 with an indicative price of $10 million.

The freehold property has a land area of 20,222 square feet and the single-level bungalow with an outbuilding has a total floor area of 3,444 sq ft.

The main building has five bedrooms, while the outbuilding has two bedrooms.

‘The existing bungalow has to be restored but there’s sufficient vacant land for the new owner to build additional residential buildings,’ said Knight Frank auctioneer Mary Sai, who is handling the sale of the property that has been offered by the administrator of the estate of Teo Koh Seng, also known as Teo Keng Seng.

Ms Sai drew a parallel between 781 Mountbatten Road and Simon Cheong’s ‘5 Legends of Mountbatten’ development.

Mr Cheong bought the 55,000 sq ft sprawling grounds on which Chansville – the former home of the late champion swimming trainer Chan Ah Kow – was located, at 745 Mountbatten Road, for $11.05 million in 2004.

He restored Chansville and built four more new bungalows on vacant space on the property.

All five bungalows have been sold. Chansville, with a 22,979 sq ft land area, fetched $13 million or $566 psf. The other four bungalows fetched between $5.1 million and $6.3 million, or $619 to $965 psf.

Chansville was sold this year while most of the other four houses were sold last year. All five bungalows are two-storeys high, have roof terraces and come with pools in lush landscaping.

The project was designed by award-winning architect Mok Wei Wei of W Architect.

781 Mountbatten Road is classified as an ‘Early Bungalow’ characterised by a simple facade and a building constructed on brick piers.

The property, like Chansville, is one of just 15 bungalows along Mountbatten Road gazetted for conservation by the Urban Redevelopment Authority in 1993.

Knight Frank could not confirm just how old 781 Mountbatten Road is but an index of lands register shows that the earliest entry for the property, at the time with an address of 785 Grove Road, was in 1927.

Names of parties registered include Charles James Lacey, Robert Dunman, Meyer-Hyeem Sassoon, and Richard Lake.

Sometime in the 1950s, ownership of the bungalow passed into the hands of Mr Teo. The property is currently being sold by the administrator of his estate. Knight Frank’s June 29 auction at Carlton Hotel begins at 2.30 pm.

Source : Business Times – 21 Jun 2007

CapitaLand pays $9m for No 8 Tong Watt Rd

CAPITALAND is understood to have bought No 8 Tong Watt Road off River Valley Road in the Mohamed Sultan area, at an auction last week for $9 million, bridging a gap in the row of houses it owns on the street.

With the latest acquisition, CapitaLand owns about 77,000 sq ft land area (stretching from Nos 1 to 17 Tong Watt Road) and which can be developed into around 293,000 sq ft gross floor area. That would be enough for almost 200 apartments averaging 1,500 sq ft. The stretch is zoned for residential use with a 3.8 plot ratio (ratio of maximum potential gross floor area to land area).

CapitaLand had bought the earlier properties at Tong Watt Road through at least two batches since 1999. Based on earlier reports, only the facade of the properties needs to be preserved, and the rear of the shophouses could be redeveloped up to 10 storeys high.

No 8 Tong Watt Road, which CapitaLand purchased last week, had been put up for auction by Inland Revenue Authority of Singapore (IRA) to recover property taxes owed to it.

The 999-year leasehold, three-storey terrace house has yet to be restored and is the River Valley Conservation area. It has a land area of 2,751 sq ft.

Bidding for the property at the Knight Frank auction on Friday began at $6 million. The bidding was confined to just two to three parties, who drove the price up to $9 million before CapitaLand won.

Meanwhile, another group of properties that had been put for sale by its owner at the same auction – a row of six restored conservation shophouses at South Bridge Road – was sold hours before the auction began. The buyer, believed to be a Singapore investment company, paid more than the $20 million-22 million indicated price.

The six freehold shophouses at Nos 252 to 262 (even numbers) South Bridge Road, near the junction with Temple Street have a total land area of nearly 8,500 sq ft and a floor area of around 16,600 sq ft. Other properties sold at the auction include two adjoining refurbished shophouses at Nos 762 and 764 North Bridge Road, with a total freehold land area of 2,890 sq ft. They fetched $3.2 million. A three-bedroom apartment at the freehold Holland Peak in District 10 fetched $1.54 million or $1,008 psf of strata area.

Knight Frank’s auction saw the sale of 21 Senoko Loop, a detached factory building, for $3.65 million. The building has a floor area of about 71,860 sq ft with a land area of 114,345 sq ft. The site has 24-year leasehold tenure with effect from Aug 16, 1992.

Source : Business Times – 20 Jun 2007

Suburban areas find themselves under the hammer, too

The increase in land prices across the property market has resulted in a spate of collective sales that range beyond the high-demand prime districts.

Old condominium developments in the prime areas are not the only ones that find themselves under the auctioneer’s hammer.

“We are witnessing a spill over in the acquisition of residential development sites from prime districts to the suburban areas,” said Ms Grace Ng, deputy-managing director (agency and business services), Colliers International.

The real estate consulting firm is auctioning off a freehold residential development site at 57-61 Koon Seng Road/88-89 Everitt Road.

The freehold 16,574 sq ft site in Joo Chiat is a row of two-storey terrace houses. It is zoned for residential use and has a gross plot ratio of 1.4 under the 2003 Master Plan.

A five-storey residential development housing 18 apartments of 1,200 sq ft each can be built on the site. Ms Ng believes that with approval from the authorities, the site can also be the future home of a row of eight terrace houses.

The site could fetch $9 million or about $390 per sq ft per plot ratio, inclusive of development charge.

The auction will be held on June 27 at the Amara Hotel.

Also in the east is a freehold conservation bungalow at Mountbatten Road which Knight Frank will be auctioning off on June 29.

The bungalow, located at 781 Mountbatten Road, has a land area of 20,222 sq ft and has a floor area of 3,444 sq ft.

It has an indicative price of $10 million, and is one of the 15 conservation bungalows on Mountbatten Road.

Source : Weekend Today – 16 Jun 2007

IRAS puts River Valley house up for auction

The taxman is auctioning 8 Tong Watt Road, off River Valley Road, tomorrow to recover outstanding property taxes. The 999-year leasehold, three-storey intermediate terrace house stands on a plot with a land area of about 2,751 sq ft.

The site is zoned for residential use with a 3.8 plot ratio (ratio of maximum potential gross floor area to land area) within the River Valley Conservation Area.

Only the facade of the shophouses needs to be preserved while the rear portion could be redeveloped, a property consultant reckons.

BT understands that IRAS, the Inland Revenue Authority of Singapore, has yet to provide the reserve price for the property but the indicative pricing is about $6 million-8 million.

According to a BT report in March this year, IRAS is owed $58,035 in tax arrears for 8 Tong Watt Road. The authority auctions off properties only as a last resort to recover property tax – after the owner repeatedly fails to pay or defaults on his payment, despite many reminders.

IRAS will return any balance on the sum received to the owner, after recovering outstanding tax, penalty payment, interest, and the cost of recovery.

The auction is to be conducted by Knight Frank at 2.30 pm at Empress Room, Carlton Hotel.

Another property that is being put up at the auction is a row of six restored conservation shophouses at Nos 252 to 262 South Bridge Road, near the junction with Temple Street. The indicative pricing for the freehold properties being sold by their owner, a local investment company, is about $20 million-22 million.

The six shophouses, which have two storeys with attics, have a total land area of nearly 8,500 sq ft and a floor area of around 16,600 sq ft. The units are currently leased to a total of 10 tenants, generating rental income of $41,000 per month. The leases come up for renewal at various times, ranging from the end of this month to late 2009. Knight Frank auctioneer Mary Sai reckons that the six shophouses could be converted into a boutique hotel with about 55 rooms, subject to approval from Urban Redevelopment Authority.

BT understands that No 20 Trengganu Street nearby was recently sold for $18 million to Asok Kumar of Royal Brothers group. The property has a remaining lease of about 65 years, with a total land area of about 10,450 sq ft and total lettable area of nearly 24,000 sq ft.

On June 29, Knight Frank is auctioning a freehold conservation bungalow at 781 Mountbatten Road. The indicative price is about $10 million. This is one of 15 large conservation bungalows along the road, according to Knight Frank. It has a land area of 20,222 sq ft and a floor area of 3,444 sq ft. The site is zoned for residential use. It is being offered on vacant possession by the administrator for the estate of a Teo family.

Source : Business Times – 14 Jun 2007

Leonie Parc View: Soilbuild to sell penthouses, sky villa via auction

SOILBUILD will sell a ’sky villa’ and two penthouses in its freehold 44-unit Leonie Parc View through an auction by Christie’s and Colliers International, the developer said yesterday.

‘We expect the sky villa and penthouses to appeal to both foreign and local investors, commanding prices in the region of $3,200 to $3,600 per square foot (psf),’ said Grace Ng, Colliers International’s auctioneer. Colliers will jointly conduct the auction with Christie’s Great Estates exclusive affiliate Ken Jacobs.

Leonie Parc View is located on Leonie Hill Road in the prime District 9. The development comprises one sky villa, three penthouses and 40 four-bedroom units.

The project has been previewing overseas since late April. Following roadshows in Hong Kong and Indonesia, 18 of the 20 units released were sold through private placements to overseas buyers, with prices ranging from $2,600 to $3,000 psf, said Jerry Tan, managing director of property firm JTResi, which is handling the preview sales. The rest of the units will be released at a later date, Soilbuild said.

The double-storey sky villa is an expansive 7,000 sq ft and comes with a private lap pool on its upper level. The other two penthouses are 2,900 and 3,000 sq ft. The by-invitation-only auction is slated for June 8 at 3pm at the Raffles Hotel.

Low Soon Sim, executive director of Soilbuild, said: ‘Through this auction, we intend to reach out to a wider group of international investors seeking a presence in a global city like Singapore.’

Source : Business Times – 22 May 2007

The Boulevard Residence (BLVD): Penthouse may go for $5K psf

MAINBOARD-listed SC Global Developments is selling a penthouse in The Boulevard Residence (BLVD) by auction next month. Colliers International, one of the two auctioneers for the property, expects the 7,029 square foot unit to fetch about $35 million or almost $5,000 per square foot.

Market watchers note this is more than double the $16 million an identical penthouse in the freehold development’s other tower was sold for in May last year to high-flying Japanese fund manager Yoshiaki Murakami, who was later indicted for insider trading.

Both penthouses occupy the top three levels of the 36-storey development, which was completed in 2005.

Colliers auctioneer Grace Ng said the $5,000 psf price expectation for the ’super penthouse’ is based on the surge in luxury home prices and high-floor units at the nearby 99-year leasehold Orchard Residences having already fetched over $4,000 psf.

‘As well, currently, this is the only new penthouse unit in a move-in condition in the location, being offered by its developer. And it boasts 360-degree views,’ she said of the BLVD unit on offer. The unit comes with an 11-metre private lap pool and an open rooftop terrace.

The auction for the penthouse will be conducted on May 20 jointly by Colliers and Christie’s Great Estates exclusive affiliate Ken Jacobs.

BLVD comprises 46 units housed in two towers.

Source : Business Times – 18 Apr 2007

‘Hotspot’ auction nets no sale

Not a single property sold yesterday at a highly touted auction for owner-sales of apartments in the hot spots of Marina Bay/CBD and Sentosa Cove.

Twenty-one properties were offered. And in most cases the opening prices sought by the auctioneers were not even met. In a few cases there were some bids, but these were below the owners’ reserve prices.

However, CKS Property Consultants, which conducted the auction, is unfazed by the result and confident of selling the properties post-auction through private treaty deals.

CKS spokeswoman Valerie Ho attributed the poor response at yesterday’s auction to bidder shyness. ‘Bidders were predominantly local and they may still not be used to the idea of buying a home at an auction,’ she said. ‘And this is the first attempt to have an auction featuring solely properties put up for sale by owners.

‘There has been a lot of interest after the auction. We expect a lot of negotiations and transactions over the weekend for this batch of properties. We also have a few potential buyers from Indonesia who are coming to our office next week for discussions.’

Ms Ho reckons the asking prices set by owners are reasonable.

A long-time market watcher who attended yesterday’s auction generally agreed, pointing for instance to the $1.3 million or $1,050 psf opening price sought for a 40th floor two-bedroom unit with a study/loft at Icon at Tanjong Pagar, and the $2.5 million ($1,408 psf) opening asking price for a three-bedroom, 12th floor unit at The Oceanfront @ Sentosa Cove. ‘The thing to remember is that these are all sub-sale properties and usually their asking prices are lower than what is being charged by developers for newer project launches in the location,’ the market watcher said.

‘But the problem right now is that there are so many sub-sale units in these so called hot-spot locations that, frankly, you can easily pick one up from the classifieds. No need to come to an auction looking for such units – unless the pricing or facing is very attractive.’

Also, from a potential buyer’s perspective there is a disincentive in buying in the sub-sale market as developers will not extend deferred payment schemes they may have given to initial buyers to sub-sale buyers, the market watcher added.

Properties on offer yesterday included the entire 57th floor, comprising seven apartments, at The Sail @ Marina Bay Tower 2.

The auctioneer’s opening asking price was $10 million but there were no takers.

Three units at One Shenton were also offered.

Source : Business Times – 13 Apr 2007