Hitachi Tower, Chevron House attract record bids

The office market continues to sizzle, with an expression of interest for Hitachi Tower at Collyer Quay said to have resulted in a top indicative bid of over $3,200 per sq ft based on existing net lettable area, sources say.

The figure is a record for office space, surpassing the figure of about $2,650 psf set earlier this year for 1 Finlayson Green.

Shortlisted bidders for the 999-year leasehold Hitachi Tower are now likely to conduct due diligence before finalising their offers, observers reckon.

Bids are believed to have been received mostly from overseas parties. The 37-storey building has about 280,000 sq ft net lettable area. So assuming a top bid of say $3,200 psf, the price would work out to around $900 million.

CapitaLand owns 50 per cent of Hitachi Tower and National University of Singapore the other half.

A similar exercise is said to be going on for Chevron House next door, which is believed to have attracted a top bid of about $2,800 psf.

The 99-year leasehold Chevron House – formerly known as Caltex House – is owned by CapitaLand (50 per cent), IP Property Fund Asia (25 per cent) and NTUC Income Insurance Co-operative (25 per cent).

The former Pidemco, now part of Capitaland, bought the two buildings from entities linked to Ong Beng Seng in 1999.

The spread in top bids between Chevron House and Hitachi Tower is due to the difference in tenure and the orientation of the properties. Also, some leases at Chevron House are believed to have caps on rental increases, which limits the ability of the building’s owner to take advantage of booming office rentals.

More office blocks continue to be offered for sale. Colliers International yesterday launched a tender for The Globe at Cecil Street, with an indicative price of $100 million.

The property, being offered for sale by owner Prosper Realty, is being pitched for its redevelopment potential. The $100 million price tag reflects a unit land price of $1,178 psf of potential gross floor area, including two payments the buyer will have to make to the state – an estimated $12.5 million differential premium to build a bigger project on the site and a premium of $9.6 million to top up the 9,080 sq ft site’s lease to 99 years from the remaining 75 years.

Under Master Plan 2003, the site is zoned for commercial use with an 11.2-plus plot ratio. Colliers says the successful buyer can apply for additional gross floor area (GFA) of up to 2 per cent. This will boost the plot ratio to around 11.42, allowing a 30-storey office block with 103,694 sq ft of GFA.

Colliers has also been marketing Keck Seng Tower in Cecil Street. The tender closed last week, attracting three bids above $200 million or $1,700 psf based on the existing net lettable area. The property is on a 17,322 sq ft site with a lease balance of 72 years.

Yesterday Colliers launched a tender exercise for Cassia View, a 20-storey freehold apartment block in Guillemard Road completed about eight years ago.

Owner Melody Development is offering the property – comprising 68 apartments and four penthouses – with vacant possession. The indicative pricing is $80 million or close to $900 psf based on the total strata floor area of 89,361 sq ft. ‘The buyer could refurbish the property into a serviced residence or hostel. The location is popular among expats and travellers looking for affordable accommodation,’ Colliers executive director (investment sales) Ho Eng Joo says. The tenders for Cassia View and The Globe close on Sept 12.

Source : Business Times – 15 Aug 2007

Prime office rents in Singapore still competitive

Occupancy cost in prime Singapore office locations has risen 54 per cent in the first six months of the year. Though the cost is still lower than in Hong Kong, the increase here is still the fastest in the Asia-Pacific region.

DTZ Debenham Tie Leung defines occupancy cost as the average total cost of leasing prime net usable space of 10,000 sq ft within a prime CBD location. It includes rent and outgoings, such as maintenance costs and property tax, if these are normally payable by the occupier.

And according to DTZ, average occupancy cost has more than doubled from a year ago in the Raffles Place and Marina Centre zones where average rents are now S$13.10 psf per month and S$11.80 psf per month respectively.

However, DTZ’s report does show that Grade A office rents in general are still competitive compared to other regional cities at S$10.89 psf per month.

And although DTZ believes that ‘unrelenting office demand’, will see occupancy cost keep rising, its executive director Ong Choon Fah said: ‘A lot of corporates still see value in operating out of Singapore.’

Demand for office space has been ‘extremely strong’ from the financial sector but Mrs Ong notes that this has also begun to ‘trickle down’ to other support sectors, boosting demand further.

Supporting this is DTZ’s data which shows that Grade A vacancy rates in Singapore is the lowest at 2.6 per cent after Delhi at 0 per cent, followed by Shanghai (2.8 per cent), Tokyo (2.96 per cent) and Hong Kong (3 per cent).

Asked to comment on the figures for occupancy cost in Singapore, a URA spokesman said that the statistics were computed based on DTZ’s knowledge of rental transactions for a selected basket of prime office buildings as well as their estimates of ‘achievable rentals’ where there were no actual transactions done in certain buildings.

URA, which had also consulted DTZ on its figures, added: ‘The inclusion of pre-committed space may result in instances of double-counting of occupied office space, as the tenants may be vacating other office buildings when they shift to their new premises.’

Noting that different methodologies may result in different statistics, URA also noted that DTZ estimates that office occupancy rates for prime office buildings in Raffles Place, Marina Centre and Orchard Road for Q2 2007 were 97.4 per cent, 98.9 per cent and 96.9 per cent respectively.

By comparison, URA’s office occupancy rate figure for Category 1 office buildings in the Downtown Core – which includes Raffles Place and Marina Centre and Orchard Planning Area – was 95 per cent for the same period, and computed based on the physical occupancy of space.

URA also said that based on Iras’ records of rental contracts signed in Q2 2007, the median rental for Category 1 office buildings was S$10.33 psf per month.

DTZ said that although the increase in occupancy cost was the greatest in Singapore, occupancy cost is still the highest in Hong Kong at US$180.27 psf per year where base Grade A rents in the Central and Admiralty areas is S$20.09 psf per month.

This is followed by Tokyo at US$119.30 psf per year with base rent at S$150.55 psf per month, and Singapore at US$102.61 psf per year with a base rent of S$10.89 psf per month.

Source : Business Times – 14 Aug 2007

Fairways condo sells en bloc for $244m

The owners of Fairways Condominium on Telok Blangah Road have managed to sell their estate for $244.3 million.

Each owner will be richer by at least $1.35 million – what those with studio apartments will reap. The largest penthouse unit will fetch $4.3 million.

The 108-unit freehold development, which sits on a 146,532 sq ft site, was sold to Bukit Sembawang via a tender.

The price works out to $785 per sq ft per plot ratio (psf ppr), including a development charge and a fee for alienating a neighbouring plot of state land of about 8,288 sq ft.

Colliers International, which marketed the site, said the price is a benchmark one for the area. Still, the firm added that it is hard to draw comparisons because few collective sales have taken place nearby.

The estimated breakeven price for the project is between $1,200 and $1,300 psf ppr, said Mr Ho Eng Joo, Colliers’ director for investment sales.

Property consultants said Bukit Sembawang is likely to take its cue from prices for nearby Reflections at Keppel Bay and price the new development at $1,600 to $1,700 psf.

This is the second site that Bukit Sembawang has bought this year. Last month, it picked up Airview Towers in St Thomas Walk for $202.2 million.

Source : Straits Times – 18 May 2007

Green and futuristic, The Lumos redefines luxurious living

Ever wanted a spot of green living — complete with a view from the top?

That may soon be a reality if early impressions from the Koh Brothers and Heeton Land project are anything to go by.

The two companies recently revealed the name and concept of their new freehold luxury development on Leonie Hill — The Lumos.

“With our complementary strengths and the good level of understanding we have developed, I believe we can do something very special with The Lumos and I am truly excited about the potential of this development,” said Mr Danny Low, chief operating officer and executive director of Heeton Holdings.

The Lumos is set to be another addition to the evolving Orchard Road skyline. Though not as towering as the Orchard Residences, the Lumos’ twin 36-storey towers aim to stand out as its iconic architecture stems from the idea of a glittering chandelier.

A central zone of vertical Sky Gardens connects the two towers together, enabling every unit to open up onto a landscaped plot of high-rise greenery.

Sitting on a 34,516-square-foot plot of land on Leonie Hill, the Lumos houses 53 exclusive residential units that range from 635-sq-ft one-bedroom apartments to the 6,000-sq-ft penthouses that sit atop of each tower.

The penthouses also come with a rooftop garden as well as a private lap pool.

To tie in with its iconic and futuristic design, the apartments will also be home to state-of-the-art interior fittings to suit the tastes of residents in the cosmopolitan development.

Knight Frank and the Dennis Wee Group, the marketing agents for the development, are confident of a positive reception for the Lumos.

“We believe this luxurious freehold apartment will be highly sought after and the partnership of reputable developers like Koh Brothers Group and Heeton Holdings will further inspire confidence in buyers and investors,” said Mr Dennis Wee, chairman of Dennis Wee Group.

“The outlook for luxury developments in prime locations remains very positive and we have seen recent sales of ultra-luxury projects, like the 99-year leasehold Orchard Residences at Orchard Turn, set new benchmarks for top-end homes with price tags of around $4,000 psf.

Added Mr Peter Ow, executive director of Knight Frank: “The Lumos is set to benefit from this pent-up demand for luxury projects in prime locations.”

The futuristic design and the plush interior fittings all come at a price although it remains to be seen whether the freehold Lumos can match the prices set by Orchard Residences.

At this point, property buyers and analysts alike await the announcement of the project’s launch date and, more importantly, the prices.

Source : Weekend Today – 21 Apr 2007

UOL in deal to acquire Pan Pacific hotel brand

UOL Group has entered into a sales-and-purchase agreement for the Pan Pacific hotel brand.

The acquisition will fast-track the UOL Group’s strategy to become a key player in hotel management in and beyond the Asia-Pacific region. The deal brings the Pan Pacific group’s 12 hotels in the United States, Canada and the region into the UOL portfolio, adding 3,800 rooms.

The Pan Pacific group’s suite of hotels is especially strong in the region with eight of the 12 located in key Asian gateway cities like Yokohama, Jakarta, Bangkok, Manila and Singapore.

‘Strategically, the acquisition provides us with a distinct two-tier structure that will enhance both the Pan Pacific brand and the Parkroyal brand,’ said UOL chief executive Gwee Liang Kheng. The brand acquisition takes the total number of hotel properties under the UOL umbrella to 26, which includes properties operated under leading international hotel chain names like Sheraton, Sofitel and Crowne Plaza.

The purchase also boosts UOL’s room capacity significantly. ‘From a business standpoint, we now have a total of more than 8,900 rooms,’ said Mr Gwee.

Source : Business Times – 11 Apr 2007

URA puts up site near Dhoby Ghaut station for sale

A SLIVER of land at Handy Road not much bigger than half a football pitch will further test the strength of the recovery of properties in the Orchard Road area.

The 3,584 sq m site is next to Frasers Centrepoint’s 8 @ Mount Sophia, behind The Atrium @ Orchard and near Dhoby Ghaut MRT Station.

Experts expect it to attract keen interest given the buoyant market and its location.

Property consultants said the land, which has been launched for tender by the Urban Redevelopment Authority (URA), could fetch between $600 and $890 per sq ft (psf) per plot ratio.

This means a project on the 99-year leasehold site could fetch prices of $1,200 to $1,600 psf. With a plot ratio of 2.8, the site can accommodate a 10-storey building with a maximum gross floor area of 10,034 sq m.

Commercial space is allowed on the first floor of the residential development.

Mr Li Hiaw Ho of CB Richard Ellis said the expected land price of $600 psf would be more than double the $280 psf of Frasers Centrepoint’s 8 @ Mount Sophia site.

Units at 8 @ Mount Sophia were sold at up to $900 psf about two months ago, said Mr Li.

But considering the strong recovery in the high-end market and the robust interest in Orchard Road properties, prices at the Handy Road development could reach $1,200 to $1,300 psf, he said.

Colliers International’s Mr Ng Eng Joo and Savills Singapore’s Mr Ku Swee Yong both believe the price of the new project could go as high as $1,500 or $1,600 psf.

‘The site could be developed to around 150 units and these could be leased out to students or professors,’ said Mr Ku.

The value in that area has been rising, particularly with the investment from Far East Organization and Lend Lease in the commercial space in the Somerset stretch, and the collective sales around it, he said.

At the other end of Orchard Road, the site of the most coveted spots, new luxury projects such as Orange Grove Residences and Cuscaden Royale have sold relatively well before their launch.

The Handy Road site is one of two residential blocks transferred from the reserve list to the confirmed list for the first half of this year.

It was first made available in 2004 but there were no takers in a flat market.

Unlike those on the reserve list, sites on the confirmed list are tendered out according to a pre-stated schedule without the need for developers to indicate their interest via a bid.

The tender will close on March 28.

Source : Straits Times – 1 Feb 2007

Bullish Far East raises prices of its unsold homes

IN A daring move displaying its confidence in the property market recovery, Far East Organization is raising the prices of its unsold homes islandwide.

The property company, one of Singapore’s biggest developers, is upping the prices of its condominium units and landed properties across both the luxury and mass-market segments.

Its bold decision surprised market watchers as the property recovery has so far been confined to the luxury segment.

Far East is raising prices for both condominiums and landed homes by at least 3 per cent and up to 20 per cent, sources told The Straits Times.

For instance, the price of a three-bedroom home at 99-year leasehold Dunman View condo in Katong rose by $80,000, or almost 10 per cent, to more than $800,000 on Monday.

Some popular Far East landed homes will also cost 10 per cent more, with at least one project set to rise by up to 20 per cent.

Far East could not be contacted for comment yesterday but a check with more than 10 sales offices of its developments yesterday found that all had either upped prices on Monday or were planning to do so over the next week.

The price hikes appear to apply to Far East’s projects – some of them under construction – regardless of whether they are more desirable freehold properties in prime districts or 99-year leasehold suburban homes.

Far East will even increase prices of already-completed projects which most developers will try to sell as fast as they can.

Property consultants yesterday said Far East may be testing the strength of a property market recovery that has not yet lifted mass market prices.

If it succeeds, other developers may follow suit, market watchers say.

‘The mid-tier and high-end segments have some room for price expansion, but the mass market is still rather price-sensitive,’ said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Other Far East projects where prices were upped on Monday include Meadow Lodge in Upper Bukit Timah, a 99-year leasehold condo that was completed last year. Prices of its seven remaining units rose by 3 per cent to about $768,000.

The Straits Times understands that tomorrow, prices of landed projects in Yio Chu Kang such as Florida Park and Banyan Villas will rise by 3 to 5 per cent and up to 20 per cent respectively.

Prices at Bukit Villas in Woodlands will similarly climb by about 10 per cent.

Some property developers have recently raised the prices of their projects to take advantage of the booming luxury home market, but these price hikes have been limited to specific areas, if not individual developments.

Mr Joseph Tan, residential director at property consultancy CB Richard Ellis told The Straits Times that he ‘can’t recall any such move by a developer in the past’ to increase prices for its projects across the board.

He described Far East’s move as ’somewhat optimistic’ and said it was likely ‘in anticipation of increased property values’.

Home prices have been creeping up slowly since 2004, rising 3.8 per cent last year and 3.3 per cent in the first half of this year.

But this has largely been driven by the stellar performance of the high-end home segment – comprising freehold homes in prime areas – while prices of ‘mass-market’ 99-year leasehold suburban homes have remained flat.

fiochan@sph.com.sg

Costlier homes

PRICES of these homes have gone up or are going to be raised soon:

Dunman View in Katong

Price of a three-bedroom condo unit up by $80,000, or almost 10 per cent, to more than $800,000.

Meadow Lodge in Upper Bukit Timah

Prices of its seven remaining units rose by 3 per cent to $768,000.

Florida Park and Banyan Villas in Yio Chu Kang

Prices for landed projects at the former will go up by 3 to 5 per cent tomorrow, while those for homes at the latter will rise by up to 20 per cent.

Bukit Villas in Woodlands

Prices will climb about 10 per cent.

Source : Straits Times – 31 Aug 2006

The property temptation

PROPERTY people and investors are beside themselves cheering on the rising demand for upper-end homes. Even after making allowance for the disproportionate impact on price data of luxury developments such as St Regis Residences and Sentosa Cove, the flow-on recovery in other market bands is pleasingly indicative of a healthy economy.

Against the 7.7 per cent average price gain in the second quarter for the luxury segment, the URA’s overall private home index rose 1.6 per cent quarter-on-quarter – not that big a gain to make home-owners do a jig, but decent. But for monitoring degrees of social impact, all eyes should be on the HDB resale price index. For the Government, if not for developers, too rapid an assumed asset-value improvement should sound alarm bells as it could bring on unduly exuberant buyer behaviour. People are hung-up on property despite declining yields. T

he HDB resale figure for Q2 rose by a shade over 1 per cent – again, not much, but it was the strongest showing in two years. This is where the significance lodges. Rising value in HDB assets being a social goal, it is an inherent weakness that upgraders could be influenced more by expectations of capital gain (after which, cash out to downgrade) than the instinct of purchasing a home for permanent shelter.

There are two related trends intending upgraders should absorb :

the appreciable number of CPF members aged 55-plus still paying off mortgages, and the flat market in suburban condominiums compared with better addresses a notch below the prime districts.

Two in 10 CPF members aged 55 and older owning HDB flats, or 25,000 persons, are still in debt. The majority of these are loosely speaking insolvent as the loan service exceeds their monthly contributions. They have years left before retirement, as the CPF Board notes (Forum, Home Page 16), but this is a supposition of indeterminate risk as boom-bust cycles come at shorter intervals.

The upshot is that improving property values can induce this broad middle-income group to take a gamble on bigger HDB flats and condos. As the flat suburban condo curve shows, there is no gold to be picked up, unlike two decades ago.

They could fall deeper into debt. The take-off in high-end values can be a conversation piece but not be mistaken for a sectoral yardstick. For most of the working population, the watchword is the same: Buy what you can afford, not what you want to have.

Source : Straits Times – 7 Jul 2006

DBS Tampines Centre up for sale

DBS Tampines Centre and Pavilion is up for collective sale at an asking price of $200 million.

The buildings, close to Tampines MRT station, are part of Tampines Regional Centre. DBS Tampines Centre is an eight-storey commercial building with shops in the basement, and on the first and second floors.

The Pavilion is a four-storey cineplex that has been leased for food and beverage as well as entertainment use. The two buildings have a net lettable area of 24,379.58 sq m.

Knight Frank is the marketing agent for the sale. Its executive director and head of investment sales, Foo Suan Peng, says outline planning permission has already been obtained for the redevelopment of the site into a five-storey shopping complex with three basements, at a plot ratio of 4.2.

This would yield a total gross floor area (GFA) of 35,386.26 sq m – an increase of 45 per cent. The new owners will need to pay an additional $10.8 million in development charges to bring the existing GFA up to a plot ratio of 4.2.

The land is on a 99-year lease which started in 1990. Any top-up of the lease will have to be bourne by the new owner.

Based on a plot ratio of 4.2, the land value is $553 psf per plot ratio.

The buildings are not old and, being well located, they might have been attractive to real estate investment trusts (Reits). But Mr Foo says Knight Frank did a feasibility study for the existing buildings and based on the asking price of $200 million and prevailing rental yields, a Reit would not find it yield-accretive. ‘The best use based on the asking price is to redevelop the site,’ he added.

It is understood that DBS sold the DBS Tampines Centre in 1999. Knight Frank did not reveal who the current owner is.

Source : Business Times – 4 Jan 2006

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