Collective sale of Dalvey Road apartment

The latest condominium to climb on the en bloc bandwagon is the Villa D’Este on Dalvey Road in prime district 10. The freehold site currently holds 12 apartment units ranging from 3,456 sq ft to 3,949 sq ft and 10 owners have already agreed to putting the site up for sale. And the asking price? $96 million.

Villa DesteThe pros for this site is that there are no development charges and with the $96 million price tag it comes with, that works out to be about $1,730 psf for the 55,480 sq ft land site. Land acquisition moves by developers have been aggressive this year and quite a few collective sales efforts have come to fruition and more mature residential establishments are feeling confident about putting themselves out there.

Other properties which have started their en bloc sales process recently are The Albracca, Serangoon Ville and Tampines Court with the latter 2 being former HUDCs. The Villa D’Este is a private property with relatively few units on site, which could mean each owner getting $7.5 to $8 million from the sale. And its location would attract developers since it is rare to find a site so close to a Good Class Bungalow (GCB) area. This could translate to promising sales of projects eventually launched here as the area is popular with expatriates and also provides the exclusivity of ambience and address. Other private land plots which were sold this year included One Tree Hill Gardens, Goh & Goh Building, Rio Casa and Eunosville.

The Dalvey Road site holds the potential to yield 1 to 3 GCBs or 24 new apartment units sized approximately at 2,000 sq ft. There was a previous collective sale attempt in 2015 for $115 million.

Woodleigh government land sales site attracts top bids

A 99-year leasehold site on Woodleigh Lane launched under the Government Land Sales (GLS) programme has drawn bids from 15 developers, with a top bid thus far of $700.7 million from CEL Unique Development, jointly owned by Chip Eng Seng Corp and Unique Real Estate. The latter is a joint venture between Heeton Holdings and KSH Holdings. About half of the 15 bids were above price expectations, one-third above the $1,000 psf plot ratio and the top 4 were within the 3.6% margin.

BidadariWith current market sentiments consistently improving and the potential for a market recovery not impossibly far away, when a choice piece of land comes along, developers have been seen to bid aggressively, especially of late. The 19,547 sq m Woodleigh site is primely located beside the Woodleigh MRT station and near the upcoming Bidadari township which many buyers and investors are keeping their eye on. The site has a maximum gross floor area of 58,641 sq m and residents of the new development may also enjoy the unblocked view of the neighbouring low-rise landed housing area.

8woodleighTaking into consideration the proximity to an MRT station and other amenities such as the NEX shopping mall, property experts are expecting selling prices of the future residential project on the site to be between $1,720 psf and $1,800 psf. The Bidadari township will prove to be both a boon and a slight disadvantage as the new HDB estate will bring life and activity into the area, but the recent sale of a mixed-use site nearby may bring on the competition. By the time both properties are launched, it will simply be a matter of whether the price is right.

Release of new land sites in H2 may not satisfy developer demand

After holding back for the past few quarters, 16 new land sites will be released under the Government Land Sales (GLS) programme in the second half of this year. That is in addition to other private land sites which might go on sale as well during the same period.

CUscadenResidencesDespite this ramped up supply of land plots, property analysts expect continued aggressive bidding from developers as they seem to be on the hunt for resources to replenish their land banks and especially as the demand for new homes has grown steadily in the last few months. As the nation’s population continues to grow, the authorities also recognise the need to keep up with the demand for new private housing in the years ahead.

The 16 sites from the GLS programme can potentially yield up to 8,125 private homes. And yet, analysts still consider this allocation inadequate in meeting developer demand. The sites most likely to draw the most number of bids are those in Jiak Kim StreetFourth Avenue and Cuscaden Road due to their locations. New record high bids are expected for these sites.

With  the possibilities of more joint ventures between developers and funds, the potential for higher bids for limited land plots may very well drive land prices up. Could that mean eventual increases in property prices, even if not now then sometime in the future? How would that then affect the market then?

Freehold residential land in Orchard sold for $72 million

Land in Singapore seems to be selling like hotcakes in recent months. As the flow of plots made available under the government land sales (GLS) programme languishes, developers have been eyeing and snapping up plots sold privately. En bloc deals have been monopolising the real estate scene and the latest private land sale was of 1 Draycott Park to Selangor Dredging to the tune of $72 million.

DraycottPark

Photo credit: Google Maps.

What currently stands at the 17,422 sq ft site is a 7-storey apartment block with 8 apartments ranging from 860 to 6,200 sq ft. After a development charge of $15.3 million, the sale translates to $1,787 psf. As the site is zoned for residential development, it could potentially yield 36 new storeys of new apartment units.

Situated in the exclusive yet primely located Claymore Hill and Ardmore Park enclave, near Orchard road and the American Club, the new properties to be built on site are likely to go for between $2,700 and $2, 800 psf just to break even. Thus it will not be unusual to expect prices starting from $3,300 psf, about 10 per cent above recent transacted prices in the area, from the future launch of the new project.

TheClaymoreWhile foreigners account for about 50 per cent of the luxury property transactions in Singapore, the stamp duty rate which now stands at 15 per cent has somewhat kept demand at bay. However, from developers’ recent responses to en bloc and private land sales, the prices they are willing to fork out may signify a quicker than expected recovery to the high-end property segment.

Prime sites may yield high-demand homes

Should the sites currently earmarked for future residential use be put up for sale, the public can expect some juicy baits from developers as these sites are in prime locations near the city centre.

Tanglin ResidencesThe 2 sites which are particularly beguiling are the former Ministry of Home Affairs Phoenix Park site in Tanglin road and the former Overseas Family School plot in Paterson road. Both sites are under governmental ownership and while the location of these sites will excite developers and buyers alike, the government is unlikely to put them up for sale anytime soon. They have in fact been holding back on the release of land sites possibly contributing to the increased number of successful en bloc sales in recent months.

Paterson SuitesThese sites with their exclusive addresses are currently put up for interim use though should they eventually be placed for sale, they are likely to yield 450 to 700 homes in the Paterson road site and 850 to 1000 units averaging 800 to 1,000 sq ft on the Phoenix Park site. The latter is currently tenanted by LHN Facilities Management who will have the option of renewing till the end of 2020. The proximity of this site to various embassies in the Tanglin area will however mean restrictions may be placed on the height not to mention possible heritage conservation regulations.

 

Long-term potential of Commercial property in Singapore

Commercial properties in Singapore still hold a special place in the hearts of investors, if the activity in the market last year was anything to go by.

straitstradingbuildingThere were some massive bulk purchases of prime sites from foreign entities in 2016 and developers were actively buying up land sites. Investors are obviously seeing huge potentials of the commercial property market here. The 43-storey Asia Square Tower 1 for example was sold at $3.38 billion to Qatar Investment Authority’s sovereign fund in June 2016. This record sale by investment firm BlackRock was the largest single-asset and office transaction in the Asia-Pacific region. On a smaller but not any less worthy scale, is the sale of the Straits Trading Building to Indonesia’s Mayapada Group for $560 million. At $3,250 psf, it set a record for psf prices in the district.

Investors from all over the world are spotting the potential for long-term positive growth in this region and in extending their reach in Singapore. Large assets here are of particular interest and 2017 may see more such transactions taking place.

sbf-centerNot only are they investing in completed commercial properties, but also in land with developmental potential, such as a white site in Central Boulevard which was purchased by Malaysian plantation and real estate tycoon, Lee Shin Cheng. This Marina Bay mixed-use site was released under the Government Land Sales (GLS) programme. Though the office rental market has not been in its best form last year, there is hope that it will bounce back up by 2021.

 

Will current property bright spots continue to shine in 2017?

Private home prices have continued to fall in 2016, and while that may have coloured the market atmosphere somewhat grey, bright spots are beginning to shine through the gloom, with 3 sectors performing particularly well this year.

Miro condo on Lincoln Road, just off Novena at the City Fringe districts.

Miro condo on Lincoln Road, just off Novena in the city fringe.

The luxury residential property, commercial office and collective sales segments have all shone this year. And industry players are no doubt hoping that the positive streak will continue in 2017. In this year alone, 3 en bloc sales were closed. Only 1 such transaction was recorded for 2015 and none in 2014. Even for the private home market, sales volume has risen 9.8 per cent this year despite 10.8 and 10.7 per cent fall respectively in sale prices and rents in 12 consecutive quarters.

Some property analysts however consider the fall in property prices a good thing, as this has enticed more buyers back into the market. Buyers who may have previously stayed away from the market due to the increased stamp duties and fees implemented by the authorities in the past few years to attempt to cool the market, have now returned and are now swiftly closing transactions.

2 RVG condo apartment in River Valley

2 RVG condo apartment in River Valley

In the prime districts of 9, 10 and 11, private home transactions were already 42.6 per cent higher than the total in 2015. 2,601 deals were sealed in the Orchard, River Valley, Bukit Timah and Novena areas as of mid-December. With more land allocated under the Government Land Sales (GLS) scheme and developers on the lookout for smaller prime location sites, the market may see a lot more activity quite soon.

Prime land plots released for H1 of 2017

Out of the 5 residential sites which were released under the Government Land Sales (GLS) scheme‘s confirmed list for H1 of 2017 are 3 sites which may see heated competition from bidders – one on Jiak Kim Street where the Zouk nightclub used to stand, another on Fourth Avenue right next to the Sixth Avenue MRT station and yet another on Woodleigh Lane, near the new Bidadari township and Woodleigh MRT station.

rmaisonThese 5 sites are expected to yield up to 2,330 new homes, about 50% more than the 1,560 units yielded by land released in the first half of this year. Bidding on the last few sites released this year have gotten developers and property analysts excited about the potential volume and size of land plots to be released next year, but the authorities have kept it conservative thus far, having released only 10 sites on the reserve list. This includes 1 mixed-use site and 2 commercial sites.

It is possible that the Government is concerned about the stock of unsold executive condominiums (EC) currently in the market. In addition, most of the units sold this year were purchased by investors and not true home-occupiers. The Monetary Authority of Singapore has also recently flagged their concern about rising vacancy rates in the private property market. This combination of factors may have influenced their decision on how much land supply to release in 2017. Only 1 EC site was released on the confirmed list and another on the reserved list.