$1-billion bid for Stirling road land plot breaks record

A $1 billion bid for a piece of land at Queenstown made history as the first time a residential site under the Government Land Sales (GLS) programme scored such a high offer, almost $300 million more than the previous record.

queenspeakcondoChina-based developers Logan Property and Nanshan Group put the bid of $1.003 billion in for the 21,109 square metre plot in Stirling Road. The site had been on the GLS reserve list since 2010 and consists of a 2 adjoining land plots. It was triggered for sale only last month after a bid of at least $685.25 million was put in for the site.

But the billion-dollar bid certainly takes things to a whole new level. The previous highest ever bid was $925.7 million from MCL Land and for a pure residential site, the record stood at $682.8 million for the site where Costa Del Sol condominium now stands. At 20.6 per cent higher than the winning bid for the nearby Queens Peak condominium, the latest $1billion bid may set a new record for the Queenstown area in terms of cost per square foot. With a maximum permissible gross floor area of 954,328 sq ft, the bid will translate to $1,050 psf per plot ratio.

Commonwealth TowersThe Stirling Road site is close to Buona Vista, and placed strategically between the Central Business District and Jurong East regional business hub which makes it the prime spot for rental properties. Despite the existence of many other private properties in the area, developers do not seem intimidated, possibly as most investors of units in the area would have sold them by the time this new development is ready and will in fact be looking for new investment opportunities. There could also be a rebound of foreign investment interest following Bandar Malaysia‘s recent collapse.

London Home prices fall for first time in 8 years

Home prices in London have been rising continually despite its high levels. Brexit has slowed the rate of increase slightly, but for the first time in 8 years, prices have fallen 1.8 per cent in April to S$1.4 million. The last decline of 2 per cent was in 2009.
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Central London properties experienced the biggest change as the sector underperformed on a whole. Brexit aside, tax increases and unaffordable valuations have also had a part to play in the decline. Consumer confidence suffered a blow in the first quarter and though foreigners are still closing some property transactions in the city, the change is the first indication of the Brexit-effect.
That said, the national annual increase for the United Kingdom still registered at 2.2 per cent and prices rose 1.1 per cent in April. On average, prices have risen 1.6 per cent during this time over the past 7 years. The luxury property market perhaps saw the biggest change  with a 4.2 per cent annual decline. Properties in less expensive suburbs posted a 1.7 per cent decline. Most of  the country have however enjoyed a surge in spring but some higher-end real estate are seeing the need to re-adjust prices to make sales.

 

Consistent growth in private resale property prices

For the fifth consecutive month, resale private home prices have had a good showing. Can we hope for a market recovery? Perhaps not quite yet, but there is no reason not to feel good about the turnaround.

THeSienaCondoMarch’s numbers were the highest in 2 and a half years with the resale index hitting 168.8 with an improvement of 50% in the number of units sold. Market prices have also been creeping upwards with sellers now beginning to set asking prices above the market rates. Overall, private resale property prices rose 0.5 per cent last month and were 2.2 per cent higher than the same month last year.

In the same year-on-year comparison, resale transactions grew by 77.5 per cent last month with 1,058 units sold. That is 51.8 per cent higher than the 697 units sold in February. Prime district property prices rose 0.4 per cent while 0.7 per cent and 0.4 per cent increases were registered in the city fringes and outlying suburban regions respectively.

Though the numbers are still lower than when the property market was at a few of its peaks in 2010 and 2013, the consistently improving numbers reflect an overall positive market sentiment. As the half-year mark draws closer, the numbers from the second quarter will be more crucial in determining the direction for the rest of the year.

Another HUDC estate tries for collective sale – Rio Casa

HUDCs certainly seem to making the news this year as yet another HUDC estate tries for an en bloc sale. Earlier last month, Braddell View became the last HUDC to be privatised and Shunfuville successfully completed their en bloc journey in May last year.

RioCasaHUDC HougangThis time, Rio Casa, formerly called Hougang N3 is trying their hand at the collective sale game. The process was surprisingly easy as 80 per cent approval was achieved within 3 weeks. Bidding is expected to hover around $450.3 million for the 286-unit site. If successful, each unit owner will receive $1.5 million which is approximately $586 psf. The property has about 73-years left to its lease and the new owner will have to fork out $57.5 million for a new 99-year lease. In addition, $141.5 million will be required for site-intensification.

Kingsford WaterbayThe site should be quite desirable as it features 200m of riverfront and greenery views with schools such as Holy Innocents’ Primary and High Schools and CHIJ Our Lady of the Nativity nearby. With the recent uptick in buying sentiments and the competitiveness in the Government Land Sales segment, developers may pay for the site despite its slightly pricier tag. There are considerations however, as the site is not near any MRT station and the nearby Kingsford WaterBay has unsold units remaining. It is still however early days and the Hougang area has a deep potential for redevelopment which may very well happen in the decade ahead. The tender for the site closes on May 23.

Outlook hopeful despite fall in private home prices

After 14 consecutive quarters of declining private home prices, slivers of light are shining through – the suburban condominium market has seen a tad more activity with prices rising slightly; and for most part, the rate of decline has slowed.

SantoriniThe fall in prices of private homes stood at 0.5 per cent last quarter, similar to that in the last quarter of 2016. Suburban non-landed property prices have in fact posted a growth of 0.1 per cent after 13 straight quarters of decline. The positive figures in the suburbs could be due to the many new projects in areas outside of the central region which launched to much success in the earlier part of the year. These included developments such as The Clement Canopy in Clementi and Grandeur Park Residences in Tanah Merah. Previously-launched projects such as Parc Riviera and The Santorini also re-marketed their units resulting in favourable response from buyers.

Property analysts also contributed some of the uptick in buying sentiment to recent changes in the property cooling measures. Though the impact may not be obvious and immediate, it has nevertheless helped to inject some optimism in the market. Though the expectation is for property prices to fall 1 to 3 per cent in H1, the second half of the year should see prices stabilising and 2017 may just end on a happier note.

Need for clear foreign property ownership laws in Myanmar

New emerging South-east Asian economies,  in countries such as Cambodia, Myanmar and Vietnam, are flourishing and investors have expressed interest in these growing markets as the rest of the world struggles with political and economic stability.

junctioncityyangonBut the demand is now and some confusion in Myanmar’s legal system may be stopping investors from bringing their investment monies into the country. Existing legislation concerning the permissibility of foreign ownership of private condominium units has put an obstacle in developers’ efforts in wooing investors. The uncertainty stems from the lack of clarity in whether the regulations apply to existing apartments and the specifications of a “condominium”. Under current laws, 40 per cent foreign ownership of a development is permitted.

While the Myanmar government scrambles to come up with by-laws, the real estate sector in Myanmar has lost a little of the shine following the bullish market since 2011 when the economy opened up to foreign investors. The residential sector in particular has been quiet over the past year and a half. The Department of Urban and Housing Development has been working hard to come up with the by-laws but they have yet to be sent to the Cabinet for approval.

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Photo credit: D3 Capital

In the meantime, mid-tier condominium and luxury property prices have fallen 41 per cent and 22 per cent since 2014. That said, rental yields of 8 to 12 per cent can be expected in the current environment, though much more lies in potential yet untapped. Industry players are hoping the new rulings, when implemented, will open the market up to retail buyers from Thailand, Singapore, Hong Kong and China.

Resale private home prices up for 4th consecutive month

3 months into the new year and things seem to be looking up for the resale non-landed private home sector. Prices have been on the rise for the fourth consecutive month with a 0.9 per cent climb last month, following a 0.6, 0.3 and 1 per cent rise respectively in the months counting up from December last year.

ParkInfiniaRecent industry figures have shown a slight recovery in both prices and sales volume in the resale market, mostly due to an overall more upbeat atmosphere boosted by a series of successful new launches within the first 3 months of the year. Approximately 694 private non-landed residential units were resold in February albeit it being the shortest month of the year. That is 31.2 per cent higher than the 529 units which exchanged hands in January though that could have been because of the Chinese New Year holidays.

Comparing year-on-year, resale prices in February this year clocked at 1.8 per cent higher that the last and resale volume was 77.9 per cent higher than the 390 units sold the same month last year. Compared to the price peak in 2014, resale private non-landed home prices is still lagging by 6 per cent, but considering the lull which took over the real estate sector for the past 2 to 3 years, price increases across the island in this segment is a step in the right direction. Prices in the prime districts rose 1 per cent while inching up 0.8 per cent in the city fringes and 0.9 per cent in the outside central regions.

 

Thailand’s most expensive condo opens Singapore and China offices

Foreign property investors looking for a piece of luxury in Thailand now have something new to look forward to. Thai developer Sansiri has partnered with Thailand’s mass transit operator BTS group to open international sales offices in Singapore and China, tapping on the influx of tourists in particular mainland Chinese in recent years.

Sansiri98WirelessPhoto credit: Sansiri

Their Singapore office opened at the Ocean Financial Centre 2 weeks ago and plans to open more in Shanghai and Beijing are already in the way. The venture hopes to increase sales from foreign buyers by 40 per cent. Though interest from Singapore investors have been rising, investment monies flowing into Thailand’s real estate sector from China has been limited. Sansiri currently has over 300 projects in Thailand and one in London.

BaseGardenSansiriPhoto credit: Sansiri

Their flagship condominium project, 98 Wireless, is touted as Thailand’s most expensive condominium development. 120 sq m two-bedroom apartment units are going for US$2 million. Though most Singaporean investors favour mass market condominiums in Thailand, Singapore is nevertheless a good base to indirectly steer attention from interest mainland Chinese parties temporarily residing or visiting the country to possible investment opportunities within the region. The developer says Singaporeans are more keen on rental yields and quick turnarounds. Their new partnership with the BTS group will also allow them a leverage in developing projects which build upon upcoming infrastructure.