Property consultant Credo Real Estate announced the sale of Goodrich Park in Simon Lane with offers likely to be around $80 million to $85 million.

More than 80 per cent of the owners have agreed to the sale and each may gain between $1.54 million and $1.63 million for the sale, Credo said.

Knight Frank also unveiled the tender for Cavenagh Mansions, a freehold residential redevelopment site along Cavenagh Road, with a guide price of $55 million to $60 million.

This translates to a land price of $1,258 to $1,367 per square foot per plot ratio.

Analysts said the asking prices for the properties appear to be high.

But they do not think that the simultaneous launch of the two properties marks a return of the en bloc fever.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the property market is entering an “uncertain phase” due to the crisis in the euro zone. And property owners may be anxious to sell as “they want to use the present opportunity to sell before any more uncertainty materialises”, he said.

The marketing agents for both sites said they are confident that the properties will get good response from buyers.

Mr Karamjit Singh, managing director at Credo Real Estate (Singapore), said medium to large-sized developers will be keen on the freehold Goodrich Park, which can be made into 120 apartment units.

Goodrich Park currently has 52 units on a land area of close to 97,703 sq ft.

Mr Nicholas Wong, executive director for Investment at Knight Frank, believes that boutique property developers and foreign developers will be interested in Cavenagh Mansions since the site is relatively small.

Mr Colin Tan, Chesterton Suntec International’s research and consultancy director, said the site has a good location but the drawback is its small size. “The eventual development needs to be niche or else it will be difficult to get buyers,” he said.

Both tenders will close on July 8.

Responding to the strong demand for private housing and land for private residential developments, the Ministry of National Development last week released its “highest potential supply quantum” per half year since 2001.

Comments from the industry suggest they expect the impact of this strong signal to be immediate, in terms of cooling home sales and dampening land bids.

Well, the experts have been swiftly proven wrong.

The first tender to close thereafter saw a record price for Executive Condominium (EC) land. The level of interest has also not waned. The number of bids – seven – was about on par with recent tender exercises for EC and Design, Build and Sell Scheme sites.

Just how large is the newly-announced housing land supply? Assuming developers do not trigger any sites from the reserve list for the second half of the year, the estimated 8,135 private homes from the confirmed list sites for the second half is only 30 per cent more than the actual first-half supply (including triggered sites).

Given that demand from developers has been enthusiastic, a 30-per-cent growth rate for the next six months may not be too unreasonable.

At the same time, it might be necessary to close the tenders for the next few sites at the same time, to thwart further rises in land prices.

If it is not a big problem for developers to absorb the increased supply, what about the demand side? Will there be enough buyers?

Yes, if the results of a recent property survey are to be believed. The survey with a sample size of more than 2,200 people found that three out of four potential home-buyers feel that the prices of private homes and resale Housing and Development Board (HDB) flats in Singapore are too high.

I think most of us know that already, but wait for this: Out of a sub-set of 657 active property seekers, 75 per cent still hope to buy a home within the next two years. They constitute 22 per cent of the total sample size. And this after saying in the same survey that they expect HDB resale prices and private property prices to rise between 6 and 10 per cent over the coming year. The survey was conducted last month and this month – after two sets of cooling measures were already introduced.

Last year, we had about 1.1 million households in Singapore. If we apply the 22-per-cent finding, this means there would be 242,000 households actively seeking to buy a property within the next two years. That is a lot of buying potential. Even if we were to take just one-fifth of this to allow for a very high margin of error, that is still 48,400 households.

This is the conundrum facing the Singapore housing market – the liquidity problem. Potential buyers know that housing prices are high but are still intent on buying. Developers sense this even if they cannot quantify it.

The trick is to turn things around fast, from land award to securing a sales licence before any correction can take place. The only crucial factor is whether the downpayment is affordable: If this cannot be done, throw in branded furnishings. Which tenant can resist such fine living?

As one property consultant noted: The bullish demand is largely driven by sentiment rather than a supply shortage. Quite right, as most buyers are investment driven, not need-driven.

Will it all come to grief eventually? You do the math. The capacity to occupy the homes is only 8,700 units per annum (average for past decade). The land supply for this year will be at least 14,400 units. The remaining owners will have to find other better uses for their homes when completed.

Colin Tan is Head, Research and Consultancy, Chesterton Suntec International.

MCL Land offered a top bid of $207.5 million, which translates to about $456 psf ppr. This was higher than the analysts’ projection of $310 psf ppr to $350 psf ppr when the residential site was first triggered to be put up for sale more than a month ago.

“While the number of bids, at seven, are within expectations, the bid prices are fairly bullish,” said Li Hiaw Ho, executive director of CBRE Research.

“The top bid of $207.5 million, or $456 psf ppr, will translate to a breakeven cost of about $780 to $800 psf for a low-rise condominium project. The new project could probably fetch around $900-$950 psf when launched in 2011.”

The developer said it will build a 450- to 500-unit project if the site will be awarded to them. It added that most of the units will be one- and two-room units, as well as several smaller three-room units. The project will be launched after nine to 12 months.

The top bid offered by MCL Land was 10 percent higher than the second-highest bid of $189.3 million, or $416 psf ppr from Frasers Centrepoint, and 21 percent higher than the $171-million or $376 psf ppr by Sim Lian Land.

Several analysts said that MCL Land might have been bullish in obtaining the top bid, as it was the company’s sixth attempt in a government land sale tender since 2009.

“It has been unsuccessful in the previous five land tenders, which may explain why it is more aggressive in this tender, bidding 10 per cent higher than the second highest bidder,” said Nicholas Mak, a real estate lecturer from Ngee Ann Polytechnic.

The land site was triggered to be put up for sale after a developer agreed to bid at least $109.9 million or $241 psf ppr in April.

(SINGAPORE) Just a day after the prime ministers of Singapore and Malaysia announced that six Malaysia- owned land parcels here would be jointly redeveloped, the market was abuzz with the possibilities awaiting these prime plots of real estate estimated to be worth billions of dollars.

The ‘crown jewel’ among them is a 16-hectare site in downtown Tanjong Pagar, sitting just a stone’s throw from the Republic’s busy financial district. The area is also where the 78-year-old Keretapi Tanah Melayu (KTM) railway station is currently located. It will be shifted to the Woodlands Train Checkpoint by July next year.

Property veteran Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic, said that one possibility for the railway building – which will be conserved because of its historical significance – could be to turn it into a historical hotel similar to the iconic Fullerton Hotel in Raffles Place.

‘The site and the surrounding areas where the railway tracks run are very large. By my own estimates we could be looking at several million square feet of potential built-up area,’ he told BT yesterday. ‘We could see a combination of offices, shops, retail space, as well as some apartments and condominiums. I wouldn’t be surprised if the land is eventually carved up into several smaller parcels.’

Prime Minister Lee Hsien Loong is now awaiting an updated valuation of the railway land, after which he will visit his Malaysian counterpart Najib Razak in Kuala Lumpur next month to discuss the swap of the railway land for other real estate in Singapore.

Between them, the six parcels of land span more than 200 hectares, according to Malaysian media reports. Apart from Tanjong Pagar, the other land parcels include one each in Kranji and Woodlands, and three in Bukit Timah.

Cushman & Wakefield managing director Donald Han said that it would make sound business sense for Malaysia to consider swapping Tanjong Pagar for a more urban and developed location such as the Ophir-Rochor area because of the greater potential in enhancing people connectivity.

‘The Rochor area has hotels and shopping centres. So there is complementary potential for Malaysia to build and create more attractions for their citizens who want to come to Singapore,’ said Mr Han.

While not much is known about exactly where the land parcels in Kranji or Woodlands are, two of the three Bukit Timah sites are likely to be a vacant plot and another that is currently housing workers’ quarters near Methodist Girls’ School, said Mr Mak. Both are likely to be used for residential purposes owing to their small size.

On Monday, Mr Lee and Mr Najib announced that a new private company set up by the two countries’ sovereign wealth funds – Khazanah Nasional and Temasek Holdings – will take charge of the Tanjong Pagar land and five other sprawling plots.

Mr Mak ventured that the joint company, called M-S Pte Ltd, could well decide to allow private developers to take charge of building up the land once the master plan is completed. ‘It’s a much neater way to do things. The company decides what to do with the land, and then sells it in an open tender afterwards. This is a cleaner way to extract the highest value from the land with minimum hassle,’ he said.

Efforts to contact KTM yesterday for comments were unsuccessful. Singapore’s Foreign Affairs Ministry, which is handling all local media queries regarding Malaysia’s railway land, was unable to respond to BT’s queries by press time.

SOURCE: Business Times

Singapore has plans to re-develop the Tanjong Pagar area into a new waterfront city, while Woodlands is set to become more vibrant when the station moves there.

The Tanjong Pagar site is zoned for commercial use, but this could change to include residential units, said property firm Cushman and Wakefield’s managing director, Mr Donald Han.

“For a high-rise development, with a gross floor area of over a million square feet and plot ratio of 4.2, we estimate the value to be about $650 million to $700 million,” he said.

The price per square foot per plot ratio (psf ppr) would be about $600 to $650 psf ppr, he added.

Mr Han said that the value could potentially increase by about 25 to 30 per cent if the land is allowed to be converted for residential use.

The current railway station site in the southern part of Singapore is on prime land – it is near the city centre and shopping mall VivoCity.

Its attraction is its size, which spans about five football fields. But development of residential units, if allowed, will likely take shape only in 2015 or 2016.

Meanwhile, the newly-available land in Woodlands can be commercially developed.

Its value will also increase with a mall and busy traffic, said Mr Colin Tan, head of research and consultancy at Chesterton Suntec International.

Mr Han said: “Right now, if you go into Woodlands, there is only the Causeway Bay shopping mall … There are not many activities that are coming up.

“If you look at the potential relocation of the KTM, if it allows an integrated development to be located there … it will certainly help to increase land values and existing property values in the area.”

Three parcels of land in Tanjong Pagar, Kranji and Woodlands and another three pieces of land in Bukit Timah will be available for development when the train station moves to Woodlands train checkpoint by July 1 next year.

SINGAPORE – In a move that’s set to spell relief for those worried about rising private property prices, the Ministry of National Development (MND) has increased the supply of land under the Government Land Sales (GLS) programme in the second half of the year.

Developers and homebuyers can look forward to 31 residential sites, which can yield a total of 13,905 units – the highest number since the Confirmed/Reserve List system was introduced in 2001. About 18 sites that can house 8,135 residential units are on the Confirmed List, while 13 sites which can generate 5,770 residential units, are on the Reserve List.

Announcing this on Friday, National Development Minister Mah Bow Tan said the significant increase is in response to market demand and to assure homebuyers that there is enough supply and that “there is no need to rush” to buy properties in anticipation of higher prices.

“This will probably dampen some of the exuberance in the market,” Mr Mah said.

Overall, there are 45 sites in the GLS programme, comprising 27 residential sites, three commercial sites, three commercial and residential sites, two white sites and 10 hotels.

Of the 27 residential sites and four mixed-use sites, five were earmarked for executive condominium development. Most of them are located in suburban areas or in the city fringes.

Head of research and consultancy at Chesterton Suntec International Colin Tan believes that “this is to address the very real concerns of HDB residents who have aspirations of upgrading over the next few years and who have seen prices rising very quickly beyond their affordability over the past one to two years.”

Prices have risen about 25 per cent since the middle of last year, said Mr Donald Han, managing director (Singapore) at real estate consultancy Cushman and Wakefield.

“The purpose of offering more sales of sites in the second half is really to tone down and curb any increase in land prices, because it has repercussion on end prices as well,” he said.

In the first half of the GLS programme, the most popular site attracted up to 18 bids, with tender prices of over $150 million.

While six sites from the previous Confirmed List and four from the previous Reserve List will be carried over into the second half, the Government is removing the Ophir Road/Rochor Road from the list as it reviews the development plan for the site.

It is also making available some 399,830 square metres of commercial space and 3,750 hotel rooms in the second half of the year.

Three new white sites, which can be for commercial and residential use, have been included: Choon Guan Street/Peck Seah Street, Paya Lebar Road/Eunos Road 8 and Boon Lay Way.

Mr Mah said the Government is also keeping tabs on the European debt crisis, which may pose some short-term correction.

And he added that there will be ample time to adjust if demand slows down significantly in the second half.

Dr Chua Yang Liang, head of Research, South-east Asia at property consultancy Jones Lang LaSalle, believes that overall sentiment remains positive and low financing cost will also support buying demand.

TWO adjacent bungalows in Margate Road off Meyer Road are said to have been sold for a total of $38 million.

Margate Road bungalows: The combined site can accommodate up to a 24-storey development of 55-60 apartments averaging about 850 sq ft
The buyer is understood to be a low-profile boutique property investor that is likely to build a block of apartments on the combined freehold site of 24,002 sq ft. The plot can accommodate up to a 24-storey development of 55-60 apartments averaging about 850 sq ft.

The $38 million translates to a land price of $1,023 per sq ft of potential gross area including an estimated development charge (DC) of $13.6 million. This is close to the $1,047 psf per plot ratio (psf ppr) including DC that is said to have been paid for neighbouring 10, Margate Road in late 2007.

Soilbuild Group Holdings, which bought that property, later amalgamated it with the adjacent Margate Mansions to form an enlarged plot it is now redeveloping into Meier Suites. Soilbuild’s land cost for the entire site was reported as $987 psf ppr.

Market watchers point out that the $1,023 psf ppr land price for the latest transaction, which involves 6 and 8, Margate Road, is close to what Chip Eng Seng paid recently – slightly over $1,000 psf ppr – for 16 freehold terrace houses in Fort Road.

However, that purchase is still subject to obtaining outline planning permission for a new development, as well as approval from the authorities to buy some state land for amalgamation with the property.

Cushman & Wakefield brokered the sale of 6 and 8 Margate Road through an expression-of-interest exercise that is said to have drawn more than five bids. The bungalows are being sold to the highest bidder.

No 8 Margate Road is being sold by Bian Guan Realty, while No 6 is being sold by the Estate of Tan Lai Choon.

The site is zoned for residential use with a 2.1 plot ratio – the ratio of maximum potential gross floor area to land area.

Assuming the new owner uses the balcony allowance of an additional 10 per cent gross floor area, the unit land price would be lowered to $954 psf ppr. Based on this, the breakeven cost for a new apartment project could be around $1,500 psf, analysts say.

Next door, Soilbuild sold units at Meier Suites, which comprises three and four-bedroom apartments, at prices ranging from $1,200 to $1,549 psf in February and March, according to monthly developer sales stats released by the Urban Redevelopment Authority.

In a separate transaction, a consortium said to include Soilbuild is said to have recently signed a deal to buy 23, New Industrial Road for $24 million. The freehold site houses an old industrial building that is likely to be redeveloped.

The Punggol site has been set aside for an executive condominium development which can potentially yield about 615 units. The 99-year leasehold land parcel has a site area of 22,497 square metres and a permissible gross floor area of 67,492 sq m. The minimum offer price for the site is $147.7 million.

Meanwhile, the Yishun land parcel is meant for condominium housing with about 600 units expected. The 99-year lease development has a site area of 26,539 sq m and a permissible gross floor area of 66,349 sq m. The minimum offer price is $137.9 million.

SOURCE: Today ONLINE

SINGAPORE – The tender for the land parcel at Boon Lay Way and Lakeside Drive has attracted the highest bid for a residential site this year.

Keppel Land Mayfair, a subsidiary of Mainboard-listed Keppel Land, has submitted the highest bid of $302.98 million for the 1.6-hectare site which can potentially yield 525 units.

This was a tad higher than the $302-million bid from Sim Lian Land for the tender of a 3.2ha land parcel at Tampines Avenue 1 and Tampines Avenue 10, which was closed almost two months ago.

The Urban Redevelopment Authority said that it has received 14 bids for the Boon Lay Way/Lakeside Drive tender, which was closed yesterday. This compared to only eight bids received for the Tampines Avenue 1/Avenue 10 plot.

With a gross floor area of 56,411 sq m and a 99-year lease, the next highest bid for the Boon Lay Way land parcel came from MCC Land at $263 million. The site was launched for tender on March 23 and the lowest bid received was $165.8 million from Cove Residential.

Mr Li Hiaw Ho, executive director of CBRE Research, said the site attracted so many bids due to its location – which is near two MRT stations, coupled with an unblocked view of Jurong Lake. He said the development will likely attract upgraders from nearby private and public housing estates as well as employees from the surrounding industrial centres and Nanyang Technological University.

Mr Li added that the top bid of $302.98 million which works out to $499 per square feet (psf) per plot ratio will translate to a breakeven price of between $830 psf and $850 psf. As a comparison, Mr Li pointed out that sub-sale units at The Caspian transacted at $650 psf and $800 psf in the past four months.

“Assuming the residential market continues its present state of activity and growth, the future project on this site could fetch an average price of $900 psf to $950 psf by early next year,” said Mr Li.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak noted that the number of bids placed for the land parcel was high. “This is a surprising high number indicating that developers in Singapore are still very hungry for development sites, especially those that are located near MRT stations,” he said.

Mr Mak said there is a high number of condominium developments around the site, which could contribute to the supply of resale units in the area. “The developers did not appear to be deterred by this fact. This indicates that they are very confident of the demand for new condominium units in the Boon Lay area,” said Mr Mak.

URA will decide on the winning bidder at a later date.

SOURCE: Today Online