Property units flipped within days last year for tidy gains

Published 6 June 2011
The Business Times
By Kalpana Rashiwala

An analysis of subsale transactions by Savills Singapore has shed light on the sort of short-term property speculation in the Singapore non-landed private housing market last year that culminated in the government announcing a punitive seller’s stamp duty regime.

Subsale - Win, lose or draw

At least 20 units were bought last year and flipped within days. They involved mostly smallish apartments in projects such as Dorsett Residences at New Bridge Road, Suites@Topaz in the Serangoon-Moonstone Lane area, Centra Suites in Geylang, Haig 162, One Amber, The Shore Residences and Suites@Shrewsbury. Profits generated by these 20 units which changed hands within 29 days ranged from $5,000 to $188,000, translating to returns of 0.6 per cent to 27.6 per cent.

In all, there were 111 subsales of private apartments and condos in 2010 which had previously changed hands in the same year. All of these transactions were profitable. Gains ranged from $5,000 to $2.08 million per subsale transaction.

The latter was recorded for a 3,907 square foot unit at Urban Suites near Cairnhill Road which was bought in late January 2010 for $8.81 million from the project’s developer and flipped in early March for $10.89 million. The smallest gain of $5,000 was for a 926 sq ft unit at Waterview in Tampines which involved a 10-day holding period.

Savills Singapore traced caveats for subsale transactions for private apartments and condos against previous caveats for the same units. It found earlier matching caveat records for 86.7 per cent or 2,917 of the 3,365 total caveats lodged for subsales of private apartments and condos last year.

The 111 units subsold last year which had been previously transacted within the same year made up 3.8 per cent of the 2,917 total subsales that Savills matched for the whole of 2010.

And the 20 units flipped within days of being purchased in 2010 accounted for 0.7 per cent of total subsale matches last year.

The punitive seller’s stamp duty (SSD) regime that the government unleashed on Jan 13 this year has had an impact on cooling property speculation. Savills’ analysis revealed that none of the subsales in Q1 2011 involved units which had been bought within the same period.

Analysts say that it would be challenging for speculators now to buy a private home and flip it within a year given the higher hurdle to break even following the introduction of the 16 per cent SSD for those who buy a private home after Jan 13 and sell it within a year.

Foo Suan Peng, managing director of investment sales at Knight Frank, said: ‘The property’s price would have to move up at least 20 per cent for the investor to break even (comprising 16 per cent SSD if the property is held for a year or less; 3 per cent buyer’s stamp duty; and one per cent for other costs).

‘These investors might as well hold on to their properties till next year before they flip, by which time the SSD rate would be 12 per cent.’

Savills’ analysis showed that in Q1 2011, there were 22 subsales which yielded gains exceeding $1 million each, of which six cases reflected gains exceeding $2 million each – in projects such as Marina Bay Residences, The Trillium (two units), Belle Vue Residences, Nassim Park Residences and One Amber. The 22 subsales involved units which had been previously transacted in 2006-2009 and made up 4.3 per cent of the 506 subsale matches Savills traced in Q1.

Last year, there were 92 subsales (or 3.1 per cent of 2,917 subsale matches in the period) which produced a profit of over $1 million each. These included 14 deals with gains surpassing $2 million apiece, nine of which were at Marina Bay Residences.

Last year’s most profitable subsale deal (in absolute terms) generated a gain of $3.3 million; it involved a unit at Marina Bay Residences which had been previously bought for $4.97 million in January 2007 and subsold for about $8.29 million in April 2010.

In Q1 2011, the most profitable subsale deal (in absolute terms) generated a profit of $3.44 million, on a ground floor unit at Nassim Park Residences previously bought for around $12.1 million from the developer in June 2008 and sold in March 2011 for $15.56 million.

In percentage terms, Q1 2011’s most profitable subsale yielded a 167.4 per cent return – on a unit at SouthBank at North Bridge Road that had been bought from the developer in June 2006 for $561,000 and sold in the subsale market in January 2011 for $1.5 million.

The majority or 69.4 per cent of the 506 matched subsale deals in Q1 this year involved units previously bought in 2007 or 2009. It was a similar trend last year, when 73.8 per cent of the 2,917 matched subsales involved units previously purchased in 2007 or 2009.

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Property investors go for the slow flip

Published 6 June 2011
The Business Times
By Kalpana Rashiwala

Average holding period of Q1 subsales rises, so does average gain from profitable deals

It pays not to flip properties too frequently, according to a study of subsale transactions by Savills Singapore.

Property investors go for the slow flipThe average holding period of subsales in the first three months of 2011 increased to its longest in at least three years, while the average gain from profitable subsale deals in the quarter was also at its highest since Q3 2008.

Savills’ study, which traced caveat matches to work out holding periods and gains or losses from subsales since Q1 2008, revealed that the average holding period for subsale transactions in Q1 2011 was 2.31 years.

This was longer than the 2.07 to 2.23 years average holding period for subsales in various quarters of last year and the longest since Q1 2008, when the average holding period for subsale deals was 1.64 years.

Some 97.4 per cent of matched subsales in Q1 2011 were profitable and, of these, the average gain per profitable subsale deal climbed to $315,043, surpassing the $283,498 to $289,004 for Q1-Q4 last year and the highest figure for any quarter since Q3 2008.

Steven Ming, executive director of investment sales at Savills Singapore, said: ‘The bigger average gain from profitable subsale deals is in sync with the upbeat market sentiment, which has seen prices of non-landed private homes rebounding strongly from the trough in 2009 and even surpassing its previous peak in 2008.’

‘The longer holding period for subsales transacted in Q1 2011 indicates that short-term speculation was stifled by the government’s various cooling measures announced since February 2010, particularly the stringent seller’s stamp duty introduced on Jan 13, 2011,’ he added.

Indeed, there were no instances of units bought in Q1 this year and flipped within the same period.

‘These results support (the view) that real estate should be a mid- to long-term investment rather than short-term speculation,’ concludes Mr Ming.

The most profitable subsale in Q1 2011 yielded a profit of $3.44 million; it involved a ground-floor unit at Nassim Park Residences that was previously bought for around $12.1 million from the developer in June 2008 and sold in March 2011 for $15.56 million. The biggest subsale loss, of $723,200, was for an apartment at The Orchard Residences.

Subsales, often used as a proxy of speculative activity, refer to secondary-market deals in projects that have yet to receive a Certificate of Statutory Completion and where property titles for units sold have yet to be transferred to buyers.

‘Transaction volume in the subsale market is expected to moderate over the next 24 months and the average holding period (lengthen), following the imposition of steep seller’s stamp duty (SSD), which compels any real estate investor to think mid- to longer-term to ride out the four-year SSD period to reduce costs,’ said Mr Ming.

Savills’ analysis showed that the average subsale gain for profitable deals was highest at $445,313 in Q1 2008 – during the heyday of the previous property boom when anecdotal evidence of people flipping properties within a short period for handsome returns was not uncommon. Back then, 98.2 per cent of all subsales made money and the average holding period for subsale deals was just 1.64 years.

Then came Lehman’s collapse and during the low point of the property market in Q1 2009, only 67.5 per cent of subsales were in the black while their average gain sank to $105,663. From that point, the proportion of profitable subsales quickly began to recover, reaching 90.7 per cent in Q3 2009, 97.5 per cent in Q4 2010 and 97.4 per cent in Q1 2011.

Savills examined URA Realis caveats data for subsale deals and tried to find previous caveat records for the same units; where it found matches, it worked out the holding period for the subsales and the profit or loss. The latter was calculated as the difference between sale and purchase prices, without taking into account agent fees, stamp duties and other expenses.

For instance, of the total 584 caveats for subsales of private condos or apartments in Q1 2011, Savills found previous caveat records for 506 units, of which 493 (or 97.4 per cent) made gains and 13 made losses.

The projects with the most subsale caveat matches in Q1 2011 were Livia in Pasir Ris and Double Bay Residences in Simei – with 24 and 22 deals respectively, all profitable.

Savills said subsale interest in these two projects was probably fuelled by recent launches in the respective locations such as NV Residences and My Manhattan, given that the average price in the subsale market is relatively lower than that for new launches.

As for 2010, the projects with most subsale matches were The Parc Condominium in West Coast (150 units), One Amber (132), Caspian in the Jurong Lake area (93), Marina Bay Residences (75) and Sky@Eleven (63).

Some of these projects were completed last year, and it is often around this time that a flurry of subsale activity occurs as projects then have added appeal to buyers seeking properties that they can move into or rent out soon.

But Savills noted that even projects which are slated for completion around 2013 such as Caspian and Kovan Residences were active in the subsale market last year.

‘Matched results showed that most units in these mass-market projects made gains through subsales, riding on the strong price growth in the mass-market segment,’ Savills observed.

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Marking a new high

Published 23 May 2011
The Edge Singapore
By Cecilia Chow

The Marq on Paterson Hill, the flagship development of SC Global, has set a new record for residential property prices in Singapore. What does this mean for the housing market?

Jerry Tan waves confidently at security guards standing at the gates of The Marq on Paterson Hill as his car swoops along the driveway that’s graced bya magnificent Botero bronze horse sculpture. Moments later, he rides up the private lift, and with a flourish, strides into one of the 66 units at the super-luxury development. He points out that the floors of the living and dining room, as well as the bathrooms, are laid with travertine tiles that are more expensive than marble, and then leads the way into an expansive master bedroom with an enormous walk-in wardrobe that has a dehumidifier. Next, he opens the door of the en-suite bathroom, which features a long vanity top with double washbasins, a Cartier clock and a bathtub complete with an LCD TV.

Entrance driveway with the Botero horse sculpture

Entrance driveway with the Botero horse sculpture

Tan isn’t the proud owner of the apartment. He is the founder and managing director of JTResi, the property agency that has sold more units at The Marq than any other. Just over a week ago, he struck again with the sale of a 3,003 sqft four-bedroom apartment for $17.54million to a Southeast Asian tycoon. That price tag translates into $5,842psf, a new record for local residential property. The previous high was set in late 2007, just before the global financial crisis, when a penthouse at The Orchard Residences was sold for $5,600 psf.

Now, Tan senses that interest in the very top end of Singapore residential property is gaining momentum again, with the number of transactions increasing and prices creeping back up to the $5,000 psf mark. In fact, just days before he brokered the sale of the unit at The Marq, he also managed to sell a 1,808 sqft, three-bedroom apartment at The Orchard Residences to a European buyer for $8.7 million, or $4,800 psf. That’s good news for developers of properties in the Orchard Road area that have some of their projects on hold during the global crisis, or that maybe thinking of “re-launching” unsold developments.

It is especially significant for SC Global Developments, the company that built The Marq. Founded by banker-turned-property developer Simon Cheong, it has carved a reputation for developing properties so sought after that they command stratospheric prices. It is more than just snob appeal. “Buyers who’re willing to pay such prices want a different style of living,” Tan says, referring to The Marq, which is SC Global’s flagship property. “When people who know quality and understand luxury see it, they will buy.”

In fact, the buyer of the unit at The Marq who set the record price already owns an apartment at the 46-unit The Boulevard Residences, or BLVD, located on Cuscaden Walk, which was jointly developed by SC Global and GuocoLand. According to Tan, the tycoon’s wife was shown several properties before finally being given a tour of the 18th floor apartment at The Marq, which has unblocked views of ION Orchard. “After I showed her that, she didn’t want to see anything else,” says Tan. “And, when her husband came to town, the deal was done.”

What makes The Marq such a draw? “It’s more than just the real estate,” reckons Tan. “It’s the service. At The Marq, there’s a concierge team on the ground that knows all the residents by name. For those with young children, there’s an added sense of security because they know that if there’s a problem, they can always call the concierge.”

By setting such standards, SC Global is forcing other developers to raise their game in the super luxury end of the market. In fact, Tan sees that more of such projects will likely be sold only at the temporary occupation permit stage unless the developer has a track record. “Everybody will say their project is high end. But at the end of the day, it will be the end product that determines whether they are or not.”

Four years ago, Tan brokered the first sale of a unit at The Marq that crossed the $5,000 psf level. It was for a 6,157 sqft apartment purchased for $31.4 million, or $5,100 psf, and is still considered the most expensive apartment in terms of absolute price.“Back in 2007, I sold 10 properties worth $213 million at The Marq to people who bought the apartments without having seen them,” he recalls. “I had nothing to show but a fly-through video. But when the buyers received the keys to their new apartments recently, they felt that it was worth every cent.”

The latest sale brokered by Tan brings the total deals he has transacted at The Marq to 11, and real estate value to $230.5 million. He is confident of being able to sell a few more soon, noting that super-luxury homes are the only sector of the property market where prices are still below their pre-crisis peaks. “Obviously one swallow doesn’t make a summer,” he says. “But I hope to break the $6,000 psf level soon.”

What do you get for $42 million?

Shifting a unit at The Marq is no easy task, though, because of the very high absolute prices. The development has two 24-storey towers, the Premier Tower and Signature Tower. Signature Tower contains 21 four-bedroom duplex apartments, and three penthouses that are yet to be released for sale. The four-bedroom apartments on the even-numbered floors are 6,232sqft in size, while those on the odd numbered floors are 6,157 sqft.

The developer’s asking price at Signature Tower today starts from $6,100 psf for the lowest floor, which is the second floor. One unit on the eighth floor has a price tag of $42 million, or $6,739 psf, for a 6,232 sqft, four-bedroom apartment. “These are limited-edition units,”says Tan. “Especially in land-scarce Singapore, such spacious apartments are becoming rare and, therefore, command a premium.”

4BR duplex apartments with private 15m lap pools
4BR duplex apartments with private 15m lap pools

To be sure, one gets a lot for $42 million. Apartments in the Signature Tower have living and formal dining rooms with sweeping city views, and soaring ceiling heights of 6m. Full-height glass doors from the living room open out to a 15m private lap pool. The formal dining room is anchored by a 4.5m-long marble countertop at one end, with a fully-fitted open kitchen, ideal for those who like to entertain.

For storage, tall cabinets with high-gloss black lacquered doors can be accessed easily with a movable step ladder provided by the developer. At the entrance hall of the apartment, there’s a powder room and a shoe cupboard large enough to fit an extensive collection of Christian Louboutins, Manolo Blahniks and Jimmy Choos. And it comes with a built-in dehumidifier.

There is also a sizeable wet kitchen in the apartment with additional “bonus space” of at least 500 sqft in the form of an air-conditioned attic that can be entered via a folding attic stairs. “You can store your winter clothes, as the air-conditioner is on all the time,” says Tan.

Premier Tower, on the other hand, contains 42 apartments averaging 3,000 sqft each, which means the absolute price tags are much lower compared to those at the Signature Tower. While the units here are also four-bedroom apartments, the scale of the rooms is generally smaller than those at Signature Tower, but no less impressive. For instance, only three of the four bedrooms have en-suite bathrooms. The living and dining rooms are still sizeable, although smaller than those at Signature Tower. However, they still have double-volume ceiling heights, and identical in terms of finishing.

All units at The Marq also have access to facilities such as a yoga garden and a sunken lounge surrounded by water, called “The Fireplace” as there is an actual working fireplace and comfortable seats. There’s also a luxurious clubhouse, a well-equipped spacious gym that overlooks the playground, and two swimming pools. Those with a fleet of fancy cars will appreciate the ample parking space. Owners of units at Signature Tower are entitled to four parking spaces each, and those at the Premier Tower have two.

SC Global’s crown jewel

Of the 66 units at The Marq, only 28 units have been sold so far. That’s just 42% of the total units in the condominium. Having that many unsold units at a flagship project might be worrying for most property developers, but not for SC Global. The company actually prides itself for being able to hold out for prices that reflect the value it creates at its properties.

“SC Global is a developer which focuses on adding value to developments, [it’s] not an asset trader,” says IIFL Instutional Equities in a March29 report, after a meeting with the management.“It is not concerned with high land prices as long as it could add value to sell at premium margins. As a result, it adopts the hold-and-sell strategy for its limited amount of projects, and believes that scarcity value will continue to rise.”

For instance, the company took its time selling BLVD, which was completed in 2006. Last October, it sold the remaining 7,072 sqft penthouse for $30 million ($4,242 psf), which is the highest price achieved in the development to date. The first penthouse was sold for $16 million ($2,276 psf) in 2006.

In the resale market, prices of units at BLVD have also soared in recent years. The most recent transaction was that of a 3,961 sqft junior penthouse on the 32nd level that was sold for $13.35 million ($3,370 psf) in February. The seller had purchased it for $7.83 million($1,977 psf) in mid-2006 from an owner who had bought it from the developer a year earlier for $6.3 million ($1,590 psf).

Now, the unsold inventory of units at The Marq could be a boon for SC Global, as interest in top-end residential property returns. On May 12, SC Global said its revenue for 1Q2011 increased 29%y-o-y to $221.2 million, while its earnings jumped 14-fold to $72.8 million. That was fuelled by progressive revenue recognition from its key developments, including The Marq.

As at end-March, the company had some $2.45 billion of inventory on its balance sheet. This consisted of land and development properties, all held at historical cost. Its net asset valueat end-March was $1.47 per share. Shares in SC Global were trading at $1.35 at the close of May 19.

Among its other property developments besides The Marq are No 38 Martin, which consists of 91 units sitting on top of a commercial podium with upscale restaurants, a bou-tique gym and other services, located on Martin Road. So far, 60 units have been launched and sold. Last month, four units were sold at a median price of $2,622 psf.

SC Global is also behind the exclusive 41-unit Seven Palms at Sentosa Cove, which has also set a record in terms of prices at the waterfront residential enclave. To date, nine units at Seven Palms have been sold. The most recent recorded transaction was of a 4,822 sqft first-level apartment that was sold for $16 million, or $3,318 psf, last October. The other units were sold at prices ranging from $3,019 to $3,353 psf.

Another development that was completed earlier this year is the 240-unit Hilltops on Cairnhill Rise,which is SC Global’s largest condo development in Singapore. To date, 31 units have been sold by the developer, with the last recorded transaction (based on caveats lodged with URA) on February 2008, for a 1,819sqft unit that was sold at $6.94 million ($3,818 psf). The highest price achieved at Hilltops was for a 2,465sqft 12th floor unit that was sold for $11.86 million ($4,812 psf).

In mid-2009, a consortium of investors led by Parkway Holdings’ former managing director, Tony Tan, reportedly purchased 18 units en-bloc at Hilltops in a sub-sale from a Hong Kong investor who had purchased the units back in late 2007. The consortium paid a total of $48.2 million, or an average of $2,560 psf, in a deal brokered by Savills Singapore.
SC Global is much more discerning with buyers of its more exclusive properties such as The Marq, though. According to property agents, the company vigorously screens agents and their clients. In fact, securing an appointment to view either an SC Global show gallery or an actual condo development is a rare privilege.

“You have to call the developer first,” says a property agent who declined to be named. “You have to state the name of your client and his or her company. Then, the person at the other end of the line will tell you that he or she will check with the management and get back to you. More often than not, they don’t.”

Days of frivolous buying are over

Tan of JTResi is no ordinary property agent, though. In the past decade, he has built his boutique firm into an exclusive purveyor of high-end property. He had started out by marketing high-end projects overseas — particularly in Indonesia and Hong Kong— even before they were launched in Singapore. Since the crisis, however, he had changed the way he markets properties, saying that doing overseas road shows over a weekend isn’t really effective.

“The days of frivolous buying are over,” he says. “It’s no longer about buying today in anticipation of making money two years later. The seller’s stamp duty announced in mid- January has certainly put an end to that. Today, buyers have to buy with a minimum four year time horizon, and they want to look at the end-product, and how it’s being delivered.”

So, Tan has morphed into a niche property finder for the super rich. Three months ago, JTResi chartered a private jet and flew five swashbuckling businessmen, including some of Australia’s wealthiest, from Perth to Singapore. They came with their wives, and the sightseeing included some of Singapore’s top-end residential properties: Goodwood Residences along Bukit Timah Road, Cliveden at Grange, Seven Palms at Sentosa Cove and The Orchard Residences. “At that time, The Marq wasn’t ready yet,” says Tan.

According to Tom Lapping, whojoined JTResi last year as director of the Australia desk, his Aussie clients are generally in their 40s and have young children. With the exchange rate at A$1 to $1.32, “they feel this is a good time to diversify overseas, where they can capitalise on the strength of the Australian dollar and the liquidity, as well as the low lending rates here compared with in Australia, where mortgage rates areat 7%,” says Lapping.

What appeals to them, coming from a place like Perth, is the buzz of the city, says Lapping. “This [TheMarq] is the kind of prime property they are looking for: right in the city, with everything at your fingertips and just a stone’s throw from Orchard Road, a pedigreed architect and a stylish development with freehold tenure on a large site, where land is scarce,” he lists.

“We show them what the privileged can experience in Singapore, and the one thing that really impresses them is that if you’ve got the money, this is a great place to live,” adds Lapping. “You get the best parking spots, the best table at restaurants, the best service, or even a legitimate massage at 2am. This is capitalism at its working best.”

Looking ahead, Tan says he is beginning to focus more on the larger apartments in the luxury sector, which he believes is what appeals to the really well-heeled buyers. “The bigger, the better, because these are going to be a rarity,” he says. “These people want large units with space to entertain.”

A unit at Signature Tower of The Marq above $6,000 psf would certainly fit the bill.

If you have any questions related to real estate,
do not hesitate to contact Jack @ +65-9337-8483.

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每个单位至少800万元起跳的超级豪华公寓汉美登(Hamilton Scotts),自2008年推出市场以来卖出四成,当中一半买家是本地人。

超级豪华公寓汉美登发展商高鸿置地(KOP Properties)表示,接下来会推出的公寓项目将走年轻化路线,令其单位在更可负担的范围内。





超级豪华公寓汉美登 2除了两个小型顶层豪宅和两个顶层豪宅以外,汉美登其余52个单位都是约2700平方英尺(不包括停车空间在内)的三卧房式单位,目前售价从每平方英尺3000元起跳,但这个价位比2008年7月推出时的3800元尺价要低。





汉美登是由意大利最大建筑师事务所之一AMA Architects操刀,也多次赢得国际奖项。


高鸿置地也是本地豪华私宅项目丽嘉豪庭(Ritz Carlton Residences)的发展商。它也在去年底买下英国伦敦的著名地标建筑之一——Ten Trinity Square这栋历史悠久的建筑,并会将它发展成一个拥有37个单位的豪华住宅项目及高级酒店。这个项目已在上个月于伦敦推出。


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Singapore Residential Leasing Briefing Q1-2011

Published 16 May 2011
Savills Research | Singapore

Market overview

Having undergone several phases of expansion, Singapore’s economy progressed to a more advanced stage of recovery in Q1. The growth was driven mainly by the manufacturing, services-producing and electronics and precision engineering sectors.

Based on advance estimates, Singapore’s growth paced ahead by 8.5% year-on-year in the first quarter. The expansion was unexpected following a year in which the country experienced one of the highest growth rates (14.5%) in the world. On a seasonally adjusted quarter-on-quarter annualised basis, overall GDP grew by 23.5% in Q1.

According to the April to June 2011 Hudson Report, hiring expectations remain firm with 61% of the 450 executives polled across different business sectors intending to increase hiring in Q2/2011. Although this is a shade below the 62% seen last quarter, hiring intentions are up 7 percentage points year-on-year.

The highest expectations (67%) came from the healthcare and life sciences sector, followed by the IT&T sector (65%). The banking and fi nancial services sector reported an 8 percentage point decrease in expectations as most banks have already conducted many rounds of recruitment.

Transaction volume, Q1/2000 – Q1/2011

Transaction volume, Q1/2000 - Q1/2011

The overall unemployment rate in Singapore also fell to a three-year low in Q1 with a seasonally adjusted 1.9% in March 2011. According to the Ministry of Manpower, 23,700 new jobs were created, 96% of which were in the services industry.

The rental market continued its stellar performance this quarter with 10,162 leasing transactions. This is an 8.7% year-on-year increase and the highest Q1 total recorded since 2000.


According to the Urban Redevelopment Authority’s (URA) rental index, rents of private residential properties rose by 1.2% in Q1. However, the rate of increase has moderated from the 2.6% recorded in Q4/2010, reflecting a third consecutive slowdown in rents.

Among the various segments, rental growth for nonlanded homes saw the slowest rise of 1.1% in Q1, down from 2.9% in Q4/2010. The slower growth could be the result of a build-up of supply from the many new completions seen in recent months.

Rental index for non-landed private residential properties by region, Q1/2004 – Q1/2011

Rental index for non-landed private residential properties by region, Q1/2004 – Q1/2011By region, rents of non-landed properties in the core central region, the rest of central region and outside the central region registered smaller increases of 1.2%, 0.4% and 1.6% respectively this quarter. The slowdown in rents therefore appeared to be widespread across residential areas.

Bucking the general trend are the rents of detached and terraced houses which increased by 1.5% and 2.7% in Q1 respectively, up from 0.3% and 1.6% in Q4/2010. The increase in rents could be a result of fewer new detached and terraced homes being completed in recent months.

According to the URA, island-wide median rents for non-landed private homes edged up from S$3.57 per sq ft per month in Q4/2010 to S$3.61 per sq ft per month in Q1/2011. Similarly, rents of detached houses rose from S$3.57 to S$3.62 per sq ft per month quarter-on-quarter; while rents of semi-detached and terraced houses hit all time highs of S$2.50 and S$1.90 per sq ft per month respectively.

Average rents of high-end non-landed residential homes, Q1/2000 – Q1/2011

Average rents of high-end non-landed residential homes, Q1/2000 – Q1/2011The average monthly rent of high-end non-landed residential properties tracked by Savills continued to climb for a fifth successive quarter to S$5.43 per sq ft in Q1/2011, albeit at the slower rate of 0.7%. On a year-on-year basis, prime rents increased by 9.9%.

New supply

In Q1, 2,230 private residential units received temporary occupation permits, comprising 2,132 non-landed units and just 98 landed units. Major new completions included One Shenton (341 units), The Clift (312 units), The Peak@Balmeg (180 units), Seascape (151 units), Helios Residences (140 units), Marina Collection (124 units), Duchess Residences (120 units), Amber Residences (114 units), Casa Fortuna (106 units) and Nassim Park Residences (100 units). Most of these projects are located in prime districts and their arrival could exert some short-term pressure on prime rents.


With a positive economic outlook and strong hiring intentions, leasing demand is expected to remain stable in 2011. Demand will also be supported by an increase in the number of top executives relocating to Singapore most likely from the banking and financial, pharmaceutical and petrochemical sectors. There are also long waiting lists for admission to top international schools here.

Although rents for some high-end private homes may face short-term pressure from the new completions, the limited supply of land for this market segment in the long term could still see rents of good class bungalows and super luxury homes holding fi rm in the next few quarters.

If you have any questions related to real estate,
do not hesitate to contact Jack @ +65-9337-8483.

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Kellock Lodge up for collective sale at S$84 million

Published 3 June 2011
By Jo-Ann Huang Limin

Kellock Lodge on River Valley Road is up for a collective sale, with an asking price of more than S$84 million or S$1,383 psf per plot ratio, says its sole marketing agent CKS Property Consultants.

Kellock Lodge up for collective sale at S$84 millionThe redevelopment site has a land area of 21,784 sq ft and it will yield a maximum gross floor area of 60,995 sq ft.

This is based on a plot ratio of 2.8 for the redevelopment of the site, with a development charge of S$380,000.

Residents of the 48 units at Kellock Lodge will receive about S$1.5 million to S$2.76 million each.

This is the first time Kellock Lodge is going up for a collective sale. The 48 units have sizes ranging from 882 sq ft to 1,786 sq ft.

Based on the plot ratio of 2.8, the site can yield about 100 apartments at about 600 sq ft each or 60 apartments at 1,000 sq ft each.

It is within walking distance from Great World City, Zion Riverside Food Centre, and other eateries and amenities, said CKS Property Consultants.

It is located in District 10, within minutes’ drive from the Orchard Road shopping belt and the Central Business District.

Mr Derrick Tan, head of investment sales at CKS Property Consultants, said Kellock Lodge’s medium-sized freehold land plot is in demand, particularly since it is in a city fringe area like River Valley.

The tender will close on July 8 at 3pm.

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Little short-term impact from public housing moves

Published 3 June 2011
By Colin Tan

It has not been a week since National Development Minister Khaw Boon Wan made his move to make housing and the Housing and Development Board (HDB) popular again but already some private property investors are feeling anxious.

Little short-term impact from public housing movesCan their nerves hold out for a whole month? The irony is that Mr Khaw has not even begun to reveal his thoughts on the private housing sector.

Last Friday, Mr Khaw announced that the HDB would roll out 4,000 new flats -the largest supply ever in a single launch. Supply for this year would also be ramped up from 22,000 to 25,000 units with the new pace of building sustained for next year.

Two days later, Mr Khaw said Singapore would need to build “tens of thousands” of subsidised rental flats to meet the demand – the sooner, the better.

In another blog post a day later, he said home buyers can expect HDB to offer more new flats in mature estates from next year.

The big question is: What possible negative impact will these moves have on the HDB resale and the private housing market? In reality, over the short term, not much.

For one, all of the new ramped-up supply will not enter the HDB resale market for the next seven to nine years at least, assuming a construction period of two to three years and a minimum five-year occupation period. An oversupply problem can only happen then. Between now and then, anything can happen to make this discussion redundant.

In the immediate term, it will take buyers away from the HDB resale market. But building statistics show that the problem with the resale market presently is one of supply rather than demand. The fresh supply of resale flats in the current market is very thin, most probably at its historical low.

At the same time, the usual numbers upgrading to private housing are staying put because private prices are not affordable. And for reasons of their own, some private property owners are even downgrading to HDB resale flats.

Therefore, any easing in demand for resale flats actually helps alleviate the problem of a shortage of supply. Do not expect resale prices to drop.

As for a possible drop in rental demand, those who qualify for rental flats probably cannot afford market rates anyway and were never in the market in the first place. What is not there cannot be taken away.

More new flats in mature estates will draw away demand from newer estates. Flat prices in the newer estates need to be suitably lower or cheaper to compensate for location and fewer amenities. There will always be trade-offs.

There will be those who will opt for cheaper or bigger flats in newer estates. Alternatively, a longer minimum occupation period, say, 10 years instead of the current five, for flats in mature estates can discourage applicants who are mainly interested in the capital appreciation potential.

If HDB resale flat prices are kept stable while private housing prices continue to climb, this may affect the pool of upgraders. But really, how big is this group today?

Which group is driving the private housing buying today – investors or upgraders?

Have income levels of upgraders risen in line with or higher than private property prices for them to afford one? Are true upgraders really interested in buying one or two-bedders and shoebox units? The reason for the robust demand for Design, Build and Sell Scheme (DBSS) flats and Executive Condos – which surprised many – is because genuine owner-occupiers want them affordable as well as liveable.

If you agree that the bulk of buyers are investors, are they your conventional types? Normal investors would have reacted to the ramped-up supply and shied away from buying. Even investors themselves tell me that they are worried but continue to purchase anyway.

The market is liquidity-driven and will continue to be so. Nothing has changed – yet. For the private market, I expect Mr Khaw to be consistent and come up with moves to help people fulfil their aspirations. Interestingly, he has left HDB flat prices alone, for now at least. That speaks volumes and may indicate how he may tackle issues in the private housing sector.

Colin Tan is head, research & consultancy at Chesterton Suntec International.

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Buangkok site gets $247m top bid

Published 3 June 2011
The Business Times
By Emilyn Yap

THE tender for a 99-year leasehold residential site at Buangkok Drive/Sengkang East Drive closed yesterday with just four bidders in the fray.

Buangkok site gets $247m top bidQingdao Construction (Singapore) submitted the top bid of $247 million or $391 per square foot per plot ratio (psf ppr).

The bid is within market expectations and is just 3 per cent above the next highest bid of $239.8 million or $380 psf ppr, which came from a tie-up between Lum Chang Building Contractors and a unit of Frasers Centrepoint.

A Centurion Properties unit and Best Desire Investments also took part in the tender. Best Desire, which is not incorporated in Singapore, put in the lowest bid of $145.2 million or $230 psf ppr.

The site is near Kangkar LRT Station but is some distance away from Buangkok MRT Station. It is next to Austville Residences, an executive condominium project launched early this year.

The ‘moderate tender response and bids’ reflect the plot’s location in the ‘less busy part’ of Sengkang and Upper Serangoon, said Credo Real Estate executive director Ong Teck Hui.

With a maximum gross floor area of around 631,300 sq ft, the site can yield an estimated 550 units.

CB Richard Ellis executive director Li Hiaw Ho expects the project’s breakeven cost to be around $760-$780 psf.

Credo’s Mr Ong expects the project to have an average selling price of around $800-850 psf.

Caveats lodged with the authorities show that at The Quartz nearby, units changed hands at $837-963 psf between April and May. At H2O Residences at Sengkang West Avenue/Fernvale Link, units went for $916-$1,020 psf in May.

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26,000 new HDB flats this year: Khaw

Published 3 June 2011
The Business Times
By Uma Shankari

THE Housing & Development Board (HDB) will release some 1,000 left-over flats accumulated from previous launches under its ‘sale of balance flats’ exercise later this year – boosting the total flat supply for 2011 to 26,000 units.

Just last week, HDB ramped up the supply for the full year from 22,000 units to 25,000 units. This was done by bringing forward the projects planned for the first quarter of 2012 by a couple of months.

And yesterday, HDB said the supply will be increased further after National Development Minister Khaw Boon Wan asked the government agency to look into releasing the 1,000 left-over units.

‘We have some 1,000 balance units accumulated from earlier sale exercises,’ Mr Khaw said in his Housing Matters blog yesterday. ‘With these, we are looking at a total supply of 26,000 units by year-end.’

Mr Khaw also said that the 4,000 new flats HDB released across six projects at the end of last month – the largest supply of new flats ever rolled out at one go – drew around 13,000 applications.

This gives an application rate of over three times – similar to the application rate for new HDB flats launched in April, and lower than the application rates of five times for the February launch and seven times for the March launch.

‘With this launch, we have offered about 12,000 units this year, leaving another 13,000 units to be launched in the next seven months,’ Mr Khaw said.

‘With monthly launch, this will mean an average launch size of about 1,800 units, smaller than the recent launch of 4,000 units. For the June BTO (build-to-order) currently being prepared, we are looking to launch about 2,100 flats in Bukit Panjang and Sengkang.’

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CapitaLand, CMA and CMT unveil $1.5b Jurong project

Published 2 June 2011
The Business Times
By Emilyn Yap

CAPITAMALLS Asia (CMA), CapitaMall Trust (CMT), and CapitaLand will be developing a 25-storey retail- cum-office project on a site at Jurong Gateway which they won in a tender.

CapitaLand, CMA and CMT unveil $1.5b Jurong projectThe total development cost is expected to come up to around $1.5 billion. The partners had put in the top bid of $969 million or $1,012 per square foot (psf) per plot ratio for the site.

The project will be among several new ones coming up in the area. Next door, a mixed-use development by Lend Lease is on the way.

CMA, CMT, and CapitaLand believe that their plot is the ‘most prime’ in Jurong Gateway. Behind their confidence is its connectivity – the new building will have links to Jurong East MRT station, bus interchange, and Ng Teng Fong hospital.

‘It’s a place that everybody must pass through if they’re in Jurong Gateway,’ said CMA CEO Lim Beng Chee.

Of the maximum permissible gross floor area of 957,780 sq ft, 60 per cent will be set aside as retail space. The mall is likely to take up five levels and may open its doors in time for the Christmas shopping season in 2013.

The project partners are expecting rents to be in the range of $16-18 psf. There are no plans to sign up anchor tenants because there will be large retailers in IMM and JCube – malls in CMT’s stable – and also in Lend Lease’s development, they said.

JCube, which is expected to open in the first quarter of next year, is more than 70 per cent pre- leased.

Offices – spanning 20 storeys – will take up 40 per cent of the project and may be ready in December 2014.

The partners are looking to incorporate regular- size column-free floor plates in the design and they believe rents can go up to $8 psf.

There is a lack of quality offices in Jurong and the development will fill a market void, said CEO of CMT’s manager Simon Ho.

Target tenants include government agencies, medical firms, and multinational corporations in the energy and marine sectors with operations in Jurong Island and Tuas.

The government is promoting Jurong Lake District as a new major regional centre and has released sites in the area for sale. Last year, Lend Lease won the tender for its plot with a bid of $650 psf ppr.

CMA, CMT, and CapitaLand note that Jurong Gateway is 2.5 times the size of Tampines Regional Centre and has a catchment of one million residents in the surrounding towns.

On the stock market yesterday, CMA gained three cents to close at $1.63, CMT lost a cent to $1.99, and CapitaLand rose two cents to $3.11.

If you have any questions related to real estate,
do not hesitate to contact Jack @ +65-9337-8483.

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