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.

Success of collective sales continues

2017 continues to be a good year for the collective sales market with Shunfu Ville given the go-ahead from the Court of Appeal last week and the sale of One Tree Hill Gardens site for $65 million this year.

OneTreeHillGardensThe Lum Chang Group has purchased the latter freehold landed residential development site near Orchard Road at $1,644 psf. Its proximity to Orchard Road makes it a prime site that is rare also because of its freehold status. It is of sizeable land ratio and developers have expressed considerable interest. The site was initially put up for sale at $72.8 million. Despite the $7.2 million shortfall, individual owners of the 6 maisonettes and 7 apartments will still receive $4.3 to $9.1 million depending on the size of their units.

Under a 2014 masterplan, the freehold site is zoned for 2-storey semi-detached residential use within a 39,063 sq ft land area. What it could potentially yield are 8 semi-detached houses, 5 bungalows or 10 semi-detached homes and 3 bungalows. With such landed properties near Orchard Road a scarcity, the freehold homes will no doubt receive much interest from investors and high net-worth buyers.

venturaheightsWhile the market is still tender from the previous years of slow growth, developers are beginning to replenish land stock and collective sales may be their means to the ends as the government has recently cut back on the release of land plots. Though price-sensitivity continues to rule developers’ bids, the collective sale market will be active this year especially with more home owners enquiring about en bloc sales and the sale of Eunosville and Rio Casa last month.

Prime Marina Bay site expected to lure aggressive bids

The Urban Redevelopment Authority (URA) has recently released a 1.1 ha prime site at Marina Bay in Central Boulevard. Coupled with news that Asian banks are expected to strengthen their presence in Singapore, this could be an office development site developers hanker after.

Asia Square

Photo credit: www.thehumanbuilding.com

The last time a site at Marina Bay was put up for tender was in 2007 – Asia Square now stands on this site. With the Central Business District location and size of the site taken into consideration, it will no doubt yield a number of plum Grade A offices. Bids are expected to come from mid- to large-sized developers as well as real estate investment funds, at aggressively too, as the site holds the potential for an impressive building with a huge number of units.

Despite the softening commercial sales and rental market, the successful bidder will be likely to have the project completed by 2020, which allows sufficient time for a market upturn. The bid closes on 8 November and investment entities from China and the Middle East may show particular interest. In fact, China’s Nanshan Group is said to be the ones triggering the release of the site as it was originally on the Government’s reserve list and was said to have been released after a developer committed to bidding at least $1.536 billion. But as more buildings are seeing increased levels of commitment from companies looking to stake a presence in Southeast-Asia, developers may have more confidence taking on commercial projects.